SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a) of the
Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e) (2)
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Peoples Bancorp Inc.
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(Name of Registrant as Specified in its Charter)
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(Name of Person Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: _________________________________
(2) Form, Schedule or Registration Statement No.: ___________
(3) Filing Party: ___________________________________________
(4) Date Filed: ____________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
PEOPLES BANCORP INC.
Marietta, Ohio
March 9, 2001
To the Shareholders of Peoples Bancorp Inc.:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Annual Meeting") of Peoples Bancorp Inc. ("Peoples") to be held at 10:30
A.M., local time, on Thursday, April 12, 2001, in the Ball Room, Holiday Inn,
701 Pike Street, Marietta, Ohio (I-77 Ohio, exit 1), for the following purposes:
1. To elect the following directors for terms of three years each:
Nominee Term Expires In
Robert E. Evans (for re-election) 2004
Robert W. Price (for re-election) 2004
Paul T. Theisen (for re-election) 2004
Thomas C. Vadakin (for re-election) 2004
2. To transact any other business which properly come before the Annual
Meeting and any adjournment thereof.
Shareholders of record at the close of business on February 15, 2001,
will be entitled to notice of and to vote at the Annual Meeting and any
adjournment.
The vote of each shareholder is important, whatever the number of
common shares held. Whether or not you plan to attend the Annual Meeting, please
sign, date and return your proxy card promptly in the enclosed envelope.
Peoples' Annual Report to Shareholders for the fiscal year ended
December 31, 2000, accompanies this Notice and proxy statement.
By Order of the Board of Directors,
/S/ RUTH I. OTTO
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Ruth I. Otto
Corporate Secretary
PEOPLES BANCORP INC.
PO Box 738
138 Putnam Street
Marietta, OH 45750-0738
(740) 374-6136
www.peoplesbancorp.com
PROXY STATEMENT
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This proxy statement and the accompanying proxy card are being mailed
to shareholders of Peoples Bancorp Inc., an Ohio corporation ("Peoples"), on or
about March 9, 2001, in connection with the solicitation of proxies by the Board
of Directors of Peoples for use at the Annual Meeting of Shareholders of Peoples
(the "Annual Meeting") called to be held on Thursday, April 12, 2001, or at any
adjournment. The Annual Meeting will be held at 10:30 A.M., local time, in the
Ball Room, Holiday Inn, 701 Pike Street, Marietta, Ohio (I-77 Ohio, exit 1).
Peoples has two wholly-owned subsidiaries, Peoples Bank, National
Association ("Peoples Bank"), (formerly The First National Bank of Southeastern
Ohio, The Peoples Banking and Trust Company, and Peoples Bank FSB, which were
merged as of March 10, 2000, under the title Peoples Bank, National
Association), and Northwest Territory Life Insurance Company.
A proxy card for use at the Annual Meeting accompanies this proxy
statement and is solicited by the Board of Directors of Peoples. Shareholders
may use their proxy cards if they are unable to attend the Annual Meeting in
person or wish to have their common shares voted by proxy even if they do attend
the Annual Meeting. Without affecting any vote previously taken, any shareholder
appointing a proxy may revoke it at any time before it is voted by filing with
the Secretary of Peoples, at the address set forth on the cover page of this
proxy statement, written notice of such revocation; by executing a later-dated
proxy card which is received by Peoples prior to the Annual Meeting; or by
attending the Annual Meeting and giving notice of such revocation in person.
Attendance at the Annual Meeting will not, in and of itself, constitute
revocation of a proxy.
Only shareholders of record at the close of business on February 15,
2001, (the "Record Date") are entitled to receive notice of and to vote at the
Annual Meeting. At the close of business on the Record Date, 6,496,418 common
shares were outstanding and entitled to vote. Each common share entitles the
holder to one vote on each matter to be submitted to shareholders at the Annual
Meeting. A quorum for the Annual Meeting is a majority of the common shares
outstanding. There is no cumulative voting with respect to the election of
directors.
Shareholders holding common shares in "street name" with a broker
dealer, bank, or other holder of record should review the information provided
to them by such holder of record. This information will set forth the procedures
to be followed in instructing the holder of record how to vote the "street name"
common shares and how to revoke previously given instructions.
Peoples will bear the costs of preparing and mailing this proxy
statement, the accompanying proxy card, any other related materials, and all
other costs incurred in connection with the solicitation of proxies on behalf of
the Board of Directors. Proxies will be solicited by mail and may be further
solicited, for no additional compensation, by officers, directors, or employees
of Peoples and its subsidiaries by further mailing, telephone, or personal
contact. Peoples will also pay the standard charges and expenses of brokerage
houses, voting trustees, banks, associations and other custodians, nominees, and
fiduciaries, who are record holders of common shares not beneficially owned by
them, for forwarding such materials to, and obtaining proxies from, the
beneficial owners of common shares entitled to vote at the Annual Meeting.
The Annual Report to the Shareholders of Peoples for the fiscal year
ended December 31, 2000 (the "2000 Fiscal Year") is enclosed herewith.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
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The following table sets forth, as of the Record Date, certain
information concerning the beneficial ownership of common shares by the only
person known to Peoples to be the beneficial owner of more than 5% of the
outstanding common shares:
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class (1)
---------------- -------------------- --------------------
Peoples Bank - Trustee
138 Putnam Street
Marietta, OH 45750 923,751 (2) 14.22 %
(1) The percent of class is based on 6,496,418 common shares outstanding
and entitled to vote on the Record Date.
(2) Includes 178,500 common shares, 573,196 common shares, 120,273 common
shares and 51,782 common shares as to which the Investment and Trust
Division of Peoples Bank has shared investment and sole voting power,
shared investment and voting power, sole voting and investment power,
and sole investment and shared voting power, respectively. The officers
and directors of Peoples Bank and Peoples disclaim beneficial ownership
of these common shares by reason of their positions. Does not include
257,150 common shares held by the Investment and Trust Department in its
capacity as Trustee under the Peoples Bancorp Inc. Retirement Savings
Plan with respect to which the Investment and Trust Department has
neither voting nor investment power.
The following table sets forth, as of the Record Date, certain
information with respect to the common shares beneficially owned by each
director of Peoples, by each nominee for election as a director of Peoples, by
the executive officers of Peoples named in the Summary Compensation Table and by
all executive officers and directors of Peoples as a group:
Amount and Nature of Beneficial Ownership (1)
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Common Shares
Which Can Be Acquired
Upon Exercise
Common Shares Options Exercisable Percent of
Name Presently Held Within 60 Days Total Class (2)
---- -------------- -------------- ------ ---------
Carl Baker, Jr. 5,964 (4) 6,652 12,616 (3)
David B. Baker (5) 16,537 (6) 21,244 37,781 (3)
George W. Broughton 124,175 (7) 13,163 137,338 2.11%
Frank L. Christy 61,783 (8) 1,163 62,946 (3)
John W. Conlon (5) 15,006 (9) 18,667 33,673 (3)
Wilford D. Dimit 23,237 (10) 13,271 36,741 (3)
Robert E. Evans (5) 127,116 (11) 44,870 171,986 2.63%
Larry E. Holdren (5) 12,863 (12) 23,059 35,922 (3)
Rex E. Maiden 855 (13) 5,583 6,438 (3)
Robert W. Price 544 (14) -0- 544 (3)
Paul T. Theisen 17,809 (15) 13,271 31,080 (3)
Thomas C. Vadakin 6,881 (16) 4,659 11,540 (3)
Joseph H. Wesel 36,014 (17) 9,206 45,220 (3)
Joseph S. Yazombek (5) 12,951 (18) 23,059 36,010 (3)
All directors and
executive officers as a
group (numbering 16) 471,209 (19) 222,954 694,163 10.33%
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(1) Unless otherwise noted, the beneficial owner has sole voting and
investment power with respect to all of the common shares reflected in
the table. All fractional common shares have been rounded to the nearest
whole common share.
(2) The percent of class is based upon 6,496,418 common shares outstanding
and entitled to vote on the Record Date and the number of common shares
as to which the named person or group has the right to acquire beneficial
ownership upon the exercise of options exercisable within 60 days of the
Record Date.
(3) Reflects ownership of less than 1%.
(4) Includes 5,000 common shares held by B & N Coal, Inc., to which Mr. Baker
exercises shared voting and investment power. Does not include 173 common
shares credited to Mr. Baker's account under the Peoples Bancorp Inc.
Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and
Subsidiaries, as to which Mr. Baker has no voting or investment power.
Does not include 24,049 common shares held in the Jewel Baker Irrevocable
Trust as to which Mr. Baker is a beneficiary and has no voting or
investment power.
(5) Executive officer of Peoples named in the Summary Compensation Table.
(6) Includes 8,165 common shares held jointly by Mr. Baker and his wife as to
which he exercises shared voting and investment power. Includes 8,291
common shares allocated to the account of Mr. Baker in the Peoples
Bancorp Inc. Retirement Savings Plan with respect to which Mr. Baker has
the power to direct the voting and disposition. Does not include 399
common shares owned by his wife in an individual retirement account as to
which common shares Mr. Baker has no voting or investment power.
(7) Includes 6,174 common shares held by Mr. Broughton as custodian for his
children, as to which Mr. Broughton has sole voting and investment power
and claims beneficial ownership. Includes 440 common shares held by GWB
Sales, Inc., as to which Mr. Broughton exercises shared voting and
investment power. Includes 45,241 common shares held by Mr. Broughton as
Trustee of the George W. Broughton and Nancy R. Broughton Retained
Annuity Trust, as to which Mr. Broughton has voting and investment power.
Does not include 12,857 common shares held of record and beneficially
owned by Mr. Broughton's wife, as to which he has no voting or investment
power and disclaims beneficial ownership. Does not include 2,069 common
shares held in the Carl Broughton Trust as to which Mr. Broughton is a
beneficiary. (Peoples Bank is trustee of this trust and exercises sole
voting and investment power with respect to these common shares, which
are included among the common shares shown as beneficially owned by
Peoples Bank in the preceding table.) Does not include 855 common shares
credited to Mr. Broughton's account under the Peoples Bancorp Inc.
Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and
Subsidiaries, as to which Mr. Broughton has no voting or investment
power.
(8) Includes 5,215 common shares held in the Frank L. Christy Investment
Account as to which he exercises shared voting and investment power. Also
includes 56,348 common shares held in the Riverbank Restaurants Inc.
Agency Account as to which Mr. Christy exercises shared voting and
investment power.
(9) Includes 8,501 common shares allocated to the account of Mr. Conlon in
the Peoples Bancorp Inc. Retirement Savings Plan with respect to which
Mr. Conlon has the power to direct the voting and disposition.
(10) Includes 15,120 common shares held jointly by Mr. Dimit and his wife as
to which he exercises shared voting and investment power. Does not
include 8,396 common shares credited to Mr. Dimit's account under the
Peoples Bancorp Inc. Deferred Compensation Plan for Directors of Peoples
Bancorp Inc. and Subsidiaries, as to which Mr. Dimit has no voting or
investment power.
(11) Includes 26,926 common shares allocated to the account of Mr. Evans in
the Peoples Bancorp Inc. Retirement Savings Plan with respect to which
Mr. Evans has the power to direct the voting and disposition. Does not
include 16,870 common shares held of record and owned beneficially by Mr.
Evans' wife, nor 3,007 common shares held jointly by Mr. Evans' wife and
son, Douglas B. Evans, as to which common shares Mr. Evans has no voting
or investment power and disclaims beneficial ownership. Does not include
8,183 common shares credited to Mr. Evans' account under the Peoples
Bancorp Inc. Deferred Compensation Plan for Directors of Peoples Bancorp
Inc. and Subsidiaries, as to which Mr. Evans has no voting or investment
power.
(12) Includes 10,921 common shares allocated to the account of Mr. Holdren in
the Peoples Bancorp Inc. Retirement Plan with respect to which Mr.
Holdren has the power to direct the voting and disposition.
(13) Does not include 933 common shares credited to Mr. Maiden's account under
the Peoples Bancorp Inc. Deferred Compensation Plan for Directors of
Peoples Bancorp Inc. and Subsidiaries, as to which Mr. Maiden has no
voting or investment power.
(14) Does not include 203 common shares credited to Mr. Price's account under
the Peoples Bancorp Inc. Deferred Compensation Plan for Directors of
Peoples Bancorp Inc. and Subsidiaries, as to which Mr. Price has no
voting or investment power.
(15) Does not include 3,869 common shares credited to Mr. Theisen's account
under the Peoples Bancorp Inc. Deferred Compensation Plan for Directors
of Peoples Bancorp Inc. and Subsidiaries, as to which Mr. Theisen has no
voting or investment power.
(16) Includes 6,238 common shares in the Thomas C. Vadakin Investment Account
in Peoples Bank in which Mr. Vadakin shares investment and voting power.
(17) Does not include 11,196 common shares held of record and beneficially
owned by Mr. Wesel's wife as to which he has no voting or investment
power and disclaims beneficial ownership. Does not include 5,281 common
shares credited to Mr. Wesel's account under the Peoples Bancorp Inc.
Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and
Subsidiaries, as to which Mr. Wesel has no voting or investment power.
Does not include 30,528 common shares in the Joseph and Lu Wesel
Grandchildren's Trust, as to which the Peoples Bank has sole investment
and voting power. Does not include 22,591 common shares held of record by
the Marietta Ignition, Inc. Pension Plan as to which Mr. Wesel has no
voting or investment power and disclaims beneficial ownership. Mr. Wesel
serves as a member of the Administrative Committee for Marietta Ignition,
Inc. Pension Plan. Peoples Bank shares voting power with respect to the
common shares held in the Marietta Ignition, Inc. Pension Plan with the
Plan Administrator and said common shares are included among the common
shares shown as beneficially owned by Peoples Bank in the preceding
table.
(18) Includes 10,010 common shares allocated to the account of Mr. Yazombek in
the Peoples Bancorp Inc. Retirement Plan with respect to which Mr.
Yazombek has the power to direct the voting and disposition.
(19) Includes common shares held jointly by directors and executive officers
with other persons. Also includes 65,914 common shares allocated to the
accounts of all executive officers of Peoples in the Peoples Bancorp Inc.
Retirement Savings Plan. See notes (4) and (6) through (18) above.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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To Peoples' knowledge, based solely on a review of reports furnished to
Peoples and written representations that no other reports were required, during
the 2000 Fiscal Year, all filing requirements applicable to officers, directors,
and greater than 10% beneficial owners of Peoples under Section 16(a) of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") were complied
with, except as noted below:
(1) Carl L. Baker, Jr. filed a Form 4 on November 11, 2000, to report late
transactions by B&N Coal, Inc. during February, March, and September,
2000. Mr. Baker is President & CEO of B&N Coal, Inc., and may be deemed
the beneficial owner of the common shares held by B&N Coal, Inc.
(2) George W. Broughton filed an amended Form 4 on August 10, 2000, to
report two late transactions, which occurred in June 2000.
(3) Frank L. Christy received a December 1999 gift which should have been
reported on Form 5 for the 1999 fiscal year; the transaction was
reported on Mr. Christy's Form 5 for the 2000 Fiscal Year filed on
February 12, 2001.
(4) Wilford D. Dimit filed a late Form 4 on August 10, 2000, to report one
transaction which occurred in June 2000.
(5) Robert E. Evans filed a Form 5 for the 2000 Fiscal year, which included
one late report of one transaction which occurred in July 2000.
(6) Larry E. Holdren filed a Form 5 for the 2000 Fiscal Year, which reported
one transaction which occurred in December, 1999, and should have been
reported on his Form 5 for the 1999 fiscal year.
(7) Robert W. Price was elected to the Board of Directors, effective
September 1, 2000. His Form 3 was filed one day late with the SEC on
September 12, 2000.
TRANSACTIONS INVOLVING MANAGEMENT
---------------------------------
Paul T. Theisen is of counsel to the law firm of TheisenBrock, LPA,
which rendered legal services to Peoples and its subsidiaries during Peoples'
2000 Fiscal Year, and is expected to render legal services to Peoples and its
subsidiaries during Peoples' 2001 fiscal year.
During Peoples' 2000 Fiscal Year, Peoples Bank entered into banking
transactions, in the ordinary course of business, with certain executive
officers and directors of Peoples, with members of their immediate families, and
with corporations for which directors of Peoples serve as executive officers. It
is expected that similar banking transactions will be entered into in the
future. Loans to such persons have been made on substantially the same terms,
including the interest rate charged and the collateral required, as those
prevailing at the time for comparable transactions with persons not affiliated
with Peoples or its subsidiaries. These loans have been subject to, and are
presently subject to, no more than a normal risk of uncollectibility, and
present no other unfavorable features. The aggregate amount of loans to
directors and executive officers of Peoples, and affiliates of these directors
and executive officers, as a group at December 31, 2000, was $7,400,000. This
does not include the aggregate amount of $16,072,000 in loans to individuals
acting in the sole capacity as directors or executive officers of subsidiaries
of Peoples, including affiliates of these directors and executive officers. As
of the date of this proxy statement, all of such loans are performing loans.
ELECTION OF DIRECTORS
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Pursuant to the authority granted under Section 2.02 (C) of Peoples'
Regulations, on February 1, 2000, the Board of Directors increased the number of
Directors in the class whose term expires at the Annual Meeting to four and
appointed Carl Baker, Jr. to fill the vacancy created by such increase. Each
director is to be elected for a three-year term and until his successor is duly
elected and qualified. The individuals named in the accompanying proxy card
intend to vote the common shares represented by the proxies received pursuant to
this solicitation for the nominees named below who have been designated by the
Board of Directors, unless otherwise instructed on the proxy card.
The following table gives certain information concerning each nominee
for election as a director of Peoples. Unless otherwise indicated, each has had
his principal occupation for more than five years.
Director Nominee
Position(s) Held With Peoples and Continuously For Term
Nominee Age Its Principal Subsidiaries and Principal Occupation(s) Since Expiring In
------- --- ------------------------------------------------------ ----- -----------
Robert E. Evans 60 President, and Chief Executive Officer of Peoples and 1980 2004
Peoples Bank; Chairman of the Board of Peoples Bank.
Robert W. Price 38 President of: Smith Concrete Company, a ready-mix concrete 2000 2004
company, since 1992; Chesterhill Stone Company, a sand,
limestone and gravel company, since 1992; and Price Inland
Terminal Company, an off-river terminal service providing
offloading and dry bulk storage of raw material, since
August 1994.
Paul T. Theisen (1) 70 Of counsel, TheisenBrock, LPA, Attorneys at Law, Marietta, 1980 2004
Ohio. (2)
Thomas C. Vadakin (1) 70 Director, The Airolite Company, Marietta, Ohio, a 1989 2004
manufacturer of ventilation louvers. (2)
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(1) Thomas C. Vadakin and Paul T. Theisen are brothers-in-law.
(2) Also a director of Peoples Bank.
While it is contemplated that all nominees will stand for election, if one
or more nominees at the time of the Annual Meeting should be unavailable or
unable to serve as a candidate for election as a director, the proxies reserve
full discretion to vote the common shares represented by the proxies for the
election of the remaining nominees and for the election of any substitute
nominee or nominees designated by the Board of Directors. The Board of Directors
knows of no reason why any of the above-mentioned individuals will be
unavailable or unable to serve if elected to the Board.
The Regulations of Peoples provide that shareholder nominations for
election to the Board of Directors must be made in writing and must be delivered
or mailed to the Secretary of Peoples not less than 14 days nor more than 50
days prior to any meeting of shareholders called for the election of directors.
However, if less than 21 days notice of the meeting is given to the
shareholders, the nomination must be mailed or delivered to the Secretary not
later than the close of business on the seventh day following the day on which
the notice of the meeting was mailed. Each nomination must contain the following
information to the extent known by the notifying shareholder: (a) the name, age,
business address and residence address of each proposed nominee; (b) the
principal occupation or employment of each proposed nominee; (c) the number of
common shares beneficially owned by each proposed nominee and by the notifying
shareholder; and (d) any other information required to be disclosed with respect
to a nominee for election as a director under the proxy rules promulgated under
the Exchange Act. Each such notification must be accompanied by the written
consent of the proposed nominee to serve as a director of Peoples if elected.
Nominations not made in accordance with the Regulations of Peoples, as
determined by the Chairman of the Annual Meeting will be disregarded. Under Ohio
law and Peoples' Regulations, the four nominees for election as directors
receiving the greatest number of votes will be elected as directors.
The following table gives certain information concerning the current
directors who will continue to serve after the Annual Meeting. Unless otherwise
indicated, each individual has had his principal occupation for more than five
years.
Director
Position(s) Held With Peoples and Continuously Term
Name Age Its Principal Subsidiaries and Principal Occupation(s) Since Expires In
---------------- --- ------------------------------------------------------------ ------------ -----------
Carl Baker, Jr. 38 President and CEO, B & N Coal, Inc., a mining, reclamation, 2000 2003
and construction concern in Southeastern Ohio; Co-Owner of
Sharon Stone Company, a limestone and slag producer in Noble
and Washington Counties, Ohio; Owner of Dexter Hardwoods,
Inc., a hardwood sawmill located in Noble County, Ohio.
George W. Broughton 43 President, GWB Sales, Inc., Marietta, Ohio, a business 1994 2003
development company, since September, 1999; Director and
Executive Vice President/Sales and Marketing, Broughton
Foods Co., a processor and distributor of dairy products,
from December, 1981 to August, 1999; Director of SBR, Inc.,
maker of replacement windows and owner of "Woodcraft"
catalog and stores (1)
Frank L. Christy 53 President/Owner of Christy & Associates, a business 1999 2002
development company located in Marietta, Ohio.
Wilford D. Dimit 66 President of First Settlement, Inc., Marietta, Ohio, a 1993 2003
retail clothing store, shoe store and restaurant. (1)
Rex E. Maiden 65 Chairman of the Board of Maiden & Jenkins Construction Co., 1996 2002
Nelsonville, Ohio, highway and bridge contractor and
contractor of commercial, industrial and educational
buildings; Treasurer and Director of Sunday Creek Coal Co.,
Nelsonville, Ohio, holding company for land and minerals
(coal and oil); President and Chairman of the Board of
Nelsonville Consulting and Construction Co., Nelsonville,
Ohio, design consulting firm; Chairman of the Board, Black
Top Contracting, Nelsonville, Ohio, paving contractor;
Chairman of the Board, B T Materials, Nelsonville, Ohio,
sand and gravel mining operation and ready-mix concrete
plant. (1)
Joseph H. Wesel 71 Chairman and Chief Executive Officer of Marietta Automotive 1980 2002
Warehouse, Inc., Marietta, Ohio, an automotive parts
wholesaler; President of Auto Paints Works Inc., Marietta,
Ohio, a wholesaler/retailer of auto paint and body shop
supplies; President of W.D.A., Inc., Marietta, Ohio, a real
estate holding company; Director, Marietta Ignition, Inc., a
wholesaler/retailer of automotive parts and industrial
supplies; Director of Peoples Bank; Chairman of the Board of
Peoples since 1991. (1)
-------------------------
(1) Also a director of Peoples Bank.
The Board of Directors held a total of fifteen (15) meetings during
Peoples' 2000 Fiscal Year. Each incumbent director attended 75% or more of the
aggregate of the total number of meetings held by the Board of Directors, and of
the total number of meetings held by all committees on which he served, during
his period of service. The Board of Directors maintains two standing committees.
The Audit Committee is comprised of seven independent directors,
----------------
as that term is defined for the purposes of the NASDAQ rules: Wilford D. Dimit,
Chairman; Carl L. Baker, George W. Broughton, Frank L. Christy, Robert W.
Price, Thomas C. Vadakin, and Joseph H. Wesel. The Peoples Bancorp Inc.
Board of Director's Audit Committee Charter, as approved by the Board of
Directors for the 2001 fiscal year, governs the Audit Committee. A copy of
the Charter is included as Appendix A. The activities of the Audit
Committee are detailed in the Board of Directors' Audit Committee Report to
Shareholders as found below.
The Compensation Committee is comprised of five independent directors:
----------------------
Frank L. Christy, Wilford D. Dimit, Rex E. Maiden, Thomas C. Vadakin and Joseph
H. Wesel, none of whom is a compensated executive officer or employee of Peoples
or its subsidiaries. The function of the Compensation Committee is to review and
recommend for approval by the Board of Directors salaries, bonuses, employment
agreements and employee benefit plans for officers and employees, to supervise
the operation of Peoples' compensation plans, including its stock option plans,
to select those eligible employees who may participate in each plan (where
selection is required) and prescribe (where permitted under the terms of the
plan) the terms of any stock options granted under any stock option plan of
Peoples.
The Board of Directors does not have a standing nominating committee or
committee performing similar functions.
BOARD OF DIRECTORS' AUDIT COMMITTEE
REPORT TO SHAREHOLDERS
The Audit Committee oversees Peoples' financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Committee
reviewed the audited financial statements in the Annual Report with management
including a discussion of the quality, not just the acceptability of the
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The Board of Directors appointed Ernst & Young LLP ("E&Y") as
independent auditors for Peoples during the 2000 Fiscal Year. E&Y is responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles. The Committee reviewed
with E&Y their judgments as to the quality, not just the acceptability, of
Peoples' accounting principles and such other matters as are required to be
discussed with the Committee under generally accepted auditing standards. In
addition, the Committee has discussed with E&Y the auditors' independence from
management and Peoples including the matters in the written disclosures required
by the Independence Standards Board. The Committee considered the fees for
non-audit services rendered by E&Y with the compatibility of the auditors'
independence.
The committee discussed with Peoples' internal auditors and E&Y the
overall scope and plans for their respective audits. The committee met with the
internal auditors and E&Y, with and without management present, to discuss the
results of their examinations, their evaluations of Peoples' internal controls,
and the overall quality of Peoples' financial reporting. The committee held five
meetings during 2000 Fiscal Year 2000.
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors (and the board has approved) the
audited financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 2000 for filing with the Securities and Exchange
Commission. The Committee has also recommended to the Board of Directors the
selection of E&Y as Peoples' independent auditors for the 2001 fiscal year.
Submitted by the Audit Committee of Peoples' Board of Directors:
Wilford D. Dimit, Chairman; Carl L. Baker, George W. Broughton,
Frank L. Christy, Robert W. Price, Thomas C. Vadakin, and
Joseph H. Wesel, Members.
REPORT OF THE BOARD OF DIRECTORS'
COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee meets periodically to review and recommend
for approval by the Board of Directors salaries, bonuses, employment agreements
and employee benefits plans for officers and employees, including executive
officers of Peoples. The Committee also supervises the operation of Peoples'
compensation plans, selects those eligible employees who may participate in each
plan (where selection is permitted) and prescribes (where permitted under the
terms of the plan) the terms of any stock options granted under any stock option
plan of Peoples. The Compensation Committee met four times during 2000 Fiscal
Year.
Section 162(m) of the Internal Revenue Code of 1986, as amended,
prohibits Peoples from claiming a deduction on its federal income tax return for
compensation in excess of $1 million paid for a given fiscal year to the chief
executive officer (or person acting in that capacity) at the close of Peoples'
fiscal year and the four most highly compensated officers of Peoples, other than
the chief executive officer, at the end of Peoples' fiscal year. The $1 million
compensation deduction limitation does not apply to "performance-based
compensation". Due to the fact that all executive officers of Peoples receive
compensation at levels substantially below the $1 million deductibility limit,
the Committee does not propose at this time to present for shareholder approval
performance goals such as those provided in the Performance Compensation Program
("Program") discussed below. The 1995 Stock Option Plan and the 1998 Stock
Option Plan comply with Section 162(m) so that any compensation which may be
received by executive officers of Peoples under those plans will qualify as
"performance-based". The Committee will rely, from time to time, upon the advice
of Peoples' General Counsel regarding the appropriateness of presenting the
Program, or any similar plan, to shareholders.
The Committee operates under the principle that the compensation of
executive officers should be directly and significantly related to the financial
performance of Peoples. The compensation philosophy of Peoples reflects a
commitment to reward executive officers for performance through cash
compensation and through plans designed to enhance the long-term commitment of
officers and employees to Peoples and its subsidiaries. Peoples seeks to attract
and retain quality talent, which is key to the short and long-term success of
Peoples. In order to accomplish this goal, Peoples seeks to pay its executives
base salaries that are competitive and comparable to other financial
institutions of similar size and overall performance. The cash compensation
program for executive officers consists of two elements, a base salary component
and an incentive component payable under the Program. The combination of base
salary and incentive compensation is designed to relate total cash compensation
levels to the performance of Peoples, its subsidiaries and the individual
executive officer. The Committee reviewed comparative salary data for the chief
executive officer from various sources of information including the Bank
Administration Institute's 1999 Bank Cash Compensation Survey for Illinois,
Indiana, Michigan, Ohio, and Wisconsin (159 banks participating); the Bank
Administration Institute's 1999 Bank Cash Compensation for Ohio (21 banks
participating); the 1999 Bank Compensation Survey as prepared by Crowe, Chizek
and Company LLP for Midwestern banks of the asset size $500 million - $1 billion
(34 banks participating) and greater than $1 billion (24 banks participating);
and executive compensation data along with performance data as taken from 1998
proxy data for ten financial institution holding companies. The Committee
approved a base salary increase of 10% for Mr. Evans for 2000 Fiscal Year to
$248,160. At mid-year, the Committee compared Mr. Evans' compensation with
compensation data gathered from proxy statements of 20 financial institution
holding companies headquartered in Ohio and West Virginia. The Committee
considered the relative size of this peer group as well as various performance
ratios and compared this information to corresponding data for Peoples. The
Committee approved a base salary increase to $273,160 (annualized amount),
effective the second half of 2000 Fiscal Year. These adjustments caused Mr.
Evans' 2000 base salary to equal 75% to 104% of the 1999 median salaries
reported in the three surveys referenced above for financial institutions with
total assets greater than or equal to $1 billion. The Committee was of the
opinion the adjustments made were necessary and appropriate to provide
reasonably competitive compensation.
In late 1996, Peoples established a Performance Compensation Program
("Program") in which all employees of Peoples and its subsidiaries are eligible
to participate. The Program is designed to reward all employees for balanced
growth and increased profitability. The amount of the award available for
distribution is based upon Peoples' performance with regard to specified
performance goals. In 2000, the incentive payout was based on Peoples'
consolidated financial results. The allocation of the bases for the payout
percentage may be adjusted on an annual basis.
In 2000, the performance goals focused on loan growth, deposit
retention, profitability, asset quality, productivity (increased operational
efficiency), and earnings per share growth. The Program compared current year
performance to the immediately prior year and rewarded employees for incremental
growth in the key performance goals previously listed. Each performance goal was
weighted according to contribution to net income. Consequently, enhanced
performance in relation to the performance goals creates higher incentive
bonuses.
The incentive compensation of the executive officers listed on page 10
was based entirely on Peoples' consolidated financial results and the
aforementioned key performance goals. During 2000, performance goals were
exceeded resulting in a payout during 2001 to Mr. Evans, Mr. Baker, Mr. Conlon,
Mr. Holdren, and Mr. Yazombek of 7.87% of their base salary. Mr. Evans also
received an additional bonus for 2000, to be paid in 2001, in the amount of
$10,426. This additional bonus was awarded in lieu of any usual base salary
increase that would have typically been awarded to Mr. Evans at the beginning of
2001, in recognition of the overall performance of Peoples and sustained
earnings growth over the last several years. The Committee observed the annual
bonus payments made to executive officers are below the current market
percentages paid to executive officers of financial institutions of similar size
and with similar performance ratios. The Committee will continue to monitor this
and other compensation issues to ensure adequate and appropriate compensation of
Peoples' executives while creating a mutuality of interest between executive
officers and shareholders through compensation structures that share the rewards
and risks of strategic decision-making.
Peoples' long-term compensation program consists primarily of stock
options granted under Peoples' Stock Option Plans. The Committee believes that
stock ownership by members of Peoples' management and stock-based performance
compensation arrangements are important in aligning the interests of management
with those of shareholders, generally in the enhancement of shareholder value.
Options are granted with an exercise price equal to the fair market value of
Peoples' common shares on the date of grant. If there is no appreciation in the
fair market value of Peoples' common shares, the options are valueless. The
Committee grants options based upon its subjective determination of the relative
current and future contribution each officer has or may make to the long-term
welfare of Peoples.
On April 27, 2000, the Committee granted incentive stock options to Mr.
Evans covering a total of 3,000 common shares at an exercise price of $17.25 for
a term of ten (10) years with vesting of 25% annually from April 27, 2003;
granted incentive stock options covering 12,000 common shares to Mr. Baker, Mr.
Conlon, Mr. Holdren and Mr. Yazombek (3,000 common shares to each) at an
exercise price of $17.25 for a term of ten (10) years with vesting of 25%
annually from April 27, 2003, and granted incentive stock options covering a
total of 50,000 common shares to the key employees as a group, exclusive of Mr.
Evans, Mr. Baker, Mr. Conlon, Mr. Holdren and Mr. Yazombek, at a price of $17.25
for a term of ten (10) years with vesting of 25% annually from April 27, 2003.
In order to further enhance Mr. Evans' long-term commitment to Peoples
Bank, Peoples Bank entered in a Deferred Compensation Agreement with him in
1976. Under this agreement, Mr. Evans agreed to serve Peoples Bank as an
employee until he reaches age 65 or until his earlier retirement, disability or
death and agreed not to engage in activities in competition with Peoples Bank.
The amount of $5,000 is automatically accrued to Mr. Evans' account upon the
completion of each year of service to Peoples Bank until he reaches normal
retirement age.
At various times in the past, Peoples has adopted certain broad-based
employee benefit plans in which Peoples' executive officers are permitted to
participate on the same terms as non-executive officer employees who meet
applicable eligibility criteria, subject to legal limitations on the amounts
that may be contributed or the benefits that may be payable under the plans.
To enhance the long-term commitment of the officers and employees of
Peoples and its subsidiaries, Peoples established the Peoples Bancorp Inc.
Retirement Savings Plan (the "Peoples 401(k) Plan"). All officers and employees
of Peoples and its subsidiaries may participate in the Peoples 401(k) Plan, upon
satisfying applicable eligibility criteria. Peoples' matching contributions and
participant contributions may be invested in common shares providing each
participant with motivation toward safe and sound long-term growth of Peoples.
Peoples' matching contributions may vary at the discretion of the Board of
Directors.
Submitted by the Compensation Committee of Peoples' Board of Directors:
Joseph H. Wesel, Chairman; Frank L. Christy, Wilford D. Dimit,
Rex E. Maiden, and Thomas C. Vadakin, Members
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary of Cash and Certain Other Compensation
----------------------------------------------
The following table shows for the last three fiscal years, the cash
compensation paid by Peoples and its subsidiaries, as well as certain other
compensation paid or accrued for those years, to Robert E. Evans, the Chief
Executive Officer of Peoples and the four most highly compensated executive
officers of Peoples.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
------------------- Awards
Common Shares All Other
Name and Salary Directors' Bonus Underlying Compensation
Principal Position Year ($) Fees (1) ($) (2) Options (3) ($) (4)
------------------ ---- --- -------- ------- ----------- -------
Robert E. Evans 2000 $ 260,660 $ 16,700 $ 30,940 3,000 $13,451
President & Chief Executive 1999 $ 225,605 $ 18,750 $ 12,476 6,253 $ 7,400
Officer 1998 $ 212,800 $ 18,750 $ 11,384 6,687 $ 8,383
David B. Baker 2000 $ 126,349 $ 200 $ 9,680 3,000 $ 5.263
Executive Vice President 1999 $ 95,851 $ 700 $ 5,235 6,050 $ 1,437
1998 $ 89,040 $ 2,200 $ 4,763 644 $ 1,421
John W. Conlon 2000 $ 110,500 $ 8,696 3,000 $ 4,618
Chief Financial Officer and 1999 $ 95,851 $ 6,959 6,050 $ 1,412
Treasurer 1998 $ 84,624 $ 4,527 644 $ 1,351
Larry E. Holdren 2000 $ 125,005 $ 9,837 3,000 $ 5,211
Executive Vice President 1999 $ 95,533 $ 5,272 6,050 $ 1,501
1998 $ 88,680 $ 4,744 644 $ 1,412
Joseph S. Yazombek 2000 $ 123,000 $ 200 $ 9,680 3,000 $ 4,927
Executive Vice President/ 1999 $ 91,467 $ 1,200 $ 20,058 6,050 $ 1,018
Chief Lending Officer 1998 $ 78,400 $ 2,200 $ 4,194 644 $ 1,266
------------------------------------
(1) Fees received by Mr. Evans for services rendered as a director of
Peoples and its subsidiaries. Fees received by Mr. Baker and Mr.
Yazombek for services rendered during 1998 as directors of Russell
Federal Savings Bank, Catlettsburg Federal Savings Bank, and, during
1999 and 2000, as directors of Peoples Bank FSB, all subsidiaries of
Peoples at time of payment of the fees.
(2) All bonuses were earned under the Performance Compensation Program, and
are reported for the fiscal year for which they were earned. Bonuses are
traditionally paid during the first quarter of the following fiscal
year.
(3) These numbers have been adjusted for a 10% stock dividend issued on
March 14, 2000, a 10% stock dividend issued on June 15, 1999, and a
3-for-2 stock split effective April 30, 1998.
(4) "All Other Compensation" includes contributions by Peoples to the
Peoples 401(k) Plan on behalf of each of the named executive officers
to match their pre-tax elective deferral contributions (included
under "Salary"). For Mr. Evans, "All Other Compensation" also
includes the amount of $5,000, which was accrued pursuant to the terms
of a Deferred Compensation Agreement between Mr. Evans and Peoples.
See the discussion under "Deferred Compensation Agreement".
Grant of Options
----------------
The following table sets forth information concerning individual grants
of options made under Peoples' 1998 Stock Option plan during the 2000 Fiscal
Year to the named executive officers. Peoples has never granted stock
appreciation rights.
% of Total
Number of Common Options Potential Realizable Value
Shares Underlying Granted to at Assumed Annual Rates of
Options Granted Employees Exercise Price Expiration Share Price Appreciation for
Name (#) (1) in Fiscal Year $/Share Date Option Term (2)
---- -------- -------------- ------- ---- ---------------
5% ($) 10% ($)
------ -------
Robert E. Evans 3,000 4.58% $17.25 4/26/2010 $32,550 $82,470
David B. Baker 3,000 4.58% $17.25 4/26/2010 $32,550 $82,470
John W. Conlon 3,000 4.58% $17.25 4/26/2010 $32,550 $82,470
Larry E. Holdren 3,000 4.58% $17.25 4/26/2010 $32,550 $82,470
Joseph S. Yazombek 3,000 4.58% $17.25 4/26/2010 $32,550 $82,470
(1) All options were granted under the 1998 Stock Option Plan, 25% of which
become exercisable annually beginning April 27, 2003. If employment is
terminated by reason of death while an employee of Peoples or a
Subsidiary, the options may be exercised in full for a period of year
following the termination of employment, subject to the stated terms of
the option. If employment is terminated by reason of retirement under the
provisions of any retirement plan of Peoples, or for any reason other
than cause, the options may be exercised in full for a period of three
months after termination of employment, subject to the stated term of
each option. If employment is terminated for cause, the unexercised
options will be forfeited.
(2) The amounts reflected in this table represent the specified, assumed
annual rate of appreciation only and have been rounded to the nearest
whole dollar. Actual realized value, if any, on option exercise will be
dependent on the actual appreciation of the common shares over the term
of each option. There can be no assurances that the potential realizable
values reflected in this table will be achieved.
Option Exercises and Holdings
-----------------------------
The following table summarizes information concerning unexercised
options held as of the end of the 2000 Fiscal Year by each of the named
executive officers. None of the named executive officers exercised options
during the 2000 Fiscal Year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Number of Common
Common Shares Shares Underlying Value of Unexercised
Underlying Unexercised Options In-the-Money Options
Options Value at FY-End (#) (1) at FY-End ($) (2)
----------------- -----------------
Name Exercised Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------- ------------ ----------- ------------- ----------- -------------
Robert E. Evans 0 N/A 43,119 27,097 $185,621 $0
David B. Baker 0 N/A 21,244 12,663 $ 80,505 $0
John W. Conlon 0 N/A 18,667 12,663 $ 63,033 $0
Larry E. Holdren 0 N/A 23,059 12,663 $ 92,811 $0
Joseph S. Yazombek 0 N/A 23,059 12,663 $ 92,811 $0
----------------------
(1) These numbers have been adjusted to reflect the 10% stock dividends
issued on March 14, 2000, and June 15, 1999, and the three-for-two
stock split effective April 30, 1998.
(2) "Value of Unexercised In-the-Money Options at FY-End" is based upon the
fair market value of Peoples' common shares on December 31, 2000
($14.75) less the exercise price of in-the-money options at the end of
the 2000 Fiscal Year.
Pension Plan
------------
The following table shows the estimated annual pension benefits payable
upon retirement at age 65 on a lifetime annuity basis under the Peoples Bancorp
Inc. Retirement Plan, a funded, noncontributory pension plan (the "Pension
Plan"), to a covered participant in specified compensation and years of service
classifications.
PENSION PLAN TABLE
------------------
Years of Service
Annualized Average -------------------------------------------------------
Monthly Compensation
--------------------
15 20 25 30 35
--------- --------- --------- --------- ---------
$125,000 $32,642 $43,522 $54,403 $65,283 $65,283
$150,000 $39,767 $53,022 $66,278 $79,533 $79,533
$175,000 $45,467 $60,622 $75,778 $90,933 $90,933
and over
Benefits listed in the Pension Plan Table are not subject to deduction
for Social Security benefits or other amounts and are computed on a lifetime
annuity basis.
Monthly benefits upon normal retirement (age 65) are based upon 40% of
"average monthly compensation" plus 17% of the excess, if any, of "average
monthly compensation" over "covered compensation". For purposes of the Pension
Plan, "average monthly compensation" is based upon the monthly compensation
(including regular salary and wages, overtime pay, bonuses and commissions) of
an employee averaged over the five consecutive credited years of service which
produce the highest monthly average within the last ten years preceding
retirement and "covered compensation" is the average of the 35 years of social
security wage bases prior to social security retirement age. As of the end of
the 2000 Fiscal Year, "covered compensation" for Mr. Evans was $46,896, Mr.
Baker $57,708, Mr. Conlon $55,992, Mr. Holdren $59,376, and Mr. Yazombek
$68,220. 2000 annual compensation, to the extent determinable, for purposes of
the Pension Plan, for Mr.Evans was $170,000, Mr. Baker $134,052, Mr.Conlon
$117,149, Mr. Holdren $130,277, and Mr.Yazombek $143,259. As of the end of 2000
Fiscal Year, credited years of service for Mr. Evans was 30, Mr. Baker 26, Mr.
Conlon 19, Mr. Holdren 19, and Mr. Yazombek 18.
Deferred Compensation Agreement
-------------------------------
On November 18, 1976, Peoples Bank entered into a Deferred Compensation
Agreement with Mr. Evans. Under this Deferred Compensation Agreement, Mr. Evans
agreed to serve Peoples Bank as an employee until he reaches age 65 or until his
earlier retirement, disability or death and agreed not to engage in activities
in competition with Peoples Bank. Under this Agreement, Mr. Evans or his
beneficiaries are entitled to receive specified amounts upon Mr. Evans'
retirement, disability or death, which amounts are payable monthly for ten years
(with interest) or in one lump sum at the election of Peoples Bank. The
principal amount payable to Mr. Evans is based upon the sum of the amounts
accrued for his account during his years of employment with Peoples Bank. During
Peoples' 2000 Fiscal Year, the amount of $5,000 was accrued for Mr. Evans'
account pursuant to his Deferred Compensation Agreement and as of December 31,
2000, a total of $125,000 had been accrued for his account. The amount of $5,000
will be accrued for Mr. Evans' account upon the completion of each year of
service to Peoples Bank until he reaches normal retirement age.
Directors' Compensation
-----------------------
Each director of Peoples receives $600 per calendar quarter and $600
for each meeting attended.
Since 1991, Peoples has maintained the Peoples Bancorp Inc. Deferred
Compensation Plan for Directors of Peoples Bancorp Inc. and Subsidiaries (the
"Directors' Plan"). Voluntary participation in the Directors' Plan enables a
director of Peoples, or of one of its subsidiaries, to defer all or a part of
his or her directors' fees, including federal income tax thereon. Since January
2, 1998, Directors have been permitted to allocate their deferrals between a
cash account (earning interest equal to Peoples Bank's three-year CD interest
rate) and a stock account (credited with common shares based upon on the amount
deferred and cash dividends on such common shares). The only right a participant
has with respect to his cash account and/or stock account is to receive
distributions upon retirement from service to Peoples. Distribution of the
deferred funds is made in a lump sum or annual installments beginning in the
first year in which the person is no longer a director. The stock account will
be paid only in common shares and the cash account only in cash.
Directors who are not employees of Peoples (the "Non-Employee
Directors") were granted non-qualified stock options under Peoples' 1998 Stock
Option Plan (the "1998 Plan"). Each Non-Employee Director then serving on
Peoples' Board of Directors and who had served on Peoples' Board of Directors or
the Board of Directors of a subsidiary for all or a portion of at least the
preceding five calendar years (the "Five-Year Service Requirement") was granted
options for 1,238 common shares on the date of the Annual Meeting in 1998 and
2000. Each Non-Employee Director who had not satisfied the Five-Year Service
Requirement was granted an option for 248 common shares (as adjusted) plus 248
common shares for each calendar year (or portion thereof) served.
All options granted to Non-Employee Directors under the 1998 Plan have
an exercise price equal to 100% of the fair market value of the underlying
common shares on the grant date and a term of ten (10) years. If a Non-Employee
Director ceases to be a Director for any reason other than his death or for
"cause", his options may be exercised in full until the expiration of the term
of the options. However, if the former Non-Employee Director dies prior to the
expiration of the term of his options, those options may only be exercised for a
period of two years following his death, subject to the stated term of the
options. If a Non-Employee Director ceases to be a Director for cause, all of
his options will immediately terminate.
Peoples also automatically granted options to Non-Employee Directors
under the terms of Peoples' 1993 Stock Option Plan (the "1993 Plan") and the
1995 Stock Option Plan (the "1995 Plan"). No options have been granted to
Non-Employee Directors under the 1993 Plan since April 10, 1997, and no options
have been granted to Non-Employee Directors under the 1995 Plan since April 15,
1999. All options were granted with an exercise price equal to 100% of the fair
market value of the underlying common shares on the date of grant and a ten-year
term. Options granted under the 1995 Plan are exercisable following termination
of service as a director in the same manner as options granted under the 1998
Plan.
If a Non-Employee Director ceases to be a director for reasons other
than his death, his options granted under the 1993 Plan may be exercised for a
period of three months, subject to their stated term. If a Non-Employee Director
dies, his options granted under the 1993 Plan may be exercised for a period of
one year, subject to their stated term.
PERFORMANCE GRAPH
-----------------
The following line graph compares the yearly percentage change in
Peoples' cumulative total shareholder return (as measured by dividing (i) the
sum of (A) the cumulative amount of dividends for the measurement period,
assuming dividend reinvestment, and (B) the difference between the price of
Peoples' common shares at the end and the beginning of the measurement period;
by (ii) the price of Peoples' common shares at the beginning of the measurement
period) against the cumulative return for an index for NASDAQ Stock Market (U.S.
Companies) comprised of all domestic common shares traded on the NASDAQ National
Market and the NASDAQ Small-Cap Market and an index for NASDAQ Bank Stocks
comprised of all depository institutions (SIC Code #602) and depository
institutions holding companies (SIC Code #671) that are traded on the NASDAQ
National Market and the NASDAQ Small-Cap Market ("NASDAQ Bank Stocks"), for the
five-year period ended December 31, 2000.
(actual numbers plotted on a graph)
NASDAQ STOCKS
Year ended Peoples Bancorp Inc. NASDAQ Bank Stocks (U.S. Companies)
----------- -------------------- ------------------- ----------------
12/31/95 100 100 100
12/31/96 126.86 123.04 132.04
12/31/97 203.92 150.69 221.06
12/31/98 181.96 212.51 219.64
12/31/99 180.59 394.92 211.14
12/31/00 141.56 237.62 241.08
Notes: 1. Total return assumes reinvestment of dividends.
2. Fiscal year ending December 31.
3. Return based on $100 dollars invested on December 31, 1995 in
Peoples Bancorp common shares, an index for NASDAQ Stock Market
(U. S. Companies), and an index for NASDAQ Bank Stocks.
SHAREHOLDER PROPOSALS
FOR 2002 ANNUAL MEETING
Proposals by shareholders intended to be presented at the 2002 Annual
Meeting of Shareholders must be received by the Secretary of Peoples no later
than November 9, 2001, to be included in Peoples' proxy, notice of meeting and
proxy statement relating to such meeting and should be mailed to Peoples Bancorp
Inc., 138 Putnam Street, Marietta, Ohio 45750, Attention: Corporate Secretary.
The SEC has promulgated rules relating to the exercise of discretionary voting
authority under proxies solicited by the Board of Directors. If a Shareholder
intends to present a proposal at the 2002 Annual Meeting of Shareholders, and
does not notify the Corporate Secretary of Peoples of the proposal by January
23, 2002, the proxies solicited by Peoples' Board of Directors for use at the
2002 Annual Meeting may be voted on the proposal without discussion of the
proposal in Peoples' proxy statement for the 2002 Annual Meeting.
Shareholders desiring to nominate candidates for election as Directors
at the 2002 Annual Meeting must follow the procedures described in "Election of
Directors".
NOTIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of Peoples appointed the accounting firm of
Ernst & Young LLP ("E&Y") to serve as independent auditors of Peoples for the
2000 Fiscal Year. Fees for the 2000 Fiscal Year were:
Audit Fees $101,000
All Other Fees $295,100
The Board of Directors expects representatives of E&Y will be present
at the Annual Meeting, will have the opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions.
Pursuant to the recommendation of the Audit Committee, it is
anticipated E&Y will be appointed to serve as independent auditors of Peoples
for the 2001 fiscal year.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors knows of
no business to be presented for action by the shareholders at the 2001 Annual
Meeting of Shareholders other than as set forth in this proxy statement.
However, if any other matter is properly presented at the Annual Meeting, or at
any adjournment, the individuals authorized under management proxies will vote
and act according to their best judgments in light of the conditions then
prevailing.
It is important that proxies be voted and returned promptly; therefore,
shareholders who do not expect to attend the Annual Meeting in person are urged
to fill in, sign, and return the enclosed proxy card in the self-addressed
envelope furnished herewith.
By Order of the Board of Directors
/S/ ROBERT E. EVANS
-------------------------------------
Robert E. Evans
President and Chief Executive Officer
APPENDIX A
----------
PEOPLES BANCORP INC. BOARD OF DIRECTORS' AUDIT COMMITTEE CHARTER
Page - 1
I. Audit Committee Purpose
The Audit Committee shall be appointed by the Board of Directors
("Board") to assist the Board in fulfilling its oversight responsibilities. The
Audit Committee's primary duties and responsibilities shall be to:
o Monitor the integrity of Peoples' financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance;
o Monitor the independence and performance of Peoples' independent
auditors and internal auditing department;
o Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board; and
o Report Audit Committee activities to the Board.
In discharging its oversight role, the Audit Committee shall have the
authority to conduct any investigation appropriate to fulfill its
responsibilities, with full access to all books, records, facilities, and
personnel of Peoples. The Audit Committee shall have authority to retain, at
Peoples' expense, special legal, accounting, or other consultants or experts it
deems necessary in the performance of its duties.
II. Audit Committee Composition and Meetings
1. In compliance with SEC Audit Committee structure and composition
standards, the Committee shall be comprised of at least three or
more directors as determined by the Board. All members of the
Committee shall be independent non-employee directors, free from
any relationship that would interfere with the exercise of his or
her independent judgment.
2. In compliance with Nasdaq Audit Committee structure and
composition standards, all members of the Committee shall have a
basic understanding of finance and accounting, and be able to read
and understand fundamental financial statements. At least one
member of the Committee shall have past employment experience in
finance or accounting, requisite professional certification in
accounting, or any other comparable experience or background,
including being or having been a chief executive officer, chief
financial officer, or other senior officer with financial
oversight responsibility, which results in the individual's
financial sophistication.
3. The Committee shall meet at least four times annually in the
second month following a calendar quarter-end, or more frequently
as circumstances or financial reporting deadlines dictate.
4. The Committee shall meet at least annually with members of
management, the director of internal auditing, the independent
auditors and may meet at any time in executive session to discuss
any matters the Committee believes should be discussed.
5. The Committee, or at least its Chair, shall communicate quarterly
with management and the independent auditors to review Peoples'
financial statements and significant findings based upon the
independent auditors' limited review procedures.
PEOPLES BANCORP INC. BOARD OF DIRECTORS' AUDIT COMMITTEE CHARTER
Page - 2
III. Audit Committee Responsibilities and Duties
Review Procedures
-----------------
1. The Committee shall review and reassess the adequacy of this
Charter annually; submit the Charter annually to the Board for
approval and, at least every three years in compliance with SEC
regulations, have the Charter published in Peoples' annual proxy
statement.
2. The Committee shall review Peoples' annual audited financial
statements, which review shall include discussion with management
and independent auditors of significant issues regarding
accounting principles, practices, and judgments. In reliance on
its review and discussions, the Committee shall present a
recommendation to the Board regarding the inclusion of the
financial statements in Peoples' Annual Report on Form 10-K.
3. In consultation with management, the independent auditors, and the
internal auditors, the Committee will: consider the integrity of
Peoples' financial reporting processes and controls, discuss
significant financial risk exposures and the steps management has
taken to monitor, control, and report such exposures; and review
significant findings of the independent auditors and the internal
auditing department together with management's responses,
including the status of previous recommendations.
4. The Committee shall review with financial management and the
independent auditors Peoples' quarterly financial results prior to
the release of earnings and/or Peoples' quarterly financial
statements prior to filing or distribution. The Committee shall
discuss any significant changes in Peoples' accounting principles
and any items required to be communicated by the independent
auditors in accordance with SAS 61.
Independent Auditors
--------------------
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board. The Committee shall review the
independence and performance of the auditors, and annually
recommend to the Board the appointment of the independent
auditors, and, at any time circumstances warrant, recommend the
discharge of the auditors.
6. On an annual basis, the Committee shall review and discuss with
the independent auditors all significant relationships the
auditors have with Peoples that could impair the auditors'
independence.
7. The Committee shall review and approve the independent auditors'
audit plan, including its scope, staffing, and reliance upon
management, internal audit, and general approach. The Committee
shall review and approve the fees and other significant
compensation to be paid to the independent auditors.
8. Prior to releasing the year-end earnings, the Committee shall
discuss the results of the audit with the independent auditors,
and consider the independent auditors' judgments regarding the
quality and appropriateness of Peoples' accounting principles as
applied in its financial reporting.
PEOPLES BANCORP INC. BOARD OF DIRECTORS' AUDIT COMMITTEE CHARTER
Page - 3
Internal Audit Department
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9. The internal audit department shall be responsible to senior
management, but shall have direct reporting responsibility to the
Board through the Committee. The Committee shall annually review
the resource needs of the internal audit department.
10. The Committee shall review and approve the audit plan, any changes
in its plan or activities, and the qualifications of the internal
audit department, as needed.
11. The Committee shall review significant reports prepared by the
internal audit department, together with management's response and
any necessary follow-up to the reports.
Legal Compliance
----------------
12. On at least an annual basis, the Committee shall review with
Peoples' counsel any legal matters, including asserted and
unasserted claims, that could have a significant impact on the
organization's financial statements or Peoples' reputation.
13. On at least an annual basis, The Committee shall review with
Peoples' compliance officer Peoples' compliance with applicable
laws, regulations, and inquiries received from regulators or
governmental agencies.
14. The Committee shall review all reports concerning any significant
fraud or regulatory noncompliance that occurs at Peoples. This
review shall include consideration of strengthening internal
controls to reduce the risk of a similar event in the future.
Other Audit Committee Responsibilities
--------------------------------------
15. The Committee shall prepare a Report to the Shareholders, as
required by the Securities and Exchange Commission, to be
included in Peoples' annual proxy statement.
16. The Committee shall maitain minutes of its meetings and periodically
report to the Board on significant results of the foregoing
activities.
REVOCABLE PROXY
PEOPLES BANCORP INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 12, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder(s) of common shares of Peoples Bancorp Inc. (the
"Company") hereby constitutes and appoints Robert E. Evans and Joseph H. Wesel,
or either of them, the Proxy or Proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of the Company (the
"Annual Meeting") to be held on Thursday, April 12, 2001, in the Ball Room,
Holiday Inn, 701 Pike Street, Marietta, Ohio (I-77 Ohio exit 1) at 10:30 A.M.,
local time, and any adjournment(s) thereof, and to vote all of the common shares
of the Company which the undersigned is entitled to vote at such Annual Meeting
or at any adjournment(s) thereof:
1. The election as Directors of the Company of all of the nominees listed below
for terms of three years each (except as marked to the contrary):
Robert E. Evans Robert W. Price Paul T. Theisen Thomas C. Vadakin
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
*(INSTRUCTION: To withhold authority to vote for any individual
nominee, mark "For all Except" and write the name of the nominee in the
space provided below.
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2. In their discretion, the Proxies are authorized to vote upon such other
matters (none known at the time of solicitation of this proxy) as may properly
come before the Annual Meeting or any adjournment(s) thereof.
WHERE A CHOICE IS INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED OR NOT VOTED AS SPECIFIED. IF NO CHOICE IS
INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED IN ITEM NO. 1 AS DIRECTORS OF THE COMPANY. IF
ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE ANNUAL MEETING OR ANY
ADJOURNMENT(S) THEREOF OR IF A NOMINEE FOR ELECTION AS A DIRECTOR NAMED IN THE
PROXY STATEMENT IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE, THE COMMON
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE PROXIES
ON SUCH MATTERS OR FOR SUCH SUBSTITUTE NOMINEE(S) AS THE DIRECTORS MAY
RECOMMEND.
All proxies previously given or executed by the undersigned are hereby
revoked. The undersigned acknowledges receipt of the accompanying Notice of
Annual Meeting of Shareholders and Proxy Statement for the April 12, 2001
meeting and the Summary Annual Report and Form 10-K of the Company for the
fiscal year ended December 31, 2000.
Dated: _______________________________________, 20__
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Shareholder sign above
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Co-holder (if any) sign above
Please sign exactly as your name appears hereon. When common shares are
registered in two names, both shareholders MUST sign. When signing as executor,
administrator, trustee, guardian, attorney or agent, please give full title as
such. If shareholder is a corporation, please sign in full corporate name by
President or other authorized officer. If shareholder is a partnership, please
sign in partnership name by authorized person. (Please note any change of
address on this Proxy.)
PLEASE FILL IN, DATE, SIGN AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE