def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to Section 240.14a-12
Central Federal Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ |
|
No fee required. |
|
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11 |
|
(1) |
|
Title of each class of securities to which transaction applies: |
|
(2) |
|
Aggregate number of securities to which transaction applies: |
|
(3) |
|
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
|
(4) |
|
Proposed maximum aggregate value of transaction: |
o |
|
Fee paid previously with preliminary materials. |
|
o |
|
Check box if any part of the fee is offset as provided by Exchange Act rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing. |
|
(1) |
|
Amount Previously Paid: |
|
(2) |
|
Form, Schedule or Registration Statement No.: |
|
|
|
2923
Smith Road
|
Fairlawn,
Ohio 44333
|
(330) 666-7979
|
April 20, 2010
Fellow Stockholders:
You are cordially invited to attend the Annual Meeting of
Stockholders of Central Federal Corporation which will be held
at Fairlawn Country Club, located at 200 North Wheaton Road,
Fairlawn, Ohio, on Thursday, May 20, 2010 at
10:00 a.m., local time.
The attached notice of the Annual Meeting and proxy statement
describe the formal business to be transacted at the Meeting.
Directors and officers of the Company, as well as a
representative of Crowe Horwath LLP, the Companys
independent registered public accounting firm, will be present
at the Meeting to respond to any questions stockholders may have
regarding the business to be transacted. In addition, the
Meeting will include managements report on the
Companys financial performance for 2009. Attendance at the
Meeting is limited to stockholders of record as of the close of
business on April 9, 2010, their duly appointed proxies,
and guests of management.
The Board of Directors of Central Federal Corporation has
determined that matters to be considered at the Annual Meeting
are in the best interests of the Company and its stockholders,
and the Board unanimously recommends that you vote
FOR each of the proposals identified in the
accompanying proxy statement.
Your vote is very important. Whether or not you expect to attend
the Meeting, please read the enclosed proxy statement and then
complete, sign and return the enclosed proxy card promptly in
the postage-paid envelope provided so that your shares will be
represented. If you attend the Meeting, you may vote in person
even if you have previously mailed a proxy card.
On behalf of the Board of Directors and all of the employees,
thank you for your continued interest and support.
Sincerely yours,
Mark S. Allio
Chairman, President and Chief Executive Officer
TABLE OF CONTENTS
2923 Smith Road
Fairlawn, Ohio 44333
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on May 20, 2010
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of Central Federal Corporation will be held Thursday,
May 20, 2010 at the Fairlawn Country Club, located at 200
North Wheaton Road, Fairlawn, Ohio at 10:00 a.m., local
time.
The purpose of the Meeting is to consider and vote upon the
following matters:
|
|
|
|
1.
|
The election as Directors of the two candidates nominated by
management for terms of three years each, or until their
successors are elected and qualified;
|
|
|
2.
|
The approval, in a non-binding advisory vote, of the
compensation of executives disclosed in the proxy statement;
|
|
|
3.
|
The ratification of the appointment of Crowe Horwath LLP as
independent registered public accounting firm for the Company
for the year ending December 31, 2010; and
|
|
|
4.
|
Such other matters as may properly come before the Meeting. The
Board of Directors is not currently aware of any other business
to come before the Meeting.
|
Record holders of the common stock of Central Federal
Corporation at the close of business on April 9, 2010 are
entitled to receive notice of and to vote at the Meeting and any
adjournment(s) or postponement(s) of the Meeting. The Meeting
may, for example, be adjourned to permit the Company to solicit
additional proxies in the event that there are insufficient
shares present or represented at the Meeting for a quorum or
insufficient votes to approve or ratify any of the
aforementioned proposals at the time of the Meeting. A list of
stockholders entitled to vote will be available at the Meeting
and for the ten days preceding the Meeting at CFBank, 2923 Smith
Road, Fairlawn, Ohio 44333.
By the Order of the Board of Directors
Eloise L. Mackus
Corporate Secretary
Fairlawn, Ohio
April 20, 2010
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE
COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO
ENSURE A QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
INFORMATION
CONCERNING SOLICITATION AND VOTING
This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of Central Federal
Corporation (the Company) of proxies to be voted at
the Annual Meeting of Stockholders of the Company (the
Meeting) to be held at Fairlawn Country Club, 200
North Wheaton Road, Fairlawn, Ohio, at 10:00 a.m. local
time on May 20, 2010, and at any and all postponements or
adjournments thereof. Your vote is very important. This proxy
statement, proxy card and 2009 Annual Report are being first
sent or given on or about April 20, 2010 to stockholders of
record at the close of business on April 9, 2010. The Board
of Directors encourages you to read this proxy statement
thoroughly and to take this opportunity to vote on the matters
to be decided at the Meeting. This proxy statement and the form
of proxy card and 2009 Annual Report are also available at
www.CFBankonline.com/secproxy. The Companys principal
executive offices are located at 2923 Smith Road, Fairlawn, Ohio
44333.
VOTING
PROCEDURES AND ATTENDING THE MEETING
WHO CAN
ATTEND THE MEETING?
If you are a stockholder of record as of the close of business
on April 9, 2010, you are entitled to attend the Meeting.
Please note, however, that if you hold your shares in street
name (i.e., you are a beneficial owner of shares of Company
common stock that are held by a broker, bank or other nominee),
you will need proof of ownership to be admitted to the Meeting.
See HOW DO I VOTE and MUST I VOTE BY PROXY OR
MAY I VOTE IN PERSON AT THE ANNUAL MEETING?
WHO IS
ENTITLED TO VOTE?
You are entitled to vote your shares of common stock if the
Companys records show that you held your shares as of the
close of business on April 9, 2010. As of the close of
business on that date, a total of 4,099,587 shares of
common stock were outstanding and entitled to vote. Each share
of common stock is entitled to one vote on each matter presented
at the Meeting, except that, as provided in the Companys
Certificate of Incorporation, record holders of common stock
that is beneficially owned, either directly or indirectly, by a
person (either a natural person or an entity) who, as of the
close of business on April 9, 2010, beneficially owned a
total number of shares of common stock in excess of 10% of the
outstanding shares of common stock (the 10% limit)
are not entitled to any vote of their shares that are in excess
of the 10% limit, and those shares are not treated as
outstanding for voting purposes.
A person is deemed to beneficially own shares owned by an
affiliate of, as well as by persons acting in concert with, such
person. The Companys Certificate of Incorporation
authorizes the Board of Directors (i) to make all
determinations necessary to implement and apply the 10% limit,
including determining whether persons are acting in concert, and
(ii) to demand that any person who is reasonably believed
to beneficially own stock in excess of the 10% limit supply
information to the Company to enable the Board of Directors to
implement and apply the 10% limit.
As of the record date, April 9, 2010, there were two
persons that were known to the Company to be the beneficial
owner of more than 5% of the Companys outstanding common
stock, and there was also one person who was known to the
Company to be subject to the 10% limit. See SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS on page 21 of this proxy
statement.
1
HOW DO I
VOTE?
If you were a stockholder of record as of April 9, 2010,
you may vote in person by attending the Meeting or you may vote
by completing the enclosed proxy card and returning it signed
and dated in the enclosed postage-paid envelope. If you hold
your shares through a broker, bank or other nominee, you are
considered to hold your shares in street name, and
you will receive separate instructions from the nominee
describing how to vote your shares. Please note that if you hold
your shares in street name and wish to vote those shares in
person at the Meeting, you will need to obtain a written proxy
from the broker, bank or other nominee that holds those shares
for you.
MUST I VOTE
BY PROXY OR MAY I VOTE IN PERSON AT THE ANNUAL MEETING?
You may vote in person at the Meeting if you are a stockholder
of record and you provide at the Meeting the identification
required for admission. To be admitted at the meeting, you will
need to present personal photo identification. If your shares
are held in street name (i.e., the shares are not registered in
your name), you must (1) bring personal photo
identification and proof of stock ownership to the Meeting to be
admitted, and (2) obtain and bring with you to the meeting
a proxy from your broker, bank or other institution in whose
name your shares are held in order to vote those shares at the
meeting. A copy of your account statement or a letter from your
broker, bank or other institution reflecting the number of
shares of common stock you own as of April 9, 2010
constitutes adequate proof of stock ownership.
WHAT ARE THE
MATTERS TO BE PRESENTED?
Three proposals will be presented for you to consider and vote
on at the Meeting:
1) the election as directors of the two candidates
nominated by management;
2) to approve, in a non-binding advisory vote, the
compensation of executives disclosed in this proxy
statement; and
3) ratification of the appointment of the independent
registered public accounting firm for 2010.
WHAT ARE THE VOTING RECOMMENDATIONS OF THE BOARD OF DIRECTORS?
The Board of Directors unanimously recommends that you
vote:
|
|
|
|
|
FOR EACH NOMINEE TO THE BOARD OF DIRECTORS;
|
|
|
|
FOR THE APPROVAL OF THE COMPENSATION OF
EXECUTIVES AS DISCLOSED IN THIS PROXY STATEMENT; AND
|
|
|
|
FOR RATIFICATION OF CROWE HORWATH LLP AS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2010
FISCAL YEAR.
|
WHAT VOTE IS
REQUIRED FOR EACH PROPOSAL?
In voting on the election of directors (Proposal 1), you
may vote in favor of any or all of the nominees or withhold
authority to vote for any or all of the nominees. Directors are
elected by a plurality of the votes cast. This means that the
nominees receiving the greatest number of votes will be elected.
Votes that are withheld and broker non-votes (see definition
below) will have no effect on the outcome of the election.
In voting on the approval of the executive compensation
(Proposal 2), the ratification of Crowe Horwath LLP as
independent registered public accounting firm for the Company
(Proposal 3) and all other matters that may properly
come before the Meeting, you may vote in favor of the proposal,
vote against the proposal or abstain from voting. Under the
Companys Bylaws, an affirmative vote of the holders of a
majority of the votes cast at the Meeting is required to approve
these proposals. Shares in excess of the 10% limit will not be
counted as present and entitled to vote or as votes cast, and,
accordingly, such shares will have no effect on the outcome.
Abstentions and broker non-votes (see definition below) are not
counted as votes for or against these proposals and will have no
effect on the outcome of these proposals.
2
IS THE BOARD
OF DIRECTORS AWARE OF ANY OTHER MATTERS THAT WILL BE PRESENTED
AT THE ANNUAL MEETING?
The Company is not aware of any other matters to be presented at
the Meeting. If any matters not described in this proxy
statement are properly presented at the Meeting, the persons
named in the proxy card will use his or her best judgment to
determine how to vote your shares. This includes a motion to
adjourn or postpone the Meeting in order to solicit additional
proxies.
WHAT IS A
BROKER NON-VOTE?
A broker non-vote occurs when a broker, bank, or other nominee
holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have
discretionary voting power with respect to the item and has not
received voting instructions from the beneficial owner of the
shares it holds.
Effective this year, the New York Stock Exchange now classifies
the election of directors as a non-routine matter. What this
means is that if you hold your shares through an account with a
broker, bank or other nominee, your shares may not be voted with
respect to the election of directors or other non-routine
matters unless you provide specific voting instructions to the
broker, bank or other nominee that holds your shares.
WHAT
CONSTITUTES A QUORUM FOR THE MEETING?
A quorum exists if a majority of the outstanding shares of
common stock entitled to vote (after subtracting any shares in
excess of the 10% limit) at the Meeting is present in person or
represented by proxy at the Meeting. The Meeting will be held if
a quorum exists at the Meeting. If you return valid proxy
instructions or attend the Meeting in person, your shares will
be counted for purposes of determining whether there is a
quorum, even if you abstain from voting. Broker non-votes also
will be counted for purposes of determining a quorum. If there
are not sufficient shares present or represented by proxy at the
Meeting to provide a quorum or to approve or ratify any proposal
at the time of the Meeting, the Meeting may be adjourned or
postponed in order to permit the further solicitation of proxies.
CAN I REVOKE
OR CHANGE MY VOTE AFTER I SUBMIT MY PROXY?
You may revoke your proxy at any time before the vote is taken
at the Meeting. To revoke your proxy, you must either advise the
Corporate Secretary of the Company in writing before your shares
have been voted at the Meeting, deliver to the Company another
proxy that bears a later date, or attend the Meeting and vote
your shares in person. Attendance at the Meeting will not in
itself revoke your proxy. If your shares are held in street name
and you wish to change your voting instructions after you have
returned your voting instruction form to your broker or bank,
you must contact your broker or bank. Please note that if the
Meeting is postponed or adjourned, your shares may be voted by
the persons named on the proxy card on the new Meeting date as
well, unless you have revoked your proxy.
WHO WILL
COUNT THE VOTE?
The Companys transfer agent, Registrar and Transfer
Company, will tally the vote, which will be certified by an
independent Inspector of Election. The Board of Directors has
designated Douglas J. Root, President of Q.T. Equipment Company,
to act as the Inspector of Election. Mr. Root is a
stockholder of the Company and is not otherwise employed by, or
a director of, the Company or any of its affiliates. After the
final adjournment of the Meeting, the proxies will be returned
to the Company.
Important Notice Regarding the Availability of Proxy
Materials
for the Stockholder Meeting to Be Held on May 20,
2010.
The Proxy Statement, Form of Proxy and 2009 Annual Report are
available at
www.CFBankonline.com/secproxy.
3
GENERAL
The Company continually reviews its corporate governance
policies and practices. This includes comparing its current
policies and practices to applicable legal and regulatory
requirements and to the policies and practices suggested by
various groups and authorities active in corporate governance
and practices of other public companies. Based upon this review,
the Company expects to adopt any changes that the Board of
Directors believes are the best corporate governance policies
and practices for the Company.
One role of the Board of Directors in the risk management
process is to oversee and monitor the Companys risk
management processes. The Board of Directors
responsibility is to exercise business judgment in the best
interests of the Company, to provide direction and oversight for
the Companys management framework, and to set high level
strategy and risk tolerances. The Companys senior risk
officer is an executive officer appointed by and reporting to
the Board of Directors. The senior risk officer meets with the
Compensation and Management Development Committee at least every
six months. The independent Directors also meet at least twice
each year with no members of management present to discuss a
variety of topics, including risk. In these ways, the Board of
Directors is able to monitor the Companys risk profile and
risk management activities on an on-going basis. Additionally,
the Company has other risk-monitoring processes. For example,
certain financial risks are also monitored by employees of
CFBank who report to the Chief Financial Officer. In turn, the
Chief Financial Officer and the Assistant Vice President,
Compliance and Audit, attend the meetings of the Audit
Committee. The Chair of the Audit Committee makes a full report
of each Audit Committee meeting to the full Board of Directors.
CODE OF
ETHICS AND BUSINESS CONDUCT
Since the Companys inception in 1998, it has had a Code of
Ethics and Business Conduct (Code of Conduct). The
Company requires all directors, officers and other employees of
the Company and its wholly owned subsidiary, CFBank, to adhere
to the Code of Conduct in addressing the legal and ethical
issues encountered in conducting their work. The Code of Conduct
requires that the Companys and CFBanks employees
avoid conflicts of interest, comply with all laws and other
legal requirements, conduct business in an honest and ethical
manner and otherwise act with integrity and in the
Companys and CFBanks best interests. All of the
Companys and CFBanks employees are required to
certify that they have reviewed and understand the Code of
Conduct. In addition, all officers and senior level executives
are required to certify as to any actual or potential conflicts
of interest involving them and the Company or CFBank. The
Company and CFBank also provide training for employees on the
Code of Conduct and their legal obligations. The Companys
Code of Conduct is applicable to all employees of the Company
and CFBank, including its principal executive officer, principal
financial officer and controller, and meets the requirements of
the Sarbanes-Oxley Act of 2002 with respect to the obligations
of such persons.
Employees are required to report any conduct that they believe
in good faith to be an actual or apparent violation of the Code
of Conduct. The Code of Conduct includes procedures to receive,
retain and treat complaints received regarding accounting,
internal accounting controls or auditing matters and to allow
for the confidential and anonymous submission by employees of
concerns regarding questionable accounting or auditing matters.
The Companys Code of Ethics and Business Conduct is
available on the Companys website at www.CFBankonline.com
at the link
http://www.cfbankonline.com/corporate_gov.html.
4
PROPOSAL 1 ELECTION OF DIRECTORS
The number of directors is fixed at six. Two directors,
Mr. Ash and Mr. Whitmer, have been nominated to be
elected to hold office until the Annual Meeting in 2013.
Notwithstanding the foregoing, each director will serve until
his successor is duly qualified and elected. Information
concerning Messrs. Ash and Whitmer and the continuing
directors is set forth below. Should any nominee decline or be
unable to accept such nomination or be unable to serve, an event
which management does not now expect, the Board of Directors
reserves the right in its discretion to substitute another
person as a nominee or to reduce the number of nominees. In this
event, the proxy holders may vote your shares in their
discretion for any substitute nominee proposed by the Board of
Directors unless you indicate otherwise.
All nominees currently are directors of the Company. There are
no family relationships among any of the directors and executive
officers. No directors hold directorships in other public or
registered investment companies. No person being nominated as a
director is being proposed for election pursuant to any
agreement or understanding between any such person and the
Company. The following is information regarding each nominee and
each director continuing in office. Unless otherwise stated,
each individual has held his current occupation for at least
five years.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE ELECTION OF EACH OF THE NOMINEES NAMED IN
THIS PROXY STATEMENT.
The biographies of the nominees and continuing directors below
contain information regarding the persons service as a
director, business experience, directorships held currently or
at any time during the last five years at public or registered
investment companies, involvement in certain legal or
administrative proceedings, if applicable, and the experiences,
qualifications, attributes or skills that caused the Corporate
Governance and Nominating Committee and the Board of Directors
to determine that the person should serve, or continue to serve,
as a director for the Company at the time of filing of this
proxy statement.
The Board of Directors codified standards for directors in the
Boards Corporate Governance Guidelines. These guidelines
provide that the Board of Directors should encompass, among
other things, a diverse range of viewpoints, backgrounds,
experiences and demographics sufficient to build a Board that is
effective, collegial and responsive to the Companys
operations and interests. The Corporate Governance Guidelines
also provide that Board membership be based on judgment,
character, expertise, skills and knowledge useful to the
oversight of the Companys business as well as on business
or other relevant experience. Further, at all times a majority
of the Board must be independent directors, as
defined from time to time by the listing requirements of the
Nasdaq®
Stock Market, Inc. and any specific requirements established by
the Board. Each director also is expected to:
|
|
|
|
|
provide loyalty, direction and oversight to the business and
management of the Company;
|
|
|
|
establish strategic direction of the Company;
|
|
|
|
exercise business judgment in the best interests of the Company;
|
|
|
|
review at least annually a management succession plan to ensure
continuity in senior management;
|
|
|
|
evaluate the principal executive officer;
|
|
|
|
review and evaluate significant transactions;
|
|
|
|
possess sufficient familiarity with the Companys principal
operational and financial objectives and plans to ensure active
and effective participation in the deliberations of the Board of
Directors and each committee on which the director
serves; and
|
|
|
|
possess the capacity to obtain a basic understanding of the
Companys results of operations and financial condition.
|
5
The Corporate Governance Guidelines are available on the
Companys website at www.CFBankonline.com at the link
http://www.cfbankonline.com/corporate_gov.html.
See also the discussion under CORPORATE GOVERNANCE AND
NOMINATING COMMITTEE, below.
NOMINEES
Thomas P. Ash has been Director of Governmental Relations at the
Columbus, Ohio-based Buckeye Association of School
Administrators since August 2005. Prior to that time,
Mr. Ash was Superintendent of Schools, Mid-Ohio Educational
Service Center in Mansfield, Ohio from January 2000 through July
2005. Mr. Ash was the Superintendent of Schools, East
Liverpool City School District in East Liverpool, Ohio from
August 1984 to December 1999. As Superintendent at Mid-Ohio
Educational Service Center and East Liverpool City School
District, his experience included financial reporting and
analysis, supervising and directing financial staff members,
implementing and complying with U.S. generally accepted
accounting principles (GAAP) reporting requirements and
developing internal controls. He does not serve, and has not
served in the last five years, on the board of directors of any
other public company. Mr. Ashs public-sector and
advocacy experience, both on the local level in Columbiana
County and on the state level, lends a perspective unique to the
Board of Directors. Age 60. Director since 1985.
Jerry F. Whitmer is Of Counsel to Brouse McDowell, LPA, a law
firm in Akron, Ohio, where he was a shareholder from 1971
through 2005. Mr. Whitmer served as Managing Partner of the
firm from 1997 through 2005. He is a shareholder and officer of
Mutual Oil & Gas Company, which invests in a
corporation engaged in the drilling and operation of oil and gas
wells. He does not currently hold, and has not held within the
last five years, a director position with any other public
company, although more than five years ago he was a director for
another publicly traded financial institution.
Mr. Whitmers professional service background,
primarily in northeast Ohio, permits him to provide insights
from the perspective of one who has consistently advised
financial institution and other commercial clients, including
borrowers. Age 74. Director since 2003.
CONTINUING
DIRECTORS
William R. Downing has been President of R. H. Downing, Inc., an
automotive supply, sales and marketing agency in Akron, Ohio,
since June 1973. He is also Chairman and Chief Executive Officer
of JohnDow Industries, Inc., a manufacturer and distributor of
lubrication and fluid handling equipment which he founded in
1988, and Chairman of Dowco, LLC, a manufacturer and processor
of tire cord for use in the power transmission belt industry
which he acquired in 2006. He does not serve, and has not served
in the last five years, on the board of directors of any other
public company. Mr. Downing is the only director currently
involved in the manufacturing industry and is able to bring his
success as a businessman and formidable business judgment to his
activities on the Board of Directors. Age 64. Director
since 2003. Current term as director expires on the date of the
Annual Meeting in 2011.
Gerry W. Grace, retired, was President of Grace Services, Inc.,
a weed and pest control company located in Canfield, Ohio, from
April 1980 through 2005. He was the Chairman of CFBank, then
known as Central Federal Savings & Loan Association of
Wellsville, from 1994 to early 2003, and the Chairman of Central
Federal Corporation, then known as Grand Central Financial
Corp., from 1998 to early 2003. Mr. Grace also served as a
Trustee of Ellsworth Township, Ohio from 1976 through 2005. He
does not serve, and has not served in the last five years, on
the board of directors of any other public company.
Mr. Grace is well known to many long-standing stockholders
of the Company and customers of CFBank. His long-term management
of a local business organization and his many years of public
service at the local level give him a solid basis for
understanding the needs of community bank clients. Age 70.
Director since 1986. Current term as director expires on the
date of the Annual Meeting in 2011.
Jeffrey W. Aldrich, retired, was President and Chief Executive
Officer of Sterling China Co., a dishware manufacturing company
in Wellsville, Ohio, from November 1970 through 2005. His many
years as a senior executive of a local business allow him to
bring important perspective to the Board in connection with its
oversight of the Companys relationships with local
business customers, plus he does not serve, and has not served
in the last five years, on the board of directors of any other
public company. He now resides in Columbus, Ohio, and so has
perspective on both the Columbiana County and Franklin County
constituencies. Age 67. Director since 1979. Current term
as director expires on the date of the Annual Meeting in 2012.
6
Mark S. Allio has been the Chairman of the Company and CFBank
since January 1, 2006 and President and Chief Executive
Officer of the Company and Chief Executive Officer of CFBank
since February 1, 2005. He was the Vice Chairman of the
Company and CFBank from February 1, 2005 through
December 31, 2005. Mr. Allio was President and Chief
Executive Officer of Rock Bank, an affiliate of Quicken Loans,
Inc. in Livonia, Michigan, from April 2003 to December 2004,
President of Third Federal Savings, MHC in Cleveland, Ohio from
January 2000 to December 2002, Chief Financial Officer of Third
Federal from 1988 through 1999, and has more than 30 years
of banking and banking-related experience. He does not serve,
and has not served in the last five years, on the board of
directors of any other public company. His extensive experience
with a variety of financial institutions supplies the Board of
Directors with an insiders perspective to the Company and
CFBank. Age 55. Director since 2003. Current term as
director expires on the date of the Annual Meeting in 2012.
INDEPENDENCE
OF DIRECTORS
The Board of Directors has adopted Director Independence
Standards to assist in determining the independence of each
director or nominee for director. In order for a director or
nominee to be considered independent, the Board of Directors
must affirmatively determine that the director or nominee has no
material relationship with the Company. In each case, the Board
of Directors broadly considers all relevant facts and
circumstances, including the directors or nominees
commercial, industrial, banking, consulting, legal, accounting,
charitable and familial relationships and such other criteria as
the Board of Directors may determine from time to time. These
Director Independence Standards are available on the
Companys website at www.CFBankonline.com at the link
http://www.cfbankonline.com/corporate_gov.html.
The Board of Directors has determined that Messrs. Aldrich,
Ash, Downing, Grace, and Whitmer meet these standards and are
independent and, in addition, satisfy the independence
requirements of the
Nasdaq®
Stock Market, Inc.
The Board of Directors currently combines the role of Chairman
with the role of Chief Executive Officer. The Board of Directors
believes this provides an efficient and effective leadership
model for the Company. Combining the Chairman and Chief
Executive Officer roles fosters clear accountability, effective
decision making, and alignment on corporate strategy. To assure
effective independent oversight, the Board of Directors has
adopted a number of governance practices, including executive
sessions of the independent Directors at least twice each year,
and annual performance evaluations of the Chairman and Chief
Executive Officer by the Compensation and Management Development
Committee, which consists entirely of independent directors.
No single leadership model is correct for all companies at all
times. The Board of Directors recognizes that depending on the
circumstances another leadership model, such as a separate
independent chairman of the board, might be appropriate.
Accordingly, the Board of Directors will continue to review and
assess its leadership structure.
Absent unusual circumstances, each Director is expected to
attend all annual and special meetings of stockholders. All the
directors who were board members at the time of the 2009 Annual
Meeting of Stockholders attended that meeting.
MEETINGS AND
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company is responsible for
establishing broad corporate policies and for the overall
performance of the Company. The members of the Board of
Directors of the Company also serve as members of the Board of
Directors of CFBank. The Board of Directors of the Company holds
regularly scheduled meetings at least three times annually. The
Board of Directors of CFBank meets on a monthly basis. Both
Boards may have additional meetings as needed.
During the year ended December 31, 2009, the Board of
Directors of the Company held five meetings, one of which was a
special meeting, the independent directors of the Company held
an additional two meetings, and the Board of Directors of CFBank
held 12 meetings. No director attended fewer than 75% of the
aggregate number of Board meetings and meetings of the
committees on which he served. The Board of Directors of the
Company maintains committees, the nature and composition of
which are described below:
AUDIT COMMITTEE. The Audit Committee consists of
Messrs. Ash, Grace and Whitmer. Each member of the
Committee is independent as defined in the corporate governance
listing standards of the
Nasdaq®
Stock Market, Inc., the Companys Director Independence
Standards, and the Securities Exchange Act. Mr. Ash is the
Audit
7
Committee financial expert and is independent of management. The
Audit Committee operates under a written charter adopted by the
Board of Directors. The Audit Committee Charter is available on
the Companys website at www.CFBankonline.com at the link
http://www.cfbankonline.com/corporate_gov.html.
This committee is primarily responsible for overseeing the
engagement, independence and services of our independent
registered public accounting firm and is also responsible for
the review of audit reports and managements actions
regarding the implementation of audit findings and review of
compliance with all relevant laws and regulations. The Audit
Committee met nine times during 2009.
AUDIT
COMMITTEE REPORT
The Audit Committee operates under a written charter adopted by
the Board of Directors. The Board of Directors has determined
that each Audit Committee member is independent in accordance
with the listing standards of the
Nasdaq®
Stock Market, Inc.
The Companys management is responsible for the
Companys internal controls and financial reporting
process. The independent registered public accounting firm is
responsible for performing an independent audit of the
Companys consolidated financial statements and issuing an
opinion on the conformity of those financial statements with
GAAP. The Audit Committee oversees the Companys internal
controls and financial reporting process on behalf of the Board
of Directors.
In this context, the Audit Committee has met and held
discussions with management and representatives of the
independent registered public accounting firm. Management
represented to the Audit Committee that the Companys
consolidated financial statements were prepared in accordance
with GAAP, and the Audit Committee has reviewed and discussed
the audited consolidated financial statements with management
and the independent registered public accounting firm. The Audit
Committee discussed with the independent registered public
accounting firm the matters required to be discussed by
Statement on Auditing Standards No. 61, as amended, as
adopted by the Public Company Accounting Oversight Board in
Rule 3200T, including the quality, not just the
acceptability, of the accounting principles, the reasonableness
of significant judgments, and the clarity of the disclosures in
the financial statements.
In addition, the Audit Committee has received the written
disclosures and the letter from the independent registered
public accounting firm required by the Public Company Accounting
Oversight Board regarding the independent registered public
accounting firms communications with the Audit Committee
concerning independence, and has discussed with the independent
registered public accounting firm the independent registered
public accounting firms independence. In concluding that
the accountants are independent, the Audit Committee considered,
among other factors, whether the non-audit services provided by
the independent registered public accounting firm were
compatible with its independence.
The Audit Committee discussed with representatives of the
Companys independent registered public accounting firm the
overall scope of plans for their audit. The Audit Committee
meets with such representatives, with and without management
present, to discuss the results of their examination, their
evaluation of the Companys internal controls, and the
overall quality of the Companys financial reporting.
In performing all of these functions, the Audit Committee acts
only in an oversight capacity. In its oversight role, the Audit
Committee relies on the work and assurances of the
Companys management, which has a primary responsibility
for financial statements and reports, and of the independent
registered public accounting firm which, in its report,
expresses an opinion on the conformity of the Companys
financial statements to GAAP. The Audit Committees
oversight does not provide it with an independent basis to
determine that management has maintained appropriate accounting
and financial procedures designed to assure compliance with
accounting standards and applicable laws and regulations.
Furthermore, the Audit Committees considerations and
discussions with management and the independent registered
public accounting firm do not assure that the Companys
financial statements are presented in accordance with GAAP, that
the audit of the Companys financial statements has been
carried out in accordance with generally accepted auditing
standards or that the Companys independent registered
public accounting firm is, in fact, independent.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board
has approved, that the audited consolidated financial statements
be included in the
8
Companys Annual Report on
Form 10-K
for the year ended December 31, 2009 for filing with the
Securities and Exchange Commission. The Audit Committee and the
Board of Directors also have approved the selection of the
Companys independent registered public accounting firm.
Thomas P. Ash, Chairman, Gerry W. Grace and Jerry F. Whitmer
COMPENSATION AND MANAGEMENT DEVELOPMENT
COMMITTEE. The Compensation and Management
Development Committee consists of Messrs. Ash, Downing and
Whitmer. Each member of the Committee is independent as defined
in the corporate governance listing standards of the
Nasdaq®
Stock Market, Inc. and the Companys Director Independence
Standards. The committee is responsible for
(i) establishing compensation and benefits for the Chief
Executive Officer, (ii) reviewing the incentive
compensation programs and practices of the Company and CFBank,
and (iii) reviewing matters regarding compensation
practices and policies for other officers and employees of the
Company and CFBank. The Compensation and Management Development
Committee, with assistance from other committees and the Board,
is responsible for evaluating and minimizing risks relating to
the Companys compensation and benefits systems. The
Compensation and Management Development Committee of the Company
met four times in 2009. The Compensation and Management
Development Committee has a charter, which is available on the
Companys website at www.CFBankonline.com at the link
http://www.cfbankonline.com/corporate_gov.html.
COMPENSATION
AND MANAGEMENT DEVELOPMENT COMMITTEE REPORT
This report is made under the Committees charter and the
rules and regulations of the Securities and Exchange Commission.
The Compensation and Management Development Committee operates
under a written charter adopted by the Board of Directors. The
Board of Directors has determined that each member of the
Compensation and Management Development Committee is independent
in accordance with the listing standards of the
Nasdaq®
Stock Market, Inc. and the Companys Director Independence
Standards.
The Committee has overall responsibility for approving and
evaluating the director and officer compensation plans, policies
and programs of the Company and CFBank. The Committee also has
authority to certify the Companys and CFBanks
compliance with the requirements of the Capital Purchase Program
(CPP) of the United States Treasury Department
(Treasury Department) (see discussion below).
Under its charter, the Compensation and Management Development
Committee may delegate all or a portion of its duties and
responsibilities to a subcommittee, which the Committee has
chosen not to do, and they must meet at least three times
annually. The Committee met four times during 2009.
Mr. Allio periodically makes recommendations to the
Committee for the Companys and CFBanks
directors and executive officers compensation,
including stock-based incentive awards. No stock-based incentive
awards were granted to any director or senior executive officer
during 2009. The Compensation and Management Development
Committee, under its charter, is vested with the authority to
retain compensation consultants, for which the Company would pay
a fee. The Committee did not retain compensation consultants in
2009.
In December 2008, the Company became a participant in the CPP,
which was part of the Troubled Asset Relief Program
(TARP) under the Emergency Economic Stabilization
Act of 2008 (EESA). In that transaction, the
Treasury Department acquired preferred shares in the Company and
a warrant to acquire shares of the Companys common stock.
Under the provisions of EESA and the terms of the CPP, for as
long as the Treasury Department retains an interest in the
Companys stock, there are certain limits and restrictions
relating to executive compensation with which the Company must
comply. The primary requirements imposed on the Company are as
follows:
|
|
|
|
|
The Compensation and Management Development Committee must
review senior executive officer incentive compensation with the
Companys senior risk officer to determine whether those
arrangements encourage unnecessary or excessive
risks that threaten the value of the Company. This review
must be performed at least every six months. The Committee
completed its initial review on September 17, 2009 and
conducted another review on October 15, 2009. The term
senior executive officer means the individuals
identified as named executive officers in the
summary compensation table of this proxy statement, and may
include others.
|
9
|
|
|
|
|
All bonuses and other incentive compensation arrangements with
the senior executive officers must provide that during the time
the Treasury Department holds an equity position in the Company,
the Company may recover (or claw-back) any payments
that were based on materially inaccurate financial statements or
any other materially inaccurate performance metrics used to
award bonuses or incentive compensation.
|
|
|
|
The Company is prohibited from making so-called golden
parachute payments to senior executive officers during the
period the Treasury Department holds an equity position in the
Company.
|
|
|
|
The Company is not permitted to deduct compensation related to
certain senior executive officers in excess of $500,000 per
officer, even if such compensation is qualified
performance-based compensation under section 162(m)
of the Internal Revenue Code.
|
As a condition to the Companys participation in the CPP,
all employment-related agreements and all bonuses and other
incentive compensation arrangements with the current senior
executive officers have been reviewed and, where necessary,
amended to include the provisions required under the CPP.
On February 17, 2009, President Obama signed the American
Recovery and Reinvestment Act of 2009 (the ARRA),
which amended certain provisions of the EESA and required the
Treasury Department to adopt rules relating to executive
compensation. These rules, the TARP Standards for Compensation
and Corporate Governance, were adopted in 2009 and affect senior
executive compensation in 2009 and thereafter. The ARRA
amendments included expansion of the individuals subject to the
claw-back provisions, expanded prohibitions on
golden parachute payments, and additional limits on
performance-based compensation plans. The ARRA amendment rules
also limited bonuses, retention awards and incentive
compensation payments to executives. The Compensation and
Management Development Committee has reviewed the implementing
rules and considered whether any changes needed to be made to
the terms of existing agreements and compensation arrangements
with the Companys executive officers, consistent with the
new rules and any certification requirements. No executive
officer of the Company or CFBank has a formal employment
agreement, and no changes were made to compensation arrangements
with the executive officers following adoption of the rules.
The Compensation and Management Development Committee certifies
that:
(1) it has reviewed with the Companys senior risk
officer the senior executive officer compensation arrangements
and has made reasonable efforts to ensure that such arrangements
do not encourage the senior executive officers to take
unnecessary and excessive risks that threaten the value of the
Company;
(2) it has reviewed with the Companys senior risk
officer the employee compensation arrangements and has made
reasonable efforts to limit any unnecessary risks that such
arrangements pose to the Company; and
(3) it has reviewed the employee compensation arrangements
to eliminate any features of these arrangements that would
encourage the manipulation of reported earnings of the Company
to enhance the compensation of any employee.
The Companys senior risk officer has discussed the
Companys compensation programs with the Compensation and
Management Development Committee. The discussions covered all
compensation arrangements of the Company and CFBank. Neither the
Company nor CFBank have any formal employment agreements with
any of their employees. The Compensation and Management
Development Committee reviewed and evaluated the following as
the Companys and CFBanks compensation arrangements:
|
|
|
|
|
employees base salary;
|
|
|
|
the Companys 2009 Equity Compensation Plan (2009
Plan), which was adopted by the Companys
stockholders at the 2008 annual meeting;
|
|
|
|
the CFBank Employees Savings and Profit Sharing Plan and Trust
(401(k) Plan);
|
|
|
|
a specific arrangement for the head of residential mortgage
lending, tied to residential real estate lending;
|
|
|
|
a discretionary bonus plan for commercial lenders; and
|
|
|
|
the residential mortgage lenders compensation plan of draw
against commission.
|
10
The Compensation and Management Development Committee believes
that the Companys overall compensation practices for
senior executive officers limit the ability of executive
officers to benefit from taking unnecessary or excessive risks.
Those compensation practices include the following elements:
|
|
|
|
|
executive stock ownership;
|
|
|
|
balance between fixed compensation in the form of base salary
and equity compensation opportunity;
|
|
|
|
the absence of equity compensation awards in 2009;
|
|
|
|
balance between short-term and long-term equity compensation
opportunities; and
|
|
|
|
the absence of a formal incentive compensation program for
senior executive officers.
|
The Compensation and Management Development Committee further
believes that the Companys compensation arrangements, in
part because they do limit the ability of senior executive
officers to benefit from taking unnecessary or excessive risks,
do not incentivize officers and other employees to take improper
risks that would threaten the value of the Company and CFBank.
The Board of Directors awards and approves any increase in base
salary or award of bonus to a senior executive officer. The 2009
Plan makes equity compensation available to officers and other
employees at the Board of Directors discretion. The 401(k)
Plan is available to all employees, and investment in the
Companys stock under the Plan is discouraged. The specific
arrangement for the head of residential mortgage lending is
based on performance of the mortgage division as a whole, with
no ability on the part of the head of the division to manipulate
the divisions results. The Compensation and Management
Development Committee concluded, therefore, that his arrangement
does not pose a risk to CFBank. The Compensation and Management
Development Committee also determined that none of the
compensation arrangements encourages the manipulation of
reported earnings to enhance employee compensation or encourages
behavior focused on short-term results rather than long-term
creation of value for the Company and CFBank.
The Companys senior executive compensation is currently
operating within the constraints of the TARP limits. The
Compensation and Management Development Committee believes,
however, that the Companys standard compensation for
executives did not encourage unnecessary and excessive risk,
even before application of the TARP limits. The standard
compensation for senior executive officers, before the impact of
TARP, consisted of salary, bonus at the discretion of the Board
of Directors, and equity compensation awards (stock options and
restricted stock) at the discretion of the Board of Directors.
Due to the impact of TARP, annual cash incentive awards for the
principal executive officer have been severely limited or
prohibited. Equity awards to the principal executive officer are
also restricted. Except for an options award to a non-senior
executive employee, no equity compensation was awarded to any
officer or other employee of the Company or CFBank during 2009.
On an ongoing basis, at least every six months, and for so long
as the Company has any obligations outstanding under its
participation in TARP, the Compensation and Management
Development Committee will discuss, evaluate, and review with
the senior risk officer the Companys compensation
arrangements in light of any risks posed to the Company by the
arrangements and how to limit those risks, specifically to:
|
|
|
|
|
ensure that the compensation arrangements to not encourage
employees to take unnecessary and excessive risks that threaten
the value of the Company;
|
|
|
|
ensure that the compensation arrangements do not encourage the
manipulation of the Companys reported earnings to enhance
the compensation of any of the Companys employees; and
|
|
|
|
identify and eliminate any features in employee compensation
arrangements that could encourage the manipulation of reported
earnings of the Company to enhance the compensation of any
employee.
|
The Compensation and Management Development Committee will
discuss, evaluate and review with the senior risk officer
features in the Companys senior executive officer
compensation arrangements that could lead senior executive
officers to take the risks identified above and the features in
the employee compensation arrangements that pose risks to the
Company, including any features in the senior executive officer
compensation arrangements and the employee compensation
arrangements that would encourage behavior focused on short-term
results and not on long-term value creation. The Compensation
and Management Committee is required to limit these features to
11
ensure that the senior executive officers are not encouraged to
take risks that are unnecessary or excessive and that the
Company is not unnecessarily exposed to risks.
William R. Downing, Chairman, Thomas P. Ash and Jerry F. Whitmer
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE. The
Corporate Governance and Nominating Committee is comprised
solely of independent Directors whose goal is to identify and
nominate candidates from a broad range of experiences and
backgrounds who can contribute to the Boards overall
effectiveness in meeting its mission. The Corporate Governance
and Nominating Committee seeks to nominate candidates who bring
diverse experiences and perspectives to the Board of Directors.
In evaluating candidates, the Corporate Governance and
Nominating Committees practice is to consider, among other
things, diverse business experiences, the candidates range
of experiences with other companies and organizations, and
diverse geographic locations relative to CFBanks office
locations. The Corporate Governance and Nominating Committee
actively seeks individuals to become Board members who have the
highest personal and professional character and integrity, who
possess appropriate characteristics, skills, experience and time
to make a significant contribution to the Board of Directors,
the Company and its stockholders, who have demonstrated
exceptional ability and judgment, who represent the diverse
geographies of markets served by the Company and CFBank, who
represent diverse business and professional backgrounds, and who
will be most effective, in the context of the whole Board of
Directors and other nominees to the Board of Directors, in
perpetuating the success of the Company and in representing
stockholders interests. The Compensation and Management
Development Committee has not formalized its nomination review
practices into a written policy. The Corporate Governance and
Nominating Committee periodically reviews the size and
composition of the Board of Directors and determines whether to
add or replace Directors. The Committee may employ professional
search firms, for which the Company would pay a fee to assist it
in identifying potential members of the Board of Directors with
the desired skills and disciplines.
The Committee considers candidates for director nominees based
on factors it deems appropriate. These factors may include
judgment, character, background, skill, diversity, experience
with businesses and other organizations of comparable size, the
interplay of the candidates experience with the experience
of other Board members and the extent to which the candidate
would be a desirable addition to the Board and any committees of
the Board. In addition, because the Company is primarily a
community financial services company, board candidates must be
highly regarded members of the communities in which the Company
provides financial services. The Committee does not have a
formal diversity policy. The Compensation and Management
Development Committee recommends candidates to the full Board of
Directors, which, in turn, selects candidates to be nominated
for election by the stockholders or to be elected by the Board
of Directors to fill a vacancy.
The Committee will consider stockholder nominations for director
on the same basis and in the same manner as it considers
nominations for director from any other source. Any stockholder
may submit a nomination in writing to the Chair, Corporate
Governance and Nominating Committee,
c/o Corporate
Secretary, Central Federal Corporation, 2923 Smith Road,
Fairlawn, Ohio 44333. The nominations must be accompanied by all
the information relating to the nominee required by the
Companys Bylaws and the Securities and Exchange
Commissions proxy rules. The Companys Bylaws provide
that, to be considered timely, any stockholder nomination for
director generally must be received in writing by the Corporate
Secretary at least 90 days before the date fixed for the
next Annual Meeting of Stockholders; provided, however, under
certain unusual circumstances a nomination received as late as
the 10th day after the mailing of a notice of an Annual
Meeting of Stockholders may be considered. A copy of the full
text of the Bylaw provisions relating to stockholder nominations
may be obtained by writing to the Corporate Secretary at 2923
Smith Road, Fairlawn, Ohio 44333.
The Corporate Governance and Nominating Committee met two times
in 2009 and is currently composed of three directors:
Messrs. Aldrich, Grace and Whitmer. Mr. Whitmer is
Chairman of the Committee. Each member of the Committee is
independent as defined in the corporate governance listing
standards of the
Nasdaq®
Stock Market, Inc. and the Companys Director Independence
Standards.
The Corporate Governance and Nominating Committee charter is
available on the Companys website at www.CFBankonline.com
at the link
http://www.cfbankonline.com/corporate_gov.html.
12
COMMITTEE CHARTERS AND OTHER CORPORATE GOVERNANCE
DOCUMENTS. The Audit Committee Charter, Compensation
and Management Development Committee Charter, Corporate
Governance and Nominating Committee Charter, Corporate
Governance Guidelines, Director Independence Standards and Code
of Ethics and Business Conduct are available on the
Companys website at www.CFBankonline.com at the link
http://www.cfbankonline.com/corporate_gov.html.
You also may receive copies without charge by writing to:
Corporate Secretary, Central Federal Corporation, 2923 Smith
Road, Fairlawn, Ohio 44333.
COMMUNICATIONS
WITH DIRECTORS
The Board of Directors also has adopted a process by which
stockholders and other interested parties may communicate with
the Board, any individual director, any committee chair or the
non-management directors as a group by
e-mail or
regular mail. Communications by
e-mail
should be sent to EllyMackus@CFBankmail.com. Communications by
regular mail should be sent to the attention of the Board of
Directors; any individual director by name; Chair, Audit
Committee; Chair, Compensation and Management Development
Committee; Chair, Corporate Governance and Nominating Committee
or to the Non-Management Directors,
c/o Corporate
Secretary, Central Federal Corporation, 2923 Smith Road,
Fairlawn, Ohio 44333. All communications will be reviewed by
management to determine whether the communication requires
immediate action. Management will pass on all communications
received, or a summary of such communications, to the
appropriate director or directors.
DIRECTORS
COMPENSATION
DIRECTORS FEES. Each director (including
Mr. Allio) is paid an annual retainer in the amount of
$15,000, which includes a retainer of $3,000 for service as a
director of the Company and a retainer of $12,000 for service as
a director of CFBank. The Chairman of the Board receives an
additional $9,500 per year and the Audit Committee Chairman, who
is also the Committees financial expert, receives an
additional $3,000 per year.
STOCK BASED COMPENSATION PLANS The Company
maintains the 2009 Plan for the benefit of employees and outside
directors of the Company and CFBank. For more information on
this plan, see Note 14 to our consolidated financial
statements included in our annual report on
Form 10-K
for the year ended December 31, 2009.
13
DIRECTOR COMPENSATION TABLE. The following
table summarizes compensation paid to each director who is not a
named executive officer during the year ended December 31,
2009. Director compensation for Mr. Allio is included in
the Summary Compensation Table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director Compensation for 2009
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
|
or Paid in
|
|
|
All Other
|
|
|
|
|
Name
|
|
Cash ($) (1)
|
|
|
Compensation ($) (2)
|
|
|
Total ($)
|
|
|
Jeffrey W. Aldrich
|
|
$
|
15,000
|
|
|
$
|
3,966
|
|
|
$
|
18,966
|
|
Thomas P. Ash
|
|
|
18,000
|
|
|
|
1,173
|
|
|
|
19,173
|
|
William R. Downing
|
|
|
15,000
|
|
|
|
20
|
|
|
|
15,020
|
|
Gerry W. Grace
|
|
|
15,000
|
|
|
|
20
|
|
|
|
15,020
|
|
Jerry F. Whitmer
|
|
|
15,000
|
|
|
|
20
|
|
|
|
15,020
|
|
|
|
|
(1) |
|
The Fees Earned column for Mr. Ash includes
$3,000 in fees related to service as the Audit Committee
Chairman. |
|
(2) |
|
The amounts shown in the All Other Compensation
column represent costs associated with life insurance benefits
for Messrs. Aldrich and Ash, and $20 dividends on unvested
stock awards for each director. |
As of December 31, 2009, each director had a total of
200 shares of unvested restricted stock awards outstanding,
which will vest on May 31, 2010, and a total of 5,000
options outstanding. No stock or option awards were granted in
2009.
14
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE. The following table
summarizes compensation for our Chief Executive Officer and our
two most highly compensated executive officers other than the
CEO for the years ended December 31, 2009 and 2008.
Summary
Compensation Table for 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
All Other
|
|
|
|
|
Name and Principal
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
|
|
Position
|
|
Year
|
|
|
Salary ($)
|
|
|
Bonus ($)
|
|
|
($) (1)
|
|
|
($) (2)
|
|
|
($)(3)
|
|
|
Total ($)
|
|
|
Mark S. Allio
|
|
|
2009
|
|
|
$
|
225,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
29,044
|
|
|
$
|
254,044
|
|
Chairman, President
|
|
|
2008
|
|
|
|
225,000
|
|
|
|
35,000
|
|
|
|
50,375
|
|
|
|
17,161
|
|
|
|
31,118
|
|
|
|
358,654
|
|
and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond E. Heh
|
|
|
2009
|
|
|
|
135,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
410
|
|
|
|
135,410
|
|
President and Chief
|
|
|
2008
|
|
|
|
124,583
|
|
|
|
20,000
|
|
|
|
20,150
|
|
|
|
6,126
|
|
|
|
1,500
|
|
|
|
172,359
|
|
Operating Officer, CFBank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eloise L. Mackus
|
|
|
2009
|
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,340
|
|
|
|
122,340
|
|
Executive Vice President,
|
|
|
2008
|
|
|
|
109,583
|
|
|
|
20,000
|
|
|
|
16,120
|
|
|
|
5,639
|
|
|
|
2,630
|
|
|
|
153,972
|
|
General Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts included in the Stock Awards column
represent the aggregate grant date fair value of awards granted
during the year related to non-option stock awards, computed in
accordance with FASB ASC Topic 718. No non-option stock awards
were granted in 2009. Amounts for 2008 have been recomputed
under this methodology in accordance with SEC rules. For a
discussion of the assumptions we used to calculate the value of
non-option stock awards, see Note 14 to our consolidated
financial statements on pages
50-51 of our
annual report on
Form 10-K
for the year ended December 31, 2009. |
|
(2) |
|
The amount included in the Option Awards column
represents the aggregate grant date fair value of awards granted
during the year related to stock options, computed in accordance
with FASB ASC Topic 718. No option awards were granted in 2009.
Amounts for 2008 have been recomputed under this methodology in
accordance with SEC rules. For a discussion of the assumptions
we used to calculate the value of option awards, see
Note 14 to our consolidated financial statements on pages
50-51 of our
annual report on
Form 10-K
for the year ended December 31, 2009. |
|
(3) |
|
The amounts shown in the All Other Compensation
column are attributable to dividends on unvested non-option
stock awards, employer 401(k) plan matching contributions, and
director fees as follows: |
|
|
|
For Mr. Allio, $892 and $3,125 dividends on unvested
non-option stock awards in 2009 and 2008, respectively; $3,653
and $3,493 employer 401(k) plan match in 2009 and 2008,
respectively, and $24,500 director fees, including a $9,500
annual fee he received as Chairman of the Board , in each of
2009 and 2008. |
|
|
|
For Mr. Heh $410 and $1,500 dividends on unvested
non-option stock awards in 2009 and 2008, respectively. |
|
|
|
For Ms. Mackus, $298 and $1,063 dividends on unvested
non-option stock awards in 2009 and 2008,respectively; and
$2,042 and $1,567 employer 401(k) plan match in 2009 and 2008,
respectively. |
15
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END. The
following table shows information regarding outstanding equity
awards we have made to our named executive officers which are
outstanding as of December 31, 2009.
Outstanding
Equity Awards at Fiscal Year-End 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Market
|
|
|
|
Number of
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Value of
|
|
|
|
Securities
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Shares or
|
|
|
|
Underlying
|
|
|
Unexercised
|
|
|
|
|
|
|
|
|
Stock That
|
|
|
Units of
|
|
|
|
Unexercised
|
|
|
Options (#)
|
|
|
Option
|
|
|
Option
|
|
|
Have Not
|
|
|
Stock That
|
|
|
|
Options (#)
|
|
|
Unexercisable
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Vested (#)
|
|
|
Have Not
|
|
Name
|
|
Exercisable
|
|
|
(1)
|
|
|
Price ($)
|
|
|
Date
|
|
|
(2)
|
|
|
Vested ($) (3)
|
|
|
Mark S. Allio
|
|
|
24,474
|
|
|
|
|
|
|
|
10.42
|
|
|
|
5/19/15
|
|
|
|
11,000
|
|
|
|
16,500
|
|
|
|
|
3,334
|
|
|
|
1,666
|
|
|
|
7.35
|
|
|
|
2/15/17
|
|
|
|
|
|
|
|
|
|
|
|
|
4,167
|
|
|
|
8,333
|
|
|
|
4.03
|
|
|
|
3/20/18
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
20,000
|
|
|
|
3.29
|
|
|
|
10/16/18
|
|
|
|
|
|
|
|
|
|
Raymond E. Heh
|
|
|
12,000
|
|
|
|
|
|
|
|
12.57
|
|
|
|
6/9/13
|
|
|
|
4,933
|
|
|
|
7,400
|
|
|
|
|
3,632
|
|
|
|
|
|
|
|
13.76
|
|
|
|
3/18/14
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
|
|
|
|
12.60
|
|
|
|
4/15/14
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
10.42
|
|
|
|
5/19/15
|
|
|
|
|
|
|
|
|
|
|
|
|
666
|
|
|
|
334
|
|
|
|
7.35
|
|
|
|
2/15/17
|
|
|
|
|
|
|
|
|
|
|
|
|
1,667
|
|
|
|
3,333
|
|
|
|
4.03
|
|
|
|
3/20/18
|
|
|
|
|
|
|
|
|
|
|
|
|
3,500
|
|
|
|
6,500
|
|
|
|
3.29
|
|
|
|
10/16/18
|
|
|
|
|
|
|
|
|
|
Eloise L. Mackus
|
|
|
7,000
|
|
|
|
|
|
|
|
12.70
|
|
|
|
7/7/13
|
|
|
|
3,651
|
|
|
|
5,477
|
|
|
|
|
7,500
|
|
|
|
|
|
|
|
12.60
|
|
|
|
4/15/14
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
10.42
|
|
|
|
5/19/15
|
|
|
|
|
|
|
|
|
|
|
|
|
1,166
|
|
|
|
584
|
|
|
|
7.35
|
|
|
|
2/15/17
|
|
|
|
|
|
|
|
|
|
|
|
|
1,333
|
|
|
|
2,667
|
|
|
|
4.03
|
|
|
|
3/20/18
|
|
|
|
|
|
|
|
|
|
|
|
|
3,500
|
|
|
|
6,500
|
|
|
|
3.29
|
|
|
|
10/16/18
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The unexercisable Option Awards as of December 31, 2009
have a vesting date or will vest as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
Mr. Allio
|
|
|
Mr. Heh
|
|
|
Ms. Mackus
|
|
|
01/31/10
|
|
|
1,666
|
|
|
|
334
|
|
|
|
584
|
|
02/28/10
|
|
|
4,167
|
|
|
|
1,667
|
|
|
|
1,333
|
|
09/30/10
|
|
|
10,000
|
|
|
|
3,500
|
|
|
|
3,500
|
|
02/28/11
|
|
|
4,166
|
|
|
|
1,666
|
|
|
|
1,334
|
|
09/30/11
|
|
|
10,000
|
|
|
|
3,000
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,999
|
|
|
|
10,167
|
|
|
|
9,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
The Stock Awards that have not vested as of December 31,
2009 have a vesting date or will vest as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
Mr. Allio
|
|
|
Mr. Heh
|
|
|
Ms. Mackus
|
|
|
01/31/10
|
|
|
1,667
|
|
|
|
1,000
|
|
|
|
584
|
|
02/28/10
|
|
|
4,167
|
|
|
|
1,667
|
|
|
|
1,333
|
|
05/31/10
|
|
|
1,000
|
|
|
|
600
|
|
|
|
400
|
|
02/28/11
|
|
|
4,166
|
|
|
|
1,666
|
|
|
|
1,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,000
|
|
|
|
4,933
|
|
|
|
3,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
Based on the $1.50 closing price of our common stock as of
December 31, 2009. |
16
ADDITIONAL
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE. Section 16(a) of the Securities
Exchange Act of 1934 requires the Companys executive
officers and directors and persons who own more than 10% of any
registered class of the Companys equity securities to file
reports of ownership and changes in ownership with the
Securities and Exchange Commission. Executive officers,
directors and greater than 10% stockholders are required by
regulations of the Securities and Exchange Commission to furnish
the Company with copies of all Section 16(a) reports they
file.
Based solely on a review of the copies of all such reports of
ownership furnished to the Company, or written representations
that no forms were necessary, we believe there were no known
failures to file a required report for the year ended
December 31, 2009. However there were three filings that
were not made in a timely manner, for Messrs. Aldrich, Ash,
and Grace, which related to the expiration of certain stock
options without exercise. The late transactions were
subsequently reported on Form 4s.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS. CFBank policy and Federal regulations
related to insured financial institutions require that any and
all loans or extensions of credit made by CFBank to related
persons of the Company or CFBank, including executive officers,
directors or their immediate family members (i) be made in
the ordinary course of business on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with persons not related to
CFBank, (ii) do not involve more than the normal risk of
collectability and (iii) do not present any other
unfavorable features. All outstanding loans or extensions of
credit made by CFBank to such related persons comply with these
regulations and policies. In addition, loans made to a director
or executive officer in an amount that, when aggregated with the
amount of all other loans to such person and his or her related
interests, exceed the greater of $25,000 or 5% of CFBanks
capital and surplus (up to a maximum of $500,000) must be
approved in advance by a majority of the disinterested members
of the Board of Directors. Total loans outstanding to such
related persons totaled $2.3 million at December 31,
2009, and were all approved by a majority of disinterested
members of the Board of Directors.
17
PROPOSAL 2 NON-BINDING ADVISORY VOTE APPROVING EXECUTIVE
COMPENSATION
The ARRA, which was enacted on February 17, 2009, requires
that, during the period in which any obligation arising from
financial assistance provided to a recipient under the Treasury
Departments TARP remains outstanding, any proxy statement
for an annual meeting of stockholders of that TARP recipient at
which directors are to be elected must provide the
recipients stockholders with a so-called say on
pay. This means that the recipient has to provide for a
separate stockholder vote to approve the compensation of the
recipients executives, as disclosed pursuant to the
applicable compensation disclosure rules of the Securities and
Exchange Commission. The Company, which has received funds under
the TARP, is complying with the say on pay
requirement through the presentation of this Proposal 2.
The purpose of the Companys compensation policies and
procedures is to attract and retain experienced, highly
qualified executives critical to the Companys long-term
success and enhancement of stockholder value. Those policies and
procedures also should strongly align the interests of our
executives with the interests of our stockholders in building
the long-term value of the Company. The Board of Directors and
the Compensation and Development Committee believe that the
Companys compensation policies and procedures achieve
these objectives and that our compensation levels, policies and
procedures, as disclosed and discussed in this Proxy Statement,
are reasonable in comparison both to our peer bank holding
companies and to the Companys performance during 2009.
Accordingly, the Company presents the following advisory
proposal for stockholder approval:
Resolved, that the stockholders approve the
compensation of the Companys executive officers, as set
forth in the compensation tables and any related disclosures or
discussion in this Proxy Statement.
Your vote on this proposal is advisory and is not binding on the
Company or its Board of Directors. The Board of Directors may,
however, take into account the outcome of the vote when
considering future executive compensation decisions.
Vote
Necessary to Approve Proposal 2
The affirmative vote of the holders of a majority of the votes
cast on the proposal is required for approval of this
Proposal 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE FOR THE PROPOSAL TO APPROVE
THE COMPENSATION OF THE COMPANYS EXECUTIVE OFFICERS AS
DISCLOSED IN THIS PROXY STATEMENT.
18
PROPOSAL 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee, with the approval of the Board of
Directors, has appointed Crowe Horwath LLP to be its independent
registered public accounting firm for 2010, subject to
ratification by stockholders. A representative of Crowe Horwath
LLP is expected to be present at the Meeting to respond to
appropriate questions from stockholders and will have the
opportunity to make a statement should he or she desire to do so.
If stockholders do not ratify the appointment of Crowe Horwath
LLP as the Companys independent registered public
accounting firm for 2010, the Audit Committee may replace them
with another independent registered public accounting firm for
the balance of the year or may continue to use Crowe Horwath LLP
if the Audit Committee deems it to be in the best interest of
the Company under the circumstances.
Vote
Necessary to Approve Proposal 3
The affirmative vote of the holders of a majority of votes cast
on the proposal is required for approval of this Proposal 3.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR RATIFICATION OF THE APPOINTMENT OF CROWE HORWATH
LLP AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR 2010.
The following table sets forth the fees billed to the Company
for 2009 and 2008 by Crowe Horwath LLP:
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Audit Fees
|
|
$
|
106,300
|
|
|
$
|
88,650
|
|
Audit-Related Fees (1)
|
|
|
1,400
|
|
|
|
5,943
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
All Other Fees (2)
|
|
|
3,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
111,167
|
|
|
$
|
94,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes fees related to the filing of
Form S-8
for the Companys equity compensation plans in 2009 and
2008 and
Form S-3
for the registration of the warrant issued to the Treasury
Department in connection with the CPP in 2008. |
|
(2) |
|
Includes fees related to the Companys subscription to
accounting research products. |
The Companys Audit Committee must pre-approve all
engagements of the independent registered public accounting firm
by the Company and its subsidiaries, including CFBank, as
required by the Audit Committees charter and the rules of
the Securities and Exchange Commission. Prior to the beginning
of each fiscal year, the Audit Committee approves an annual
estimate of fees for engagements, taking into account whether
the services are permissible under applicable law and the
possible impact of each non-audit service on the independent
registered public accounting firms independence from
management. In addition, the Audit Committee evaluates known
potential engagements of the independent registered public
accounting firm, including the scope of the proposed work to be
performed and the proposed fees, and approves or rejects each
service. Management may present additional services for approval
at subsequent committee meetings. The Audit Committee has
delegated to the Audit Committee Chairman the authority to
evaluate and approve engagements on behalf of the Audit
Committee in the event a need arises for pre-approval between
Committee meetings and in the event the engagement for services
was within the annual estimate but not specifically approved. If
the Chairman so approves any such engagements, he reports that
approval to the full Committee at the next Committee meeting.
Since the effective date of the Securities and Exchange
Commissions rules that strengthen independent registered
public accounting firm independence, all audit, audit-related,
tax and other services, if applicable, as provided by Crowe
Horwath LLP, have been pre-approved in accordance with the Audit
Committees policies and procedures.
19
STOCK
OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table provides information as of March 15,
2010 about the persons known by the Company to be beneficial
owners of more than 5% of the Companys outstanding common
stock. A person may be considered to beneficially own any shares
of common stock over which he or she has, directly or
indirectly, sole or shared voting or investment power.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
Nature of
|
|
Percent of
|
|
|
Beneficial
|
|
Common Stock
|
Name and Address of Beneficial
Owner
|
|
Ownership
|
|
Outstanding
|
|
Uni Capital LP (1)
|
|
|
410,784
|
|
|
|
10.02
|
%
|
Uni Capital GP LLC
|
|
|
|
|
|
|
|
|
Reid S. Buerger
|
|
|
|
|
|
|
|
|
7111 Valley Green Road
|
|
|
|
|
|
|
|
|
Fort Washington, PA 19304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MacNealy Hoover Investment Management, Inc. (2)
|
|
|
366,701
|
|
|
|
8.94
|
%
|
Harry C.C. MacNealy
|
|
|
|
|
|
|
|
|
200 Market Avenue North, Suite 200
|
|
|
|
|
|
|
|
|
Canton, OH 44702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellington Management Company, LLP (3)
|
|
|
333,088
|
|
|
|
8.12
|
%
|
75 State Street
|
|
|
|
|
|
|
|
|
Boston, MA 02109
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Based on information contained in a
statement on Schedule 13D dated August 22, 2008 and
filed August 22, 2008, this group has sole voting power and
sole investment power over 410,784 shares of the
outstanding common stock of the Company.
|
|
(2)
|
|
Based in information contained in a
statement on Schedule 13D dated December 15, 2009 and
filed December 17, 2009, MacNealy Hoover Investment
Management, Inc. has shared voting power and shared investment
power over 366,701 shares of the outstanding common stock
of the Company.
|
|
(3)
|
|
Based on information contained in a
statement on Schedule 13G/A dated December 31, 2007
and filed February 14, 2008, Wellington Management Company,
LLP has shared voting power over 251,388 shares of the
outstanding common stock of the Company and shared investment
power over 333,088 shares of the outstanding common stock
of the Company.
|
20
SECURITY
OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of March 15,
2010 with respect to the number of shares of Company common
stock considered to be owned by each director or nominee for
director of the Company, by each executive officer named in the
Summary Compensation Table and by all directors and executive
officers of the Company as a group. A person may be considered
to own any shares of common stock over which he or she has,
directly or indirectly, sole or shared voting or investment
power.
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of
|
|
|
Beneficial Ownership
|
|
|
Shares
|
|
Percent
|
|
Mark S. Allio, Chairman of the Board, President and Chief
Executive Officer (1)
|
|
|
182,341
|
|
|
|
4.4
|
%
|
Jeffrey W. Aldrich, Director (2)
|
|
|
29,296
|
|
|
|
0.7
|
%
|
Thomas P. Ash, Director (3) (9)
|
|
|
29,178
|
|
|
|
0.7
|
%
|
William R. Downing, Director (4)
|
|
|
37,892
|
|
|
|
0.9
|
%
|
Gerry W. Grace, Director (5)
|
|
|
51,007
|
|
|
|
1.2
|
%
|
Jerry F. Whitmer, Director (3)
|
|
|
11,700
|
|
|
|
0.3
|
%
|
Raymond E. Heh, President and Chief Operating Officer, CFBank (6)
|
|
|
54,966
|
|
|
|
1.3
|
%
|
Eloise L. Mackus, Executive Vice President, General Counsel and
Secretary (7)
|
|
|
46,666
|
|
|
|
1.1
|
%
|
All directors and executive officers as a group (9 persons)
(8)
|
|
|
478,962
|
|
|
|
11.3
|
%
|
|
|
|
(1)
|
|
Includes 11,000 shares awarded
to Mr. Allio pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 47,808 shares
which may be acquired by exercising stock options within
60 days. Also includes 1,300 shares owned by Michele
Allio, Mr. Allios spouse.
|
|
(2)
|
|
Includes 200 shares awarded to
Mr. Aldrich pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 3,700 shares
which may be acquired by exercising stock options within
60 days. Also includes 23,322 shares owned by Jean
Aldrich, Mr. Aldrichs spouse.
|
|
(3)
|
|
Includes 200 shares awarded to
each of these outside directors pursuant to the Companys
equity compensation plans which have not yet vested, but as to
which they may provide voting recommendations. Includes
3,700 shares each which may be acquired by exercising stock
options within 60 days.
|
|
(4)
|
|
Includes 200 shares awarded to
Mr. Downing pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 3,700 shares
which may be acquired by exercising stock options within
60 days. Also includes 16,192 shares owned by R.H.
Downing, Inc., which is 100% owned by Mr. Downing, and
10,000 shares owned by Mary Downing Trust, of which
Mr. Downing is trustee.
|
|
(5)
|
|
Includes 200 shares awarded to
Mr. Grace pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 3,700 shares
which may be acquired by exercising stock options within
60 days. Also includes 2,790 shares owned by Janet
Grace, Mr. Graces spouse.
|
|
(6)
|
|
Includes 4,933 shares awarded
to Mr. Heh pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 37,966 shares
which may be acquired by exercising stock options within
60 days.
|
|
(7)
|
|
Includes 3,651 shares awarded
to Ms. Mackus pursuant to the Companys equity
compensation plans which have not yet vested, but as to which
she may provide voting recommendations. Includes
25,416 shares which may be acquired by exercising stock
options within 60 days.
|
|
(8)
|
|
Includes 23,567 shares awarded
to all directors and executive officers as a group pursuant to
the Companys equity compensation plans which have not yet
vested, but as to which they may provide voting recommendations.
Includes 153,606 shares which may be acquired by exercising
stock options within 60 days.
|
|
(9)
|
|
Includes 20,000 shares that
Mr. Ash has pledged as security.
|
21
EQUITY COMPENSATION PLAN INFORMATION. The following
table sets forth information about Company common stock that may
be issued upon exercise of options, warrants and rights under
all of the Companys equity compensation plans as of
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
Securities to be
|
|
|
|
|
|
Securities
|
|
|
|
Issued Upon
|
|
|
Weighted-Average
|
|
|
Remaining
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
Available for Future
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Issuance under
|
|
|
|
Options, Warrants
|
|
|
Options, Warrants
|
|
|
Equity Compensation
|
|
Plan Category
|
|
and Rights
|
|
|
and Rights
|
|
|
Plans
|
|
|
Equity compensation plans approved by stockholders
|
|
|
310,361
|
|
|
$
|
7.89
|
|
|
|
1,092,788
|
|
Equity compensation plans not approved by stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
310,361
|
|
|
$
|
7.89
|
|
|
|
1,092,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MISCELLANEOUS
The Company will pay the cost of this proxy solicitation. The
Company will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by
them in sending proxy materials to the beneficial owners of the
Companys common stock. Directors, officers and regular
employees of the Company may also solicit proxies personally or
by telephone and will not receive additional compensation for
these activities.
STOCKHOLDER
PROPOSALS
If a stockholder desires to have a proposal included in the
Companys proxy statement and form of proxy for the 2011
annual meeting of stockholders, the proposal must conform to the
requirements of Exchange Act
Rule 14a-8
and other applicable proxy rules and interpretations of the
Securities and Exchange Commission concerning the submission and
content of proposals and must be received by the Company, at
2923 Smith Road, Fairlawn, Ohio 44333, prior to the close of
business on December 22, 2010.
The Companys Bylaws provide an advance notice procedure
for a stockholder to properly bring business before an annual
meeting of stockholders. For business to be properly brought
before an annual meeting by a stockholder the business must
relate to a proper subject matter for stockholder action and the
stockholder must have given timely notice thereof in writing to
the Corporate Secretary of the Company. To be timely, a
stockholders notice must be delivered or mailed to and
received at the principal executive offices of the Company not
less than 90 days prior to the date of the annual meeting;
provided, however, that in the event that less than
100 days notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by
the stockholder to be timely must be received not later than the
close of business on the 10th day following the day on
which such notice of the date of the annual meeting was mailed
or such public disclosure was made. A stockholders notice
to the Corporate Secretary shall set forth as to each matter
such stockholder proposes to bring before the annual meeting:
(i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting
such business at the annual meeting; (ii) the name and
address, as they appear on the Companys books, of the
stockholder proposing such business; (iii) the class and
number of shares of the Companys capital stock that are
beneficially owned by such stockholder; and (iv) any
material interest of such stockholder in such business.
Assuming that the 2011 annual meeting of stockholders is held on
the third Thursday of May, as has been the Companys recent
practice, and that such date is announced at least 100 days
in advance, a stockholders proposal for that meeting must
be received by the Company at 2923 Smith Road, Fairlawn, Ohio
44333, not later than the close of business on February 9,
2011, in order to be considered timely. If any such proposal is
received after such date, it will be considered untimely, and
the persons named in the proxies solicited by the Board of
Directors of the Company may exercise discretionary voting power
with respect to that proposal.
Stockholder nominations for director are discussed above under
the caption CORPORATE GOVERNANCE AND NOMINATING
COMMITTEE.
22
A COPY OF THE
FORM 10-K
(WITHOUT EXHIBITS) FOR THE YEAR ENDED DECEMBER 31, 2009, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE
FURNISHED WITHOUT CHARGE TO STOCKHOLDERS OF RECORD UPON WRITTEN
REQUEST TO THE CORPORATE SECRETARY, CENTRAL FEDERAL CORPORATION,
2923 SMITH ROAD, FAIRLAWN, OHIO 44333.
BY ORDER OF THE BOARD OF DIRECTORS
Eloise L. Mackus
Corporate Secretary
Fairlawn, Ohio
April 20, 2010
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
YOU ARE REQUESTED TO SIGN, DATE AND PROMPTLY RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Unless we have received contrary instructions, we send a single
copy of the annual report, proxy statement and notice of annual
meeting to any household at which two or more stockholders
reside if we believe the stockholders are members of the same
family. Each stockholder in the household will continue to
receive a separate proxy card. This process, known as
householding, reduces the volume of duplicate
information received at those households and helps reduce our
expenses.
If you would like to receive your own set of the annual report,
proxy statement and notice of annual or special meetings this
year or in future years, follow the instructions described below:
If your shares are registered in your own name, please contact
our transfer agent, Registrar & Transfer Company, and
inform them of your request to revoke householding by calling
them at 1.800.368.5948 or writing to them at
Registrar & Transfer Company, 10 Commerce Drive,
Cranford, NJ 07016. Within 30 days of your revocation, we
will send to you individual documents.
If a bank, broker or other nominee holds your shares, please
contact your bank, broker or other nominee directly.
If two or more stockholders residing in the same household
individually receive copies of the annual report, proxy
statement and notice of annual or special meeting and as a
household wish to receive only one copy, you may contact our
transfer agent at the address and telephone number listed in the
preceding paragraph in the case of registered holders, or your
bank, broker or other nominee directly if such bank, broker or
other nominee holds your shares, and request that householding
commence as soon as practicable.
23
CENTRAL FEDERAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 2010
10:00 A.M. LOCAL TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Eloise L. Mackus and Therese Ann Liutkus, and each of them, with
full power of substitution, as proxies for the undersigned, and to vote all shares of common stock
of Central Federal Corporation which the undersigned is entitled to vote at the Annual Meeting of
Stockholders, to be held at the Fairlawn Country Club located at 200 North Wheaton Road, Fairlawn,
Ohio on Thursday, May 20, 2010 at 10:00 a.m., local time, and at any and all adjournments or
postponements thereof as follows:
(1) |
|
The election as directors of all nominees listed (except as marked to the contrary below). |
Thomas P. Ash
Jerry F. Whitmer
|
|
|
|
|
|
|
FOR
|
|
|
VOTE WITHHELD
|
|
|
FOR ALL EXCEPT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK FOR ALL EXCEPT AND WRITE
THAT NOMINEES NAME ON THE LINE PROVIDED BELOW.
(2) |
|
Approval of the following advisory (non-binding) proposal: Resolved, that the stockholders
approve the compensation of the Companys executive officers, as set forth in the compensation
tables and any related disclosures or discussion in this Proxy Statement. |
(3) |
|
Ratification of the appointment of Crowe Horwath LLP as independent registered public
accounting firm for the Company for the year ending December 31, 2010. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED
PROPOSALS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED. IF ANY OTHER
BUSINESS IS PRESENTED AT THE ANNUAL MEETING, INCLUDING WHETHER OR NOT TO ADJOURN THE
MEETING, THIS PROXY WILL BE VOTED BY THE PROXIES IN THEIR BEST JUDGEMENT. AT THE PRESENT
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL
MEETING.
The undersigned acknowledges receipt from the Company prior to the execution of this proxy
of a Notice of Annual Meeting of Stockholders and of a Proxy Statement dated April 20, 2010
and of the Annual Report to Stockholders. The undersigned hereby revokes any proxies
submitted previously.
Please sign exactly as your name appears on this card. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title. If shares are held
jointly, each holder may sign but only one signature is required.
Dated:
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
(Central Federal Corporation Letterhead)
Dear Stock Award Recipient:
On behalf of the Board of Directors, I am forwarding you the attached Vote Authorization
Form for the purpose of conveying your voting instruction to First Bankers Trust (the
Trustee) on the proposals to be presented at the Annual Meeting of Stockholders of
Central Federal Corporation (the Company) on May 20, 2010. Also enclosed is Notice and
Proxy Statement for the Companys Annual Meeting of Stockholders and a copy of the
Companys Annual Report to Stockholders.
As a participant in the Central Federal Corporation 1999 Stock-Based Incentive Plan (the
Incentive Plan) you are entitled to vote all unvested shares of restricted stock awarded
to you under the Incentive Plan as of April 9, 2010. The Incentive Plan Trustee will vote
those shares of the Company stock in accordance with instructions it receives from you and
the other Stock Award recipients. Shares of restricted stock for which instructions are
not received by May 13, 2010, will not be voted by the Incentive Plan Trustee, as directed
by the Company.
At this time, in order to direct the voting of Company common stock awarded to you under
the Incentive Plan, you must complete and sign the enclosed Vote Authorization Form and
return it in the accompanying postage-paid envelope no later than May 13, 2010.
Sincerely,
Mark S. Allio
Chairman, President & Chief Executive Officer
|
|
|
|
|
Name
|
|
|
|
INCENTIVE PLAN |
Shares
|
|
|
|
|
|
|
|
|
|
VOTE AUTHORIZATION FORM
I understand that First Bankers Trust (the Trustee), is the holder of record and custodian
of all shares of Central Federal Corporation (the Company) common stock held in trust for the
Central Federal Corporation 1999 Stock-Based Incentive Plan (Incentive Plan). Further, I
understand that my voting instructions are solicited on behalf of the Companys Board of Directors
for the Annual Meeting of Stockholders to be held on May 20, 2010.
|
|
Accordingly, I vote my shares as follows: |
(1) |
|
The election as directors of all nominees listed (except as marked to the contrary below). |
Thomas P. Ash
Jerry F. Whitmer
|
|
|
|
|
|
|
FOR
|
|
|
VOTE WITHHELD
|
|
|
FOR ALL EXCEPT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK FOR ALL EXCEPT AND WRITE
THAT NOMINEES NAME ON THE LINE PROVIDED BELOW.
(2) |
|
Approval of the following advisory (non-binding) proposal: Resolved, that the stockholders
approve the compensation of the Companys executive officers, as set forth in the compensation
tables and any related disclosures or discussion in this Proxy Statement. |
(3) |
|
Ratification of the appointment of Crowe Horwath LLP as independent registered public
accounting firm for the Company for the year ending December 31, 2010. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED
PROPOSALS
|
|
The Incentive Plan Trustee is hereby authorized to vote all unvested shares of Company
common stock awarded to me under the Incentive Plan in its trust capacity as indicated
above. |
Please date, sign and mail this form in the enclosed postage-paid envelope no later than May 13,
2010.