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:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e) (2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Peoples Bancorp Inc.
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(Name of Registrant as Specified in its Charter)
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(Name of Person Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: _________________________________
(2) Form, Schedule or Registration Statement No.: ___________
(3) Filing Party: ___________________________________________
(4) Date Filed: ____________________________________________
[Peoples Bancorp Inc. Letterhead]
March 10, 2003
Dear Peoples Bancorp Shareholder(s):
Enclosed is your Notice of Annual Meeting, Revocable Proxy and Proxy
Statement, along with Peoples' Summary Annual Report and Form 10-K. Please sign
the Revocable Proxy and return it in the envelope provided. If you attend the
Annual Meeting, you may withdraw your Proxy at the meeting and vote in person.
Sending your Proxy assures you that your shares will be represented.
Carl Baker, Jr., George W. Broughton and Wilford D. Dimit have been
nominated as Directors for re-election to terms of three years each, and Mark F.
Bradley has been nominated as a Director for re-election to a term expiring in
two years.
The following are also listed on the Proxy for your vote at this
meeting:
1) Adoption of amendment to Article Fourth of Peoples' Articles of
Incorporation to increase the number of authorized shares to
24,000,000.
2) Adoption of amendments to Peoples' Code of Regulations to permit
electronic proxies, notices, waivers and meetings.
3) Adoption of amendment to Peoples' Code of Regulations to provide
for Board committees of one or more members.
At this time, we know of no other business to be presented for
Stockholder consideration.
Please take time to review your company's progress, detailed in
Peoples' Summary Annual Report and Form 10-K. We urge you to take advantage of
the many financial services offered by the company. Your recommendation of these
services to your associates, friends and neighbors is an excellent way to aid
Peoples Bancorp toward continued progress.
You may access Peoples' home page on the internet at
http://www.peoplesbancorp.com.
Sincerely,
PEOPLES BANCORP INC.
/s/RUTH I. OTTO
Ruth I. Otto
Corporate Secretary
Enclosures
[Peoples Bancorp Inc. Letterhead]
Peoples Bancorp Inc. P.O. Box 738 Marietta, Oh 45750-0738
Telephone: (740)374-6163
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
PEOPLES BANCORP INC.
Marietta, Ohio
March 10, 2003
To the Shareholders of Peoples Bancorp Inc.:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Annual Meeting") of Peoples Bancorp Inc. ("Peoples") to be held at 10:30
A.M., local time, on Thursday, April 10, 2003, in the Ball Room, Holiday Inn,
701 Pike Street, Marietta, Ohio (Interstate 77, Ohio exit 1), for the following
purposes:
1. To elect the following directors for terms of three years each:
Nominee Term Expires In
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Carl Baker, Jr. (for re-election) 2006
George W. Broughton (for re-election) 2006
Wilford D. Dimit (for re-election) 2006
2. To elect the following director for a term of two years:
Nominee Term Expires In
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Mark F. Bradley (for re-election) 2005
3. To consider and vote on a proposal to adopt an amendment to
Article FOURTH of Peoples' Articles of Incorporation to
increase the number of authorized shares to 24,000,000.
4. To consider and vote on a proposal to adopt amendments to
Peoples' Code of Regulations to permit electronic proxies,
notices, waivers, and meetings.
5. To consider and vote on a proposal to adopt a further
amendment to Peoples' Code of Regulations to provide for Board
committees of one or more members.
6. To transact any other business which properly comes before the
Annual Meeting and any adjournment thereof.
Shareholders of record at the close of business on February 14, 2003,
will be entitled to notice of and to vote at the Annual Meeting and any
adjournment.
The vote of each shareholder is important, whatever the number of
common shares held. Whether or not you plan to attend the Annual Meeting, please
sign, date and return your proxy card promptly in the enclosed envelope.
Peoples' Annual Report to Shareholders for the fiscal year ended
December 31, 2002, accompanies this Notice and proxy statement.
By Order of the Board of Directors,
/s/RUTH I. OTTO
Ruth I. Otto
Corporate Secretary
PEOPLES BANCORP INC.
P.O. Box 738
138 Putnam Street
Marietta, OH 45750-0738
(740) 374-6136
www.peoplesbancorp.com
PROXY STATEMENT
This proxy statement and the accompanying proxy card are being mailed to
shareholders of Peoples Bancorp Inc., an Ohio corporation ("Peoples"), on or
about March 10, 2003, in connection with the solicitation of proxies by the
Board of Directors of Peoples for use at the Annual Meeting of Shareholders of
Peoples (the "Annual Meeting") called to be held on Thursday, April 10, 2003, or
at any adjournment. The Annual Meeting will be held at 10:30 A.M., local time,
in the Ball Room, Holiday Inn, 701 Pike Street, Marietta, Ohio (Interstate77,
Ohio exit 1).
Peoples has two wholly-owned subsidiaries, Peoples Bank, National
Association ("Peoples Bank"), and Peoples Investment Company.
A proxy card for use at the Annual Meeting accompanies this proxy
statement. Shareholders may use their proxy cards if they are unable to attend
the Annual Meeting in person or wish to have their common shares voted by proxy
even if they do attend the Annual Meeting. Without affecting any vote previously
taken, any shareholder appointing a proxy may revoke it at any time before it is
voted by filing with the Secretary of Peoples, at the address set forth on the
cover page of this proxy statement, written notice of such revocation; by
executing a later-dated proxy card which is received by Peoples prior to the
Annual Meeting; or, if you are the registered shareholder, by attending the
Annual Meeting and giving notice of such revocation in person. Attendance at the
Annual Meeting will not, in and of itself, constitute revocation of a proxy.
Only shareholders of record at the close of business on February 14, 2003,
(the "Record Date") are entitled to receive notice of and to vote at the Annual
Meeting. At the close of business on the Record Date, 9,647,555 common shares
were issued and entitled to vote. Each common share entitles the holder to one
vote on each matter to be submitted to shareholders at the Annual Meeting. A
quorum for the Annual Meeting is a majority of the common shares issued. There
is no cumulative voting with respect to the election of directors.
Shareholders holding common shares in "street name" with a broker-dealer,
bank, or other holder of record should review the information provided to them
by such holder of record. This information will set forth the procedures to be
followed in instructing the holder of record how to vote the "street name"
common shares and how to revoke previously given instructions.
Peoples will bear the costs of preparing and mailing this proxy statement,
the accompanying proxy card, any other related materials, and all other costs
incurred in connection with the solicitation of proxies on behalf of the Board
of Directors. Proxies will be solicited by mail and may be further solicited,
for no additional compensation, by officers, directors, or employees of Peoples
and its subsidiaries by further mailing, telephone, or personal contact. Peoples
will also pay the standard charges and expenses of brokerage houses, voting
trustees, banks, associations and other custodians, nominees, and fiduciaries,
who are record holders of common shares not beneficially owned by them, for
forwarding such materials to, and obtaining proxies from, the beneficial owners
of common shares entitled to vote at the Annual Meeting.
The Annual Report to the Shareholders of Peoples for the fiscal year ended
December 31, 2002 (the "2002 Fiscal Year") is enclosed herewith.
DELIVERY OF PROXY MATERIALS
TO HOUSEHOLDS
Annually, Peoples notifies each registered shareholder at a shared address,
not previously notified, a separate notice of its intention to household proxy
materials. Beneficial shareholders (those who hold common shares through a
financial institution, broker or other record holder) are notified of the
householding process by the record holder. Those registered and beneficial
shareholders who are eligible and have not opted-out (as defined below) of the
householding process will receive one copy of Peoples Annual Report to
Shareholders and one copy of this proxy statement for the 2002 Fiscal Year. A
separate proxy card and a separate notice of the meeting of shareholders will
continue to be included for each account at the shared address.
Registered shareholders who reside at a shared household and would like to
receive a separate Annual Report and/or a separate proxy statement (to
"opt-out"), or have questions regarding the householding process, may contact
Peoples' transfer agent and registrar, Registrar and Transfer Company, by
calling (908) 497-2300, or forwarding a written request addressed to Registrar
and Transfer Company, 10 Commerce Drive, Cranford, New Jersey, 07016. Promptly
upon request, a separate Annual Report and/or separate proxy statement will be
sent. By contacting Registrar and Transfer Company, registered shareholders
sharing an address can also request delivery of a single copy of annual reports
or proxy statements if they are receiving multiple copies. Beneficial
shareholders should contact their brokers, financial institutions, or other
record holder for specific information on the householding process as it applies
to those accounts.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, certain information
concerning the beneficial ownership of common shares by the only person known to
Peoples to be the beneficial owner of more than 5% of the outstanding common
shares:
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class (1)
---------------- -------------------- ----------------
Peoples Bank - Trustee
138 Putnam Street
Marietta, OH 45750 1,005,523 (2) 10.42%
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(1) The percent of class is based on 9,647,555 common shares issued and
entitled to vote on the Record Date.
(2) Includes Peoples Bank's beneficial ownership through Peoples Financial
Advisors group (formerly known as the Investment and Trust Division of
Peoples Bank) in the following manner: 151,234 common shares with shared
investment and sole voting power; 620,049 common shares with shared
investment and voting power; 161,856 common shares with sole voting and
investment power; and 72,384 common shares with sole investment and
shared voting power. The officers and directors of Peoples Bank and
Peoples disclaim beneficial ownership of these common shares by reason
of their positions. Does not include 277,973 common shares held by
Peoples Bank in its capacity as trustee under the Peoples Bancorp Inc.
Retirement Savings Plan with respect to which it has neither voting nor
investment power. Does not include 111,657 common shares with shared
investment and voting power directly attributable to each director,
nominated director, or executive officer as reported in the table below.
The following table sets forth, as of the Record Date, certain information
with respect to the common shares beneficially owned by each director of
Peoples, by each nominee for election as a director of Peoples, by the executive
officers of Peoples named in the Summary Compensation Table and by all executive
officers and directors of Peoples as a group:
Amount and Nature of Beneficial Ownership (1)
---------------------------------------------
Common Shares
Which Can Be Acquired Upon
Common Shares Exercise of Options Exercisable
Name Presently Held Within 60 Days Total Percent of Class(2)
---- -------------- -------------- ----- ----------------
Carl Baker, Jr. 20,785(3) 9,151 29,936 (4)
David B. Baker (5) 15,486(6) 31,892 47,378 (4)
George W. Broughton 161,147(7) 9,730 170,877 1.73%
Frank L. Christy 76,802(8) 2,508 79,310 (4)
John W. Conlon (5) 22,064(9) 24,702 46,766 (4)
Wilford D. Dimit 38,870(10) 10,111 48,981 (4)
Robert E. Evans (5) 172,204(11) 43,044 215,248 2.17%
Larry E. Holdren (5) 19,638(12) 21,123 40,761 (4)
Rex E. Maiden 1,094(13) 7,855 8,949 (4)
Robert W. Price 12,011(14) 1,100 13,111 (4)
Paul T. Theisen 24,472(15) 14,234 38,706 (4)
Thomas C. Vadakin 14,363(16) 1,100 15,463 (4)
Joseph H. Wesel 36,567(17) 12,240 48,807 (4)
Joseph S. Yazombek (5) 21,328(18) 30,425 51,753 (4)
All directors and
executive officers as a
group (numbering 16)
654,222(19) 252,022 906,244 9.15%
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(1) Unless otherwise noted, the beneficial owner has sole voting and
investment power with respect to all of the common shares reflected in
the table. All fractional common shares have been rounded to the nearest
whole common share.
(2) The percent of class is based upon 9,647,555 common shares issued and
entitled to vote on the Record Date and the number of common shares as to
which the named person or group has the right to acquire beneficial
ownership upon the exercise of options exercisable within 60 days of the
Record Date.
(3) Includes 6,050 common shares held by B & N Coal, Inc., as to which Mr.
Baker exercises shared voting and investment power. Also includes 6,613
common shares held by Mr. Baker as Trustee of the Gilbert Baker Trust as
to which Mr. Baker is Trustee, and exercises sole voting and investment
power. Does not include 220 common shares accrued to Mr. Baker's account
under the Peoples Bancorp Inc. Deferred Compensation Plan for Directors
of Peoples Bancorp Inc. and Subsidiaries, as to which Mr. Baker has no
voting or investment power. Does not include 24,901 common shares held in
the Jewel Baker Trust as to which Mr. Baker is a beneficiary and has no
voting or investment power.
(4) Reflects ownership of less than 1%.
(5) Executive officer of Peoples named in the Summary Compensation Table.
(6) Includes 11,957 common shares held jointly by Mr. Baker and his wife as
to which he exercises shared voting and investment power. Includes 3,529
common shares allocated to the account of Mr. Baker in the Peoples
Bancorp Inc. Retirement Savings Plan with respect to which Mr. Baker has
the power to direct the voting and investment.
(7) Includes 6,930 common shares held by Mr. Broughton as custodian for his
children, as to which Mr. Broughton has sole voting and investment power
and claims beneficial ownership. Includes 532 common shares held by GWB
Sales, Inc., as to which Mr. Broughton exercises shared voting and
investment power. Includes 24,050 common shares held by Mr. Broughton as
Trustee of the George W. Broughton and Nancy R. Broughton Retained
Annuity Trust, as to which Mr. Broughton has shared voting and investment
power. Includes 11,685 common shares held in an IRA account by Peoples
Bank as custodian, as to which Mr. Baker exercises shared voting and
investment power. Does not include 15,556 common shares held of record
and beneficially owned by Mr. Broughton's wife, or 100 common shares held
of record and beneficially owned by Mr. Broughton's daughter, as to which
he has no voting or investment power and disclaims beneficial ownership.
Does not include 1,090 common shares accrued to Mr. Broughton's account
under the Peoples Bancorp Inc. Deferred Compensation Plan for Directors
of Peoples Bancorp Inc. and Subsidiaries, as to which Mr. Broughton has
no voting or investment power.
(8) Includes 9,210 common shares held in the Frank L. Christy Investment
Account as to which he exercises shared voting and investment power. Also
includes 67,176 common shares held in the Riverbank Restaurants Inc.
Agency Account as to which Mr. Christy exercises shared voting and
investment power.
(9) Includes 11,504 common shares allocated to the account of Mr. Conlon in
the Peoples Bancorp Inc. Retirement Savings Plan with respect to which
Mr. Conlon has the power to direct the voting and investment. Does not
include 8 common shares held of record and owned beneficially by Mr.
Conlon's wife, or 3,670 common shares allocated to the account of Mr.
Conlon's wife in the Peoples Bancorp Inc. Retirement Plan, as to which
common shares Mr. Conlon has no voting or investment powers and disclaims
beneficial ownership.
(10) These common shares are held jointly by Mr. Dimit and his wife, and he
exercises shared voting and investment power. Does not include 13,145
common shares accrued to Mr. Dimit's account under the Peoples Bancorp
Inc. Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and
Subsidiaries, as to which Mr. Dimit has no voting or investment power.
(11) Includes 33,176 common shares allocated to the account of Mr. Evans in
the Peoples Bancorp Inc. Retirement Savings Plan with respect to which
Mr. Evans has the power to direct the voting and investment. Does not
include 21,425 common shares held of record and owned beneficially by Mr.
Evans' wife, nor 4,000 common shares held jointly by Mr. Evans' wife and
their son, as to which common shares Mr. Evans has no voting or
investment power and disclaims beneficial ownership. Does not include
12,114 common shares accrued to Mr. Evans' account under the Peoples
Bancorp Inc. Deferred Compensation Plan for Directors of Peoples Bancorp
Inc. and Subsidiaries, as to which Mr. Evans has no voting or investment
power.
(12) Includes 5,818 common shares held jointly by Mr. Holdren and his wife as
to which he exercises shared voting and investment power. Includes 13,820
common shares allocated to the account of Mr. Holdren in the Peoples
Bancorp Inc. Retirement Plan with respect to which Mr. Holdren has the
power to direct the voting and investment.
(13) Does not include 1,189 common shares accrued to Mr. Maiden's account
under the Peoples Bancorp Inc. Deferred Compensation Plan for Directors
of Peoples Bancorp Inc. and Subsidiaries, as to which Mr. Maiden has no
voting or investment power.
(14) Includes 10,000 common shares held in the Robert W. Price Investment
Account at Peoples Bank as to which Mr. Price shares investment and
voting power. Does not include 1,357 common shares accrued to Mr. Price's
account under the Peoples Bancorp Inc. Deferred Compensation Plan for
Directors of Peoples Bancorp Inc. and Subsidiaries, as to which Mr. Price
has no voting or investment power.
(15) Does not include 4,930 common shares accrued to Mr. Theisen's account
under the Peoples Bancorp Inc. Deferred Compensation Plan for Directors
of Peoples Bancorp Inc. and Subsidiaries, as to which Mr. Theisen has no
voting or investment power.
(16) Includes 13,586 common shares in the Thomas C. Vadakin Investment Account
in Peoples Bank as to which Mr. Vadakin shares investment and voting
power.
(17) Does not include 16,334 common shares held of record and beneficially
owned by Mr. Wesel's wife as to which he has no voting or investment
power and disclaims beneficial ownership. Does not include 6,729 common
shares accrued to Mr. Wesel's account under the Peoples Bancorp Inc.
Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and
Subsidiaries, as to which Mr. Wesel has no voting or investment power.
Does not include 36,939 common shares in the Joseph and Lu Wesel
Grandchildren's Trust, as to which Peoples Bank has sole investment and
voting power. Does not include 26,285 common shares held of record by the
Marietta Ignition, Inc. Pension Plan as to which Mr. Wesel has no voting
or investment power and disclaims beneficial ownership. Mr. Wesel serves
as a member of the Administrative Committee for the Marietta Ignition,
Inc. Pension Plan. Peoples Bank shares voting power with respect to the
common shares held in the Marietta Ignition, Inc. Pension Plan with the
Plan Administrator, and the common shares are included among the common
shares shown as beneficially owned by Peoples Bank in the preceding
table.
(18) Includes 9,238 common shares held jointly by Mr. Yazombek and his wife.
Includes 12,090 common shares allocated to the account of Mr. Yazombek in
the Peoples Bancorp Inc. Retirement Plan with respect to which Mr.
Yazombek has the power to direct the voting and disposition.
(19) Includes common shares held jointly by directors and executive officers
with other persons. Also includes 80,576 common shares allocated to the
accounts of all executive officers of Peoples in the Peoples Bancorp Inc.
Retirement Savings Plan. See notes (3) and (6) through (18) above.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To Peoples' knowledge, based solely on a review of reports furnished to
Peoples and written representations that no other reports were required, during
the 2002 Fiscal Year, all filing requirements applicable to officers, directors,
and greater than 10% beneficial owners of Peoples under Section 16(a) of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") were complied
with, except as noted below:
(1) David B. Baker filed a delinquent Form 4 on August 2, 2002, to report a
transaction by his wife which occurred on May 2, 2002.
(2) Joseph H. Wesel filed a delinquent Form 4 on January 10, 2003, to report
a transaction by his wife which occurred on December 23, 2002.
TRANSACTIONS INVOLVING MANAGEMENT
Paul T. Theisen is Of Counsel to the law firm of TheisenBrock, LPA, which
rendered legal services to Peoples and its subsidiaries during Peoples' 2002
Fiscal Year and is expected to render legal services to Peoples and its
subsidiaries during Peoples' 2003 fiscal year.
During Peoples' 2002 Fiscal Year, Peoples Bank entered into banking
transactions, in the ordinary course of business, with certain executive
officers and directors of Peoples, with members of their immediate families, and
with corporations for which directors of Peoples serve as executive officers. It
is expected that similar banking transactions will be entered into in the
future. Loans to such persons have been made on substantially the same terms,
including the interest rate charged and the collateral required, as those
prevailing at the time for comparable transactions with persons not affiliated
with Peoples or its subsidiaries. These loans have been subject to, and are
presently subject to, no more than a normal risk of uncollectibility, and
present no other unfavorable features. The aggregate amount of loans to
directors and executive officers of Peoples, and affiliates of these directors
and executive officers, as a group at December 31, 2002, was $2,999,000. This
does not include the aggregate amount of $21,348,000 in loans to individuals
acting in the sole capacity as directors or executive officers of subsidiaries
of Peoples, including affiliates of these directors and executive officers. As
of the date of this proxy statement, all of the loans described in this
paragraph are performing loans in accordance the original terms.
ELECTION OF DIRECTORS
(Items 1 and 2 on Proxy)
The Board of Directors proposes that each of the three nominees named in
the following table be elected for a three-year term and until his successor is
duly elected and qualified or until the earlier of his resignation, removal from
office, or death. The three nominees for election for the term in expiring in
2006 receiving the greatest number of votes will be elected. Common shares
represented by properly executed and returned proxies will be voted FOR the
election of the Board of Directors' nominees for three-year terms unless
authority to vote for one or more nominees is withheld. Common shares as to
which the authority to vote is withheld will 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 form of proxy. The following table
gives certain information concerning each nominee for election as a director of
Peoples for a three year term. Unless otherwise indicated, each individual has
had his principal occupation for more than five years.
NOMINEES FOR TERMS EXPIRING IN 2006
Director Nominee
Position(s) Held With Peoples and Continuously For Term
Nominee Age its Subsidiaries and Principal Occupation(s) Since Expiring In
------- --- -------------------------------------------- ----- -----------
Carl Baker, Jr. 40 President and CEO, B & N Coal, Inc., a mining, 2000 2006
reclamation, and construction concern in Southeastern
Ohio; Co-Owner of Sharon Stone Company, a limestone and
slag producer in Noble and Washington Counties, Ohio;
Owner of Dexter Hardwoods, Inc., a hardwood sawmill
located in Noble County, Ohio. Partner in Belpre Sand
& Gravel Company, a sand and gravel operation located
in Little Hocking, Washington County, Ohio, since
December 2002. (1)
George W. Broughton 45 Since September 1999: President of GWB Sales, Inc., an 1994 2006
ice cream, frozen food, and coffee service distributor;
President of Broughton Commercial Properties, LLC, a
commercial properties rental company; Chairman of
Broughton Foundation, a nonprofit charitable
foundation, and Broughton Park, a park facility owned
by the Broughton Foundation and made available to the
public; and President and Controller of George
Broughton Family LLC, an asset management company, all
based in Marietta, Ohio. Prior to that time, Mr.
Broughton served as a director and EVP/Sales and
Marketing for Broughton Foods Company, a processor and
distributor of dairy products. (1)
Wilford D. Dimit 68 President of First Settlement, Inc., Marietta, Ohio, a 1993 2006
retail clothing store, shoe store and restaurant. (1)
--------------------------
(1) Also a Director of Peoples Bank.
Pursuant to the authority granted under Section 2.02 (C) of Peoples' Code
of Regulations ("Regulations"), on January 9, 2003, the Board of Directors
increased to four the number of directors in the class whose term expires at the
2005 Annual Meeting, and appointed Mark F. Bradley to fill the vacancy created
by the increase until this Annual Meeting. The Board of Directors has nominated
Mr. Bradley for election in the class of directors whose terms expire at the
2005 Annual Meeting. The nominee for election for the term expiring in 2005
receiving the greatest number of votes will be elected. Common shares
represented by properly executed and returned proxies will be voted FOR the
election of Mr. Bradley, unless authority to vote is withheld. Common shares as
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 nominee specified on the form of proxy. The following table gives
certain information the nominee for election as a director of Peoples for the
term expiring in 2005. Unless otherwise indicated, the nominee has had his
principal occupation for more than five years.
NOMINEE FOR TERM EXPIRING IN 2005
Position(s) Held With Peoples and Continuously For Term
Nominee Age its Subsidiaries and Principal Occupation(s) Since Expiring In
------- --- -------------------------------------------- ----- -----------
Mark F. Bradley 33 Chief Integration Officer of Peoples Bancorp, Inc. 2003 2005
since January 2001; President and Chief Operating
Officer of Peoples Bank since July 2002; Controller of
Peoples and Peoples Bank from 1997 until May 2001. (1)
---------------------------
(1) Also a Director of Peoples Bank.
While it is contemplated that all nominees will stand for election, if one
or more nominees at the time of the Annual Meeting should be unavailable or
unable to serve as a candidate for election as a director, the proxies reserve
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 or nominees designated by the Board of Directors. The Board
of Directors knows of no reason why any of the above-mentioned individuals will
be unavailable or unable to serve if elected to the Board.
Under Peoples' Regulations, shareholder nominations for election to the
Board of Directors must be made in writing and must be delivered or mailed to
the Secretary of Peoples not less than 14 days nor more than 50 days prior to
any meeting of shareholders called for the election of directors. However, if
less than 21 days' notice of the meeting is given to the shareholders, the
nomination must be mailed or delivered to the Secretary not later than the close
of business on the seventh day following the day on which the notice of the
meeting was mailed to the shareholders. Each nomination must contain the
following information to the extent known by the notifying shareholder: (a) the
name, age, business address and residence address of each proposed nominee; (b)
the principal occupation or employment of each proposed nominee; (c) the number
of common shares beneficially owned by each proposed nominee and by the
notifying shareholder; and (d) any other information required to be disclosed
with respect to a nominee for election as a director under the proxy rules
promulgated under the Exchange Act. Each such notification must be accompanied
by the written consent of the proposed nominee to serve as a director of Peoples
if elected. Nominations not made in accordance with the Regulations of Peoples,
as determined by the Chairman of the Annual Meeting will be disregarded.
The following table gives certain information concerning the current
directors who will continue to serve after the Annual Meeting. Unless otherwise
indicated, each individual has had his principal occupation for more than five
years.
Position(s) Held With Peoples and Continuously For Term
Nominee Age its Subsidiaries and Principal Occupation(s) Since Expiring In
------- --- -------------------------------------------- ----- -----------
Robert E. Evans 62 President and Chief Executive Officer of Peoples; Chief 1980 2004
Executive Officer and Chairman of the Board of Peoples Bank.
(1)
Frank L. Christy 55 President/Owner of Christy & Associates, Inc., a business 1999 2005
development company located in Marietta, Ohio.
Rex E. Maiden 67 Chairman of the Board of Maiden & Jenkins Construction Co., 1996 2005
Nelsonville, Ohio, contractor for bridges and highways, and
commercial, industrial and educational buildings; Treasurer
and Director of Sunday Creek Coal Co., Nelsonville, Ohio,
holding company for land and minerals (coal and oil);
President and Chairman of the Board of Nelsonville
Consulting and Construction Co., Nelsonville, Ohio, design
consulting firm; Chairman of the Board, Black Top
Contracting, Nelsonville, Ohio, paving contractor; Chairman
of the Board, B T Materials, Nelsonville, Ohio, sand and
gravel mining operation and ready-mix concrete plant. (1)
Robert W. Price 39 Operations Manager, Shelly Materials, Inc. Columbus 2000 2004
District, a division of The Shelly Company. The Shelly
Company is an asphalt and construction materials company
headquartered in Thornville, Ohio, and a wholly-owned
subsidiary of Oldcastle Materials Group, a division of CRH
plc. President of: Smith Concrete Company, a ready-mix
concrete company; Chesterhill Stone Company, a sand,
limestone and gravel company; and Price Inland Terminal
Company, an off-river terminal service providing offloading
and dry bulk storage of raw material.
Thomas C. Vadakin (2) 73 Retired. Formerly director of The Airolite Company, 1989 2004
Marietta, Ohio, a manufacturer of ventilation louvers,
between 1994 and 2002. (1)
Paul T. Theisen (2) 72 Attorney-At-Law. Currently active as a mediator and 1980 2004
arbitrator. For more than 40 years, was a litigator with
TheisenBrock, LPA, Attorneys at Law, Marietta, Ohio, and has
been Of Counsel since 1998. (1)
Joseph H. Wesel 73 President of W.D.A., Inc., Marietta, Ohio, a real estate 1980 2005
holding company; Chairman of the Board of Peoples since
1991. (1)
----------------------------
(1) Also a director of Peoples Bank.
(2) Thomas C. Vadakin and Paul T. Theisen are brothers-in-law.
The Board of Directors held a total of fourteen meetings during Peoples'
2002 Fiscal Year. Each incumbent director attended 75% or more of the aggregate
of the total number of meetings held by the Board of Directors and the total
number of meetings held by all committees on which he served in each case during
his period of service. The Board of Directors has two standing committees: the
Audit Committee and the Compensation Committee.
The AUDIT COMMITTEE is comprised of seven independent directors, as that
term is defined for the purposes of the NASDAQ listing requirements: Wilford D.
Dimit, Chairman; Carl Baker, Jr.; George W. Broughton; Frank L. Christy; Robert
W. Price; Thomas C. Vadakin; and Joseph H. Wesel. The Peoples Bancorp Inc. Board
of Director's Audit Committee Charter, as approved by the Board of Directors,
governs the Audit Committee. The activities of the Audit Committee are detailed
in the Audit Committee Report to Shareholders.
The COMPENSATION COMMITTEE is comprised of six independent directors, as
that term is defined for the purposes of the NASDAQ listing requirements: Joseph
H. Wesel, Chairman; Carl Baker, Jr.; Frank L. Christy; Wilford D. Dimit; Rex E.
Maiden; and Thomas C. Vadakin, none of whom is a compensated executive officer
or employee of Peoples or its subsidiaries. The function of the Compensation
Committee is to review and recommend for approval by the Board of Directors the
salaries, bonuses, employment agreements and employee benefit plans for officers
and employees, to supervise the operation of Peoples' compensation plans,
including its stock option plans, to select those eligible employees who may
participate in each plan (where selection is required) and prescribe (where
permitted under the terms of the plan) the terms of any stock options granted
under any stock option plan of Peoples.
The Board of Directors does not have a standing nominating committee or
committee performing similar functions.
[AUDIT COMMITTEE
REPORT TO SHAREHOLDERS
The Audit Committee oversees Peoples' financial reporting process on behalf
of the Board of Directors. Management has the primary responsibility for the
consolidated financial statements and the reporting process including the
systems of internal controls. In fulfilling its oversight responsibilities, the
Audit Committee reviewed the audited consolidated financial statements in the
Annual Report with management including a discussion of the quality not just the
acceptability of the accounting principles, the reasonableness of significant
judgments, and the clarity of disclosures in the financial statements.
The Board of Directors appointed Ernst & Young LLP ("E&Y") as independent
auditors for Peoples during the 2002 Fiscal Year. E&Y is responsible for
expressing an opinion on the conformity of the audited consolidated financial
statements with generally accepted accounting principles. The Audit Committee
reviewed with E&Y their judgments as to the quality, not just the acceptability,
of Peoples' accounting principles and such other matters as are required to be
discussed with the Audit Committee under generally accepted auditing standards
and Statement on Auditing Standards No. 61. In addition, the Audit Committee has
discussed with E&Y the auditors' independence from management and Peoples,
including the matters in the written disclosures required by the Independence
Standards Board Standard No. 1, Independence Discussions With Audit Committee.
The Audit Committee considered the non-audit services rendered by E&Y with the
compatibility of the auditors' independence.
The Audit Committee discussed with Peoples' internal auditors and E&Y the
overall scope and plans for their respective audits. The Audit Committee met
with the internal auditors and E&Y, with and without management present, to
discuss the results of their examinations, their evaluations of Peoples'
internal controls, and the overall quality of Peoples' financial reporting. The
committee held four meetings during fiscal year 2002.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved) the
audited consolidated financial statements be included in the Annual Report on
Form 10-K for the year ended December 31, 2002, for filing with the Securities
and Exchange Commission. The Audit Committee has also recommended to the Board
of Directors the selection of E&Y as Peoples' independent auditors for the 2003
fiscal year.
Submitted by the Audit Committee of Peoples' Board of Directors:
Wilford D. Dimit, Chairman; Carl Baker, Jr.; George W. Broughton;
Frank L. Christy; Robert W. Price; Thomas C. Vadakin; and
Joseph H. Wesel, Members.]
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee meets periodically to review and recommend for
approval by the Board of Directors salaries, bonuses, employment agreements and
employee benefits plans for officers and associates, including executive
officers of Peoples. The Committee also supervises the operation of Peoples'
compensation plans, selects those eligible associates who may participate in
each plan (where selection is permitted) and prescribes (where permitted under
the terms of the plan) the terms of any stock options granted under any stock
option plan of Peoples. The Compensation Committee met three times during the
2002 Fiscal Year.
Section 162(m) of the Internal Revenue Code of 1986, as amended, prohibits
Peoples from claiming a deduction on its federal income tax return for
compensation in excess of $1 million paid for a given fiscal year to the chief
executive officer (or person acting in that capacity) at the close of Peoples'
fiscal year and the four most highly compensated officers of Peoples, other than
the chief executive officer, at the end of Peoples' fiscal year. The $1 million
compensation deduction limitation does not apply to "performance-based
compensation". Due to the fact that all executive officers of Peoples receive
compensation at levels substantially below the $1 million deductibility limit,
the Compensation Committee does not propose at this time to present for
shareholder approval performance goals such as those provided in the Performance
Compensation Program ("Program") discussed below. The 1995 Stock Option Plan,
1998 Stock Option Plan, and 2002 Stock Option Plan comply with Section 162(m) so
that any compensation which may be received by executive officers of Peoples
under those plans will qualify as "performance-based". The Compensation
Committee will rely, from time to time, upon the advice of Peoples' General
Counsel regarding the appropriateness of presenting the Program, or any similar
plan, to shareholders.
The Compensation Committee operates under the principle that the
compensation of executive officers should be directly and significantly related
to the financial performance of Peoples. The compensation philosophy of Peoples
reflects a commitment to reward executive officers for performance through cash
compensation and through plans designed to enhance the long-term commitment of
officers and associates to Peoples and its subsidiaries. Peoples seeks to
attract and retain quality talent, which is key to the short and long-term
success of Peoples. In order to accomplish this goal, Peoples seeks to pay its
executive officers base salaries that are competitive and comparable to other
financial institutions of similar size and overall performance.
The cash compensation program for executive officers consists of two
elements, a base salary component and an incentive component payable under the
Program. The combination of base salary and incentive compensation is designed
to relate total cash compensation levels to the performance of Peoples, its
subsidiaries and the individual executive officer. The Committee reviewed
comparative salary data for the chief executive officer from various sources of
information including the 2001 SNL Executive Compensation Review prepared by SNL
Securities for a Midwest peer group of publicly traded bank holding companies
(30 participants); 2001 Bank Compensation Survey as prepared by Crowe, Chizek
and Company llp for Midwestern banks of the asset size $500 million - $1 billion
(20 banks participating with an average asset size of $657 million) and greater
than $1 billion (17 banks participating with an average asset size of $2.1
billion); and the 2001 Financial Institutions Compensation Survey for Ohio banks
of the asset size greater than $500 million (7 participants with an average
asset size of $2.0 billion). The Committee approved a base salary increase of
6.2% for Mr. Evans for 2002 Fiscal Year to $290,000. The Committee was of the
opinion the adjustments made were necessary and appropriate to provide
reasonably competitive compensation.
In late 1996, Peoples established the Program in which all associates of
Peoples and its subsidiaries are eligible to participate. The Program is
designed to reward all associates for balanced growth and increased
profitability. The amount of the award available for distribution is based upon
Peoples' performance with regard to specified performance goals. In 2002, the
incentive payout for certain officers, including executive officers, was based
on Peoples' consolidated financial results and individual performance as it
related to certain individual qualitative and quantitative incentive objectives
specifically related to their areas of responsibility and aligned with overall
corporate objectives. The incentive payout for all other associates was based on
Peoples' consolidated financial results and an assessment of their performance
based on their individual job requirements. The allocation of the bases for the
payout percentage may be adjusted on an annual basis.
In 2002, the corporate performance goals focused equally on earnings per
share, return on average equity, and the non-interest income leverage ratio,
which is a measure of non-interest income relative to operating expense. The
Program compared current year performance to the immediately prior year and
rewarded associates for incremental growth in the key performance goals
previously listed. Enhanced performance in relation to the performance goals
creates higher incentive bonuses.
The incentive compensation of Mr. Evans was based on Peoples' consolidated
financial results using the aforementioned key performance goals. During the
2002 Fiscal Year, performance goals were exceeded resulting in a payout in 2003,
for the 2002 Fiscal Year, to Mr. Evans of 47.9% of his base salary. The
incentive compensation of the other executive officers listed on page 11, except
Mr. Yazombek (described below), was based on a combination of Peoples'
consolidated financial results, as previously described, with a 75% weighting
and the remaining 25% was based on qualitative and or quantitative performance
measures related to each executive officer's respective areas of responsibility.
The incentive compensation of Mr. Yazombek, Chief Lending Officer, was based on
Peoples' consolidated financial results using the key performance goals with a
50% weighting, 25% based on corporate loan goals/asset quality measures, and the
final 25% was based on personal loan goals. Executive officers are required to
defer 25% of their incentive compensation for a period of three (3) years and
have an option to defer any of remaining incentive until they reach retirement
age. Interest is accrued at 50% of Peoples' return on average equity achieved
during the calendar year.
Peoples' long-term compensation program consists primarily of options
granted under Peoples' stock option plans. The Compensation Committee believes
that stock ownership by members of Peoples' management and stock-based
performance compensation arrangements are important in aligning the interests of
management with those of shareholders, generally in the enhancement of
shareholder value. Options are granted with an exercise price equal to the fair
market value of Peoples' common shares on the date of grant. If there is no
appreciation in the fair market value of Peoples' common shares, the options are
valueless. In the past several years, the Compensation Committee granted options
based upon its subjective determination of the relative current and future
contribution each officer has or may make to the long-term welfare of Peoples.
During 2002, the Compensation Committee granted options under the 2002 Stock
Option Plan based on a combination of corporate goals and/or specific individual
goals, with weightings between corporate and individual goals similar to that
used under the Program for each executive officer as described in the previous
paragraph.
In order to further enhance Mr. Evans' long-term commitment to Peoples
Bank, Peoples Bank entered in a Deferred Compensation Agreement with him in
1976. Under this agreement, Mr. Evans agreed to serve Peoples Bank as an
employee until he reaches age 65 or until his earlier retirement, disability or
death and agreed not to engage in activities in competition with Peoples Bank.
The amount of $5,000 is automatically accrued to Mr. Evans' account upon the
completion of each year of service to Peoples Bank until he reaches normal
retirement age.
At various times in the past, Peoples has adopted broad-based employee
benefit plans in which Peoples' executive officers are permitted to participate
on the same terms as non-executive officer associates who meet applicable
eligibility criteria, subject to legal limitations on the amounts that may be
contributed or the benefits that may be payable under the plans.
To enhance the long-term commitment of the officers and associates of
Peoples and its subsidiaries, Peoples established the Peoples Bancorp Inc.
Retirement Savings Plan (the "Peoples 401(k) Plan"). All officers and associates
of Peoples and its subsidiaries may participate in the Peoples 401(k) Plan, upon
satisfying applicable eligibility criteria. Peoples' matching contributions and
participant contributions may be invested in common shares providing each
participant with motivation toward safe and sound long-term growth of Peoples.
Peoples' matching contributions may vary at the discretion of the Board of
Directors.
The Compensation Committee will continue to monitor compensation issues to
ensure adequate and appropriate compensation of Peoples' executive officers
while creating a mutuality of interest between executive officers and
shareholders through compensation structures that share the rewards and risks of
strategic decision-making.
Submitted by the Compensation Committee of Peoples' Board of Directors:
Joseph H. Wesel, Chairman; Frank L. Christy; Wilford D. Dimit; Rex E.
Maiden; and Thomas C. Vadakin, Members
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary of Cash and Certain Other Compensation
----------------------------------------------
The following table shows, for the last three fiscal years, the cash
compensation paid by Peoples and its subsidiaries, as well as certain other
compensation paid or accrued for those years, to Robert E. Evans, the Chief
Executive Officer of Peoples and the four other most highly compensated
executive officers of Peoples.
SUMMARY COMPENSATION TABLE
--------------------------
Annual Compensation
-------------------
Long Term
Compensation
Salary Awards All Other Compensation
-------------------------- ---------------- --------------------------
Common Interest on
Shares Deferred
Directors' Underlying Incentive
Name and Principal Position Year Base Salary Fees (1) Bonus (2) Options (3) Payment All Other (4)
--------------------------- ---- ------ ----- ----- ------- ------- ---------
Robert E. Evans 2002 $290,000 $ 17,800 $ 139,000 10,155 $ 1,915 $ 10,272
President & Chief Executive Officer 2001 $273,160 $ 15,850 $ 86,592 -- -- $ 11,800
2000 $260,660 $ 16,700 $ 30,940 3,000 -- $ 13,451
David B. Baker 2002 $150,000 -- $ 48,600 2,672 $ 2,576 $ 6,000
Executive Vice President 2001 $147,040 -- $ 29,120 -- -- $ 6,269
2000 $126,349 $ 200 $ 9,680 3,000 -- $ 5,263
John W. Conlon 2002 $141,000 -- $ 54,144 3,545 $ 1,417 $ 5,953
Chief Financial Officer and Treasurer 2001 $132,342 -- $ 35,600 -- -- $ 5,641
2000 $110,500 -- $ 8,696 3,000 -- $ 4,618
Larry E. Holdren 2002 $150,000 -- $ 59,550 3,649 $ 3,284 $ 5,500
Executive Vice President 2001 $145,634 -- $ 37,128 -- -- $ 6,219
2000 $125,005 -- $ 9,837 3,000 -- $ 5,211
Joseph S. Yazombek 2002 $150,000 -- $ 59,700 4,221 $ 2,310 $ 6,377
Executive Vice President/ 2001 $145,600 -- $ 41,787 -- -- $ 6,211
Chief Lending Officer 2000 $123,000 $ 200 $ 9,680 3,000 -- $ 4,927
----------------------------
(1) Fees received by Mr. Evans for services rendered as a director of Peoples
and its subsidiaries. Fees received by Mr. Baker and Mr. Yazombek for
services rendered during 2000 as directors of Peoples Bank fsb, a
subsidiary of Peoples at time of payment of the fees.
(2) All bonuses were earned under the Performance Compensation Program, and
are reported for the fiscal year for which they were earned. Bonuses are
traditionally paid during the first quarter of the following fiscal year.
(3) All numbers have been adjusted for a 10% stock dividend issued on
September 12, 2001 and June 28, 2002.
(4) "All Other" includes contributions by Peoples to the Peoples 401(k) Plan
on behalf of each of the named executive officers to match their pre-tax
elective deferral contributions (included under "Salary"). For Mr. Evans,
"All Other" also includes the amount of $5,000, which was accrued
pursuant to the terms of a Deferred Compensation Agreement between Mr.
Evans and Peoples. See the discussion under "Deferred Compensation
Agreement".
Grant of Options
----------------
The following table sets forth information concerning individual grants of
options made under Peoples' 2002 Stock Option Plan during the 2002 Fiscal Year
to the named executive officers. Peoples has never granted stock appreciation
rights.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at
Assumed Annual Rates of
Number of % of Total Share Price Appreciation for
Common Shares Options Granted Exercise Option Term (2)
Underlying to Employees Price Expiration ------------------------------
Name Options Granted (1) in Fiscal Year ($/Share) Date 5% 10%
---- --------------- -------------- --------- ---- -- ---
Robert E. Evans 11,170 16.04% $ 24.77 5/9/2012 $ 174,024 $ 441,012
David B. Baker 2,939 4.22% $ 24.77 5/9/2012 $ 45,788 $ 116,037
John W. Conlon 3,899 5.60% $ 24.77 5/9/2012 $ 60,745 $ 153,939
Larry E. Holdren 4,014 5.77% $ 24.77 5/9/2012 $ 62,537 $ 158,480
4,643 6.67% $ 24.77 5/9/2012 $ 72,336 $ 183,314
Joseph S. Yazombek
-------------------------
(1) All options were granted under the 2002 Stock Option Plan, and are 100%
exercisable three years after date of grant. If employment with Peoples
and its subsidiaries is terminated by reason of death, disability, or
retirement in accordance with standard retirement policies of Peoples,
vesting is accelerated and exercisable the earlier of 12 months from the
date of termination or expiration of the option. If employment is
voluntarily terminated, only those options exercisable on the date of
termination are exercisable the earlier of 12 months from the date of
termination or expiration of the option. No option may be exercised after
the date of termination if termination is for "cause".
(2) The dollar amounts reflected in this table are the result of
calculations at the 5% and 10% annual appreciation rates set by the SEC
for illustrative purposes, and assume the options are held until their
expiration date. Such dollar amounts are not intended to forecast future
financial performance or possible future appreciation in the prices of
Peoples common shares. Shareholders are therefore cautioned against
drawing any conclusions from the appreciation data shown, aside from the
fact the optionee will only realize value from the option grants shown if
the price of Peoples common shares appreciates.
Option Exercises and Holdings
-----------------------------
The following table summarizes information concerning options exercised
during, and unexercised options held as of the end of the 2002 Fiscal Year by
each of the named executive officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
-------------------------------------------------------------------------
Number of
Common Shares Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Name at Fiscal Year End (1) at Fiscal Year End (2)
---- ------------------------------ ------------------------------
Number of
Common Shares
Underlying
Options Value
Exercised Realized Exercisable Unexercisable Exercisable Unexercisable
------------- -------- ----------- ------------- ----------- -------------
Robert E. Evans 9,302 $ 78,797 40,929 35,272 $ 556,746 $ 204,082
David B. Baker - $ - 30,062 12,253 $ 405,057 $ 99,331
John W. Conlon 1,936 $ 32,247 22,872 13,213 $ 281,028 $ 100,125
Larry E. Holdren 9,302 $159,932 19,293 13,328 $ 220,908 $ 100,220
Joseph S. Yazombek - $ - 28,595 13,957 $ 377,163 $ 100,741
--------------------------
(1) These numbers have been adjusted to reflect 10% stock dividend issued on June 28, 2002.
(2) "Value of Unexercised In-the-Money Options at FY-End" is based upon the
fair market value of Peoples' common shares on December 31, 2002 ($25.60)
less the exercise price of in-the-money options at the end of the 2002
Fiscal Year.
Pension Plan
------------
The following table shows the estimated annual pension benefits payable
upon retirement at age 65 on a lifetime annuity basis under the Peoples Bancorp
Inc. Retirement Plan, a funded, noncontributory pension plan (the "Pension
Plan"), to a covered participant in specified compensation and years of service
classifications.
PENSION PLAN TABLE
Years of Service
---------------------------------------------------
Annualized Average
Monthly Compensation
-------------------- --------- --------- --------- ---------- ----------
5 20 25 30 35
--------- --------- --------- ---------- ----------
$125,000 $32,272 $43,030 $53,787 $ 64,545 $ 64,545
$150,000 $39,397 $52,530 $65,662 $ 78,795 $ 78,795
$175,000 $46,522 $62,030 $77,537 $ 93,045 $ 93,045
$200,000 $53,647 $71,530 $89,412 $107,295 $107,295
and over
Benefits listed in the Pension Plan Table are not subject to deduction for
Social Security benefits or other amounts and are computed on a lifetime annuity
basis.
Monthly benefits upon normal retirement (age 65) are based upon 40% of
"average monthly compensation" plus 17% of the excess, if any, of "average
monthly compensation" over "covered compensation". For purposes of the Pension
Plan, "average monthly compensation" is based upon the monthly compensation
(including regular salary and wages, overtime pay, bonuses and commissions) of
an employee averaged over the five consecutive credited years of service which
produce the highest monthly average within the last ten years preceding
retirement and "covered compensation" is the average of the 35 years of social
security wage bases prior to social security retirement age. As of the end of
the 2002 Fiscal Year, "covered compensation" for Mr. Evans was $48,252, Mr.
Baker $60,552, Mr. Conlon $58,608, Mr. Holdren $62,472, and Mr. Yazombek
$73,056. 2002 annual compensation, to the extent determinable, for purposes of
the Pension Plan, for Mr. Evans was $200,000, Mr. Baker $150,000, Mr. Conlon
$160,580, Mr. Holdren $150,000, and Mr. Yazombek $165,670. As of the end of the
2002 Fiscal Year, credited years of service for Mr. Evans were 32, Mr. Baker 28,
Mr. Conlon 20, Mr. Holdren 21, and Mr. Yazombek 19.
Deferred Compensation Agreement
-------------------------------
On November 18, 1976, Peoples Bank entered into a Deferred Compensation
Agreement with Mr. Evans. Under this, Mr. Evans agreed to serve Peoples Bank as
an employee until he reaches age 65 or until his earlier retirement, disability
or death, and agreed not to engage in activities in competition with Peoples
Bank. Under this Agreement, Mr. Evans or his beneficiaries are entitled to
receive specified amounts upon Mr. Evans' retirement, disability or death, which
amounts are payable monthly for ten years (with interest) or in one lump sum at
the election of Peoples Bank. The principal amount payable to Mr. Evans is based
upon the sum of the amounts accrued for his account during his years of
employment with Peoples Bank. During Peoples' 2002 Fiscal Year, the amount of
$5,000 was accrued for Mr. Evans' account pursuant to his Deferred Compensation
Agreement and as of December 31, 2002, a total of $130,000 had been accrued for
his account. The amount of $5,000 will be accrued for Mr. Evans' account upon
the completion of each year of service to Peoples Bank until he reaches normal
retirement age.
Directors' Compensation
-----------------------
Each director of Peoples received $850 per calendar quarter and $600 per
meeting attended during the 2002 Fiscal Year. Each director of Peoples also
serving on a Board committee received $50 for attending each committee meeting
of less than one hour duration, or $100 for attending each committee meeting in
excess of one hour. Each director of Peoples, other than Robert E. Evans, who
also served as a director of Peoples Bank received $600 per calendar quarter,
and $400 for each regular monthly meeting attended, during the 2002 Fiscal Year.
Mr. Evans received no quarterly compensation as a director of Peoples Bank, and
$250 for each regular monthly meeting attended.
Since 1991, Peoples has maintained the Peoples Bancorp Inc. Deferred
Compensation Plan for Directors of Peoples Bancorp Inc. and Subsidiaries (the
"Directors' Plan"). Voluntary participation in the Directors' Plan enables a
director of Peoples, or of one of its subsidiaries, to defer all or a part of
his or her directors' fees, including federal income tax thereon. Since January
2, 1998, directors have been permitted to allocate their deferrals between a
cash account (earning interest equal to Peoples Bank's three-year CD interest
rate) and a stock account (credited with common shares based upon on the amount
deferred and cash dividends on such common shares). The only right a participant
has with respect to his cash account and/or stock account is to receive
distributions upon retirement from service as a director. Distribution of the
deferred funds is made in a lump sum or annual installments beginning in the
first year in which the person is no longer a director. The stock account will
be paid only in common shares and the cash account will be paid only in cash.
Pursuant to their respective terms, options have been automatically granted
to non-employee directors of Peoples ("Non-Employee Director") under Peoples'
1993 Stock Option Plan (the "1993 Plan"), 1995 Stock Option Plan (the "1995
Plan"), and 1998 Stock Option Plan (the "1998 Plan"). No options have been
granted to Non-Employee Directors under the 1993 Plan since April 10, 1997; no
options have been granted to Non-Employee Directors under the 1995 Plan since
April 15, 1999; and no options have been granted to Non-Employee Directors under
the 1998 Plan since March 10, 2000. All options were granted with an exercise
price equal to 100% of the fair market value of the underlying common shares on
the date of grant and a ten-year term.
Under the 1995 Plan and 1998 Plan, if a Non-Employee Director ceases to be
a director for any reason other than his death or for "cause", such options may
be exercised in full until the expiration of the term of the options. However,
if the former Non-Employee Director dies prior to the expiration of the term of
his options, those options may only be exercised for a period of two years
following his death, subject to the stated term of the options. If a
Non-Employee Director ceases to be a director for cause, all options will
immediately terminate.
Under the 1993 Plan, if a Non-Employee Director ceases to be a director for
reasons other than his death, such options may be exercised for a period of
three months, subject to their stated term. If a Non-Employee Director dies,
those options may be exercised for a period of one year, subject to their stated
term.
Pursuant to the terms of the 2002 Stock Option Plan (the "2002 Plan"), on
April 11, 2002, each Non-Employee Director was automatically granted an option
to purchase 1,100 common shares (as adjusted for the June 14, 2002, 10% stock
dividend), and will be granted an option to purchase an equivalent number of
shares (as may be adjusted for future changes in capitalization) on each Annual
Meeting date. All options are 100% exercisable one year from the date of grant.
Under the 2002 Plan, if a Non-Employee Director ceases to be a director due to
death, disability (with three years service), or retirement (with five years
service), such options immediately vest and may be exercised the earlier of (i)
twelve months, or (ii) until the expiration of the option period, subject to
their stated term. If a Non-Employee director voluntarily ceases service as a
director, only those options exercisable on the date of termination may be
exercised pursuant to the above schedule. If a Non-Employee Director ceases to
be a director for cause, all options will terminate immediately.
PERFORMANCE GRAPH
The following line graph compares the yearly percentage change in Peoples'
cumulative total shareholder return (as measured by dividing (i) the sum of (A)
the cumulative amount of dividends for the measurement period, assuming dividend
reinvestment, and (B) the difference between the price of Peoples' common shares
at the end and the beginning of the measurement period; by (ii) the price of
Peoples' common shares at the beginning of the measurement period) against the
cumulative return for an index comprised of all domestic common shares traded on
the NASDAQ National Market and the NASDAQ Small Cap Market ("NASDAQ Stock Market
(U.S. Companies)"), and an index comprised of all depository institutions (SIC
Code #602) and depository institutions holding companies (SIC Code #671) that
are traded on the NASDAQ National Market and the NASDAQ Small Cap Market
("NASDAQ Bank Stocks") for the five-year period ended December 31, 2002.
(ACTUAL NUMBERS PLOTTED ON A GRAPH)
NASDAQ STOCKS
Year Ended Peoples Bancorp Inc. NASDAQ Bank Stocks (U.S. Companies)
---------- -------------------- ------------------ ----------------
12/31/97 $100.00 $100.00 $100.00
12/31/98 $ 89.23 $140.99 $ 99.36
12/31/99 $ 88.56 $262.00 $ 95.51
12/31/00 $ 69.42 $157.59 $108.94
12/31/01 $ 97.98 $125.05 $117.94
12/31/02 $152.95 $ 86.38 $120.98
Notes: 1. Total return assumes reinvestment of dividends.
2. Fiscal year ending December 31.
3. Return based on $100 dollars invested on December 31, 1997,
in Peoples' common shares, an index for NASDAQ Stock Market
(U. S. Companies), and an index for NASDAQ Bank Stocks.
PROPOSED AMENDMENT OF AMENDED ARTICLES OF INCORPORATION TO INCREASE
AUTHORIZED NUMBER OF COMMON SHARES
----------------------------------
(Item 3 on Proxy)
PROPOSAL
The Amended Articles of Incorporation (the "Amended Articles") of Peoples
currently authorize 12,000,000 shares, all of which are common shares, without
par value. The Board of Directors unanimously adopted a resolution proposing and
declaring it advisable that Article Fourth of the Amended Articles be amended in
order to increase the authorized number of shares of Peoples to 24,000,000
shares, all of which will be common shares, without par value, and recommending
to the shareholders of Peoples the adoption of the proposed amendment. The
proposed increase in the authorized number of common shares would be
accomplished by amending Article Fourth of the Amended Articles of Peoples to
read as follows:
FOURTH: The authorized number of shares of the Corporation shall be
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24,000,000, all of which shall be common shares, each without par value.
PURPOSE
Of the 12,000,000 common shares currently authorized, as of February 14,
2003, 9,589,534 were issued and outstanding; 59,351 were issued and held by
Peoples Bank as trustee under a Rabbi Trust Agreement with Peoples in connection
with the Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and
Subsidiaries and included in treasury shares; and 1,043,023 were reserved for
issuance under the stock option plans maintained by Peoples. Common shares also
may be acquired by (i) the trustee of the Peoples Bancorp Inc. Retirement
Savings Plan (the "401(k) Plan") on behalf of participants pursuant to directed
contributions, and employer matching contributions, to be invested in the
investment fund which invests in common shares of Peoples; (ii) the
administrator of the Peoples Bancorp Inc. Dividend Reinvestment Plan (the
"DRIP") on behalf of participants in the DRIP; and (iii) Peoples Bank as trustee
under the Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and
Subsidiaries.
In addition, Peoples has entered into an Agreement and Plan of Merger,
dated as of November 29, 2002 (the "KBI Merger Agreement"), with Kentucky
Bancshares Incorporated, a Kentucky bank holding company ("KBI"), under which
Peoples has agreed to acquire all of the issued and outstanding common shares of
KBI with consideration consisting of a combination of cash and Peoples common
shares. In exchange for the KBI common shares, the KBI Merger Agreement provides
the KBI shareholders with an option to elect to receive cash, Peoples common
shares, or a combination of both. The aggregate consideration to be paid to the
shareholders of KBI in the transaction is not expected to exceed $31.4 million,
of which approximately half would be paid in cash and approximately half in
Peoples common shares, depending upon the elections made by KBI shareholders and
the market price of Peoples common shares. In the event the KBI shareholders
elect to receive Peoples common shares, the number of common shares issuable by
Peoples in the transaction will range between 461,627 and 609,348 common shares
as determined by the average daily closing price of Peoples common shares, as
reported on The Nasdaq National Market, for the 30 consecutive trading days
ending at the close of business on the fifth trading day before the KBI
acquisition is consummated. The minimum number of common shares would be issued
if the average share price were $33.00 or more and the maximum number would be
issued if the average share price were $25.00 or less. The KBI acquisition will
be subject to regulatory approvals, approval by the shareholders of KBI and
other customary closing conditions and is expected to be consummated in the
second quarter of 2003.
PEOPLES WILL FILE A REGISTRATION STATEMENT ON FORM S-4 AND OTHER DOCUMENTS
REGARDING THE PROPOSED ACQUISITION OF KBI WITH THE SEC. THIS PROXY STATEMENT
DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES IN CONNECTION WITH THE PROPOSED TRANSACTION WITH KBI. KBI
SHAREHOLDERS ARE URGED TO READ THE FORM S-4, WHEN IT BECOMES AVAILABLE, BECAUSE
IT WILL CONTAIN IMPORTANT INFORMATION. A DEFINITIVE PROXY STATEMENT/PROSPECTUS
WILL BE SENT TO SHAREHOLDERS OF KBI SEEKING THEIR APPROVAL OF THE PROPOSED
TRANSACTION. KBI SHAREHOLDERS MAY OBTAIN FREE COPIES OF THE FORM S-4 AND THE
DEFINITIVE PROXY STATEMENT/PROSPECTUS, WHEN THEY ARE AVAILABLE, AS WELL AS OTHER
DOCUMENTS FILED BY PEOPLES WITH THE SEC ON THE SEC'S WEBSITE OR BY CONTACTING
CHARLES R. HUNSAKER, ESQ., GENERAL COUNSEL OF PEOPLES, AT THE ADDRESS AND
TELEPHONE NUMBER SHOWN ON THE COVER PAGE OF THIS PROXY STATEMENT.
Shareholders of Peoples should understand that they are not being asked to
vote on the adoption of, and a vote in favor of the proposal to adopt the
amendment to Article Fourth of the Amended Articles should not be deemed to be a
vote to adopt, the KBI Merger Agreement. The approval or disapproval of the
proposed amendment to Article Fourth will not affect whether the acquisition of
KBI is consummated.
The additional common shares to be authorized under the proposed amendment
to Article Fourth will have rights identical to the presently issued and
outstanding common shares. Furthermore, adoption of the proposed amendment and
issuance of the additional common shares will not affect the rights of the
holders of presently issued and outstanding common shares, except for effects
incidental to increasing the number of common shares outstanding. Existing
shareholders will have no pre-emptive rights to purchase any common shares
issued in the future.
The Board of Directors believes it is desirable and in the best interest of
Peoples and our shareholders to increase the number of authorized common shares
to 24,000,000 to ensure a sufficient number of common shares are available for
future issuance. The Board believes having a sufficient number of common shares
available for future issuance provides Peoples with additional flexibility to
use common shares to meet business and financial needs as they arise. In
addition, the proposed amendment would enable Peoples to issue additional
authorized common shares as such needs arise without further shareholder
approval, except to the extent otherwise required by applicable law, Peoples'
Amended Articles, or the rules of The Nasdaq Stock Market or any securities
exchange on which the Peoples common shares are then listed. Peoples' common
shares are currently traded on The Nasdaq National Market. The additional common
shares may be used for various corporate purposes, including share splits and
dividends, acquisitions, public offerings and stock option and other stock-based
employee benefit plans.
Except for common shares that may be issued (a) if the KBI acquisition is
consummated, (b) under existing stock option and other stock-based employee
benefit plans of Peoples, (c) under our dividend reinvestment plan, (d) under
our Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and
Subsidiaries, or (e) under the 401(k) Plan, there are no present plans to issue
any authorized common shares, nor are there any pending negotiations,
discussions, agreements or understandings with any third party which involve the
issuance of any of the additional common shares which will be authorized by the
adoption of the proposed amendment to Article Fourth. The Board of Directors
does not intend to issue any of the additional common shares except on terms
which the Board deems to be in the best interests of Peoples and its
shareholders.
The proposed amendment to Article Fourth could be deemed to have an
anti-takeover effect by discouraging an attempt by a third party to acquire
control of Peoples, since Peoples could issue the additional authorized common
shares in an effort to create voting impediments or dilute the common share
ownership of the person seeking to obtain control. Article Seventh of the
Amended Articles of Peoples requires that, if three directors of Peoples vote
against any of the following matters, the affirmative vote of the holders of at
least 75% of the voting power of Peoples entitled to vote thereon is required
before they can be implemented: (i) a proposed amendment to the Amended Articles
or the Regulations of Peoples (including the provisions of the Amended Articles
and the Regulations pertaining to the right of a shareholder to nominate an
individual for election as a director of Peoples, the number of directors, the
right of shareholders to remove directors from office and fill vacancies in the
Board of Directors, or the classified Board); (ii) a proposal to fix or change
the number of directors of Peoples by action of the shareholders; (iii) an
agreement of merger or consolidation; (iv) a proposed combination or majority
share acquisition involving the issuance of common shares of Peoples and
requiring shareholder approval; (iv) a proposal to sell, lease, exchange,
transfer or otherwise dispose of all or substantially all of Peoples' property
and assets; or (v) a proposed dissolution. Otherwise, a majority of the voting
power of Peoples must approve any of the foregoing matters. The proposal to
increase the authorized number of common shares is not in response to any effort
of which Peoples is aware to accumulate common shares or obtain control of
Peoples. The Board of Directors believes the proposal further encourages the
incentive to negotiate with the Board with respect to any proposal to acquire
control of Peoples.
The proposed amendment is not part of a plan by Peoples to adopt other
measures intended to have or having potential anti-takeover effects. In addition
to the provisions of Article Seventh of the Amended Articles discussed above,
the Amended Articles and Regulations of Peoples currently include the following
provisions which may be considered to have anti-takeover effects: (a) the
classification of the Board of Directors into three classes of directors, so
that each class of director serves for three years, with one class being elected
each year; (b) the elimination of cumulative voting in the election of
directors; (c) the requirement that shareholder nominations for election to the
Board of Directors be made in writing and delivered or mailed to the Secretary
of Peoples within specified timeframes; (d) the requirement that holders of
shares entitling them to exercise not less that 75% of the voting power of
Peoples to elect directors in place of those to be removed, vote in favor of the
removal of a director from office and that such removal only be for cause; and
(e) the requirement of written consent of all the shareholders of Peoples in
order to amend the Regulations by an action in writing without a meeting.
RECOMMENDATION AND VOTE
The affirmative vote of the holders of shares entitling them to exercise
not less than a majority of the voting power of Peoples is required to adopt the
proposed amendment to Article Fourth of the Amended Articles. As of February 14,
2003, Peoples' executive officers and directors, their respective associates and
Peoples Bank, through Peoples Financial Advisors group (formerly known as the
Investment and Trust Division of Peoples Bank), held common shares representing
approximately 27.62% voting power of Peoples.
The effect of an abstention or a broker non-vote on the proposal is the
same as a "no" vote. If the amendment is adopted, it will become effective upon
the filing of a certificate of amendment to the Amended Articles with the Ohio
Secretary of State, which is expected to be accomplished as promptly as
practicable after such adoption.
The Board of Directors recommends that the shareholders vote FOR adoption
of the proposed amendment to Article Fourth of Peoples' Amended Articles.
All valid proxies received prior to the Annual Meeting which do not specify
how common shares should be voted (excluding broker non-votes) will be voted for
the adoption of the proposed amendment to Article Fourth.
PROPOSED AMENDMENTS OF CODE OF REGULATIONS
TO PERMIT ELECTRONIC PROXIES, NOTICES, WAIVERS AND MEETINGS
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(Item 4 on Proxy)
PURPOSE
In order to position Peoples to take advantage of continuing technological
advancements to expedite communications, including the Internet, and accommodate
recent changes in Ohio General Corporation Law (the "OGCL"), the Board of
Directors believes it is desirable and in the best interests of Peoples' and its
shareholders to amend Peoples' Regulations to permit:
(A) appointment of shareholder proxies in any manner permitted by
Ohio law;
(B) shareholders and directors to receive notice of shareholder
meetings and director meetings in any manner permitted by Ohio
law;
(C) shareholder meetings to be held in any manner permitted by Ohio
law;
(D) waivers of notice of shareholder meetings and director meetings
to be given through the use of an electronic or other
transmission capable of authentication that appears to have been
sent by the shareholder or director and contains a waiver by that
person;
(E) shareholders and directors to take action without a meeting by a
writing or writings signed by all shareholders or directors,
respectively, including a writing in the form of an electronic or
other transmission capable of authentication that appears to have
been sent by the shareholder or director and contains the
affirmative vote or approval of that person; and
(F) shareholders who participate in a shareholder meeting through the
use of communications equipment to be treated as being present at
the meeting for purposes of determining the existence of a quorum
and make corresponding amendments to other provisions of Peoples'
Regulations to provide that shareholders may participate in
shareholder meetings through the use of communications equipment.
PROPOSALS
(A) Amendment of Peoples' Regulations to permit appointment of shareholder
proxies in any manner permitted by Ohio law.
Section 1.10 of Peoples' Regulations presently allows a shareholder to vote
by proxy, if the proxy appointment is in writing and signed by the shareholder.
Effective September 13, 1999, The OGCL was amended to expand the methods a
shareholder can use to appoint a proxy. The OGCL now permits a shareholder to
appoint a proxy by any verifiable communication authorized by the person
appointing the proxy. Any transmission that creates a record capable of
authentication that appears to have been transmitted by the person appointing a
proxy is permitted, and would include electronic mail and telephone, as well as
traditional written proxies. Peoples' Regulations currently do not expressly
provide for shareholder appointment of a proxy by electronic mail, telephone or
other electronic media. The proposed amendment to Section 1.10 would clarify and
confirm that shareholders are expressly authorized to utilize the more modern
forms of proxy appointment now permitted by the OGCL.
Peoples' Board of Directors has unanimously approved, and recommends that
shareholders adopt, an amendment to Section 1.10 of the Regulations to permit a
shareholder to use electronic mail, telephone and other methods to appoint a
proxy. The proposed amendment would expressly provide that a shareholder could
appoint a proxy by any method authorized by Ohio law.
The text of Section 1.10, as amended, would read as follows:
Section 1.10. Proxies.
----------------------
At meetings of the shareholders, any shareholder of
record entitled to vote thereat may be represented and may
vote by a proxy or proxies appointed by an instrument in
writing signed by such shareholder or appointed in any other
manner permitted by Ohio law. Any such instrument in writing
or record of any such appointment shall be filed with or
received by the secretary of the meeting before the person
holding such proxy shall be allowed to vote thereunder. No
appointment of a proxy is valid after the expiration of eleven
months after it is made unless the writing or other
communication which appoints such proxy specifies the date on
which it is to expire or the length of time it is to continue
in force.
(B) Amendment of Peoples' Regulations to permit shareholders and directors to
receive notice of shareholder meetings and director meetings in any manner
permitted by Ohio law.
Section 1.04 of Peoples' Regulations presently requires that written notice
of a shareholder meeting be given either by "personal delivery or by mail."
Effective May 16, 2002, the OGCL was amended to expand the methods by which a
shareholder may receive notice of meetings to include notices via personal
delivery, mail, overnight delivery service or any other means of communication
authorized by the shareholder to whom the notice is given. Under federal
securities laws and regulations, electronic delivery of proxy soliciting
materials (including meeting notices) may be substituted for paper delivery if a
shareholder consents to the electronic delivery. Peoples' Regulations currently
do not authorize a shareholder to receive notices by electronic mail or other
electronic media. The amendment to Section 1.04 would allow shareholders to
receive notices in any manner permitted by Ohio law.
Similarly, Section 2.07 of the Regulations presently limits the manner in
which notice of a director meeting may be given. Effective May 16, 2002, the
OGCL was amended to expand the methods by which a director may receive notice of
meetings to include notices via personal delivery, mail, overnight delivery
service or any other means of communication authorized by the director to whom
the notice is given. Peoples' Regulations currently do not authorize a director
to receive notices by electronic mail or other electronic media. The amendment
to Section 2.07 would allow directors to receive notices in any manner permitted
by Ohio law.
The Board of Directors has unanimously approved, and recommends that the
shareholders adopt, amendments to Sections 1.04 and 2.07 of the Regulations to
permit notices of meetings to be given to shareholders and directors in any
manner permitted by Ohio law.
The text of Section 1.04, as amended, would read as follows:
Section 1.04. Notice of Meetings.
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(A) Written notice stating the time, place, if any, and purposes of a
meeting of the shareholders, and the means, if any, by which
shareholders can be present and vote at the meeting through the
use of communications equipment, and any other matters related to
the conduct of the meeting required by Ohio law to be specified
in such notice shall be given by personal delivery, by mail, by
overnight delivery service, or by any other means of
communication authorized by the shareholder to whom notice is
given. Any such notice shall be given not less than seven nor
more than sixty days before the date of the meeting,
(1) to every shareholder of record entitled to notice of the
meeting,
(2) by or at the direction of the president or the secretary.
If mailed or sent by an overnight delivery service, such notice
shall be sent to the shareholder at the shareholder's address as
it appears on the records of the corporation. If sent by another
means of communication authorized by the shareholder, such notice
shall be sent to the address furnished by the shareholder for
such transmissions. Notice of adjournment of a meeting need not
be given if the time and place, if any, to which it is adjourned
and the means, if any, by which shareholders can be present and
vote at the adjourned meeting through the use of communications
equipment are fixed and announced at the meeting. In the event of
a transfer of shares after the record date for determining the
shareholders who are entitled to receive notice of a meeting of
shareholders, it shall not be necessary to give notice to the
transferee. Nothing herein contained shall prevent the setting of
a record date in the manner provided by law, the Articles or the
Regulations for the determination of shareholders who are
entitled to receive notice of or to vote at any meeting of
shareholders or for any purpose required or permitted by law.
(B) Following receipt by the president or the secretary of a request
in writing, specifying the purpose or purposes for which the
persons properly making such request have called a meeting of the
shareholders, delivered either in person or by registered mail to
such officer by any persons entitled to call a meeting of
shareholders, such officer shall cause to be given to the
shareholders entitled thereto notice of a meeting to be held on a
date not less than seven nor more than sixty days after the
receipt of such request, as such officer may fix. If such notice
is not given within fifteen days after the receipt of such
request by the president or the secretary, then, and only then,
the persons properly calling the meeting may fix the time of
meeting and give notice thereof in accordance with the provisions
of the Regulations.
The text of Section 2.07, as amended, would read as follows:
Section 2.07. Notice of Meetings.
---------------------------------
Notice of the place, if any, and time of each meeting
of directors for which such notice is required by law, the
Articles, the Regulations or the By-Laws shall be given to
each of the directors by at least one of the following
methods:
(A) In a writing mailed or sent by overnight delivery service, not
less than two days before such meeting and addressed to the
residence or usual place of business of a director, as such
address appears on the records of the corporation; or
(B) By personal delivery or by telegram, cablegram, telephone or any
other means of communication authorized by the director, not
later than the day before the date on which such meeting is to be
held.
Notice given to a director by any one of the methods specified in
the Regulations shall be sufficient, and the method of giving notice
to all directors need not be uniform. Notice of any meeting of
directors may be given only by the chairman of the board, the
president or the secretary of the corporation. Any such notice need
not specify the purpose or purposes of the meeting. Notice of
adjournment of a meeting of directors need not be given if the time
and place to which it is adjourned are fixed and announced at such
meeting.
(C) Amendment of Peoples' Regulations to allow our shareholder meetings to be
held in any manner permitted by Ohio law.
Section 1.03 of the Regulations presently provides that meetings of
shareholders must be held at a specified physical "place" within or outside of
the State of Ohio. Effective May 16, 2002, the OGCL was amended to expand the
methods by which shareholder meetings may be conducted, including through
communications equipment or via worldwide web or Internet simulcasting, called
"webcasting." The Regulations currently do not allow shareholder meetings to be
conducted through communications equipment. The amendment to Section 1.03 would
allow shareholder meetings to be held in any manner or place, if any, authorized
by the Board of Directors and permitted by Ohio law. Under current Ohio law, if
the directors elect to permit shareholders to attend a shareholder meeting
through the use of communications equipment, the communications equipment used
must enable the shareholder or proxyholder to participate in the meeting and to
vote on matters submitted to the shareholders, including an opportunity to read
or hear the proceedings of the meeting and to speak or otherwise participate in
the proceedings contemporaneously with those physically present.
The Board of Directors has unanimously approved, and recommends the
shareholders adopt, an amendment to Section 1.03 of the Regulations to permit
meetings of shareholders to be held in any manner authorized by the Board of
Directors and permitted by Ohio law.
The text of Section 1.03, as amended, would read as follows:
Section 1.03. Place of Meetings.
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Meetings of shareholders may be held either within or
outside the State of Ohio. Meetings of shareholders may be
held in any manner or place, if any, determined by the
directors and permitted by Ohio law. If authorized by the
directors, the shareholders and proxyholders who are not
physically present at a meeting of shareholders may attend a
meeting of shareholders by use of communications equipment as
may be permitted by Ohio law.
(D) Amendment of Peoples' Regulations to permit waivers of notice of
shareholder meetings and director meetings to be given through the use of
an electronic or other transmission capable of authentication that appears
to have been sent by the shareholder or director and that contains a waiver
by that person.
Section 1.05 of the Regulations presently states that a shareholder may
waive notice of a shareholder meeting in writing or by attending the shareholder
meeting in person or by proxy without protesting the lack of proper notice.
Similarly, Section 2.08 of the Regulations presently states that a director may
waive notice of a director meeting in writing or by attending the director
meeting without protesting the lack of proper notice. Effective May 16, 2002,
the OGCL was amended to expand the methods by which a shareholder or director
may waive notice of a meeting in writing. The OGCL now expressly recognizes a
written waiver may include electronic mail or an electronic or other
transmission capable of authentication that appears to have been sent by the
shareholder or director, as applicable, and contains a waiver by the shareholder
or director. Peoples' Regulations currently do not recognize written waivers via
electronic mail or other electronic media. The proposed amendments to Sections
1.05 and 2.08 would clarify and confirm that shareholders and directors may
waive notice of a meeting by electronic mail or an electronic or other
transmission capable of authentication that appears to have been sent by the
shareholder or director, as applicable, and contains a waiver by the shareholder
or director.
Additionally, the Board proposes to amend Section 1.05 to provide that a
shareholder may waive notice of a shareholder meeting by attending the meeting
in person, by proxy or through the use of communications equipment without
protesting the lack of proper notice. Permitting shareholders to waive notice of
a shareholder meeting by attending the shareholder meeting through the use of
communications equipment without protesting the lack of proper notice is
consistent with recent changes to the OGCL and the proposed amendment to Section
1.03 of the Regulations which permit shareholders to attend a shareholder
meeting by use of communications equipment.
The Board of Directors has unanimously approved, and recommends that the
shareholders adopt, amendments to Sections 1.05 and 2.08 of the Regulations to
permit waivers of notice of shareholder meetings and director meetings to be
given through the use of an electronic or other transmission capable of
authentication that appears to have been sent by the shareholder or director and
contains a waiver by that person.
The text of Section 1.05, as amended, would read as follows:
Section 1.05. Waiver of Notice.
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Notice of the time, place, if any, and purpose or
purposes of any meeting of shareholders may be waived in
writing, either before or after the holding of such meeting,
by any shareholder, which writing shall be filed with or
entered upon the records of such meeting. The attendance of
any shareholder, in person, by proxy or by the use of
communications equipment, at any such meeting without
protesting the lack of proper notice, prior to or at the
commencement of the meeting, shall be deemed to be a waiver by
the shareholder of notice of such meeting. A telegram,
cablegram, electronic mail, or an electronic or other
transmission capable of authentication that appears to have
been sent by a shareholder and that contains a waiver by that
shareholder is a writing for purposes of this Section 1.05.
The text of Section 2.08, as amended, would read as follows:
Section 2.08. Waiver of Notice.
-------------------------------
Notice of any meeting of directors may be waived in
writing, either before or after the holding of such meeting,
by any director, which writing shall be filed with or entered
upon the records of the meeting. The attendance of any
director at any meeting of directors without protesting, prior
to or at the commencement of the meeting, the lack of proper
notice, shall be deemed to be a waiver by such director of
notice of such meeting. A telegram, cablegram, electronic
mail, or an electronic or other transmission capable of
authentication that appears to have been sent by the director
and that contains a waiver by such director, is a writing for
purposes of this Section 2.08.
(E) Amendment of Peoples' Regulations to permit shareholders and directors to
take action without a meeting by a writing or writings signed by all
shareholders or directors, including a writing in the form of an electronic
or other transmission capable of authentication that appears to have been
sent by the shareholder or director and contains the affirmative vote or
approval of that person.
Section 6.02 of the Regulations presently provides that any action which
may be authorized or taken at a meeting of the shareholders, directors or a
committee of the Board of Directors may be authorized or taken without a meeting
by a writing or writings signed by, all shareholders, directors or members of
the committee of the Board of Directors, respectively. Effective May 16, 2002,
the OGCL was amended to expand the methods by which shareholders and directors
may take actions in writing without a meeting. The OGCL now expressly recognizes
an action may be taken without a meeting by a writing or writings signed by all
shareholders or directors, including a writing in the form of an electronic or
other transmission capable of authentication that appears to have been sent by
the shareholder or director, as applicable, and contains an affirmative vote or
approval of that person. Peoples' Regulations currently do not permit
shareholders or directors to take action without a meeting through the use of
electronic mail or other electronic media. The proposed amendment to Sections
6.02 would permit shareholders, directors and members of a Board committee to
act by a writing or writings signed by all shareholders or directors, including
a writing in the form of an electronic or other transmission capable of
authentication that appears to have been sent by the shareholder or director, as
applicable, and contains an affirmative vote or approval of that person.
The Board of Directors has unanimously approved, and recommends the
shareholders adopt, an amendment to Section 6.02 of the Regulations to permit
shareholders and directors to take action without a meeting through the use of
an electronic or other transmission capable of authentication that appears to
have been sent by the shareholder or director and contains the affirmative vote
or approval of that person.
The text of Section 6.02, as amended, would read as follows:
Section 6.02. Action by Shareholders or Directors Without a Meeting.
--------------------------------------------------------------------
Anything contained in the Regulations to the contrary
notwithstanding, except as provided in Section 6.01, any
action which may be authorized or taken at a meeting of the
shareholders or of the directors or of a committee of the
directors, as the case may be, may be authorized or taken
without a meeting with the affirmative vote or approval of,
and in a writing or writings signed by, all the shareholders
who would be entitled to notice of a meeting of the
shareholders held for such purpose, or all the directors, or
all the members of such committee of the directors,
respectively, which writings shall be filed with or entered
upon the records of the corporation. A telegram, cablegram,
electronic mail, or an electronic or other transmission
capable of authentication that appears to have been sent by a
person described in this Section 6.02 and that contains an
affirmative vote or approval of that person is a signed
writing for the purposes of this Section 6.02. The date on
which that telegram, cablegram, electronic mail, or electronic
or other transmission is sent is the date on which the writing
is signed.
(F) Amendment of Peoples' Regulations to provide that shareholders who
participate in a shareholder meeting through the use of communications
equipment be treated as being present at the meeting for purposes of
determining the existence of a quorum, and to make corresponding amendments
to other provisions of the Regulations to provide that shareholders may
participate in shareholder meetings through the use of communications
equipment.
Section 1.06 of the Regulations presently states that, at any meeting of
shareholders, the holders of a majority of Peoples' voting shares then
outstanding and entitled to vote at the meeting, present in person or by proxy,
will constitute a quorum for the meeting. Effective May 16, 2002, the OGCL was
amended to provide that, unless otherwise provided in a corporation's articles
of incorporation or code of regulations, the shareholders present in person, by
proxy or through the use of communications equipment at any meeting of
shareholders will constitute a quorum for the meeting. The amendment to Section
1.06 of the Regulations would provide that shareholders present at a meeting
through the use of communications equipment will be counted for purposes of
determining the existence of a quorum.
Additionally, Sections 1.08 and 2.03(C) of the Regulations make reference
to shareholders being present at a meeting of shareholders in person or by
proxy. The amendments to Sections 1.08 and 2.03(C) would add language to provide
that shareholders may also be present through the use of communications
equipment as permitted by Ohio law.
The Board of Directors has unanimously approved, and recommends the
shareholders adopt, the amendment to Section 1.06 of the Regulations to provide
that shareholders who participate in a shareholder meeting through the use of
communications equipment be treated as being present at the meeting for purposes
of determining the existence of a quorum, and the amendments to Sections 1.08
and 2.03(C) of the Regulations to reflect that shareholders may participate in
shareholder meetings through the use of communications equipment.
The text of Section 1.06, as amended, would read as follows:
Section 1.06. Quorum.
---------------------
At any meeting of shareholders, the holders of a
majority of the voting shares of the corporation then
outstanding and entitled to vote thereat, present in person,
by proxy or by the use of communications equipment, shall
constitute a quorum for such meeting. The holders of a
majority of the voting shares represented at a meeting,
whether or not a quorum is present, or the chairman of the
board, the president, or the officer of the corporation acting
as chairman of the meeting, may adjourn such meeting from time
to time, and if a quorum is present at such adjourned meeting
any business may be transacted as if the meeting had been held
as originally called.
The text of Section 1.08, as amended, would read as follows:
Section 1.08. Order of Business.
--------------------------------
The order of business at any meeting of shareholders
shall be determined by the officer of the corporation acting
as chairman of such meeting unless otherwise determined by a
vote of the holders of a majority of the voting shares of the
corporation then outstanding, present in person, by proxy or
by the use of communications equipment, and entitled to vote
at such meeting.
The text of Section 2.03(C), as amended, would read as follows:
(C) The election of directors shall be by ballot whenever
requested by the presiding officer of the meeting or by
the holders of a majority of the voting shares
outstanding, entitled to vote at such meeting and
present in person, by proxy or by the use of
communications equipment.
RECOMMENDATION AND VOTE
The affirmative vote of the holders of shares entitling them to exercise
not less than a majority of the voting power Peoples is required to adopt the
proposed amendments to Sections 1.10, 1.04, 2.07, 1.03, 1.05, 2.08, 6.02, 1.06,
1.08 and 2.03(C) of the Regulations. As of February 14, 2003, Peoples' executive
officers and directors, their respective associates and Peoples Bank, through
Peoples Financial Advisors group (formerly known as the Investment and Trust
Division of Peoples Bank), held common shares representing approximately 27.62%
voting power of Peoples.
The effect of an abstention or a broker non-vote on the proposed amendments
to Sections 1.10, 1.04, 2.07, 1.03, 1.05, 2.08, 6.02, 1.06, 1.08 and 2.03(C) of
the Regulations is the same as a "no" vote. If adopted by the shareholders, the
proposed amendments to Peoples' Regulations will become effective immediately
without any additional action.
The Board of Directors recommends that the shareholders vote FOR adoption
of the proposed amendments to Sections 1.10, 1.04, 2.07, 1.03, 1.05, 2.08, 6.02,
1.06, 1.08 and 2.03(C) of Peoples' Regulations.
All valid proxies received prior to the Annual Meeting which do not specify
how common shares should be voted (excluding broker non-votes) will be voted for
the adoption of the proposed amendments to Sections 1.10, 1.04, 2.07, 1.03,
1.05, 2.08, 6.02, 1.06, 1.08 and 2.03(C) of the Regulations.
PROPOSED AMENDMENT OF CODE OF REGULATIONS TO
PROVIDE FOR BOARD COMMITTEES OF ONE OR MORE DIRECTORS
-----------------------------------------------------
(Item 5 on Proxy)
PURPOSE
Section 2.10 of Peoples' Regulations provides that committees of directors
must consist of not less than three directors. Effective March 17, 2000, the
OGCL was amended to permit committees to consist of one or more directors. The
proposed amendment to Section 2.10 would allow committees of our Board of
Directors to consist of one or more directors, subject to any other requirements
as to the number of directors serving on a committee which may be imposed by law
or the rules and regulations of the SEC, The Nasdaq Stock Market or any other
regulatory authority.
Section 2.10 of the Regulations also provides that a committee of directors
may act at a meeting or by a writing or writings signed by all of its members.
Effective May 16, 2002, OGCL was amended to provide that, for this purpose, a
writing may include an electronic or other transmission capable of
authentication that contains an affirmative vote or approval of the director.
The proposed amendment to Section 2.10 would provide that a committee of
directors may act by a writing or writings signed by all of its members,
including a writing in the form of an electronic or other transmission capable
of authentication that contains an affirmative vote or approval of the director.
PROPOSAL
The Board of Directors has approved, and recommends that shareholders
adopt, amendments to Section 2.10 of the Regulations to permit committees of
directors to consist of one or more directors and provide that a committee of
directors may act by a writing or writings signed by all of its members,
including a writing in the form of an electronic or other transmission capable
of authentication that contains an affirmative vote or approval of the director.
The text of Section 2.10, as amended, would read as follows:
Section 2.10. Executive and Other Committees of Directors.
----------------------------------------------------------
The directors, by resolution passed by a majority of
the directors then in office, may create an executive
committee or any other committee of directors, each to consist
of one or more directors (subject to any other requirements as
to the number of directors serving on a committee that may be
imposed by law or the rules and regulations of the Securities
and Exchange Commission or any other regulatory authority),
and may authorize the delegation to such executive committee
or other committees, of any of the authority of the directors,
however conferred, other than that of filling vacancies among
the directors or in the executive committee or in any other
committee of the directors.
Such executive committee or any other committee of
directors shall serve at the pleasure of the directors, shall
act only in the intervals between meetings of the directors,
and shall be subject to the control and direction of the
directors. Such executive committee or other committee of
directors may act by a majority of its members at a meeting or
by a writing or writings signed by all of its members. A
telegram, cablegram, electronic mail, or an electronic or
other transmission capable of authentication that appears to
have been sent by a director and that contains an affirmative
vote or approval of that director is a signed writing for
purposes of this Section 2.10. The date on which that
telegram, cablegram, electronic mail, or other electronic
transmission is sent is the date on which the writing is
signed.
Any act or authorization of any act by the executive
committee or any other committee within the authority
delegated to it shall be as effective for all purposes as the
act or authorization of the directors. No notice of a meeting
of the executive committee or of any other committee of
directors shall be required. A meeting of the executive
committee or of any other committee of directors may be called
only by the president or by a member of such executive or
other committee of directors. Meetings of the executive
committee or of any other committee of directors may be held
through any communications equipment if all persons
participating can hear each other and participation in such a
meeting shall constitute presence thereat.
RECOMMENDATION AND VOTE
The affirmative vote of the holders of shares entitling them to exercise
not less than a majority of the voting power of Peoples is required to adopt the
proposed amendments to Section 2.10 of the Regulations. As of February 14, 2003,
Peoples' executive officers and directors, their respective associates and
Peoples Bank, through Peoples Financial Advisors group (formerly known as the
Investment and Trust Division of Peoples Bank), held common shares representing
approximately 27.62% voting power of Peoples.
The effect of an abstention or a broker non-vote on the proposed amendments
to Section 2.10 of the Regulations is the same as a "no" vote. If adopted by the
shareholders, the proposed amendments to Section 2.10 would become effective
immediately without any additional action.
The Board of Directors recommends that shareholders vote FOR adoption of
the proposed amendments to Section 2.10 of Peoples' Regulations.
All valid proxies received prior to the Annual Meeting which do not specify
how common shares should be voted (excluding broker non-votes) will be voted for
the adoption of the proposed amendments to Section 2.10 of the Regulations.
SHAREHOLDER PROPOSALS
FOR 2004 ANNUAL MEETING
Proposals by shareholders intended to be presented at the 2004 Annual
Meeting of Shareholders must be received by the Secretary of Peoples no later
than November 11, 2003, to be included in Peoples' proxy, notice of meeting and
proxy statement relating to such meeting and should be mailed to Peoples Bancorp
Inc., 138 Putnam Street, Marietta, Ohio 45750-0738, Attention: Corporate
Secretary. The SEC has promulgated rules relating to the exercise of
discretionary voting authority under proxies solicited by the Board of
Directors. If a shareholder intends to present a proposal at the 2004 Annual
Meeting of Shareholders, and does not notify the Corporate Secretary of Peoples
of the proposal by January 25, 2004, the proxies solicited by Peoples' Board of
Directors for use at the 2004 Annual Meeting may be voted on the proposal
without discussion of the proposal in Peoples' proxy statement for the 2004
Annual Meeting.
Shareholders desiring to nominate candidates for election as Directors at
the 2004 Annual Meeting must follow the procedures described in "Election of
Directors".
NOTIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of Peoples appointed the accounting firm of Ernst &
Young LLP ("E&Y") to serve as independent auditors of Peoples for the 2002
Fiscal Year. Fees billed for services rendered by E&Y the 2002 Fiscal Year were:
Audit Fees $170,000
All Other Fees $409,000
All other fees billed are primarily comfort letters and assistance with and
review of documents filed with the Securities and Exchange Commission, due
diligence related to mergers and acquisitions, accounting consultations, tax
compliance, tax planning, and tax advice related to mergers and acquisitions and
employee benefit plans.
The Board of Directors expects representatives of E&Y 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.
[Pursuant to the recommendation of the Audit Committee, it is anticipated
E&Y will be appointed to serve as independent auditors of Peoples for the 2003
fiscal year.]
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors knows of no
business to be presented for action by the shareholders at the 2003 Annual
Meeting of Shareholders other than as set forth in this proxy statement.
However, if any other matter is properly presented at the Annual Meeting, or at
any adjournment, the individuals acting under the proxies will vote and act
according to their best judgments in light of the conditions then prevailing.
It is important that proxies be voted and returned promptly; therefore,
shareholders who do not expect to attend the Annual Meeting in person are urged
to fill in, sign, and return the enclosed proxy card in the self-addressed
envelope furnished herewith.
By Order of the Board of Directors
/s/ROBERT E. EVANS
Robert E. Evans
President and Chief Executive Officer
PEOPLES BANCORP INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 10, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder(s) of common shares of Peoples Bancorp Inc.
("Peoples") hereby constitutes and appoints Robert E. Evans and Joseph H. Wesel,
or either of them, the Proxy or Proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of Peoples (the
"Annual Meeting") to be held on Thursday, April 10, 2003, in the Ball Room,
Holiday Inn, 701 Pike Street, Marietta, Ohio (Interstate 77, Ohio exit 1) at
10:30 A.M., local time, and any adjournment thereof, and to vote all of the
common shares of Peoples which the undersigned is entitled to vote at such
Annual Meeting or at any adjournment thereof, as follows:
1. To elect the following directors for terms of three years each:
Nominee Term Expires In
-----------------------------------------------------------------
Carl Baker, Jr. (for re-election) 2006
George W. Broughton (for re-election) 2006
Wilford D. Dimit (for re-election) 2006
[ ] FOR [ ] AGAINST [ ] FOR ALL EXCEPT
2. To elect the following director for a term of two years:
Nominee Term Expires In
-----------------------------------------------------------------
Mark F. Bradley (for re-election) 2005
[ ] FOR [ ] AGAINST
*(INSTRUCTION: To withhold authority to vote for any individual
nominee, mark "FOR ALL EXCEPT" and write the name of that nominee in
the space provided below.)
----------------------------------------------------------------------
3. To adopt an amendment to Article FOURTH of Peoples' Articles of
Incorporation to increase the number of authorized shares to
24,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To adopt amendments to Peoples' Code of Regulations to permit
electronic proxies, notices, waivers, and meetings.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To adopt a further amendment to Peoples' Code of Regulations to provide
for Board committees of one or more members.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. In their discretion, the Proxies are authorized to vote upon any other
matter (none known at the time of solicitation of this proxy) which
properly comes before the Annual Meeting or any adjournment thereof.
WHERE A CHOICE IS INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED OR NOT VOTED AS SPECIFIED. IF NO CHOICE IS
INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED IN ITEMS NO. 1 AND NO. 2 AS DIRECTORS OF PEOPLES
AND FOR PROPOSALS NO. 3, 4, AND 5. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT
BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT THEREOF OR IF A NOMINEE FOR
ELECTION AS A DIRECTOR NAMED IN THE PROXY STATEMENT IS UNABLE TO SERVE OR FOR
GOOD CAUSE WILL NOT SERVE, THE COMMON SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE PROXIES ON SUCH MATTERS OR FOR SUCH SUBSTITUTE
NOMINEE(S) AS THE DIRECTORS MAY RECOMMEND.
ALL PROXIES PREVIOUSLY GIVEN OR EXECUTED BY THE UNDERSIGNED ARE HEREBY
REVOKED. The undersigned acknowledges receipt of the accompanying Notice of
Annual Meeting of Shareholders and a copy of the Proxy Statement for the April
10, 2003 meeting and the Summary Annual Report and Form 10-K of Peoples for the
fiscal year ended December 31, 2002.
Dated: _______________________________________, 2003
_______________________________________
Shareholder
________________________________________
Shareholder
Please sign exactly as your name appears hereon. When common shares are
registered in two names, both shareholders MUST sign. When signing as executor,
administrator, trustee, guardian, attorney or agent, please give full title as
such. If shareholder is a corporation, please sign in full corporate name by
President or other authorized officer. If shareholder is a partnership or other
entity, please sign that entity's name by authorized person. (Please note any
change of address on this Proxy.)
PLEASE FILL IN, DATE, SIGN AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE