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
(Amendment No. )
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))
x Definitive Proxy
Statement
o Definitive
Additional Materials
o Soliciting
Material under § 240.14a-12
Peoples Bancorp Inc.
(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):
x 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:
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(3)
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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:
(5) Total
fee paid:
o Fee paid
previously with preliminary materials.
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o
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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.
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(1) Amount
Previously Paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
Peoples
Bancorp Inc. ·
138 Putnam Street · P.O. Box
738
Marietta,
OH 45750-0738
Telephone:
(740) 374-6136
www.peoplesbancorp.com
March 26,
2010
Dear
Fellow Shareholders:
Enclosed
you will find the following items pertaining to the Annual Meeting of
Shareholders of Peoples Bancorp Inc (“Peoples”) to be held at 10:00 a.m. on
Thursday, April 22, 2010 at the Holiday Inn in Marietta, Ohio:
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·
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Notice
of Annual Meeting of Shareholders and accompanying Proxy
Statement.
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·
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Peoples’
2009 Annual Report to Shareholders, which includes the Annual Report on
Form 10-K for the Fiscal Year Ended December 31,
2009.
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·
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Proxy
Card.
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·
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Return
Envelope.
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The proxy card solicits your vote on
following: (1) the election of five directors for three-year terms ending in
2013; (2) the approval and adoption of an amendment to Section 2.01 of Peoples’
Code of Regulations in order to clarify the qualifications required for an
individual to be eligible to be elected as a director of Peoples; (3) the
ratification of Ernst & Young LLP as Peoples’ independent registered public
accounting firm for the fiscal year ending December 31, 2010; (4) the approval,
in a non-binding advisory vote, of Peoples’ executive compensation as disclosed
in the accompanying Proxy Statement; and (5) other business which properly comes
before the Annual Meeting.
It is
important that your proxy card be signed, dated, and returned promptly in the
enclosed return envelope.
I hope that you will consider attending
our Annual Meeting. We continue to be active in our pursuit of
strategies that enhance long-term shareholder value in these challenging
economic times. On behalf of our directors and staff, thank you for
your continued support.
Sincerely,
Mark F. Bradley
President and Chief Executive Officer
Peoples Bancorp (w/logo)® is a
federally registered service mark of Peoples Bancorp Inc.
Peoples
Bancorp Inc. ·
138 Putnam Street · P.O. Box
738
Marietta,
OH 45750-0738
Telephone:
(740) 374-6136
www.peoplesbancorp.com
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
PEOPLES
BANCORP INC.
Marietta,
Ohio
March
26, 2010
Dear
Fellow Shareholders:
The
Annual Meeting of Shareholders (the “Annual Meeting”) of Peoples Bancorp Inc.
(“Peoples”) will be held at 10:00 a.m., Eastern Daylight Saving Time, on
Thursday, April 22, 2010, in the Ball Room of the Holiday Inn, 701 Pike Street
in Marietta, Ohio (Interstate 77, Ohio exit 1), for the following
purposes:
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1.
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To
elect the following directors for terms of three years
each:
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Nominee
Term Will Expire In
Dave M.
Archer (for
re-election) 2013
David L.
Mead
(for
re-election)
2013
Robert W.
Price
(for re-election)
2013
Paul T.
Theisen
(for
re-election) 2013
Thomas J.
Wolf
(for
re-election) 2013
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2.
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To
consider and vote upon a proposal to approve and adopt an amendment to
Section 2.01 of Peoples’ Code of Regulations in order to clarify the
qualifications required for an individual to be eligible to be elected as
a director of Peoples.
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3.
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To
ratify the appointment of Ernst & Young LLP as Peoples’ independent
registered public accounting firm for the fiscal year ending December 31,
2010.
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4.
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To
approve, in a non-binding advisory vote, Peoples’ executive compensation
as disclosed in the accompanying proxy statement;
and
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5.
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To
transact any other business which properly comes before the Annual Meeting
or any adjournment thereof. Peoples’ Board of Directors is not
aware of any other business to come before the Annual
Meeting.
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If you
were a holder of record of common shares of Peoples at the close of business on
February 26, 2010, you will be entitled to vote in person or by proxy at the
Annual Meeting.
You are
cordially invited to attend the Annual Meeting. Your vote is
important, regardless of the number of common shares you own. Whether
or not you plan to attend the Annual Meeting in person, please complete, sign,
date and return your proxy card in the enclosed envelope at your earliest
convenience.
Peoples’
2009 Annual Report to Shareholders, which includes the Annual Report on Form
10-K for the fiscal year ended December 31, 2009, accompanies this notice and
proxy statement.
By Order of the Board of Directors,
Rhonda L. Mears
General Counsel and Corporate Secretary
To
obtain directions to attend the Annual Meeting and vote in person, please call
Investor Relations at 740-374-6136.
Table
of Contents
PROXY
STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
To
Be Held April 22, 2010
i
Table
of Contents
ii
PEOPLES
BANCORP INC.
138
Putnam Street
P.O.
Box 738
Marietta,
Ohio 45750-0738
(740)
374-6136
www.peoplesbancorp.com
PROXY
STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
To
Be Held April 22, 2010
We are
sending this proxy statement and the accompanying proxy card to you because the
Board of Directors of Peoples Bancorp Inc. (“Peoples”) is soliciting your proxy
to vote at the Annual Meeting of Shareholders, to be held on Thursday, April 22,
2010, at 10:00 a.m., Eastern Daylight Saving Time (the “Annual Meeting”),
or at any adjournment thereof. The Annual Meeting will be held in the
Ball Room of the Holiday Inn, 701 Pike Street in Marietta, Ohio (Interstate 77,
Ohio exit 1). This proxy statement summarizes the information
that you will need in order to vote.
Peoples
has three wholly-owned subsidiaries, Peoples Bank, National Association
(“Peoples Bank”), Peoples Investment Company and PEBO Capital Trust
I. Peoples Bank also owns an insurance agency subsidiary, Peoples
Insurance Agency, LLC, and an asset management subsidiary, PBNA,
L.L.C. Peoples Investment Company also owns a capital management
subsidiary, Peoples Capital Corporation. In 2003, Peoples established
Peoples Bancorp Foundation, Inc., as an independent charitable foundation to
provide financial assistance and grants to local organizations within Peoples’
market area.
We mailed
this proxy statement and the accompanying proxy card on or about March 26, 2010
to all shareholders entitled to vote their common shares at the Annual
Meeting. The common shares are the only shares of Peoples’ capital
stock entitled to vote at the Annual Meeting. We also sent with this
proxy statement, Peoples’ 2009 Annual Report to Shareholders, which includes the
Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (the
“2009 Annual Report”). Additional copies of the 2009 Annual
Report may be obtained, without charge, by sending a written request
to: Rhonda L. Mears, Corporate Secretary, 138 Putnam Street,
P.O. Box 738, Marietta, Ohio 45750-0738. Peoples’ Annual Report
on Form 10-K for the fiscal year ended December 31, 2009 is posted in the
“Company Information/SEC Filings Updated” section of the “Investor Relations”
page of Peoples’ website at www.peoplesbancorp.com and is also on file with the
Securities and Exchange Commission (the “SEC”) and available on the SEC’s
website at www.sec.gov.
Proposals
by shareholders intended to be presented at the 2011 Annual Meeting of
Shareholders (the “2011 Annual Meeting”) must be received by the Corporate
Secretary of Peoples no later than November 26, 2010, to be eligible for
inclusion in Peoples’ proxy, notice of meeting, proxy statement and Notice of
Internet Availability of Proxy Materials relating to the 2011 Annual
Meeting. Peoples will not be required to include in its proxy, notice
of meeting, proxy statement or Notice of Internet Availability of Proxy
Materials, a shareholder proposal that is received after that date or that
otherwise fails to meet the requirements for shareholder proposals established
by applicable SEC rules.
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 2011 Annual Meeting without inclusion of
that proposal in Peoples’ proxy materials, and does not notify the Corporate
Secretary of Peoples of the proposal by February 9, 2011, or if Peoples meets
other requirements of the applicable SEC rules, the proxies solicited by the
Board of Directors for use at the 2011 Annual Meeting will confer discretionary
authority to vote on the proposal should it then be raised at the 2011 Annual
Meeting.
In each
case, written notice must be given to Peoples’ Corporate Secretary, at the
following address: Peoples Bancorp Inc., 138 Putnam Street, P.O. Box
738, Marietta, Ohio 45750-0738.
Shareholders
desiring to nominate candidates for election as directors at the 2011 Annual
Meeting must follow the procedures described in the section captioned “NOMINATING
PROCEDURES.”
Only
holders of common shares of record at the close of business on February 26, 2010
are entitled to receive notice of and to vote at the Annual
Meeting. At the close of business on February 26, 2010, there were
10,496,841common shares outstanding and entitled to vote. The common
shares are the only shares of Peoples’ capital stock entitled to vote at the
Annual Meeting.
Each
common share entitles the holder thereof to one vote on each matter to be voted
upon at the Annual Meeting. There is no cumulative voting with
respect to the election of directors.
Whether
or not you plan to attend the Annual Meeting, we urge you to vote in advance by
proxy. To do so, you may complete, sign and date the accompanying
proxy card and return it in the envelope provided.
If you
plan to attend the Annual Meeting and vote in person, we will give you a ballot
when you arrive. If your common shares are held in the name of your
broker, your financial institution or another record holder (i.e., held in
“street name”), you must bring an account statement or letter from that broker,
financial institution or other holder of record authorizing you to vote on
behalf of such record holder. The account statement or letter must
show that you were the direct or indirect beneficial owner of the common shares
(i.e., you retained the right to make voting and/or investment decisions with
respect to the common shares) on February 26, 2010, the record date for voting
at the Annual Meeting.
If you
hold your common shares in “street name” with a broker, financial institution or
other holder of record, you should review the information provided to you by
such record holder. This information will set forth the procedures
you need to follow in instructing the record holder how to vote your “street
name” common shares and how to revoke previously given
instructions. If you hold your common shares in “street name,” you
may be eligible to appoint your proxy electronically via the Internet or
telephonically and may incur costs associated with the electronic access or
telephone usage.
How do I vote if my common shares are held through the Peoples Bancorp
Inc. Retirement Savings Plan?
If you
participate in the Peoples Bancorp Inc. Retirement Savings Plan (the “Retirement
Savings Plan”), you will be entitled to instruct the trustee of the Retirement
Savings Plan how to vote common shares that have been allocated to your
account. If you are such a participant, you will receive a proxy card
for common shares allocated to your account in the Retirement Savings
Plan. If you do not provide voting instructions to the trustee of the
Retirement Savings Plan, the trustee will not vote the common shares allocated
to your account.
Those
common shares represented by a properly executed proxy card that is received
prior to the Annual Meeting and not subsequently revoked will be voted in
accordance with your instructions by your “proxies” (the individuals named on
your proxy card). If you submit a valid proxy card prior to the
Annual Meeting, but do not complete the voting instructions on the proxy card,
except in the case of broker non-votes where applicable, your proxy will vote
your common shares as recommended by the Board of Directors, as
follows:
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·
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“FOR” the election as
directors of the nominees listed on pages 10 through 12 under “PROPOSAL NUMBER
1: ELECTION OF
DIRECTORS”;
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“FOR” the approval and
adoption of the proposed amendment to Section 2.01 of Peoples’ Code of
Regulations in order to clarify the qualifications required for an
individual to be eligible to be elected as a director of
Peoples;
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·
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“FOR” the ratification
of the appointment of Ernst & Young LLP (“E&Y”) as
Peoples’ independent registered public accounting firm for the fiscal year
ending December 31, 2010; and
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·
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“FOR” the approval, in a
non-binding advisory vote, of Peoples’ executive compensation as described
in this proxy statement.
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No
appraisal or dissenters’ rights exist for any action proposed to be taken at the
Annual Meeting. If
any other matters are properly presented for voting at the Annual Meeting, the
individuals appointed as proxies on the accompanying proxy card will vote on
those matters, to the extent permitted by applicable law, in accordance with
their best judgment.
Shareholders
who submit proxies retain the right to revoke them at any time before they are
exercised. Unless revoked, the common shares represented by such
proxies will be voted at the Annual Meeting and any adjournment
thereof. You may revoke your proxy at any time before it is actually
exercised at the Annual Meeting by:
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·
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filing
a written notice of revocation with the Corporate Secretary of Peoples at
138 Putnam Street, P.O. Box 738, Marietta, Ohio 45750-0738, which must be
received prior to the Annual
Meeting;
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·
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executing
and returning a later-dated proxy card, which must be received prior to
the Annual Meeting; or
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·
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attending
the Annual Meeting and giving notice of revocation in
person.
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Attendance at the Annual Meeting will
not, by itself, revoke your proxy.
The last-dated proxy you submit (by
any means) will supersede any previously submitted proxy. If you hold
your common shares in “street name” and instructed your broker, financial
institution or other nominee to vote your common shares and you would like to
revoke or change your vote, then you must follow the instructions received from
your nominee to change your vote.
Yes. You
are encouraged to vote promptly, by returning your signed proxy card by mail, so
that your common shares will be represented at the Annual
Meeting. However, appointing a proxy does not affect your right to
attend the Annual Meeting and vote your common shares in person.
Under
Peoples’ Code of Regulations, a quorum is a majority of the voting shares of
Peoples then outstanding and entitled to vote at the Annual
Meeting. The common shares are the only shares of Peoples’ capital
stock entitled to vote at the Annual Meeting. Common shares may be
present in person or represented by proxy at the Annual Meeting. Both
abstentions and broker non-votes are counted as being present for purposes of
determining the presence of a quorum. There were 10,496,841 Peoples
common shares outstanding and entitled to vote on February 26, 2010, the record
date. A majority of the outstanding common shares, or 5,248,421
common shares, present in person or represented by proxy, will constitute a
quorum. A quorum must exist to conduct business at the Annual
Meeting.
If a
proposal is routine, a broker holding common shares for a beneficial owner in
street name may vote on the proposal without receiving instructions from the
beneficial owner. If a proposal is non-routine, a broker may vote on
the proposal only if the beneficial owner has provided voting
instructions. A “broker non-vote” occurs when a broker holding common
shares for a beneficial owner is unable to vote on a proposal because the
proposal is non-routine and the beneficial owner does not provide any voting
instructions.
Each of
(i) the approval and adoption of the proposed amendment to Section 2.01 of
Peoples’ Code of Regulations; (ii) the ratification of the appointment of
Peoples’ independent registered public accounting firm and (iii) the non-binding
advisory vote on executive compensation, is a routine item. The
election of directors is a proposal on which a broker may vote only if the
beneficial owner has provided voting instructions.
The
following sets forth the votes required, and the impact of abstentions and
broker non-votes, if any, on the four proposals:
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Item
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Vote
Required
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Impact
of Abstentions and
Broker
Non-Votes,
if any
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||
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Election
of Directors
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Under
Ohio law and Peoples’ Code of Regulations, the five nominees for election
as directors receiving the greatest number of votes “FOR” their election will
be elected as directors in the class whose terms will expire in
2013.
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· Common
shares as to which the authority to vote is withheld will be counted for
quorum purposes but will affect whether a nominee has received sufficient
votes to be elected.
· Broker
non-votes will not count as a vote on the proposal and will not affect the
outcome of the vote.
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||
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Amendment
to Section 2.01 of Peoples’ Code of Regulations
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Approval
of holders of at least a majority of the outstanding common
shares.
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· Abstention
has the same effect as a vote “AGAINST” the
proposal.
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Ratification
of Appointment of Independent Registered Public Accounting
Firm
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The
affirmative vote of a majority of the common shares represented at the
Annual Meeting, in person or by proxy, and entitled to vote on the
proposal, is required to ratify the appointment of Ernst & Young LLP
as Peoples’ independent registered public accounting firm for the fiscal
year ending December 31, 2010.
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· Abstention
has the same effect as a vote “AGAINST” the
proposal.
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Approval,
in Non-Binding Advisory Vote, of Peoples’ Executive
Compensation
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The
affirmative vote of a majority of the common shares represented at the
Annual Meeting, in person or by proxy, and entitled to vote on the
proposal, is required to approve, in a non-binding advisory vote, Peoples’
executive compensation disclosed in this proxy statement.
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· Abstention
has the same effect as a vote “AGAINST” the
proposal.
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Peoples’
policy is to keep confidential proxy cards, ballots and voting tabulations that
identify individual shareholders. However, exceptions to this policy
may be necessary in some instances to comply with legal requirements and, in the
case of any contested proxy solicitation, to verify the validity of proxies
presented by any person and the results of the voting. Inspectors of
election and any employees associated with processing proxy cards or ballots and
tabulating the vote must acknowledge their responsibility to comply with this
policy of confidentiality.
Peoples
will pay the costs of soliciting proxies on behalf of the Board of Directors
other than the Internet access and telephone usage charges if a proxy is
appointed electronically or telephonically through a broker, financial
institution or other holder of record. Although we are soliciting
proxies by mailing these proxy materials to the holders of our common shares,
the directors, officers and employees of Peoples and our subsidiaries also may
solicit proxies by further mailings, telephone, electronic mail, facsimile or
personal contact without receiving any additional compensation for such
solicitations. Peoples will also reimburse its transfer agent,
brokers, voting trustees, financial institutions and other custodians, nominees
and fiduciaries for their costs in forwarding the proxy materials to the
beneficial shareholders.
Important Notice Regarding
the Availability of Proxy Materials for the Annual Meeting of Shareholders of
Peoples Bancorp Inc. to Be Held on April 22, 2010: This proxy
statement, a sample of the form of proxy card and Peoples’ 2009 Annual Report to
Shareholders are available at www.peoplesbancorp.com by selecting the “Peoples
Bancorp Inc. Proxy Materials” link.
To obtain
directions to attend the Annual Meeting and vote in person, please call Investor
Relations at 740-374-6136.
ENACTED
AS PART OF TROUBLED ASSETS RELIEF PROGRAM
On
January 30, 2009, Peoples completed the sale to the United States Department of
the Treasury (the “U.S. Treasury”) of $39.0 million of newly-issued Peoples
non-voting preferred shares as part of the U.S. Treasury’s Capital Purchase
Program (the “Capital Purchase Program”) enacted as part of the Troubled Assets
Relief Program (“TARP”) established by the Emergency Economic Stabilization Act
of 2008 (“EESA”). To finalize Peoples’ participation in the Capital
Purchase Program, Peoples and the U.S. Treasury entered into a Letter Agreement,
dated January 30, 2009 (the “Letter Agreement”), including the related
Securities Purchase Agreement – Standard Terms attached thereto (the “Securities
Purchase Agreement” and together with the Letter Agreement, the “UST
Agreement”). Pursuant to the UST Agreement, Peoples issued and sold
to the U.S. Treasury (i) 39,000 of Peoples’ Fixed Rate Cumulative Perpetual
Preferred Shares, Series A, each without par value and having a liquidation
preference of $1,000 per share (the “Series A Preferred Shares”), and
(ii) a warrant (the “Warrant”) to purchase 313,505 Peoples common shares,
at an exercise price of $18.66 per share (subject to certain anti-dilution and
other adjustments), for an aggregate purchase price of $39.0 million in
cash. The Warrant has a ten-year term.
In the
Securities Purchase Agreement, Peoples adopted the U.S. Treasury’s standards for
executive compensation and corporate governance for the period during which the
U.S. Treasury owns any securities acquired from Peoples pursuant to the
Securities Purchase Agreement or upon exercise of the Warrant. These
standards generally apply to our executive officers – Mark F. Bradley, Peoples’
President and Chief Executive Officer; Edward G. Sloane, Peoples’ Executive Vice
President, Chief Financial Officer and Treasurer; Carol A. Schneeberger,
Peoples’ Executive Vice President, Operations; Joseph S. Yazombek, Peoples’
Executive Vice President and Chief Credit Officer; Daniel K. McGill, Peoples’
Executive Vice President and Chief Commercial Lending Officer; Richard W.
Stafford, Peoples’ Executive Vice President, Retail Banking; and David T. Wesel,
Peoples’ Executive Vice President, Investment and Insurance
Services. These standards are set forth in the American Recovery and
Reinvestment Act of 2009 (the “ARRA”) and an interim final rule promulgated by
the U.S. Treasury under 31 CFR Part 30 on June 15, 2009 and amended December 7,
2009 (collectively, the “Interim Final Rule”) The executive compensation and
corporate governance standards under the ARRA and the Interim Final Rule remain
in effect during the period in which any obligation arising from financial
assistance provided under TARP remains outstanding, excluding any period during
which the U.S. Treasury holds only the Warrant to purchase Peoples’ common
shares (the “ARRA Covered Period”).
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth, as of February 26, 2010 (except as otherwise noted),
certain information concerning the beneficial ownership of common shares by the
only entities known by Peoples to be the beneficial owner of more than 5% of
Peoples’ outstanding common shares:
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Name
and Address of
Beneficial Owner
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Amount
and Nature of
Beneficial Ownership
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Percent of Class (1)
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Peoples
Bank – Trustee
138
Putnam Street
P.O.
Box 738
Marietta,
OH 45750-0738
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911,720
(2)
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8.69%
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|
Franklin
Resources, Inc.
Charles
B. Johnson
Rupert
H. Johnson, Jr.
Franklin
Advisory Services, LLC
One
Franklin Parkway
San
Mateo, CA 94403-1906
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839,771
(3)
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8.00%
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|
Dimensional
Fund Advisors LP
Palisades
West, Building One
6300
Bee Cave Road
Austin,
TX 78746
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836,258
(4)
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7.97%
|
|
BlackRock,
Inc.
40
East 52nd
Street
New
York, NY 10022
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636,416
(5)
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6.06%
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(1)
|
The
“Percent of Class” computation is based on 10,496,841 common shares
outstanding and entitled to vote on February 26,
2010.
|
|
(2)
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Includes
Peoples Bank’s beneficial ownership through Peoples Financial Advisors, a
division of Peoples Bank, in the following manner: 150,824
common shares with shared investment and sole voting power; 688,342 common
shares with shared investment and shared voting power; 48,986 common
shares with sole voting and sole investment power; and 23,568 common
shares with sole investment and shared voting power. The
officers and directors of Peoples Bank and Peoples disclaim beneficial
ownership of the common shares beneficially owned by Peoples Bank through
Peoples Financial Advisors.
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|
(3)
|
Based
on information contained in a Schedule 13G amendment, filed
with the SEC on February 4, 2010 on behalf of Franklin Resources, Inc.,
Charles B. Johnson, Rupert H. Johnson, Jr., and Franklin Advisory
Services, LLC to report their beneficial ownership of common shares of
Peoples as of December 31, 2009. These common shares are
reported to be beneficially owned by one or more open- or closed-end
investment companies or other managed accounts that are investment
management clients of investment managers that are direct and indirect
subsidiaries of Franklin Resources, Inc., including Franklin Advisory
Services, LLC and Franklin Templeton Portfolio Advisors, Inc., which are
investment adviser subsidiaries of Franklin Resources, Inc. The
investment management contracts generally grant to the respective
investment adviser subsidiary all voting and/or investment power over the
common shares owned by the advisory clients. However, the
Schedule 13G amendment reports that, to the extent that the underlying
client under a managed account investment management arrangement advised
by Franklin Templeton Portfolio Advisors, Inc. has retained voting power
over any common shares, Franklin Templeton Portfolio Advisors, Inc.
disclaims any power to vote or direct the vote of such common
shares. The Schedule 13G amendment reports that Franklin
Advisory Services, LLC had sole voting power as to 825,771 common shares
(7.87% of the outstanding common shares) and sole investment power as to
838,571 common shares (7.99% of the outstanding common shares) and that
Franklin Templeton Portfolio Advisors, Inc. had sole voting (except as
previously noted) and sole investment power as to 1,200 common shares
(.0001% of the outstanding common shares). For purposes of the
reporting requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), Charles B. Johnson and Rupert H. Johnson, Jr. are
reported to be the principal stockholders of Franklin Resources, Inc., and
together with Franklin Resources, Inc., each may be deemed to be, for
purposes of Rule 13d-3 under the Exchange Act, the beneficial owner of the
common shares held by persons and entities advised by the investment
adviser subsidiaries of Franklin Resources, Inc. However, each
of Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson, Jr.,
Franklin Advisory Services, LLC and Franklin Templeton Portfolio Advisors,
Inc. expressly disclaimed any pecuniary interest (direct financial
interest) or beneficial ownership in any of the common shares covered by
the Schedule 13G amendment and they believe they are not a “group” within
the meaning of Rule 13d-5 under the Exchange
Act.
|
|
(4)
|
Based
on information contained in a Schedule 13G amendment, filed with the SEC
on February 8, 2010 on behalf of Dimensional Fund Advisors LP to report
its beneficial ownership of common shares of Peoples as of December 31,
2009. The Schedule 13G amendment reported that Dimensional Fund
Advisors LP had sole voting power as to 816,380 common shares and sole
investment power as to 836,258 common shares, all of which were held in
portfolios of four registered investment companies to which Dimensional
Fund Advisors LP furnishes investment advice and of certain other
commingled group trusts and separate accounts for which Dimensional Fund
Advisors LP serves as investment manager. The common shares
reported were owned by the investment companies, trusts and
accounts. Dimensional Fund Advisors LP disclaimed beneficial
ownership of the reported common
shares.
|
|
(5)
|
Based
on information contained in a Schedule 13G amendment filed with the SEC on
January 29, 2010 on behalf of BlackRock, Inc. to report the beneficial
ownership by its subsidiaries (BlackRock Institutional Trust Company,
N.A., BlackRock Fund Advisors and BlackRock Investment Management, LLC) of
common shares of Peoples as of December 31, 2009. The Schedule
13G reported that BlackRock, Inc. had sole voting power and sole
investment power as to 636,416 common
shares.
|
The
following table sets forth, as of February 10, 2010, certain information with
respect to the common shares beneficially owned by each current director of
Peoples (including each nominee for re-election as a director of Peoples), by
each individual named in the Summary Compensation Table for 2009 and by all
current executive officers and directors of Peoples as a group:
|
Amount
and Nature of Beneficial Ownership (1)
|
|||||||
|
Name
of
Beneficial Owner
|
Common
Shares
Presently Held
|
Common
Shares Which Can Be Acquired Upon Exercise of Options Currently
Exercisable or Options First Becoming Exercisable Within 60
Days
|
Total
|
Percent of
Class (2)
|
|||
|
Dave
M. Archer
|
24,066
|
(3)
|
2,912
|
26,978
|
(4)
|
||
|
Carl
L. Baker, Jr.
|
93,901
|
(5)
|
7,984
|
101,885
|
(4)
|
||
|
Mark
F. Bradley (6)
|
11,071
|
(7)
|
17,135
|
28,206
|
(4)
|
||
|
George
W. Broughton
|
158,820
|
(8)
|
4,665
|
163,485
|
1.56%
|
||
|
Wilford
D. Dimit
|
59,402
|
(9)
|
7,550
|
66,952
|
(4)
|
||
|
Richard
Ferguson
|
751
|
(10)
|
2,355
|
3,106
|
(4)
|
||
|
Brenda
F. Jones, M.D.
|
3,392
|
(11)
|
2,912
|
6,304
|
(4)
|
||
|
David
L. Mead
|
4,100
|
(12)
|
600
|
4,700
|
(4)
|
||
|
Robert
W. Price
|
16,656
|
(13)
|
5,820
|
22,476
|
(4)
|
||
|
Theodore
P. Sauber
|
130,188
|
(14)
|
2,355
|
132,543
|
1.26%
|
||
|
Carol
A. Schneeberger (6)
|
33,850
|
(15)
|
17,111
|
50,961
|
(4)
|
||
|
Edward
G. Sloane (6)
|
5,364
|
(16)
|
0
|
5,364
|
(4)
|
||
|
Paul
T. Theisen
|
24,225
|
(17)
|
7,550
|
31,775
|
(4)
|
||
|
David
T. Wesel (6)
|
5,932
|
(18)
|
3,609
|
9,541
|
(4)
|
||
|
Joseph
H. Wesel
|
36,126
|
(19)
|
5,820
|
41,946
|
(4)
|
||
|
Thomas
J. Wolf
|
25,600
|
(20)
|
3,510
|
29,110
|
(4)
|
||
|
Joseph
S. Yazombek (6)
|
43,870
|
(21)
|
18,969
|
62,839
|
(4)
|
||
|
All
current directors and
executive
officers as a
group
(numbering 19)
|
679,347
|
(22)
|
110,857
|
790,204
|
7.45%
|
||
|
(1)
|
Unless
otherwise indicated in the footnotes to this table, 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 down to the whole common share. The mailing
address of each of the current executive officers and directors of Peoples
is 138 Putnam Street, P.O. Box 738, Marietta, Ohio
45750-0738.
|
|
(2)
|
The
“Percent of Class” computation is based on the sum of (i) 10,496,841
common shares outstanding and entitled to vote on February 26, 2010 and
(ii) the number of common shares, if any, as to which the named individual
or group has the right to acquire beneficial ownership upon the exercise
of options which are currently exercisable or will first become
exercisable within 60 days after February 26,
2010.
|
|
(3)
|
Includes
12,936 common shares held in an investment account by Dave M. Archer, as
to which Mr. Archer exercises sole voting and investment power. Does
not include 12,233 common shares accrued to Mr. Archer’s bookkeeping
account under the Peoples Bancorp Inc. Second Amended and Restated
Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and
Subsidiaries (the “Deferred Compensation Plan for Directors”), as to which
Mr. Archer has no voting or investment power. As of February
26, 2010, 9,306 common shares held by Mr. Archer had been pledged as
security.
|
|
(4)
|
Reflects
beneficial ownership of less than 1% of the outstanding common
shares.
|
|
(5)
|
Includes
5,777 common shares held in an investment account by Carl L. Baker, Jr.,
as to which Mr. Baker exercises sole voting and investment
power. Includes 8,352 common shares held by B & N Coal, Inc., as
to which Mr. Baker exercises shared voting and investment
power. Also includes (i) 8,943 common shares held by Mr. Baker
as Trustee of the Gilbert Baker Trust, as to which Mr. Baker exercises
sole voting and investment power; (ii) 44,924 common shares held by Mr.
Baker as Trustee of the Jewell Baker Trust, as to which Mr. Baker
exercises sole voting and investment power; (iii) 9,005 common shares held
by Mr. Baker as Trustee of the Mary Baker Trust, as to which Mr. Baker
exercises sole voting and investment power; and (iv) 2,000 common shares
held by Mr. Baker as Trustee of Baker Investments LLC, as to which Mr.
Baker exercises sole voting and investment power. Does not include
294 common shares accrued to Mr. Baker’s bookkeeping account under the
Deferred Compensation Plan for Directors, as to which Mr. Baker has no
voting or investment power.
|
|
(6)
|
Executive
officer of Peoples during the 2009 fiscal year and named in the Summary
Compensation Table for 2009. Mark F. Bradley also serves as a
director of Peoples.
|
|
(7)
|
Does
not include 1,661 common shares accrued to Mark F. Bradley’s bookkeeping
account under the Deferred Compensation Plan for Directors, as to which
Mr. Bradley has no voting or investment power. Includes 7,959
common shares allocated to the account of Mr. Bradley in the Retirement
Savings Plan, as to which Mr. Bradley has the power to direct the voting
and investment.
|
|
(8)
|
Includes
2,000 common shares held by George Broughton Family Limited Partnership,
as to which Mr. Broughton exercises sole voting and investment
power. Includes 558 common shares held by Broughton Commercial
Properties, LLC, as to which Mr. Broughton exercises sole voting and
investment power. Includes 13,374 common shares held in an IRA
account by Peoples Bank as custodian, as to which Mr. Broughton exercises
sole voting and investment power. Does not include 16,333
common shares held of record and beneficially owned by Mr. Broughton’s
wife, as to which Mr. Broughton has no voting or investment power and
disclaims beneficial ownership. Does not include 1,453 common
shares accrued to Mr. Broughton’s bookkeeping account under the
Deferred Compensation Plan for Directors, as to which Mr. Broughton has no
voting or investment power. As of February 26, 2010, 558 common
shares held by Broughton Commercial Properties, LLC and 9,306 common
shares held by Mr. Broughton had been pledged as
security.
|
|
(9)
|
Includes
25,407 common shares held in the Wilford D. Dimit Trust Investment Account
at Peoples Bank, as to which Mr. Dimit exercises shared voting and
investment power with Peoples Bank. Also includes 33,669 common
shares held in the Marjorie E. Dimit Trust Investment Account at Peoples
Bank, as to which Mr. Dimit exercises shared voting and investment power
with Peoples Bank. Does not include 30,343 common shares
accrued to Mr. Dimit’s bookkeeping account under the Deferred Compensation
Plan for Directors, as to which Mr. Dimit has no voting or investment
power.
|
|
(10)
|
Includes
103 common shares allocated to the account of Richard Ferguson in the
Ferguson Consulting, LLC retirement savings plan, as to which Mr. Ferguson
has the power to direct the voting and investment. Does not
include 8,038 common shares accrued to Mr. Ferguson’s bookkeeping account
under the Deferred Compensation Plan for Directors, as to which Mr.
Ferguson has no voting or investment
power.
|
|
(11)
|
Does
not include 11,947 common shares accrued to Dr. Brenda F. Jones’
bookkeeping account under the Deferred Compensation Plan for Directors, as
to which Dr. Jones has no voting or investment
power.
|
|
(12)
|
Includes
3,500 common shares held in an investment account by David L. Mead, as to
which Mr. Mead exercises sole voting and investment power. Does not
include 4,526 common shares accrued to Mr. Mead’s bookkeeping account
under the Deferred Compensation Plan for Directors, as to which Mr. Mead
has no voting or investment power.
|
|
(13)
|
Includes
11,167 common shares held in the Robert W. Price Investment Account, as to
which Mr. Price exercises sole investment and voting
power. Does not include 9,383 common shares accrued to Mr.
Price’s bookkeeping account under the Deferred Compensation Plan for
Directors, as to which Mr. Price has no voting or investment
power.
|
|
(14)
|
Includes
56,173 common shares held in the Carol J. Sauber Trust Account at Peoples
Bank, as to which Theodore P. Sauber exercises shared investment and
voting power with Peoples Bank. Includes 65,594 common shares
held in the Theodore P. Sauber Trust Account at Peoples Bank, as to which
Mr. Sauber exercises shared investment and voting power with Peoples
Bank. Includes 8,121 common shares held in an IRA account by
Peoples Bank as custodian, as to which Mr. Sauber exercises shared
investment and voting power with Peoples
Bank.
|
|
(15)
|
Includes
8,521 common shares held jointly by Carol A. Schneeberger with her
husband, as to which Ms. Schneeberger exercises shared voting and
investment power. Includes 14,610 common shares allocated to the
account of Ms. Schneeberger in the Retirement Savings Plan, as to which
Ms. Schneeberger has the power to direct the voting and
investment. Includes 3,751 common shares held by David
Radcliff, the father of Ms. Schneeberger. Mr. Radcliff has
granted to Ms. Schneeberger, pursuant to a power of attorney, voting and
investment powers with respect to these 3,751 common shares; however, Ms.
Schneeberger disclaims beneficial ownership as to these 3,751 common
shares.
|
|
(16)
|
Includes
2,683 common shares allocated to the account of Edward G. Sloane in the
Retirement Savings Plan, as to which Mr. Sloane has the power to direct
the voting and investment.
|
|
(17)
|
Does
not include 6,569 common shares accrued to Paul T. Theisen’s account under
the Deferred Compensation Plan for Directors, as to which Mr. Theisen has
no voting or investment power.
|
|
(18)
|
Includes
2,889 common shares held jointly by David T. Wesel with his wife, as to
which Mr. Wesel exercises shared voting and investment
power. Includes 2,240 common shares held by Mr. Wesel as
custodian for his children.
|
|
(19)
|
Does
not include 14,179 common shares held in the Luada Wesel Estate Plan Trust
Investment Account at Peoples Bank, as to which: (i) Joseph H. Wesel has
no voting or investment power and disclaims beneficial ownership and (ii)
Peoples Bank shares voting and investment power with Luada
Wesel. Does not include 8,965 common shares accrued to Mr.
Wesel’s account under the Deferred Compensation Plan for Directors, as to
which Mr. Wesel has no voting or investment power. Does not
include 9,486 common shares in the Joseph and Lu Wesel Grandchildren’s
Trust, as to which Peoples Bank has sole investment and voting
power.
|
|
(20)
|
As
of February 26, 2010, 20,000 common shares held by Thomas J. Wolf had been
pledged as security.
|
|
(21)
|
Includes
26,780 common shares held jointly by Joseph S. Yazombek and his wife, as
to which Mr. Yazombek exercises shared voting and investment
power. Includes 16,208 common shares allocated to the account
of Mr. Yazombek in the Retirement Savings Plan, as to which Mr. Yazombek
has the power to direct the voting and
investment.
|
|
(22)
|
Includes
common shares held jointly by current directors and executive officers
with other persons, as well as 36,928 common shares allocated to the
accounts of the executive officers of Peoples in the Retirement Savings
Plan. See notes (3), (5) and (7) through (21)
above.
|
Section
16(a) of the Exchange Act requires that Peoples’ directors and executive
officers, and any persons beneficially holding more than 10 percent of Peoples’
outstanding common shares, file statements with the SEC reporting their initial
beneficial ownership of common shares and any subsequent changes in their
beneficial ownership. Peoples is required to disclose in this proxy
statement any late statements, if any statements are not filed within the time
periods mandated by the SEC. Based solely on Peoples’ review of (i)
Section 16(a) statements filed on behalf of these persons for their transactions
during Peoples’ 2009 fiscal year and (ii) written representations received from
these persons that no other Section 16(a) statements were required to be filed
by them for transactions during Peoples’ 2009 fiscal year, Peoples believes that
all Section 16(a) filing requirements applicable to Peoples’ executive officers
and directors, and persons holding more than 10 percent of Peoples’ outstanding
common shares, were complied with, except:
|
·
|
David
L. Mead filed late one Form 4 reporting one acquisition of common shares
(which occurred on October 30, 2009 and was reported on November 4,
2009).
|
|
·
|
George
W. Broughton filed late one Form 4 reporting one acquisition of common
shares by Mr. Broughton as Custodian (which occurred on April 14, 2009 and
was reported on November 25, 2009).
|
|
·
|
Carl
L. Baker, Jr. filed late one Form 4 reporting one acquisition of common
shares by Mr. Baker as Trustee of the Mary Baker Trust (which occurred on
September 27, 2008 and was reported on February 24,
2009).
|
During
the 2009 fiscal year, Peoples Bank entered into lending relationships with
certain executive officers and directors of Peoples, with members of their
immediate families and with corporations or organizations as to which directors
of Peoples serve as executive officers or beneficially own more than 10% of the
equity securities. All such loans (i) were made in the ordinary
course of business, (ii) were made on substantially the same terms, including
interest rates charged and collateral required, as those prevailing at the time
for comparable loans with persons not related to Peoples or Peoples Bank, and
(iii) did not involve more than the normal risk of collectability or present
other unfavorable features to Peoples or Peoples Bank.
The above
loans were subject to Peoples Bank’s written policies, procedures and standard
underwriting criteria applicable to loans generally, and were made in accordance
with Federal Reserve Regulation O requiring prior approval of each loan by the
Board of Directors of Peoples Bank.
Effective
January 1, 2006, David T. Wesel, the son of Joseph H. Wesel, a director of
Peoples, assumed the positions of Executive Vice President of Peoples and of
Peoples Bank, as well as President of Peoples Financial Advisors, a division of
Peoples Bank. Effective March 1, 2009, David T. Wesel also assumed
the position of President of Peoples Insurance Agency, LLC, and his title at
Peoples was changed to Executive Vice President for Investment and Insurance
Services. Prior to January 1, 2006, David T. Wesel had served as Vice
President of Peoples Bank and Sales Manager of Peoples Financial Advisors, but
was not an executive officer of either Peoples or Peoples Bank. David
T. Wesel’s compensation for the 2009 fiscal year is reported in the section
captioned “EXECUTIVE
COMPENSATION.” Joseph H. Wesel does not serve as a member of
Peoples’ Compensation Committee and was not involved in setting the compensation
for David T. Wesel.
The Audit
Committee is responsible, under the terms of its charter, for reviewing and
overseeing procedures designed to identify related person transactions that are
material to Peoples’ consolidated financial statements or otherwise require
disclosure under applicable rules adopted by the SEC, including those
transactions required to be disclosed under Item 404 of SEC Regulation
S-K. All such transactions must be approved by the Audit
Committee. Further, under the terms of its charter, the Audit
Committee is responsible for reviewing and overseeing all actions and
transactions which involve the personal interest of a director or executive
officer of Peoples and determining in advance whether any such action or
transaction represents a potential conflict of interest.
ELECTION
OF DIRECTORS
As of the
date of this proxy statement, there were 13 members of the Board of Directors –
five directors in the class whose terms expire at the Annual Meeting, four in
the class whose terms expire in 2011 and four in the class whose terms expire in
2012. Proxies cannot be voted at the Annual Meeting for more than
five nominees.
On March
10, 2009, Peoples received notification from Frank L. Christy that he intended
to resign at some time in the future from the Peoples Board of Directors due to
extensive travel and meeting commitments associated with his personal business
pursuits. On September 24, 2009, Mr. Christy notified Peoples that
his resignation from the Peoples Board of Directors was to be effective as of
September 24, 2009.
At the
July 23, 2009 meeting of the Peoples Board of Directors, the Board increased the
number of directors of Peoples from 12 to 13 and elected Dave M. Archer and
Brenda F. Jones, M.D. to fill the offices created by the increase in the number
of directors, in each case effective August 1, 2009. Mr. Archer was
elected as a director in the class whose term will expire at the Annual Meeting
and Dr. Jones was elected as a director in the class whose term will expire in
2011. The Governance and Nominating Committee of the Board of
Directors had unanimously recommended the increase in the number of directors
and the election of Mr. Archer and Dr. Jones. Mr. Archer and Dr.
Jones had been recommended to the Governance and Nominating Committee by Mark F.
Bradley, the President and Chief Executive Officer of Peoples.
The Board
of Directors proposes that each of the five nominees identified below be
re-elected for a new three-year term and until his successor is duly elected and
qualified or until his earlier resignation, removal from office or
death. The Governance and Nominating Committee recommended each
nominee for re-election. The five nominees for election as directors
receiving the greatest number of votes “FOR” election will be elected
to serve in the class whose terms expire in 2013. Common shares
represented by properly executed and returned proxy cards will be voted as
specified or, if no instructions are given, “FOR” the election of the
Board of Directors’ nominees, except in the case of broker
non-votes. Common shares as to which the authority to vote is
withheld and broker non-votes will not be counted toward the election of
directors, or toward the election of the individual nominees specified on the
proxy card.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS
VOTE “FOR” THE ELECTION OF ALL NOMINEES LISTED BELOW.
The
following table gives certain information, as of the date of this proxy
statement, concerning each nominee for re-election as a director of
Peoples. Unless otherwise indicated, each individual has had the same
principal occupation for more than five years. Each individual also
serves as a director of Peoples Bank.
|
Nominee
|
Age
|
Position(s)
Held with Peoples and Its
Principal Subsidiaries and Principal
Occupation(s)
|
Director
Continuously
Since
|
Nominee
For
Term
Expiring In
|
|
Dave
M. Archer
|
65
|
Owner,
President and Chief Executive Officer of several companies based in
southeastern Ohio, including Pioneer Pipe Inc., which represent one of the
largest full-service construction and fabrication groups in the United
States, specializing in general, mechanical, and electrical construction,
as well as pipe and steel fabrication and installation. He also
volunteers his time in many community service projects and charitable
organizations.
|
2009
|
2013
|
|
Mr.
Archer’s extensive entrepreneurial experience in his own business ventures
provides the Board of Directors with proven leadership skills, perspective
on the trade and construction industry, and guidance on the operational
management of Peoples. Mr. Archer’s services as a director of
Peoples Bank for 16 years and particularly as a member of Peoples Bank’s
Loan Committee are also an asset to the Peoples Board of Directors by
providing to the Board of Directors valuable insight on Peoples Bank’s
lending operations.
|
||||
|
David
L. Mead
|
54
|
Vice
President for Business Affairs, Otterbein College, located in Westerville,
Ohio, since September 2006. Associate Professor of Finance, Marietta
College, located in Marietta, Ohio, from August 2004 to September 2006.
Chief Financial Officer and Treasurer of First Place Financial Corp.,
headquartered in Warren, Ohio, from December 2002 to June
2004. Treasurer of First Place Bank, headquartered in Warren,
Ohio, from May 2002 to December 2002.
|
2006
|
2013
|
|
Mr.
Mead’s 23 years of banking experience and his previous position as the
Chief Financial Officer of a bank holding company provide significant
value to the collective knowledge of our organization and the Board of
Directors. His extensive experience, professional certification
as a Certified Public Accountant, financial expertise and background are
assets both to the Board of Directors and the Audit
Committee. In addition, Mr. Mead’s service as a director of
Peoples Bank for 4 years allows him to provide valuable perspective to the
Board of Directors in the areas of financial oversight, audit, accounting,
and general financial knowledge relevant to the financial services
industry.
|
||||
11
|
Nominee
|
Age
|
Position(s)
Held with Peoples and Its
Principal Subsidiaries and Principal
Occupation(s)
|
Director
Continuously
Since
|
Nominee
For
Term
Expiring
In
|
|
Robert
W. Price
|
46
|
Vice
President, Summit Materials, LLC, headquartered in Washington, D.C., a
vertically integrated construction materials company focused within
aggregates, asphalt, concrete and construction, since
2010. Private Investor from 2008 to 2009. General
Manager of The Shelly Company, Thornville, Ohio, an asphalt, aggregates
and construction materials company, from 2002 to
2008. President of Smith Concrete, Marietta, Ohio, a ready-mix
concrete company, from 1990 to 2002.
|
2000
|
2013
|
|
Mr.
Price’s demonstrated business management and leadership background are
assets to the organization. His experience in strategic
initiatives, mergers and acquisitions, and operational efficiency projects
in leadership roles with various privately-held companies adds valuable
knowledge to our Board of Directors.
|
||||
|
Paul
T. Theisen
|
79
|
Attorney-At-Law,
retired. For more than 40 years, was a litigator with
TheisenBrock, A Legal Professional Association (“TheisenBrock”), located
in Marietta, Ohio, and was Of Counsel to, and an independent contractor
with, that firm. Vice Chairman of the Board since June 2005,
and Leadership Director from December 2005 to July 2008, of
Peoples. Chairman of the Board of Peoples Bank since June
2005.
|
1980
|
2013
|
|
Mr.
Theisen’s extensive experience as an attorney, practicing primarily in the
areas of business and labor law, provides insights into these areas of the
law as they relate to Peoples’ business operations for the Board of
Directors. His 30 years of experience as a director of Peoples
and 31 years as a director of Peoples Bank also contribute a wealth of
experience to the Board of Directors.
|
||||
|
Thomas
J. Wolf
|
63
|
President
of seven holding companies for 14 McDonald’s Restaurants in Kentucky and
West Virginia. Chairman of the Board for Fifth Avenue
Broadcasting Co., Inc., a holding company for four radio stations in
Huntington, West Virginia. Board member of Our Lady of
Bellefonte Hospital in Ashland, Kentucky, from 2002 to
2008. Board member of the Ronald McDonald House in Huntington,
West Virginia, since 1987. He also served as a Board member of
Palmetto Heritage Bankshares, Inc., a community bank holding company based
in South Carolina, from 2005 to 2007.
|
2004
|
2013
|
|
Mr.
Wolf has 36 years of executive experience in managing businesses which is
an asset to Peoples’ Board of Directors. This experience allows
Mr. Wolf to provide key input for our Board, both from a business
perspective as well as insight into Peoples’ Kentucky
market.
|
||||
While it
is contemplated that all nominees will stand for re-election at the Annual
Meeting, if one or more nominees at the time of the Annual Meeting should be
unavailable or unable to serve as a candidate for re-election as a director, the
individuals designated as proxies on the proxy card will have full discretion to
vote the common shares represented by the proxies they hold for the election of
the remaining nominees and for the election of any substitute nominee or
nominees designated by the Board of Directors following recommendation by the
Governance and Nominating Committee. The Board of Directors knows of
no reason why any of the nominees named above would be unavailable or unable to
serve if elected to the Board.
The
following table gives certain information, as of the date of this proxy
statement, concerning the current directors of Peoples who will continue to
serve after the Annual Meeting. Unless otherwise indicated, each
individual has had the same principal occupation for more than five
years. Each individual also serves as a director of Peoples
Bank.
|
Name
|
Age
|
Position(s)
Held with Peoples and Its
Principal Subsidiaries and Principal
Occupation(s)
|
Director
Continuously
Since
|
Term
Expiring In
|
|
Carl
L. Baker, Jr.
|
47
|
President
and Chief Executive Officer, B & N Coal, Inc., a mining, reclamation
and construction concern, located in southeastern
Ohio. Co-Owner of Sharon Stone Company, a limestone and slag
producer, located in Noble and Washington Counties, Ohio. Owner
of Dexter Hardwoods, Inc., a hardwood sawmill, located in Noble County,
Ohio. Partner in Belpre Sand & Gravel Company, a sand and
gravel operation, located in Little Hocking, Washington County,
Ohio.
|
2000
|
2012
|
|
Mr.
Baker’s management and leadership in these businesses provide quality
insights on some of the core regional business types served by Peoples,
which has allowed Mr. Baker to help guide Peoples in his role as a
director. He brings a diverse background and executive
experience to the Board of Directors.
|
||||
|
Mark
F. Bradley
|
40
|
Chief
Executive Officer since May 2005, President since June 2004, a Director
since February 2003, Chief Operating Officer from July 2003 to May 2005,
Executive Vice President and Chief Integration Officer from February 2001
to July 2003, and Controller from 1997 to 2001, of
Peoples. Chief Executive Officer since May 2005, President
since 2002, Chief Operating Officer from 2002 to May 2005, and Controller
from 1997 to 2001, of Peoples Bank. Chairman, President and a
Director of Peoples Bancorp Foundation, Inc. since December
2003. President from January 2006 to February 2009 and a
Director since January 2004 of Peoples Insurance Agency, LLC.
|
2003
|
2011
|
|
Mr.
Bradley’s role as President and Chief Executive Officer of Peoples
provides him with intimate knowledge of the Peoples organization and its
operations through his day-to-day management of Peoples. In
addition, Mr. Bradley’s service as a director of Peoples Bank for 7 years
allows him to share this valuable day-to-day perspective with the Peoples
Board of Directors.
|
||||
|
George
W. Broughton
|
52
|
Owner
and President of GWB Specialty Foods, LLC, an ice cream, frozen food, and
coffee service distributor. Owner and President of Broughton
Commercial Properties, LLC, a commercial properties rental
company. Chairman of Broughton Foundation, a nonprofit
charitable foundation, and Broughton Park, a park facility owned by the
Broughton Foundation and made available to the
public. President and Controller of George Broughton Family
LLP, an asset management company. Owner and President of GWB
Oil & Gas LLC, an independent oil and gas producing
company. All of these entities are based in Marietta,
Ohio. A Director of Peoples Bancorp Foundation, Inc. since
December 2003.
|
1994
|
2012
|
13
|
Name
|
Age
|
Position(s)
Held with Peoples and Its
Principal Subsidiaries and Principal
Occupation(s)
|
Director
Continuously
Since
|
Term
Expiring
In
|
|
Mr.
Broughton brings a great deal of experience in various small business
ventures in a number of different industries to the Board of
Directors. His extensive executive experience and proven
general business and leadership skills are valuable to Peoples’ Board of
Directors and enhance its overall capabilities. Mr. Broughton’s
service as a director of Peoples Bank for 20 years allows him to provide
valuable perspective to the Peoples Board of Directors as to issues
affecting local and regional business in Peoples’ market
area.
|
||||
|
Wilford
D. Dimit
|
75
|
Former
President of First Settlement, Inc., a Marietta, Ohio corporation
operating a retail clothing store for men and women, a family shoes store,
a cosmetic studio, a public alteration shop and a
restaurant. In March 2005, the businesses were sold or closed
and Mr. Dimit retired.
|
1993
|
2012
|
|
Mr.
Dimit’s many years of extensive sales experience, and his small business
ownership and management history, combined with his degree in Business
Administration from Marietta College, are valuable to Board oversight and
leadership in providing insights into the ownership and management of
various small businesses. Mr. Dimit’s service as a director of
Peoples Bank for 21 years allows him to provide valuable perspective in
these areas of expertise to the Peoples Board of
Directors.
|
||||
|
Richard
Ferguson
|
63
|
Owner
of Ferguson Consulting, LLC, a Columbus, Ohio based professional practice
that focuses on business valuations and forensic accounting
services. Certified Public Accountant since 1976 and Certified
Valuation Analyst since 1996. Mr. Ferguson has served as
Chairman of the Board of Peoples since July 2008.
|
2004
|
2012
|
|
Mr.
Ferguson brings significant financial expertise and business knowledge to
the Peoples Board of Directors, both through his business experience and
his professional certifications. His extensive financial
experience, expertise, and background are also invaluable for Peoples’
Audit Committee.
|
||||
|
Dr.
Brenda F. Jones
|
51
|
Medical
Director, Marietta Ophthalmology Associates, Inc., located in Marietta,
Ohio, since 1991. Member, American Academy of Ophthalmology
(Fellow), Ohio Ophthalmology Society, American Medical Association,
National Medical Association, and Research to Prevent
Blindness.
|
2009
|
2011
|
|
Dr.
Jones has effectively led a corporation for 19 years as a sole
practitioner. She has brought those leadership skills to
Peoples and provides perspective to the Board on business and management
matters. In addition, Dr. Jones’ service as a director of
Peoples Bank for 15 years allows her to provide valuable perspective to
the Peoples Board of Directors as not just a practitioner, but a business
owner and operator in the medical field.
|
||||
|
Theodore
P. Sauber
|
76
|
Vice
President of T.C.K.S., Inc., a holding company for McDonald’s Restaurants
in Ohio and West Virginia. A member of the Ohio University
Trustees Academy. A member of Service Corps of Retired
Executives (SCORE) of Athens (Ohio). A Director of Peoples
Bancorp Foundation, Inc. since December 2003. Retired Trustee
of Rio Grande University.
|
2004
|
2011
|
|
Mr.
Sauber developed his business experience through ownership and operation
of McDonald’s franchises for 35 years. In additional to his
general business knowledge, his in-depth knowledge of Peoples’ Athens and
Nelsonville markets provides a valuable perspective for the Board of
Directors in a crucial market area. Mr. Sauber’s service as a
director of Peoples Bank for 19 years allows him to apply this perspective
to the Peoples Board of Directors.
|
||||
14
|
Name
|
Age
|
Position(s)
Held with Peoples and Its
Principal Subsidiaries and Principal
Occupation(s)
|
Director
Continuously
Since
|
Term
Expiring
In
|
|
Joseph
H. Wesel
|
80
|
President
of W.D.A., Inc., a real estate holding company, located in Marietta,
Ohio. Chairman and Chief Executive Officer of Marietta
Automotive Warehouse, Inc., an automotive parts wholesaler, located in
Marietta, Ohio, from 1978 until December 2007. Chairman of the
Board from 1991 until July 2003 and again from June 2005 until June 2008,
Leadership Director from July 2003 to December 2005 and Vice Chairman of
the Board from July 2003 to June 2005, of Peoples.
|
1980
|
2011
|
|
Mr.
Wesel’s extensive executive experience through owning and operating a
multi-state wholesale and retail auto parts distribution business and
through his roles as a director and Chairman provides the Board of
Directors with valuable knowledge of Peoples’ market areas and the
business community therein. His 30 years of experience as a
director of Peoples and 36 years as a director of Peoples Bank allow Mr.
Wesel to combine his knowledge of Peoples’ market areas and Peoples’
internal operations to offer valuable insight to the Peoples Board of
Directors.
|
||||
Other
than the father-son relationship between Joseph H. Wesel, a director of Peoples,
and David T. Wesel, an executive officer of Peoples, there are no family
relationships among any of the directors, nominees for election as a director
and executive officers of Peoples.
The following are the executive
officers of Peoples, all of whom are elected annually and serve at the pleasure
of the Board of Directors of Peoples. This table lists each executive
officer’s age as of the date of this proxy statement as well as the positions
presently held by each executive officer with Peoples and our principal
subsidiaries and each executive officer’s individual business
experience.
|
Name
|
Age
|
Position
|
|
Mark
F. Bradley
|
40
|
President
and Chief Executive Officer
|
|
Daniel
K. McGill
|
55
|
Executive
Vice President, Chief Commercial Lending Officer
|
|
Carol
A. Schneeberger
|
53
|
Executive
Vice President, Operations
|
|
Edward
G. Sloane
|
49
|
Executive
Vice President, Chief Financial Officer and Treasurer
|
|
Richard
W. Stafford
|
45
|
Executive
Vice President, Retail Banking
|
|
David
T. Wesel
|
48
|
Executive
Vice President, Investment and Insurance Services
|
|
Joseph
S. Yazombek
|
56
|
Executive
Vice President, Chief Credit
Officer
|
Mr.
Bradley has been Chief Executive Officer of Peoples since May 2005 and President
of Peoples since June 2004. Mr. Bradley also has been Chief Executive
Officer of Peoples Bank since May 2005 and President since July
2002. Prior thereto, Mr. Bradley served as Chief Operating Officer of
Peoples from July 2003 to May 2005, and as Executive Vice President and Chief
Integration Officer from February 2001 to July 2003. He also served
as Chief Operating Officer of Peoples Bank from July 2002 to May
2005. Between 1997 and 2001, Mr. Bradley served as Controller of
Peoples and Peoples Bank. Mr. Bradley joined Peoples in
1991. In January 2006, Mr. Bradley was appointed President of Peoples
Insurance, LLC, and served in that capacity until March 2009. Mr.
Bradley remains a director of Peoples Insurance. Mr. Bradley has been
a director of Peoples since 2003 and of Peoples Bank since 2002.
Mr.
McGill joined Peoples in September 2009 when he was appointed Executive Vice
President, Chief Commercial Lending Officer of both Peoples and Peoples
Bank. Prior to joining Peoples, Mr. McGill worked for FirstMerit
Bank, National Association, starting in 1994, and served as President and Chief
Executive Officer of the Central Region of FirstMerit Bank, National Association
from 1997 to July 2009.
Ms.
Schneeberger, a Certified Public Accountant, serves as Executive Vice President,
Operations of Peoples and Peoples Bank, positions she has held since April 1999
and February 2000, respectively, and she has served as Cashier of Peoples Bank
since March 2000. From April 2007 to May 2008, Ms. Schneeberger
served as interim Chief Financial Officer and Treasurer of both Peoples and
Peoples Bank. From October 1988 to April 1999, Ms. Schneeberger was
Vice President for Operations of Peoples. Prior thereto, she was
Auditor of Peoples from August 1987 to October 1988 and Auditor of Peoples Bank
from January 1986 to October 1988. Ms. Schneeberger joined Peoples
Bank in 1977.
Mr.
Sloane, a Certified Public Accountant, joined Peoples in May 2008 when he was
appointed as Executive Vice President, Chief Financial Officer and Treasurer of
Peoples and Peoples Bank. Prior to joining Peoples, Mr. Sloane served
from 2006 to 2008 as Senior Vice President of Strategic Planning and Analysis
for WesBanco, Inc., a West Virginia bank holding company located in Wheeling,
West Virginia. From 1991 to 2006, Mr. Sloane served as Controller of
WesBanco, Inc. He has over 25 years of experience in the financial
services industry in various roles of increasing responsibility in the
accounting, finance, mergers and acquisitions, asset/liability management and
strategic planning areas.
Mr.
Stafford joined Peoples in February 2010 when he was appointed Executive Vice
President, Retail Banking of both Peoples and Peoples Bank. Prior to
joining Peoples, Mr. Stafford served as Senior Vice President of Retail Banking
and Chief Operating Officer of Citizens First Bancorp, Inc., a Michigan bank
holding company, from 2005 to January 2010.
Mr. Wesel
became Executive Vice President of Peoples in January 2006. Mr. Wesel
was also appointed as President of Peoples Bank’s Peoples Financial Advisors
division in January 2006. Effective March 1, 2009, Mr. Wesel also
assumed the position of President of Peoples Insurance and was named Executive
Vice President for Investment and Insurance Services. From September
4, 2009, to February 8, 2010, Mr. Wesel served as interim leader of Retail
Banking of both Peoples and Peoples Bank. Mr. Wesel served as Sales
Manager of Peoples Financial Advisors from February 2004 to December
2005. Prior to joining Peoples, Mr. Wesel had over 20 years of
experience in senior management and sales administration, including two years of
experience from September 2002 to February 2004 with Parker Hunter, a regional
brokerage firm. Mr. Wesel is the son of Joseph H. Wesel, a director
of Peoples and Peoples Bank.
Mr.
Yazombek became Executive Vice President, Chief Credit Officer in September
2009. Mr. Yazombek served as Executive Vice President, Chief Lending
Officer of Peoples from January 2000 to September 2009. Mr. Yazombek
has also held the position of Executive Vice President and Chief Lending Officer
of Peoples Bank from October 1998 to September 2009. He was an
Executive Vice President of Peoples Bank’s Consumer and Mortgage Lending areas
from May 1996 to October 1998. Mr. Yazombek joined Peoples Bank in
1983 and served as a real estate lender until May 1996.
None of
the executive officers of Peoples is involved in legal proceedings required to
be reported or disclosed in this Proxy Statement.
COMMITTEES
OF THE BOARD
The rules
of The NASDAQ Stock Market LLC (the “NASDAQ Rules”) require that a majority of
Peoples’ Board of Directors be independent directors. The definition
of an independent director for purposes of the NASDAQ Rules includes a series of
objective criteria, which Peoples’ Board of Directors has used in determining
whether its members are independent.
Peoples
has an independent director who serves as Chairman of the
Board. Independent director Richard Ferguson was appointed on July 1,
2008 to serve as Chairman of the Board. Peoples believes that
independent directors provide objective oversight of management performance as a
key component of efficient corporate governance. The Board of
Directors regularly deliberates and discusses its appropriate leadership
structure and the role and responsibilities of the Chairman of the Board based
upon the needs of Peoples in order to provide effective oversight of
management.
In
addition to considering the objective criteria, as required by the NASDAQ Rules,
the Board of Directors has made a subjective determination as to each
independent director that no relationships exist which, in the opinion of the
Board, would interfere with such individual’s exercise of independent judgment
in carrying out the responsibilities of a director. In making these
independence determinations, the Board of Directors has reviewed, considered and
discussed each director’s business and personal relationships, both direct and
indirect, with Peoples and our subsidiaries and the compensation and other
payments each director and such director’s immediate family members have, both
directly and indirectly, received from or made to Peoples and our subsidiaries
and presently expect to receive from or make to Peoples and our
subsidiaries. Based on that review, consideration and discussion, the
Board of Directors has determined that at least a majority of its members
qualify as independent directors. The Board of Directors has further
determined that each of the following directors has no financial or personal
ties, either directly or indirectly, with Peoples or our subsidiaries (other
than compensation received in the individual’s capacity as a director of Peoples
and our subsidiaries, non-preferential banking relationships in the ordinary
course of business with Peoples Bank and ownership of common shares of Peoples
as described in this proxy statement) and thus qualifies as independent: Dave M.
Archer; Carl L. Baker, Jr.; George W. Broughton; Wilford D. Dimit; Dr.
Brenda F. Jones; Richard Ferguson; David L. Mead; Robert W. Price; Theodore
P. Sauber; Paul T. Theisen; and Thomas J. Wolf. The Board of
Directors also determined that during his period of service which ended
September 24, 2009, Frank L. Christy also had no financial or personal ties,
either directly or indirectly, with Peoples and our subsidiaries (other than
compensation received by him in his capacity as a director of Peoples and our
subsidiaries, non-preferential banking relationships in the ordinary course with
Peoples Bank, and ownership of Peoples common shares) and thus qualified as
independent.
Paul T.
Theisen was Of Counsel to, and an independent contractor with, the law firm of
TheisenBrock until December 2008. Mr. Theisen has not been a partner,
controlling shareholder or executive officer or otherwise been related to or
held any interest in TheisenBrock, other than as Of Counsel and an independent
contractor (and has not personally performed legal services for Peoples or any
of our subsidiaries), since 1998. TheisenBrock performed legal
services for Peoples and our subsidiaries during the 2009 fiscal
year.
Mark F.
Bradley does not qualify as an independent director because he currently serves
as an executive officer of Peoples.
On
September 14, 2005, the Board of Directors appointed David T. Wesel as an
executive officer of Peoples and Peoples Bank, effective January 1,
2006. Joseph H. Wesel is the father of David T. Wesel. The
Board of Directors has determined that, due to his relationship to David T.
Wesel, Joseph H. Wesel does not qualify as an independent director either under
the applicable NASDAQ Rules or for purposes of Rule 16b-3 under the Exchange Act
or Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Internal Revenue Code”), each of which applies to directors serving on the
Compensation Committee.
In
accordance with applicable NASDAQ Rules, the independent directors were given
the opportunity to meet in executive session during each Board of Directors
meeting, presided over by the Chairman of the Board, and at such other times as
the independent directors deemed necessary.
The Board
of Directors held a total of 13 meetings during the 2009 fiscal
year. Each incumbent director attended 77% or more of the aggregate
of the total number of meetings held by the Board of Directors and the total
number of meetings held by all committees of the Board of Directors on which he
or she served, in each case during his or her period of service, other than Dave
M. Archer, who attended 67%.
Peoples
encourages all incumbent directors and director nominees to attend each annual
meeting of shareholders. All of the directors serving on the Board of
Directors at that time attended Peoples’ last annual meeting of shareholders
held on April 23, 2009.
The Board
of Directors has a standing Audit Committee, a standing Compensation Committee,
a standing Executive Committee, a standing Governance and Nominating
Committee and a standing Risk Committee. The Audit Committee and the
Risk Committee are charged with the majority of the risk oversight
responsibilities of the Board of Directors. The Risk Committee is the
primary entity providing oversight of significant risks on an enterprise-wide
level within all the defined risk categories, as discussed
below. However, the Audit Committee duties do include overseeing a
substantial portion of management’s actions to address compliance, legal and
operational risks. The Compensation Committee evaluates with Peoples’
senior risk officers all risks posed by Peoples’ compensation programs and makes
all reasonable efforts required to limit any unnecessary risks these programs
pose to Peoples and ensure that the programs do not encourage Senior Executive
Officers to take unnecessary and excessive risks that threaten the value of
Peoples. These committees are focused on maintaining our key risks within
acceptable tolerances and work in concert to provide enterprise-wide
oversight. Each committee’s role and its interaction with the Board
of Directors regarding the committee’s oversight responsibilities are described
more fully below. Through these committees and the effective working
relationships with management, the Board of Directors is able to effectively
monitor and maintain an active role in the oversight of the key aspects of risks
to which Peoples is exposed.
The Audit
Committee was established in accordance with Section 3(a)(58)(A) of the Exchange
Act and conducts its business pursuant to a written charter adopted by the Board
of Directors. A current copy of the charter of the Audit Committee is
posted on the “Corporate Governance & Ethics” page of Peoples’ website
at www.peoplesbancorp.com. At least annually, the Audit Committee
reviews and reassesses the adequacy of its charter and recommends any proposed
changes to the full Board of Directors as necessary to reflect changes in
regulatory requirements, authoritative guidance and evolving
practices. Among other duties set forth in its charter, the Audit
Committee is responsible for:
|
·
|
overseeing
the accounting and financial reporting processes of
Peoples;
|
|
·
|
overseeing
the audits of the consolidated financial statements of
Peoples;
|
|
·
|
appointing,
terminating, compensating and overseeing the work of Peoples’ independent
registered public accounting firm, including resolving any disagreements
between management and the independent registered public accounting firm
regarding financial reporting;
|
|
·
|
pre-approving
all audit and non-audit services provided by the independent registered
public accounting firm;
|
|
·
|
discussing
with management, the internal auditors and the independent registered
public accounting firm the adequacy and effectiveness of the accounting
and financial controls of Peoples;
|
|
·
|
reviewing
and concurring in the appointment, replacement, reassignment or dismissal
of the internal auditor, the scope of the internal audit and the operation
and performance of the internal
auditor;
|
|
·
|
reviewing
and approving all related party transactions (any transaction required to
be reported pursuant to Item 404 of SEC Regulation S-K) for potential
conflict of interest situations;
|
|
·
|
reviewing
Peoples’ earnings press releases, financial information and earnings
guidance and financial statements and related disclosures in Peoples’
periodic reports;
|
|
·
|
setting
hiring policies for employees or former employees of the independent
registered public accounting firm;
|
|
·
|
establishing
procedures for the receipt, retention and treatment of complaints received
by Peoples regarding accounting, internal accounting controls or auditing
matters;
|
|
·
|
assisting
the Board of Directors in the oversight
of:
|
|
·
|
the
performance of Peoples’ independent registered public accounting
firm,
|
|
·
|
the
independent registered public accounting firm’s qualifications and
independence; and
|
|
·
|
other
responsibilities as may be delegated to the Audit Committee by the full
Board of Directors.
|
The Audit
Committee held four meetings during the 2009 fiscal year. The “AUDIT COMMITTEE REPORT FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2009” appears beginning on page
51.
The Audit
Committee is currently comprised of David L. Mead (Chairman), Carl L. Baker,
Jr., Richard Ferguson, Dr. Brenda F. Jones, Theodore P. Sauber and Thomas J.
Wolf. Messrs. Ferguson, Baker, Mead, Sauber and Wolf served as
members of the Audit Committee during the entire 2009 fiscal
year. George W. Broughton served as a member of the Audit Committee
until August 1, 2009. Wilford D. Dimit served as a member of the
Audit Committee from April 23, 2009 until August 1, 2009. Dr. Brenda
F. Jones was appointed to the Audit Committee on August 1, 2009. The
Board of Directors has determined that each of the current members of the Audit
Committee qualifies, and each of the individuals who served as members of the
Audit Committee during the 2009 fiscal year qualified, as an independent
director for purposes of Rule 10A-3 under the Exchange Act and under the
applicable NASDAQ Rules.
The Board
of Directors has concluded that each member of the Audit Committee is capable of
(i) understanding accounting principles generally accepted in the United States
(“US GAAP”) and financial statements, (ii) assessing the general application of
US GAAP in connection with the accounting for estimates, accruals and reserves,
(iii) analyzing and evaluating Peoples’ consolidated financial statements, (iv)
understanding internal control over financial reporting, and (v) understanding
audit committee functions. Based upon their respective backgrounds,
knowledge, qualifications, experience and profession, the Board of Directors has
determined that each of Richard Ferguson and David L. Mead qualifies as an
“audit committee financial expert” under the SEC’s rules, and as “financially
sophisticated” for purposes of the applicable NASDAQ Rules.
The
Compensation Committee is comprised of five directors who qualify as (i)
“independent directors” under the applicable NASDAQ Rules, (ii) “outside
directors” for purposes of Section 162(m) of the Internal Revenue Code and (iii)
“non-employee directors” for purposes of Rule 16b-3 under the Exchange
Act. In addition, the Compensation Committee constitutes a
“compensation committee” for purposes of the requirements applicable to Peoples
as a result of its participation in the Capital Purchase Program enacted by the
U.S. Treasury enacted as part of TARP and imposed by the ARRA and the Interim
Final Rule issued by the U.S. Treasury. (More information about this
requirement and the other obligations imposed on Peoples by the ARRA and the
Interim Final Rule is included in the section entitled –“COMPENSATION DISCUSSION AND
ANALYSIS - TARP Capital
Purchase Program”.)
The
members of the Compensation Committee are George W. Broughton (Chairman), Carl
L. Baker, Jr., David L. Mead, Robert W. Price and Paul T. Theisen, each of whom
served on the Compensation Committee throughout the entire 2009 fiscal
year. At the beginning of the 2009 fiscal year, Frank L. Christy was
the Chairman of the Compensation Committee. On March 10, 2009,
Peoples received notification from Mr. Christy that he intended to resign at
some point in the future from the Peoples Board of Directors due to extensive
travel and meeting commitments associated with his personal business
pursuits. On September 24, 2009, Mr. Christy notified Peoples that
his resignation from the Peoples Board of Directors was to be effective as of
September 24, 2009. The last Compensation Committee meeting Mr.
Christy attended was on March 5, 2009. Mr. Christy at all times
during his service qualified as an independent director.
The ARRA
and the Interim Final Rule require that the Compensation Committee meet at least
every six months and take the following actions:
|
·
|
Discuss,
evaluate and review all Senior Executive Officer Compensation Plans (as
defined in the Interim Final Rule) with Peoples’ senior risk officers to
ensure that the Senior Executive Officer Compensation Plans do not include
incentives for the Senior Executive Officers (as defined in the Interim
Final Rule) of Peoples to take unnecessary and excessive risks that could
threaten Peoples’ value.
|
|
·
|
Discuss,
evaluate and review all Employee Compensation Plans (as defined in the
Interim Final Rule) with Peoples' senior risk officers in light of the
risks (including the short-term and long-term risks) posed to Peoples by
such Employee Compensation Plans and how to limit such
risks.
|
|
·
|
Discuss,
evaluate and review all Employee Compensation Plans and identify and
eliminate features in the Employee Compensation Plans that could encourage
the manipulation of reported earnings of Peoples to enhance the
compensation of any employee.
|
The
Compensation Committee is required to both disclose the results, and certify
completion, of the reviews described above in the Compensation Committee
Report. The disclosure and certifications in the form required by the
Interim Final Rule are included in the section captioned “COMPENSATION COMMITTEE
REPORT”.
The
Compensation Committee is organized and conducts its business pursuant to a
written charter adopted by the Board of Directors. A current copy of
the charter of the Compensation Committee is posted on the “Corporate Governance
& Ethics” page of Peoples’ website at www.peoplesbancorp.com. The
Compensation Committee periodically reviews and reassesses the adequacy of its
charter and recommends any proposed changes to the full Board of Directors for
approval as necessary.
The
primary function of the Compensation Committee is to review and approve, on
behalf of the Board of Directors, recommendations regarding all forms of
compensation to be provided to the executive officers and directors of Peoples
and our subsidiaries, including bonuses, equity-based compensation, cash
incentives, perquisites, employee benefits and salary programs. In
carrying out this function, the Compensation Committee is responsible for
reviewing and approving goals and objectives relevant to the compensation of
Peoples’ executive officers and other officers designated by the Board of
Directors, evaluating such officers’ performance in light of those goals and
objectives and determining compensation based on that evaluation. The
Compensation Committee administers Peoples’ 1995 Stock Option Plan (the “1995
Plan”), 1998 Stock Option Plan (the “1998 Plan”), 2002 Stock Option Plan (the
“2002 Plan”), Amended and Restated 2006 Equity Plan (the “2006 Plan”), and
Amended and Restated Incentive Award Plan (the “Incentive Plan”), and approves
grants of awards under these plans in compliance with applicable securities and
tax laws. The Compensation Committee also undertakes such other
responsibilities as the full Board of Directors may from time to time
prescribe.
The
Compensation Committee held eight meetings during the 2009 fiscal
year. Its Chairman determines the agenda for the meetings of the
Compensation Committee with the assistance of Peoples’ Executive Vice President,
Operations who also serves as the Secretary to the Compensation
Committee. During the 2009 fiscal year, the Compensation Committee
reviewed and approved on behalf of the Board of Directors, management
recommendations regarding all forms of compensation provided to the executive
officers and directors of Peoples and our subsidiaries. Additionally,
the Compensation Committee reviewed and approved all equity-based compensation,
cash incentives, perquisites, employee benefits, salary programs, and human
resources policies and procedures for employees of Peoples and our
subsidiaries. The Compensation Committee also reviewed and approved
the 2009 goals and objectives relevant to the compensation of Peoples’ executive
officers, and recommended the corporate performance goals to the Board of
Directors, which were subsequently approved by the Board of
Directors. The Compensation Committee evaluated the executive
officers’ performance in light of those goals and objectives and determined the
compensation earned by each executive officer based on that
evaluation. Leadership and executive management succession plans were
also reviewed and discussed during 2009.
The
Compensation Committee has the authority to retain one or more compensation
consultants or advisors to assist in the evaluation of director and executive
officer compensation. The Compensation Committee has sole authority
to retain and terminate any such compensation consultant or advisor, including
sole authority to approve the fees and other retention terms of any consultant
or advisor. The Compensation Committee has engaged Amalfi Consulting,
LLC (“Amalfi Consulting”), a compensation and benefits consultant serving the
financial services industry. The Compensation Committee has direct
access to the consultant and may engage the consultant on an as needed basis for
advice with respect to the amount and form of executive and director
compensation. In addition, from time to time, the consultant provides
information and analysis to Peoples’ management at its request for use by the
Compensation Committee. Please see the discussion of the consulting
services provided to the Compensation Committee by Amalfi Consulting in the
section captioned "COMPENSATION
DISCUSSION AND ANALYSIS – Setting Executive Compensation".
The “COMPENSATION DISCUSSION AND
ANALYSIS” regarding executive compensation for the 2009 fiscal year
appears beginning on page 22, and the “COMPENSATION COMMITTEE
REPORT” for the 2009 fiscal year appears beginning on page
35.
The
Executive Committee is currently comprised of Mark F. Bradley (Chairman), George
W. Broughton, Richard Ferguson, David L. Mead, Robert W. Price, Paul T. Theisen
and Joseph H. Wesel. Messrs. Bradley, Price, Theisen and Wesel served
as members of the Executive Committee during the entire 2009 fiscal
year. Wilford D. Dimit served as a member of the Executive Committee
until August 1, 2009. George Broughton and Richard Ferguson were
appointed to the Executive Committee on April 23, 2009. David L. Mead
was appointed to the Executive Committee on August 1, 2009. The
Executive Committee is authorized to act in the intervals between meetings of
the directors on matters delegated to the Executive Committee by the full Board
of Directors. The Executive Committee held three meetings during the
2009 fiscal year.
The
members of the Governance and Nominating Committee are: Paul T.
Theisen (Chairman), George W. Broughton, Wilford D. Dimit, Dr. Brenda F. Jones
and Robert W. Price. Messrs. Theisen, Broughton and Price served as
members of the Governance and Nominating Committee during the entire 2009 fiscal
year. Wilford D. Dimit was appointed to the Governance and Nominating
Committee on April 23, 2009. Dr. Brenda F. Jones was appointed to the
Governance and Nominating Committee on August 1, 2009. The Board of
Directors has determined that each of the members of the Governance and
Nominating Committee qualifies as an independent director under applicable
NASDAQ Rules.
The
Governance and Nominating Committee is organized and conducts its business
pursuant to a written charter adopted by the Board of Directors. The
primary responsibilities of the Governance and Nominating Committee
are:
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to
establish and articulate qualifications, desired background and selection
criteria for members of the Board of Directors consistent with the
eligibility requirements set forth in Peoples’ Code of
Regulations;
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·
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to
identify qualified candidates for election (including re-election),
nomination or appointment to the Board of Directors and recommend to the
full Board a slate of director nominees for each annual meeting of the
shareholders of Peoples or as vacancies
occur;
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to
make recommendations to the full Board of Directors and the Chairman of
the Board regarding assignment and rotation of members and chairs of
committees of the Board;
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to
oversee matters of corporate governance, including an evaluation of Board
performance and processes;
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to
review with the Chairman of the Board, or another director designated by
the full Board of Directors, issues involving potential conflicts of
interest and/or any change of status of directors pursuant to applicable
law and the applicable provisions of Peoples’ Code of Ethics for
Directors, Officers and Employees or Peoples’ Code of
Regulations;
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·
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to
recommend the number of individuals to serve on the Board of
Directors;
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to
periodically review Peoples’ Code of Ethics for Directors, Officers and
Employees and recommend to the full Board of Directors changes thereto, as
necessary; and
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to
undertake such other responsibilities as may be referred to the Governance
and Nominating Committee by the full Board of Directors or the Chairman of
the Board.
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The
charter of the Governance and Nominating Committee is posted on the “Corporate
Governance & Ethics” page of Peoples’ website at
www.peoplesbancorp.com. The Governance and Nominating Committee
periodically reviews and reassesses the adequacy of its charter and recommends
any proposed changes to the full Board of Directors for approval as
necessary. On January 28, 2010, the Governance and Nominating
Committee proposed an amendment to its charter, which amendment was then
approved by the Board of Directors on February 25, 2010. This
amendment is further discussed in the section captioned “NOMINATING
PROCEDURES”. The Governance and Nominating Committee held four
meetings during the 2009 fiscal year.
The Risk
Committee is currently comprised of: Robert W. Price (Chairman), Carl L. Baker,
Jr., Richard Ferguson, David L. Mead, Theodore P. Sauber, Paul T. Theisen and
Thomas J. Wolf. Messrs. Price, Baker, Ferguson. Mead, Sauber, Theisen
and Wesel served as members of the Risk Committee during the entire 2009 fiscal
year. George W. Broughton, Frank L. Christy, Wilford D. Dimit and
Joseph H. Wesel served as members of the Risk Committee until August 1,
2009.
The Risk Committee is organized and
conducts its business pursuant to a written charter adopted by the Board of
Directors. The primary responsibilities of the Risk Committee
are:
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Ensuring
that policies, procedures and guidelines are designed and implemented so
as to manage risk to Peoples in all forms, including credit, market,
interest rate, liquidity, compliance and legal, operational and
technological, strategic and reputation
risks;
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Overseeing
management’s implementation and enforcement of Peoples’ risk management
policies, procedures, and
guidelines;
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Monitoring
Peoples’ internal risk management function;
and
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Ensuring
that Peoples’ risk management activities are parallel to, and reconcile
with, Peoples’ strategic plan.
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The Risk
Committee periodically reviews and reassesses the adequacy of its charter and
recommends any proposed changes to the full Board of Directors for approval as
necessary. The Risk Committee held three meetings during the 2009
fiscal year.
As
described above, Peoples has a standing Governance and Nominating Committee that
has the responsibility to identify and recommend to the full Board of Directors
individuals qualified to become directors. Each candidate must
satisfy the eligibility requirements set forth in Peoples’ Code of
Regulations. As referred to above, the Governance and Nominating
Committee and the Board of Directors approved an amendment to the Committee
Charter. This amendment serves to enhance the Committee’s ability to
identify and nominate a broader spectrum of director
candidates. Achieving greater diversity is a prime objective of the
Board of Directors, and the amendment to the charter, which gives greater
latitude to Committee members to investigate and nominate a more diverse group
of candidates is central to achieving this objective. Section 1 of
the Charter under the heading “Responsibilities” has been amended to read as
follows: “Establishing and articulating qualifications, desired
background and selection criteria for members of the Board consistent with the
eligibility requirements set forth in the Company’s Code of
Regulations. The Governance and Nominating Committee may consider
such factors as it deems appropriate.” To be eligible for election as
a director, an individual must be a shareholder of Peoples. Beyond
this requirement, the Governance and Nominating Committee will consider such
factors as it deems appropriate in evaluating potential individuals for Board
membership, including a consideration of the individual’s contribution to the
diversity of the Board. When considering potential candidates for the
Board of Directors, the Governance and Nominating Committee strives to assure
that the composition of the Board, as well as its practices and operation,
contribute to value creation and to the effective representation of Peoples’
shareholders. The Governance and Nominating Committee may consider
those factors it deems appropriate in evaluating director
candidates.
In
considering candidates for the Board of Directors, the Governance and Nominating
Committee evaluates the entirety of each candidate’s credentials and, other than
the requirement of being a shareholder, does not have any specific minimum
qualifications that must be met by a Governance and Nominating
Committee-recommended nominee. However, the Governance and Nominating
Committee does believe that all members of the Board of Directors should have
the highest character and integrity, a reputation for working constructively
with others, sufficient time to devote to Board matters and no conflict of
interest that would interfere with performance as a director. When
identifying nominees to serve as directors, the Governance and Nominating
Committee will consider candidates with diverse business and professional
experience, skills, gender, and ethnic background, as appropriate, in light of
the current composition and needs of the Board of Directors.
The
Governance and Nominating Committee considers candidates for the Board of
Directors from any reasonable source, including shareholder recommendations, and
does not evaluate candidates differently based on who has made the
recommendation. The Governance and Nominating Committee has the
authority under its charter to hire and pay a fee to consultants or search firms
to assist in the process of identifying and evaluating director
candidates. No such consultants or search firms have been used to
date and, accordingly, no fees have been paid to consultants or search
firms.
Shareholders
may recommend director candidates for consideration by the Governance and
Nominating Committee by writing to the Corporate Secretary of Peoples at
Peoples’ executive offices in Marietta, Ohio. Such recommendation
should provide the candidate’s name, age, business address, residence address,
principal occupation or employment and number of common shares beneficially
owned. The recommendation should also describe the qualifications,
attributes, skills or other qualities of the recommended director
candidate. A written statement from the candidate consenting to be
named as a director candidate and, if nominated and elected, to serve as a
director should accompany any such recommendation.
Shareholders
who wish to nominate an individual for election as a director at an annual
meeting of the shareholders of Peoples must comply with Peoples’ Code of
Regulations regarding shareholder nominations. Shareholder
nominations must be made in writing and delivered or mailed to the Corporate
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
Corporate Secretary not later than the close of business on the seventh day
following the day on which the notice of the meeting was mailed to the
shareholders. Nominations for the Annual Meeting must be received by
April 8, 2010. Each nomination must contain the following information
to the extent known by the nominating shareholder:
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the
name, age, business address and residence address of each proposed
nominee;
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the
principal occupation or employment of each proposed
nominee;
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the
number of shares of capital stock of Peoples beneficially owned by each
proposed nominee and by the nominating shareholder;
and
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any
other information required to be disclosed with respect to a nominee for
election as a director under the SEC’s proxy
rules.
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Each
nomination 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 above requirements and Peoples’ Code of Regulations will not
be considered.
Although
Peoples has not to date developed formal processes by which shareholders may
communicate directly with directors, it believes the informal process, in which
any communication sent to the Board of Directors either generally or in care of
the Chief Executive Officer, the Corporate Secretary or another corporate
officer is forwarded to all members of the Board or specified individual
directors, as appropriate, has served the needs of the Board and Peoples’
shareholders. There is no screening process, and all shareholder communications
that are received by its officers for the attention of the Board of Directors
are forwarded to the members of the Board.
Having
found no problems with shareholder communications to directors under the
existing process described above, the Governance and Nominating Committee has
not found it necessary to develop more specific procedures. Until other
procedures are developed and posted on the “Corporate Governance &
Ethics” page of Peoples’ website at www.peoplesbancorp.com, any communication to
the Board of Directors or to individual directors may be mailed to the Board or
one or more individual directors, in care of Peoples’ Corporate Secretary, at
Peoples’ headquarters in Marietta, Ohio. The mailing envelope must
contain a clear notation indicating that the enclosed letter is a
“Shareholder-Board Communication” or “Shareholder-Director Communication,” as
appropriate. In addition, shareholders may utilize Peoples’ website
to communicate with the Board or individual directors. Correspondence
through the “Investor Relations - Shareholder Information” page of the website
is also directed to the Corporate Secretary. All such communications,
whether via mail or the website, must identify the author as a shareholder of
Peoples and clearly state whether the intended recipients are all members of the
Board of Directors or certain specified individual directors. The
Corporate Secretary will make copies of all such communications and circulate
them to the appropriate director or directors without any
screening. Correspondence marked “personal and confidential” will be
delivered to the intended recipient(s) without opening.
COMPENSATION
DISCUSSION AND ANALYSIS
The
Compensation Committee of the Board of Directors (for the purpose of this
discussion and analysis, the “Committee”) has responsibility for establishing,
implementing, and continually monitoring adherence with Peoples’ compensation
philosophy. The Committee ensures that the total compensation paid
during 2009 to the individuals included in the “SUMMARY COMPENSATION TABLE FOR
2009” on page 37 (referred to collectively as the “executive officers”),
is reasonable, competitive and aligned with the best interests of the
shareholders. The Committee believes all employees should be rewarded
for executing on goals designed to create long-term shareholder value without
encouraging unnecessary and excessive risk-taking that could threaten the value
of Peoples.
In view
of the current economic and financial environment, the Committee has reviewed
the design and operation of Peoples’ compensation policies and practices for
employees, not just executive officers, as related to risk management practices
and risk-taking incentives with Peoples’ senior risk officers. This
review included the financial and non-financial goals required to be achieved
for threshold, target and maximum levels of cash payments and equity-based
awards, along with the corresponding payout potentials and associated
risk. The Committee has determined that Peoples’ compensation
policies and practices do not provide Peoples’ employees with the incentive to
engage in business activities or other behavior that would threaten the value of
Peoples or the investments of its shareholders nor are they reasonably likely to
have a material adverse impact on Peoples.
The goal
of the compensation program for the executive officers is the same as our goal
for operating Peoples: to create long-term value for our
shareholders. Toward this goal, we have designed and implemented a
compensation program for the executive officers to (i) reward them for sustained
financial and operating performance and leadership excellence, (ii) align their
interests with those of the shareholders, (iii) attract talent, and (iv)
encourage strong performers to remain with Peoples for long and productive
careers. The elements of our compensation program consist of salary,
annual cash incentive compensation, equity-based incentive compensation,
retirement and other benefits, and perquisites and other personal
benefits. We combine the compensation elements for each executive
officer in a manner we believe optimizes the executive officer’s contribution to
Peoples and our shareholders, motivates the executive officer to attain the
business goals set by Peoples, and rewards the executive officer for attaining
such goals without encouraging unnecessary and excessive risk-taking that could
threaten the value of Peoples.
The
Committee believes that the best measure of whether the executive compensation
program is achieving its intended goals is to look at the long-term performance
of Peoples. Because the absolute minimum level of performance
established for potential annual cash incentives and long-term equity-based
incentives was not attained in 2009, Peoples’ executive officers did not receive
payouts on any performance-based plans. In light of these results,
the Committee believes Peoples’ compensation program for its executive officers
continues to be aligned with the interests of the shareholders. The
program is part of a fully-integrated, performance-based system that provides a
balanced and stable foundation for strong and effective leadership into the
future and ensures alignment with long-term shareholder interests without
encouraging unnecessary and excessive risk-taking that could threaten the value
of Peoples.
On January 30, 2009, Peoples completed
the sale to the U.S. Treasury of $39 million of newly-issued Peoples non-voting
preferred shares as part of the U.S. Treasury’s Capital Purchase Program enacted
as part of the TARP which had been established by the Emergency Economic
Stabilization Act of 2008 (“EESA”). To finalize Peoples’
participation in the Capital Purchase Program, Peoples and the U.S. Treasury
entered into a Letter Agreement, dated January 30, 2009 (the “Letter
Agreement”), including the related Securities Purchase Agreement – Standard
Terms attached thereto (the “Securities Purchase Agreement”). In the
Securities Purchase Agreement, Peoples adopted the U.S. Treasury’s standards for
executive compensation for the period during which the U.S. Treasury owns any
securities acquired from Peoples pursuant to the Securities Purchase Agreement
or upon exercise of the related Warrant to purchase 313,505 common shares of
Peoples. The U.S. Treasury may unilaterally amend the Securities
Purchase Agreement to comply with applicable Federal statutes.
On
February 17, 2009, the ARRA was signed into law and retroactively amends the
executive compensation provisions applicable to participants in the Capital
Purchase Program, including Peoples. The ARRA executive compensation
standards are to remain in effect during the period in which any obligation
arising from financial assistance provided under TARP remains outstanding,
excluding any period during which the U.S. Treasury holds only the Warrant to
purchase Peoples common shares (the “ARRA Covered Period”). On
June 15, 2009, the U.S. Treasury published executive compensation and
corporate governance standards, which were amended effective December 7,
2009, applicable to TARP recipients, including Peoples and our subsidiaries,
under the ARRA in the form of the Interim Final Rule. The executive
compensation standards of the ARRA and the Interim Final Rule apply to Peoples’
Senior Executive Officers (as defined in the Interim Final Rule) as well as
other employees.
The ARRA
and the Interim Final Rule impose limitations on our executive compensation
practices by, among other things: (i) limiting the deductibility, for U.S.
federal income tax purposes, of compensation paid to any of our Senior Executive
Officers to $500,000 per year; (ii) prohibiting the payment or accrual of
any bonus, retention award or incentive compensation to our five most
highly-compensated employees, except in the form and under the limited
circumstances permitted by the Interim Final Rule; (iii) prohibiting the
payment of golden parachute payments (as defined in the Interim Final Rule) to
our Senior Executive Officers or any of our next five most highly-compensated
employees upon a departure from Peoples and our subsidiaries or due to a change
in control of Peoples, except for payments for services performed or benefits
accrued; (iv) requiring Peoples or the applicable subsidiary to “claw back”
any bonus, retention award or incentive compensation paid (or under a legally
binding obligation to be paid) to a Senior Executive Officer or any of our next
20 most highly-compensated employees if the payment was based on materially
inaccurate financial statements or any other materially inaccurate performance
metric criteria; (v) prohibiting Peoples and our subsidiaries from
maintaining any Employee Compensation Plan that would encourage the manipulation
of Peoples’ reported earnings to enhance the compensation of any of our
employees; (vi) prohibiting Peoples and our subsidiaries from maintaining
any Senior Executive Officer Compensation Plans that encourage our Senior
Executive Officers to take unnecessary and excessive risks that threaten the
value of Peoples; (vii) requiring Peoples and our subsidiaries to limit any
Employee Compensation Plan that unnecessarily exposes Peoples to risk; (viii)
prohibiting Peoples and our subsidiaries from providing (formally or informally)
“gross-ups” to any of our Senior Executive Officers or our next 20 most
highly-compensated employees; (ix) requiring that Peoples disclose to the U.S.
Treasury and our primary regulator the amount, nature and justification for
offering to any of our five most highly-compensated employees any perquisites
whose total value exceeds $25,000; (x) requiring that Peoples disclose to the
U.S. Treasury and our primary regulator whether Peoples, the Peoples Board of
Directors or the Committee engaged a compensation consultant and the services
performed by that compensation consultant and any of its affiliates; (xi)
requiring that we disclose to the U.S. Treasury the identity of our Senior
Executive Officers and next 20 most highly-compensated employees, identified by
name and title and ranked in descending order of annual compensation;
and (xii) subjecting any bonus, retention award or other
compensation paid before February 17, 2009 to our Senior Executive Officers
or our next 20 most highly-compensated employees to retroactive review by the
U.S. Treasury to determine whether any such payments were inconsistent with the
purposes of TARP or otherwise contrary to the public interest.
The ARRA
and the Interim Final Rule also required that the Peoples Board of Directors
adopt a company-wide policy regarding “excessive or luxury expenditures,” which
was adopted on August 27, 2009, and post this policy on Peoples’
website. Peoples must also permit in its proxy statements for annual
meetings a non-binding “say on pay” shareholder vote on the compensation of
executives, as disclosed pursuant to the compensation disclosure rules of the
SEC. Peoples complied with the “say on pay” requirement in 2009 and
will continue to comply with this requirement. Additionally, Peoples
must establish a compensation committee consisting solely of independent
directors for the purpose of reviewing employee compensation
plans. This compensation committee is required to meet at least
semiannually to discuss and evaluate employee compensation plans in light
of an assessment of any risk posed to Peoples from such
plans. Peoples complies with these requirements as specified in the
Interim Final Rule, and has taken such steps as are necessary to comply with
these requirements, including the evaluation of the composition of the existing
Compensation Committee to determine whether it is consistent with the
requirements of the ARRA.
In
connection with Peoples’ participation in the Capital Purchase Program, Mr.
Bradley, Mr. Sloane, Ms. Schneeberger, David Wesel and Mr. Yazombek entered into
letter agreements that modify all compensation and benefit plans in which the
executive officers participate to the extent necessary to comply with the
executive compensation limitations under EESA. These letter
agreements were later amended to incorporate the additional restrictions imposed
by the ARRA and the Interim Final Rule. Peoples’ 20 most
highly-compensated employees also entered into letter agreements that modify all
compensation and benefit plans in which the 20 most highly-compensated employees
participate to the extent necessary to comply with compensation limitations
under the ARRA and the Interim Final Rule.
The
compensation philosophy of the Committee is to design and implement a
compensation program that serves to retain, recruit, and develop talented
financial services personnel and management. In addition, we seek to
award compensation based on the individual’s contribution to the overall
improved performance of Peoples.
Notwithstanding
the stated philosophy and that varying levels of achievement were attained on
some of the corporate and individual goals for 2009, due to the current economic
conditions and the overall financial performance of Peoples, the Committee chose
to freeze base salaries and to enforce the absolute minimum level of corporate
performance requirement, which resulted in no awards to the executive officers
under the Incentive Plan and the equity-based compensation plan. See
“Plan
Design for Annual Cash Incentives and Long-Term Equity-Based
Incentives” beginning on page 28 for further discussion
of the absolute minimum requirement.
While the
Committee oversees the compensation of all officers and employees, a primary
focus of the Committee is the compensation for Peoples’ executive officers and
senior officers. The intent is to reward all employees for continuous
improvement and identification and implementation of best practices, but
specifically, to set up compensation plans for executive officers and senior
officers to reward those employees for enhancing shareholder
value. The compensation philosophy covers the direct forms of
compensation including base salary, annual cash incentive compensation and any
form of equity-based compensation. The compensation philosophy
statement is established by the Committee and serves as a tool that the Board of
Directors and management use to ensure that compensation programs are developed
that are both competitive with respect to officer compensation and reasonable
within the marketplace.
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Base
Salary: Base salaries are benchmarked against the median
of Peoples’ Peer Group (as defined on page 26). Based upon
individual circumstances, actual base salary levels may be higher or lower
than the market median.
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Total Cash
Compensation: Total cash compensation is base salary
plus an annual cash incentive. The objective is for total cash
compensation to be consistent with the market median of Peoples’ Peer
Group for achieving target performance and at or above the 75th
percentile of Peoples’ Peer Group for achieving higher
performance.
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Total Direct
Compensation: Peoples utilizes long-term equity-based
incentives for compensation purposes, typically in the form of
equity-based awards for executive officers and senior officers in
leadership capacities or other key positions. The objective is
to grant equity-based awards only after performance goals have been
attained. Equity-based awards are granted with time-based
vesting, which enhances employee retention and reduces the sensitivity to
short-term performance. Total direct compensation is total cash
compensation plus the grant date fair value of equity-based
awards. The goal for total direct compensation is that the
total direct compensation ranking for each executive officer, compared to
the total direct compensation of the similarly-situated officers serving
with members of Peoples’ Peer Group, will reflect the similar percentile
as Peoples’ performance compared to that of Peoples’ Peer
Group. For example, if target performance is achieved both at
the individual and corporate level, it is expected that each executive
officer’s total direct compensation will approximate the market median of
similarly-situated officers serving with members of Peoples’ Peer
Group.
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No
specific formula is used to determine the allocation between performance-based
compensation, which includes annual cash incentives and the long-term
equity-based incentives, and fixed compensation in the form of base
salaries. However, the significant portion of the total direct
compensation that could have been earned in the form of cash and equity-based
incentives at target levels of performance emphasizes Peoples’ focus on
pay-for-performance during 2009. At target levels of performance, 43%
of the President and Chief Executive Officer’s total direct compensation and 35%
of the other executive officers’ total direct compensation would have been in
the form of performance-based compensation. Based upon recent
guidance from the U.S. Treasury and the Federal Reserve, and considering 2010
corporate performance potential, Peoples has reduced the emphasis on the
variable, performance based-compensation and lowered the payout opportunity
available to executives through the annual cash and long-term equity-based
incentives. Peoples has not adjusted other compensation components in
an attempt to offset the lost earnings potential.
The
Committee makes all compensation decisions related to the executive officers of
Peoples and recommends to the Board of Directors any equity-based award grants
for the non-employee directors. Annually, the President and Chief
Executive Officer of Peoples reviews the performance of each executive officer
(excluding his own) by comparing the results attained to Committee-approved
goals as well as the overall performance of Peoples as compared to
Board-approved corporate performance goals. Both corporate and
individual goals are defined for threshold, target and maximum levels of
performance. This data, along with average salary data for a
similarly-situated officer derived from the most recent proxy statements of
Peoples’ peer group, are the bases for his recommendations to the Committee with
respect to the compensation of the other executive officers, including base
salary adjustments, and payout potential percentages for the annual cash
incentive payments and equity-based awards. The Committee considers
the President and Chief Executive Officer’s recommendations, and uses its own
discretion in making the final compensation decisions with respect to the
executive officers, which may differ from the recommendations of the President
and Chief Executive Officer. Additionally, the President and Chief
Executive Officer prepares a summary of his performance for the Committee and
has provided a recommendation to the Committee regarding his personal base
salary that reflects his desire to maintain internal pay equity between the
President and Chief Executive Officer and the other executive
officers. The Committee considers the recommendation of the President
and Chief Executive Officer, and uses its own discretion in making the ultimate
compensation decision with respect to the President and Chief Executive Officer,
which may differ (and has differed) from the recommendation of the President and
Chief Executive Officer. The Committee also seeks input from other
members of the Board of Directors regarding the performance of the President and
Chief Executive Officer in determining any base salary adjustment and the rating
of his individual performance which, when combined with the corporate
performance relative to goal, determines his annual cash incentive payment and
equity-based awards.
The
Committee has the sole authority to engage the services of any compensation
consultant or advisor. In order to ensure that Peoples provides total
direct compensation that is performance-based and competitive with its stated
peer group, its geographic peers and the financial services industry in general,
from time to time, the Committee has engaged Amalfi Consulting, a compensation
and benefits consultant serving the financial services
industry. Amalfi Consulting provides market intelligence on industry
compensation trends along with its views on specific compensation programs on an
as-needed basis, with the oversight of the Committee. All work
completed by Amalfi Consulting is reported to the
Committee. Communications between the Committee and Amalfi Consulting
occur through (i) direct conversations between the Chairman of the Committee and
Amalfi Consulting, (ii) communications between the President and Chief Executive
Officer and/or the Secretary of the Committee and Amalfi Consulting, and (iii)
participation by Amalfi Consulting in Committee meetings, including executive
sessions without the presence of executive management.
During
2009 and early 2010, Amalfi Consulting provided information regarding market
trends for incentive plan design along with comparisons of those designs and
individual executive officer total direct compensation opportunities to that of
Peoples peer group. Likewise, Amalfi Consulting provided advice and
guidance to the Committee about the impact of regulatory and legislative
requirements on the compensation, benefits and goal setting process for the
named executive officers and Peoples’ compensation plans for all other employees
in addition to preparation and review of specified portions of the proxy
materials. Amalfi Consulting has not provided any services to Peoples
other than those described herein. At the request of the Committee,
an Amalfi Consulting representative attended four Committee meetings in
2009.
The
Committee reviewed Peoples’ 2008 peer group on February 12, 2009 and determined
that due to the volatility in the financial services industry, it was
appropriate to modify the companies included in the Peer Group for 2009 and to
increase the number of companies to 22 for comparison purposes. For
the 2009 fiscal year, this peer group was comprised of the following 22
publicly-traded financial institution holding companies with total asset sizes
ranging from $1.6 billion to $6.7 billion. The members of this peer
group are located in similar markets and/or geographic areas to Peoples in the
states of Indiana, Illinois, Kentucky, New York, North Carolina, Ohio,
Pennsylvania, Virginia, and West Virginia.
|
Peer
Group Member
|
Location
|
Total
Assets
($
Billions)
|
Ticker
Symbol
|
|
WesBanco,
Inc.
|
Wheeling,
WV
|
$5.4
|
WSBC
|
|
First
Merchants Corporation
|
Muncie,
IN
|
$4.5
|
FRME
|
|
First
Busey Corporation
|
Urbana,
IL
|
$3.8
|
BUSE
|
|
1st
Source Corporation
|
South
Bend, IN
|
$4.5
|
SRCE
|
|
S&T
Bancorp, Inc.
|
Indiana,
PA
|
$4.2
|
STBA
|
|
First
Financial Bancorp.
|
Cincinnati,
OH
|
$6.7
|
FFBC
|
|
Community
Trust Bancorp, Inc.
|
Pikeville,
KY
|
$3.1
|
CTBI
|
|
Tompkins
Financial Corporation
|
Ithaca,
NY
|
$3.2
|
TMP
|
|
First
Bancorp
|
Troy,
NC
|
$3.5
|
FBNC
|
|
City
Holding Company
|
Charleston,
WV
|
$2.6
|
CHCO
|
|
First
Financial Corporation
|
Terre
Haute, IN
|
$2.5
|
THFF
|
|
Farmers
Capital Bank Corporation
|
Frankfurt,
KY
|
$2.2
|
FFKT
|
|
First
Community Bancshares, Inc.
|
Bluefield,
VA
|
$2.3
|
FCBC
|
|
First
Defiance Financial Corp.
|
Defiance,
OH
|
$2.1
|
FDEF
|
|
S.Y. Bancorp,
Inc.
|
Louisville,
KY
|
$1.8
|
SYBT
|
|
Summit
Financial Group, Inc.
|
Moorefield,
WV
|
$1.6
|
SMMF
|
|
BNC
Bancorp
|
Thomasville,
NC
|
$1.7
|
BNCN
|
|
Yadkin
Valley Financial Corporation
|
Elkin,
NC
|
$2.1
|
YAVY
|
|
Bank
of Kentucky Financial Corporation
|
Crestview
Hills, KY
|
$1.6
|
BKYF
|
|
German
American Bancorp, Inc.
|
Jasper,
IN
|
$1.2
|
GABC
|
|
Princeton
National Bancorp, Inc.
|
Princeton,
IL
|
$1.3
|
PNBC
|
|
CNB
Financial Corporation
|
Clearfield,
PA
|
$1.2
|
CCNE
|
This
22-member group is referred to in this discussion and analysis as the “Peer
Group.” Financial and operating data was also reviewed by the
Committee in a variety of areas such as revenue composition and various
performance ratios to ensure the 22 companies have similar performance
characteristics to those of Peoples. Additionally, the balance sheet
composition of each company was analyzed relative to that of
Peoples. The Committee also required a minimum return on equity over
the last three years and a minimum stock price in order for a company to be
included in the Peer Group. Amalfi Consulting reviewed the Peer Group
and indicated that the companies in the Peer Group were appropriate for 2009
based upon the demographic and performance filters used by the Committee to make
its Peer Group selection.
The
Committee uses Peer Group data to analyze the overall competitiveness of
Peoples’ executive officers’ compensation relative to our compensation
philosophy and objectives by comparing (i) the relative ranking of each
executive officer’s base salary and total direct compensation for threshold,
target and maximum levels of performance to the salary and total direct
compensation for similarly-situated officers serving members of the Peer Group’s
threshold, target and maximum levels of performance and (ii) the level of
performance achieved by Peoples compared to the Peer Group as measured by
earnings per common share available to common shareholders growth and other
standard performance measures used by the financial services
industry.
In view
of the current economic and financial environment, the Committee has reviewed
the design and operation of Peoples’ compensation arrangements for 2009 and
2010, including the compensation arrangements of Peoples’ executive officers,
with Peoples’ senior risk officers. This review included the mix of
base salary and performance-based compensation; and the performance goals
required to be attained for threshold, target and maximum levels of cash
payments, along with the corresponding payout potentials. The
Committee has determined that these arrangements do not provide Peoples’
executive officers with the incentive to engage in business activities or other
behavior that would threaten the value of Peoples or the investments of its
shareholders.
For 2009,
the principal components of compensation for the executive officers
were:
|
·
|
Base
salary;
|
|
·
|
Annual
cash incentive compensation;
|
|
·
|
Long-term
equity-based incentive
compensation;
|
|
·
|
Retirement
and other benefits; and
|
|
·
|
Perquisites
and other personal benefits.
|
The
Committee has determined that base salaries for the executive officers should be
competitive with the median of similarly-situated officers of members of the
Peer Group. Depending on individual experience, job performance and
other factors, the actual base salary for a particular executive officer may be
higher or lower than the median salary for the similarly-situated Peer Group
executive officer (typically in the range of the 40th to 60th percentile of the
Peer Group). Potential individual executive officer salary increases
are reviewed annually by the Committee and are based on (i) the individual’s
overall contribution to Peoples’ performance, (ii) the executive officer’s
attainment of specific individual business objectives during the preceding year,
(iii) adjustments, if such changes occur, in the overall responsibilities of the
individual, and (iv) changes in the Consumer Price
Index. Approximately every three years, the Committee engages a
compensation consultant to prepare an evaluation of the most recent comparative
Peer Group data. The most recent evaluation was completed in December
2007 by Amalfi Consulting and was used as the basis for setting 2008 base
salaries for Peoples’ executive officers.
Specific
individual business objectives for 2009 were approved for each executive officer
by the Committee on February 26, 2009. The individual business
objectives were designed to complement Peoples’ corporate goals for 2009, which
were approved by the Board of Directors on February 26, 2009. The
individual business objectives were both quantitative in nature, such as
achieving sales and revenue goals and cost containment, and qualitative in
nature, such as the development, management and retention of key staff and the
assessment and development of quality products and services. These
objectives are designed to grow core earnings, which will, in turn, promote the
long-term interests of Peoples’ shareholders.
Due to
Peoples’ 2008 financial performance wherein Peoples did not meet the absolute
minimum level of corporate performance and Peoples’ compensation philosophy and
objectives to reward executive officers for enhancing shareholder value, the
Committee did not adjust the base salaries of Peoples’ executive officers for
2009, except for the base salary of David Wesel, as described
below. The Committee determined that, with the exception of David
Wesel, increases to executive officer base salaries were not appropriate due to
the fact Peoples’ overall performance did not improve, nor were increases in
executive officer base salaries in the best interests of Peoples and its
shareholders. On February 26, 2009, the Committee approved an
increase in David Wesel’s base salary for 2009 to $180,000, effective March 1,
2009, as he assumed increased responsibilities in the role of President of
Peoples Insurance Agency, LLC, in addition to his continuing roles as Executive
Vice President of Peoples and President of Peoples Financial Advisors, a
division of Peoples Bank.
The
Committee considered Peoples’ financial performance in 2009 as the sole factor
in determining whether to increase base salaries for 2010. Due to
Peoples’ 2009 financial performance and Peoples’ compensation philosophy and
objectives to reward executive officers for enhancing shareholder value, the
Committee did not increase the base salaries of Peoples’ named executive
officers for 2010.
As a
result of financial performance, the annual base salary for the executive
officers will remain at the same level in 2010 as in 2009: Mr.
Bradley - $280,000; Mr. Yazombek - $220,000; Mr. Sloane - $196,000; Ms.
Schneeberger - $190,000; and David Wesel - $180,000.
Executive
officers are eligible to earn incentives under the Incentive Plan and the
equity-based compensation plan. These plans were developed to reward
performance by providing increasing awards as a percentage of base salary for
increasing levels of performance and, conversely, to not pay incentives if
performance goals are not met. Both plans are driven by a common set
of goals. The plans are designed to motivate and reward the executive
officers for their contributions to business goals that we believe drive
earnings and create shareholder value without encouraging unnecessary and
excessive risk-taking.
2009 Plan
Design
On
February 26, 2009, the Board of Directors established the 2009 corporate
incentive performance goals for Peoples’ executive officers. The
Board adopted a “balanced scorecard” approach which combined strategic financial
and non-financial performance measures to give a more balanced view of Peoples’
performance. The scorecard was comprised of the following components
and their corresponding weightings: (i) Earnings Per Share Available
to Common Shareholders (25% weighting); (ii) Non-Performing Assets as a Percent
of Loans and Other Real Estate Owned (20% weighting); (iii) Revenues (10%
weighting); (iv) Deposit Balances (10% weighting); (v) Client Service Score (5%
weighting); and (vi) a Discretionary Measure (30% weighting). The
Discretionary Measure was unique to each executive officer and consisted of
quantitative measures such as business unit revenue and net income goals, loan
portfolio growth, net loan charge-off results, levels of nonperforming loans,
and expense reduction; and qualitative measures, such as the development,
management and retention of key staff, the assessment and development of quality
products and services and other strategic initiatives. These measures
were intended to reflect measureable results achieved for shareholders while
ensuring that the compensation arrangement does not encourage unnecessary and
excessive risk-taking that could threaten the value of Peoples. The
Committee also has in place an absolute minimum level of corporate performance,
which was defined in 2009 as $1.00 earnings per share available to common
shareholders. Since Peoples did not achieve absolute minimum earnings
per share available to common shareholders, no executive officer was eligible
for a either cash or equity-based incentives for either corporate or individual
performance. The Committee retained the ability to award incentive
compensation based on results achieved by an individual executive officer if the
absolute minimum level of performance was not achieved, even though they did not
exercise that right during 2009.
The
corporate measurements described above were selected because the Board believed
such measures would demonstrate the overall operating performance of Peoples and
are widely recognized as industry benchmarks for operating
performance. Improvements in these ratios are viewed as indicators of
enhanced operating performance, which translates into increased shareholder
value, while not encouraging unnecessary and excessive risk-taking that could
threaten the value of Peoples.
The Board
of Directors set the goals for 2009 as shown in the table
below. Peoples’ performance results for 2009 are also
shown.
|
Weighting
|
Threshold
|
Target
|
Maximum
|
2009
Results
|
|
|
Earnings
Per Share Available to Common Shareholder
|
25%
|
$1.10
|
$1.40
|
$1.70
|
$0.22
|
|
Non-Performing
Assets as a Percent of Loans and Other Real Estate Owned
|
20%
|
35th
percentile of the Peer Group
|
50th
percentile of the Peer Group
|
65th
percentile of the Peer Group
|
8th
percentile of the Peer Group
|
|
Revenues
|
10%
|
$93,107,000
|
$95,873,000
|
$99,560,000
|
$95,499,000
|
|
Deposit
Balances
|
10%
|
$1,208,479,000
|
$1,244,374,000
|
$1,292,235,000
|
$1,297,708,000
|
|
Customer
Service Score (provided by vendor who completes customer satisfaction
surveys on behalf of Peoples Bank and other banks with $1-5 billion in
total assets)
|
5%
|
95%
of vendor-provided peer group score
|
100%
of vendor-provided peer group score
|
105%
of vendor-provided peer group score
|
104%
of vendor-provided peer group score
|
|
Discretionary
(Individual Performance)
|
30%
|
Varies
by
Executive
|
There are
three levels of incentive awards under the plans: threshold, target and
maximum. Achieving threshold performance would result in no payout to
the executive officers. The target incentive award reflected the
expected results for the year and was designed to result in total direct
compensation (base salary, annual cash incentives and equity-based incentive
awards) for each executive officer at the market median of similarly-situated
officers serving with members of the Peer Group for achieving targeted
performance. If exceptional performance was achieved, the maximum
incentive award level would have been paid and was designed to result in total
direct compensation between the 50th and
60th
percentile of the Peer Group officers.
The
levels of achievement designated as threshold, target and maximum were
established based on (i) Peoples’ actual performance in 2008 and (ii) projected
operating growth based on internally generated targets for performance as well
as overall economic conditions. Earnings per share available to
common shareholder goals were lowered for 2009 due to a recessionary economy
that impacted the earnings potential of the financial services industry and to
reflect higher capital expectations due to worsening conditions in the general
economy. However, Peoples had not anticipated the sustained downturn
of the economy and its impact on earnings through continuing high provision for
loan loss expense and additional impairment charges related to financial sector
investment securities.
Annual
individual performance goals for Mr. Bradley, in his capacity as President and
Chief Executive Officer, included his effectiveness in strategic planning and
implementation of long-range plans, identification of personnel for open
executive leadership positions, and other leadership-based factors such as
increasing employee engagement and implementing a service-based culture which
are designed to promote shareholder value. Measurement of Mr.
Bradley’s performance relative to his individual performance goals is subjective
in nature and is determined by the Committee with input from Peoples’ Board of
Directors. Mr. Bradley’s annual cash and equity-based incentive
potential awards were weighted 70% for attainment of the corporate goals and 30%
for individual performance goals, as determined by the Committee with input from
the entire Board of Directors.
Annual
individual performance goals were also established for each other executive
officer, the nature of which differed depending upon the officer’s job
responsibilities. The Discretionary Measure was unique to each
executive officer and consisted of quantitative and qualitative measures such as
business unit revenue and net income goals for David Wesel; loan portfolio
growth, net loan charge-off results, and levels of nonperforming loans goals for
Mr. Yazombek; and expense reduction and development, management and retention of
key staff goals for Mr. Sloane and Ms. Schneeberger. Measurement of
these goals was both objective and subjective in nature, depending upon the
respective goal. Annual cash and equity-based incentive potential
awards for these other executive officers were weighted 70% for the attainment
of the corporate goals and 30% based on the attainment of specific individual
performance goals.
The
Committee retains the right to exercise discretion in the awarding of incentives
absent the attainment of performance goals, or to increase or reduce the size of
the payout of cash or equity-based incentives. The Committee did not
exercise discretion to make any incentive awards to the executive officers for
2009 corporate and individual performance.
Payout
percentages for the various levels of performance are reviewed by the Committee
on an annual basis and previously had not been changed since calendar year
2004. However, for 2009, the Committee determined the percentage of
base salary for achieving maximum performance would be limited to 75% of the
previous maximum payout percentage for each executive officer to reflect the
reduced earnings potential for Peoples’ shareholders as a result of challenging
economic times and to reduce the sensitivity to short-term performance by
reducing the rate at which the amount of pay increases as the higher levels of
relevant performance are achieved.
The Board
of Directors approves corporate performance goals on an annual
basis. Incentive awards are paid after results for the performance
goals are determined.
2010 Plan
Design
On
February 24, 2010, the Committee approved the discretionary, or individual,
goals for Peoples’ executive officers and on February 25, 2010, the Board of
Directors established the 2010 corporate incentive performance
goals. The Board again adopted a “balanced scorecard” approach with
performance, capital and credit components and their corresponding weightings as
follows: (i) Earnings Per Share Available to Common Shareholders (30%
weighting); (ii) Total Revenue (5% weighting); (iii) Efficiency Ratio (5%
weighting); (iv) Tier 1 Common Capital Ratio (15% weighting); (v) Non-Performing
Assets as a Percent of Loans and Other Real Estate Owned (15% weighting); and
(vi) Discretionary Measure (30% weighting).
The
Discretionary Measure is unique to each executive officer and consists of
quantitative and qualitative measures such as effectiveness in strategic
planning and implementation of long-range plans, reduction in classified assets
and other leadership-based factors such as increasing employee engagement goals
for Mr. Bradley; business unit revenue and net income goals for David Wesel; net
loan charge-off results and levels of nonperforming loans goals for Mr.
Yazombek; expense reduction, capital planning and enhancement of management
reporting goals for Mr. Sloane; expense reduction and development, management
and retention of key staff goals for Ms. Schneeberger. These measures
are intended to reflect results achieved for shareholders while ensuring that
the compensation arrangement does not encourage unnecessary and excessive
risk-taking that could threaten the value of Peoples. The absolute
minimum level of corporate performance remains in effect for 2010, but the
Committee retains the ability to award both cash and equity-based incentive
compensation based on results achieved by the individual executive officer if
the absolute minimum level of performance is not achieved.
There are
three levels of incentive awards under the plans: threshold, target and
maximum. Payouts as a percent of salary have been increased for
achieving the threshold level of performance and decreased for achieving target
and maximum levels of performance in an effort to reduce the magnitude of the
potential incentives compared to risk-taking. Fifty percent of the
payout level attributable to achievement of the performance goals in the
balanced scorecard would be awarded to the executive officer in the form of an
annual cash incentive. The remaining 50% of the payout level achieved
would be in the form of restricted stock, 33% of which would be in the form of
restricted stock with a two-year time-based vesting period and 67% of which
would be in the form of restricted stock with a performance-based vesting based
upon the achievement of an Earnings Per Share Available to Common Shareholders
performance goal for the three-year period ending December 31,
2012. The Committee believes restricted stock awards better align the
interests of management with those of the shareholders than other forms of
equity. As a result, the Committee has increased the amount of the
total performance-based compensation that would be awarded in equity-based
awards from approximately one-third of aggregate incentive awards to one-half of
the incentive awards, and from two forms of equity (split equally between SARs
to be settled in stock and restricted stock) to a blend of time-vested and
performance-vested restricted stock. The addition of
performance-based vesting lengthens the performance period being measured for
one-third of the total incentive award from one year to three years, making it
easier to factor in risk and risk outcome. Additionally, the
mandatory 25% deferral of the cash incentive award has been eliminated for 2010
since the retention benefit is now achieved through the use of time-vested and
performance-vested restricted stock.
The Incentive Plan was developed to
motivate and reward the executive officers for their respective contributions to
business goals that we believe drive earnings and create shareholder
value. The performance goals and the overall plan design are
discussed in the preceding section captioned “Plan Design for
Annual Cash Incentives and Long-Term Equity-Based
Incentives”.
If the
target performance goals were attained in 2009, Mr. Bradley, as Peoples’
President and Chief Executive Officer, had the potential to earn a cash payout
of up to 50% of his annual base salary as a cash incentive; whereas, each of the
other executive officers had the potential to earn a cash payout of up to 35% of
his or her annual base salary. However, if overall corporate level
performance was at threshold or lower but greater than an absolute minimum level
of corporate performance as described, no payout would have been made based on
corporate results, although each executive officer would still have been
eligible for a cash incentive payout based on his or her individual
performance.
If
the maximum performance goals were attained, Mr. Bradley could have received 75%
of his annual base salary under the Incentive Plan for 2009
performance. The maximum cash payout which the other executive
officers could have received under the Incentive Plan for 2009 performance was
52.5% of their respective annual base salaries.
Since the
absolute minimum level of corporate performance was not attained during 2009,
the Committee did not award cash incentives to the executive officers in 2010
for 2009 performance. A summary of the relative weightings of
corporate and individual goals, the total cash incentive payout potential and
the actual payouts earned for 2009 performance are shown below.
ANNUAL
CASH INCENTIVE COMPENSATION
|
Named
Executive
Officer
|
Corporate
Weighting
|
Individual
Weighting
|
Total
Maximum Incentive Payout Potential (*)
|
2009
Total
Actual Incentive Payout (*)
|
2009
Annual Cash Incentive Earned
|
|
Mark
F. Bradley
|
70%
|
30%
|
75%
|
0.0%
|
$0
|
|
Edward
G. Sloane
|
70%
|
30%
|
52.5%
|
0.0%
|
$0
|
|
Joseph
S. Yazombek
|
70%
|
30%
|
52.5%
|
0.0%
|
$0
|
|
Carol
A. Schneeberger
|
70%
|
30%
|
52.5%
|
0.0%
|
$0
|
|
David
T. Wesel
|
70%
|
30%
|
52.5%
|
0.0%
|
$0
|
(*) Payout calculated as a percentage of base
salary.
The ARRA
and the Interim Final Rule prohibit Peoples from paying or accruing any bonus,
retention award or incentive compensation to our five most highly-compensated
employees during the ARRA Covered Period. This prohibition applies to
amounts payable under our Annual Incentive Plan. For 2009, no
executive officer of Peoples qualified as one of the five most
highly-compensated employees. Peoples has and will continue to take
such steps as are necessary to comply with the prohibition.
The
Committee believes that equity-based compensation and ownership ensures that the
executive officers have a continuing stake in the long-term success of
Peoples. The Committee believes that the interests of our
shareholders are best served when a significant percentage of the executive
officers’ compensation is comprised of equity-based incentives that appreciate
in value contingent upon an increase in the price of our common shares while
balancing undue risk.
The
Committee grants equity-based awards to our executive officers only after
pre-established performance goals are achieved. To enhance retention
of the executive officers and to ensure that current and subsequent business
decisions are aligned with the long-term interests of the shareholders, any
equity-based compensation awarded has typically been subject to a three-year
cliff vesting requirement. However, the Committee has the authority
to accelerate the vesting period when it believes such action would be in the
best interests of Peoples and its shareholders. The Committee did not
exercise this authority in 2009 with respect to any awards granted in previous
years. The Committee believes that the 2006 Plan has strengthened
Peoples’ ability to attract, develop and retain talented executive officers,
upon whom our success is dependent, as well as promoting closer alignment with
the long-term performance goals of Peoples and the long-term interests of the
shareholders and does not encourage unnecessary and excessive risk-taking that
could threaten the value of Peoples.
If the
2009 target performance goals had been achieved, Mr. Bradley, as Peoples’
President and Chief Executive Officer, would have had the potential to earn an
equity-based award with an economic value of up to 25% of his annual base
salary, and the other executive officers would have had the potential to earn
equity-based awards with an economic value of up to 20% of their respective
annual base salaries. The maximum economic value of equity-based
awards Mr. Bradley could have earned for attaining maximum performance goals in
2009 was 37.5% of his annual base salary, and the maximum economic value of
equity-based awards potentially available to the other executive officers was
30% of their respective annual base salaries.
The
Committee retains the right to exercise discretion in awarding equity-based
compensation absent the attainment of performance goals, or to increase or
reduce the size of any such award. The Committee did not exercise
discretion to grant equity-based awards to the executive officers in 2010 for
2009 corporate and/or individual performance.
Equity-based
awards, if earned, are granted with an economic value based on The NASDAQ Global
Select Market® closing price of Peoples’ common shares on the date of the
grant. The Committee approves equity-based grants to the executive
officers and other officers. In the absence of a scheduled Committee
meeting, the Board of Directors approves equity-based grants to executive
officers and other officers. This situation occasionally occurs when
awards to a single individual are granted as part of a recruitment
package. The grant date is the date of the approval by the Committee
or the Board of Directors or the first future date after which all material
information has been publicly disclosed, whichever is later, and is tied to
Peoples’ trading windows. In the event of equity-based grants for new
hires, the date of grant is the first business date of the month following the
new employee’s date of hire.
Since
absolute minimum performance was not achieved during 2009, the Committee did not
award any equity-based grants to the executive officers in 2010 for 2009
performance. A summary of the relative weighting of corporate and
individual goals, the total economic value of potential equity-based
compensation payouts and the actual payouts earned for 2009 are shown
below.
LONG-TERM
EQUITY-BASED INCENTIVE COMPENSATION
|
Named
Executive Officer
|
Corporate
Weighting
|
Individual
Weighting
|
Total
Maximum Economic Value of Potential Equity Award
(*)
|
Total
Economic Value of Equity Award Earned (*)
|
|
Mark
F. Bradley
|
70%
|
30%
|
37.5%
|
0.0%
|
|
Edward
G. Sloane
|
70%
|
30%
|
30.0%
|
0.0%
|
|
Joseph
S. Yazombek
|
70%
|
30%
|
30.0%
|
0.0%
|
|
Carol
A. Schneeberger
|
70%
|
30%
|
30.0%
|
0.0%
|
|
David
T. Wesel
|
70%
|
30%
|
30.0%
|
0.0%
|
(*) Payout calculated as a percentage of base
salary.
The ARRA
and the Interim Final Rule prohibit Peoples from paying or accruing any bonus,
retention award or incentive compensation to our five most highly-compensated
employees during the ARRA Covered Period. This prohibition applies to
equity awards granted under our equity-based compensation plans, other than
restricted stock and/or restricted stock units that (i) may not become
transferable or payable earlier than in increments of 25% when a corresponding
percentage of the amounts received by Peoples under the Capital Purchase Program
are repaid; (ii) must be forfeited if the employee does not continue performing
substantial services for Peoples for at least two years after the grant date
(other than due to the employee’s earlier death or disability or the earlier
occurrence of a change in control); and (iii) the amount or value of which
(determined based on the fair market value of our common shares on the grant
date) may not exceed 1/3 of employee’s annual compensation for the year
(determined by including the value of the restricted stock or restricted stock
units granted). For 2009, no executive officer of Peoples qualified
as one of the five most highly-compensated employees. Peoples has and
will continue to take such steps as are necessary to comply with the
prohibition.
The
executive officers participate in certain benefit programs available to all
other employees of Peoples, subject to the same eligibility requirements as all
employees, including participation in (i) the Peoples Bancorp Inc. Retirement
Plan and Trust (the “Retirement Plan”), (ii) the Peoples Bancorp Inc. Retirement
Savings Plan (“Peoples 401(k) Plan”), (iii) the Peoples Bancorp Group Term Life
Insurance Plan and (iv) medical and dental insurance plans provided by
Peoples.
Retirement
Plan
The
Retirement Plan has a different benefit calculation for those individuals
employed by Peoples before January 1, 2003 and those employed by Peoples on
January 1, 2003 and thereafter. Messrs. Bradley and Yazombek and Ms.
Schneeberger were employed by Peoples prior to January 1, 2003; whereas, Messrs.
Sloane and Wesel were employed by Peoples after January 1, 2003.
On
December 17, 2009, the Board of Directors closed the Retirement Plan to new
entrants hired on or after January 1, 2010.
Compensation
used to calculate the amount of pension payable under the Retirement Plan
includes base salary, incentive pay, overtime pay, bonuses, and any pre-tax
savings under the Peoples’ 401(k) Plan as well as Peoples’ Internal Revenue Code
Section 125 cafeteria plan. Benefit distribution options are
identical for both groups as well as the vesting requirement in order to be
eligible for a pension benefit under the Retirement Plan.
For those
executive officers employed by Peoples before January 1, 2003, normal retirement
occurs at age 65. The pension benefit for normal retirees is
calculated as follows:
|
(a)
|
Forty
percent (40%) of the executive officer’s average compensation (annual
compensation comprised of base salary, bonus, and cash incentive payments
during the highest five consecutive years out of the last ten years of
service), plus
|
|
(b)
|
Seventeen
percent (17%) of the excess of the executive officer’s average
compensation in excess of his/her Social Security covered
compensation;
|
|
(c)
|
Such
sum of (a) and (b) is multiplied by the total years of service with
Peoples up to a maximum of 30.
|
For those
executive officers employed by Peoples before January 1, 2003, early retirement
can occur at age 50 if the executive officer has at least 10 years of service
with Peoples. The pension benefit for early retirees is calculated as
follows:
|
(a)
|
Forty
percent (40%) of the executive officer’s average compensation (annual
compensation during the highest five consecutive years out of the last ten
years of service), plus
|
|
(b)
|
Seventeen
percent (17%) of the excess of the executive officer’s average
compensation in excess of his/her Social Security covered
compensation;
|
|
(c)
|
Such
sum of (a) and (b) is multiplied by the total years of service with
Peoples up to a maximum of 30 and reduced by one-fifteenth for each of the
first five years and one-thirtieth for each of the next ten years by which
the executive’s early retirement date precedes the normal retirement
date.
|
For those
executive officers employed by Peoples on or after January 1, 2003, normal
retirement occurs at age 65. The pension benefit for normal retirees
is calculated as follows:
|
(a)
|
The
Cash Balance Account (as such term is defined in the Retirement Plan) at
the end of the prior plan year,
plus
|
|
(b)
|
Interest
to the earlier of the end of the prior plan year or the end of the month
containing the executive officer’s termination of employment on the Cash
Balance Account as of the end of the prior plan year based on the one-year
constant maturity rate for the December preceding the determination year
plus 50 basis points, plus
|
|
(c)
|
An
annual accrual equal to 2% of compensation for the plan year provided the
executive officer earned a year of service during the plan
year.
|
For those
executive officers employed by Peoples on or after January 1, 2003, early
retirement can occur at age 50 if the executive officer has at least 10 years of
service with Peoples. The pension benefit for early retirees is
calculated as follows:
|
(a)
|
The
Cash Balance Account at the end of the prior plan year,
plus
|
|
(b)
|
Interest
to the earlier of the end of the prior plan year or the end of the month
containing the executive officer’s termination of employment on the Cash
Balance Account as of the end of the prior plan year based on the one-year
constant maturity rate for the December preceding the determination year
plus 50 basis points, plus
|
|
(c)
|
An
annual accrual equal to 2% of compensation for the plan year provided the
executive officer earned a year of service during the plan
year;
|
|
(d)
|
The
benefit is reduced as follows:
|
Ages
Reduction
60 –
65 6.66%
per year
50 –
60 3.33%
per year
None
of the executive officers participate in multiple defined benefit retirement
plans. Under the terms of the Retirement Plan, the executive officers
are not granted extra years of credited service.
Peoples 401(k)
Plan
The
executive officers are also eligible to participate in the Peoples 401(k) Plan,
on the same basis as other employees. In 2009 and previous years,
Peoples matched 100% of the first 3% of an employee’s contribution and then
matched 50% of the next 2% that the employee contributes, the sum of which were
subject to a maximum match of 4%. In light of general economic
conditions and recent Peoples operating results, on December 17, 2009, the Board
of Directors changed the “company match” on the Peoples 401(k) Plan to 100% of
the first 2% of an employee’s contribution effective January 1,
2010.
Insurance
Plans
Additionally,
the executive officers participate in the Peoples Bancorp Group Term Life
Insurance Plan on the same basis as other employees. Peoples pays the
premiums for all associates under this plan. If an executive officer
dies, his or her beneficiary will be paid an amount equal to two times the
executive officer’s base salary at the time of death, up to a limit of
$600,000.
The
executive officers are also eligible to participate in medical and dental
insurance plans provided by Peoples. These individuals participate on
the same basis as other employees. The plans are contributory and
both the employees and Peoples pay for the cost of the health insurance
premiums.
The
Committee periodically reviews the level of perquisites and other personal
benefits provided to the executive officers. Consistent with its
overall compensation program, the Committee believes the perquisites and other
personal benefits provided to the executive officers are reasonable and
necessary to attract and retain employees for key positions to promote the
long-term interests of our shareholders.
On
January 12, 2006, the Committee adopted an Executive Health Program for the
executive officers. The Executive Health Program provides an
opportunity for each executive officer to participate in a comprehensive medical
screening annually at the expense of Peoples. Participation in this
program is voluntary. The objective of the Executive Health Program
is the early identification of potential health problems and the prompt, expert
treatment of any medical problems detected, which could negatively impact
Peoples’ financial performance or current management succession
plans.
Based on
business need, on a case-by-case basis, the Committee has granted the use of a
company-paid automobile and/or country club membership to certain executive
officers to further business development on behalf of Peoples and its
shareholders. Personal use of a company-paid automobile is reported
as income to the executive officer. Expenses relating to personal use
of the country club amenities were either be reimbursed to Peoples or paid by
the executive officer. On December 17, 2009, in light of general
economic conditions and recent Peoples operating results, the Board of Directors
discontinued company-paid country club memberships for executive officers
effective January 1, 2010.
The ARRA
and the Interim Final Rule required that the Peoples Board of Directors adopt a
company-wide policy regarding “excessive or luxury expenditures,” which was
adopted on August 27, 2009. All personal benefits described above are
within the scope of those permissible in the policy.
Peoples
has entered into change in control agreements with all of the executive
officers. The change in control agreements are designed to motivate
executive officers to act in the best interests of shareholders and to promote
stability and continuity of the services of the executive officers during a
change in control. The change in control agreements are “double
trigger” agreements that provide severance payments to an executive officer only
if Peoples or its successor terminates the executive officer’s employment
without “cause” or the executive officer terminates his or her employment with
“good reason” after the change in control. The Committee chose the
“double trigger” to forego extra costs to Peoples or its successor if the
executive officer continues in the same or similar role after the change in
control while still motivating the executive officer to act in the best
interests of the shareholders by providing for the executive officer even if he
or she would not have the same or similar role after the change in
control. Additional information regarding the definition of a change
in control, the description of the additional event(s) that must occur in order
for an executive officer to receive severance compensation
following a change in control, and applicable payments under such agreements for
the executive officers is provided under the section captioned “OTHER POTENTIAL POST EMPLOYMENT
PAYMENTS” beginning on page 43. The ARRA and the Interim Final
Rule prohibit Peoples from making any golden parachute payments to our Senior
Executive Officers or any of our next five most highly-compensated
employees. Payments under the change in control agreements to
executive officers would be considered to be golden parachute payments and
subject to this prohibition.
On
February 24, 2010, the Committee approved a one-time cash payment effective
March 15, 2010 to David Wesel in the amount of $35,000 as recognition of the
additional management and leadership responsibilities David Wesel assumed during
his service from September 2009 to February 2010 as interim Executive Vice
President of Retail Banking, in addition to his roles as Executive Vice
President of Peoples; President, Peoples Financial Advisors; and President,
Peoples Insurance Agency, LLC. Since David Wesel is not one of the
five most highly-compensated employees, he is eligible for this payment under
TARP and the Interim Final Rule.
Tax
and Accounting Implications
Section
162(m) of the Internal Revenue Code 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) and the four other most highly-compensated officers of Peoples, other
than the chief executive officer, serving at the end of Peoples’ fiscal
year. The $1 million compensation deduction limitation does not apply
to “performance-based compensation.” The 2006 Plan complies with
Section 162(m) so that any compensation, which may be received by executive
officers of Peoples under the 2006 Plan, will qualify as
“performance-based.” Performance goals were included in the 2006
Plan, which was approved by Peoples’ shareholders on April 13,
2006.
The ARRA
and the Interim Final Rule require that Peoples comply with the provisions of
Section 162(m)(5) of the Internal Revenue Code. This provision
prohibits Peoples from claiming a deduction on its federal income tax return for
compensation in excess of $500,000 paid for a given year to our Senior Executive
Officers. There is no exception to this prohibition for
“performance-based compensation.” None of Peoples’ executive officers
received more than $500,000 of compensation for 2009.
Section
409A of the Internal Revenue Code imposes additional taxes, interest and
penalties on non-qualified deferred compensation arrangements that do not
satisfy its requirements. Peoples believes that it is administering
its non-qualified deferred compensation arrangements in accordance with the
requirements of Section 409A and has amended its non-qualified
deferred compensation arrangements, including the change in control arrangements
with its executive officers, to comply with the final regulations issued under
Section 409A of the Internal Revenue Code. Peoples has not realized
any material changes to its compensation program as a result of compliance with
Section 409A.
Compensation
costs for stock options, restricted stock awards and stock appreciation rights
are measured at the fair value of these awards on their grant
date. Compensation expense is recognized over the required service
period, generally the vesting period for stock options and stock appreciation
rights and the restriction period for restricted stock
awards. Compensation expense for awards granted to employees who are
eligible for retirement is recognized to the date the employee is first eligible
to retire.
Peoples
has no equity or security ownership requirements or guidelines for executive
officers and no policies regarding hedging the economic risk of any ownership of
Peoples common shares. Notwithstanding the foregoing, Peoples does
believe it is important that executive officers own common shares as evidenced
by equity-based awards granted to executive officers in the past through
Peoples’ long-term equity-based incentive plan.
The
Committee believes that the best measure of whether the executive compensation
program is achieving its intended goals is to look at the long-term performance
of Peoples. Because the absolute minimum level of performance
established for potential annual cash incentives and long-term equity-based
incentives was not achieved in 2009, Peoples’ executive officers did not receive
payouts on any performance-based plans. In light of these results,
the Committee believes Peoples’ compensation program for its executive officers
continues to be aligned with the interests of the shareholders. The
program is part of a fully-integrated, performance-based system that provides a
balanced foundation for strong and effective leadership into the future and
ensures alignment with long-term shareholder interests without encouraging
unnecessary and excessive risk-taking that could threaten the value of
Peoples.
In view
of the current economic and financial environment, the Committee has reviewed
the design and operation of Peoples’ incentive compensation arrangements with
Peoples’ senior risk officers. This review included the 2009, 2010,
and 2010 – 2012 performance goals required to be achieved for threshold, target
and maximum levels of cash and equity-based incentive payments, along with the
corresponding payout potentials. The Committee has determined that
these arrangements do not provide Peoples’ executive officers with the incentive
to engage in business activities or other behavior that would threaten the value
of Peoples or the investments of its shareholders.
The
Compensation Committee of Peoples’ Board of Directors has reviewed and discussed
the Compensation Discussion and Analysis required by Item 402(b) of SEC
Regulation S-K with management and, based on such review and discussion, the
Compensation Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this Proxy Statement and
incorporated by reference into Peoples’ Annual Report on Form 10-K for the
fiscal year ended December 31, 2009.
The
Compensation Committee certifies that, in accordance with the requirements of
the ARRA and the Interim Final Rule:
|
·
|
it
has reviewed with Peoples’ senior risk officers the Senior Executive
Officer Compensation Plans (each as defined in the regulations and
guidance established under Section 111 of EESA), and has made all
reasonable efforts to ensure that these plans do not encourage Senior
Executive Officers (as defined in the regulations and guidance
established under Section 111 of EESA) to take unnecessary and excessive
risks that threaten the value of
Peoples;
|
|
·
|
it
has reviewed with Peoples’ senior risk officers the Employee Compensation
Plans (as defined in the regulations and guidance established
under Section 111 of EESA), and has made all reasonable efforts to limit
any unnecessary risks these plans pose to Peoples;
and
|
|
·
|
it
has reviewed the Employee Compensation Plans to eliminate any features of
these plans that would encourage the manipulation of reported earnings of
Peoples to enhance the compensation of any
employee.
|
Discussion
of Risk Review and Assessment
Peoples’
Senior Vice President, Director of Risk Management and Senior Vice President,
Auditor have conducted two assessments of Peoples’ compensation programs since
February 2009 and have reviewed, evaluated and discussed the assessments and the
compensation programs with the Compensation Committee. The most recent review
and discussion with the Compensation Committee occurred on February 24, 2010 and
covered all Employee Compensation Plans, including the Senior Executive Officer
Compensation Plans. The review of all of the Employee Compensation
Plans took into consideration: (i) products and services incented: (ii) the risk
time horizon of those products and services; (iii) incentives paid as a
percentage of total revenue; and (iv) incentives paid as a percentage of each
participant’s total compensation. Broad-based welfare and benefit
plans that do not discriminate in scope, terms or operation in favor of
executive officers were excluded from the review.
The
Compensation Committee believes that Peoples’ overall compensation practices for
Senior Executive Officers, which include the following elements, limit the
ability of executive officers to benefit from taking unnecessary or excessive
risks:
|
·
|
Balance
between base salary and cash and equity-based incentive compensation
opportunities
|
|
·
|
Maximum
payouts which limit overall payout
potential
|
|
·
|
Balance
between short-term and long-term incentive compensation
opportunities
|
|
·
|
Use
of a balanced scorecard approach in setting performance goals with
interacting, complementary incentive objectives that discourage emphasis
on any single objective
|
|
·
|
Peoples’
tone at the top and culture of ethically doing the right
thing
|
|
·
|
Limitations
imposed by the ARRA and the Interim Final
Rule
|
|
·
|
Transition
to only full value equity awards in 2010 for purposes of potential
equity-based long-term incentive
compensation
|
|
·
|
Addition
in 2010 of restricted stock with a performance-based vesting based upon
the achievement of an Earnings Per Share Available to Common Shareholders
performance goal for the three-year period ending December 31, 2012 for
purposes of potential equity-based long-term incentive
compensation
|
In
addition, the Compensation Committee believes there are controls around
incentive plans for all employees (including Senior Executive Officer
Compensation Plans) that effectively discourage unnecessary and excessive
risk-taking. All employee incentive plans allow for management
discretion (or Compensation Committee discretion in the case of the Senior
Executive Officer Compensation Plans) to reduce or eliminate any
award. The Compensation Committee reviews and approves all Senior
Executive Officer Compensation Plans and award opportunities, and the Board
reviews and approves the corporate performance goals.
Most
officers, including the Senior Executive Officers, and employees serving Peoples
in support roles, such as accounting, loan operations and deposit operations,
participate in the Incentive Plan. Approximately 50% of Peoples’
employees participate in the Incentive Plan. Annual cash incentives
as well as equity-based incentives under the Incentive Plan are payable only
when specific pre-determined performance goals are met. All
participants in the Incentive Plan have some portion of their award dependent on
the selected corporate performance criteria. In addition, the
potential incentives payable to senior officers having only compliance, risk,
credit quality, and internal control roles are tied to corporate goals under the
Incentive Plan with only a 25% weighting. The remainder of their
potential incentives is driven by individual goals tied to their specific job
function. The Compensation Committee ultimately approves all
incentive compensation paid to the executive officers, including the Senior
Executive Officers.
In
addition to the Incentive Plan, Peoples has (i) compensation plans for
producers, including insurance agents and financial advisors, which include
variable pay components (commission based on the sales of products underwritten
or offered by independent third parties); (ii) compensation plans for home loan
originators which include variable cash compensation components tied to the
origination of one to four family real estate loans, the majority of which are
sold into the secondary market; and (iii) other miscellaneous individual plans
which are informal agreements that allow certain employees to earn amounts of
cash incentive compensation without encouraging the employees to take
unnecessary or excessive risk because their roles inherently do not have the
opportunity for excessive levels of risk, either individually or in the
aggregate, and the incentive compensation potential is not a substantial part of
their respective total compensation.
The
Compensation Committee believes that the elements of the Incentive Plan and the
other compensation plans, alone and/or combined with the systems of controls in
place such as separation of the valuation, authorization and payment of
incentive compensation as well as other components of compensation, do not
encourage unnecessary or excessive risk and do not encourage the manipulation of
reported earnings to enhance the compensation of any employee.
Further,
in light of the significant level of oversight and controls surrounding
incentive plans, and the significant amounts that would be required to impact
Peoples’ reported earnings, the Compensation Committee believes that, upon
evaluation of the incentive plans for employees, including Senior Executive
Officers, any elements of the Incentive Plan and other compensation and
individual plans that have the potential to encourage the manipulation of
reported earnings to enhance the compensation of any employee are
mitigated.
Submitted
by the Compensation Committee of Peoples’ Board of Directors:
George W.
Broughton (Chairman), Carl L. Baker, Jr., David L. Mead, Robert W.
Price and Paul T. Theisen.
The table
below summarizes the total compensation paid or earned by each of the named
executive officers for the fiscal years ended December 31, 2009, 2008, and
2007. Peoples has not entered into any employment agreements with any
of the executive officers.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Name
and Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
|
Change
in Pension Value and Non-Qualified Deferred Compensation
Earnings
|
All
Other Compensation
|
Total
|
|
(3)
|
(4)
|
(5)
|
(6)
|
(7)
|
|||||
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
||
|
Mark
F. Bradley
|
2009
|
$280,000
|
-
|
-
|
-
|
-
|
$13,099
|
$13,935
|
$307,034
|
|
President
and
|
2008
|
$280,000
|
-
|
$9,556
|
$9,562
|
-
|
$18,086
|
$13,175
|
$330,379
|
|
Chief
Executive Officer
|
2007
|
$255,000
|
-
|
$14,245
|
$14,251
|
$38,250
|
-
|
$15,969
|
$337,715
|
|
Edward
G. Sloane, Jr. (1)
|
2009
|
$196,000
|
-
|
-
|
-
|
-
|
$7,161
|
$16,585
|
$219,746
|
|
Executive
Vice President, Chief Financial Officer
|
2008
|
$120,364
|
$30,000
(2)
|
$46,860
|
-
|
-
|
-
|
$21,712
|
$218,936
|
|
and
Treasurer
|
|||||||||
|
Joseph
S. Yazombek
|
2009
|
$220,000
|
-
|
-
|
-
|
-
|
$57,707
|
$15,374
|
$293,081
|
|
Executive
Vice President,
|
2008
|
$220,000
|
-
|
$9,175
|
$9,170
|
-
|
$73,573
|
$14,807
|
$326,725
|
|
Chief
Lending Officer
|
2007
|
$206,012
|
-
|
$12,051
|
$12,055
|
$31,932
|
$7,654
|
$11,142
|
$280,846
|
|
Carol A. Schneeberger
|
2009
|
$190,000
|
-
|
-
|
-
|
-
|
$50,129
|
$8,449
|
$248,578
|
|
Executive
Vice President,
|
2008
|
$190,000
|
-
|
$59,900
|
$6,424
|
-
|
$58,279
|
$13,696
|
$328,299
|
|
Operations
|
2007
|
$169,002
|
-
|
$7,839
|
$7,831
|
$22,477
|
-
|
$8,509
|
$215,658
|
|
David
T. Wesel
|
2009
|
$178,000
|
-
|
-
|
-
|
-
|
$3,725
|
$13,937
|
$195,662
|
|
Executive
Vice President,
|
2008
|
$168,000
|
-
|
$10,245
|
$10,240
|
-
|
$4,260
|
$11,105
|
$203,850
|
|
Investment
and Insurance Services
|
2007
|
$157,500
|
-
|
$10,881
|
$10,878
|
$35,910
|
$3,929
|
$10,278
|
$229,376
|
|
(1)
|
Mr.
Sloane became Executive Vice President, Chief Financial Officer and
Treasurer on May 21, 2008. Prior to that date, he was not
employed by Peoples or any of our
subsidiaries.
|
|
(2)
|
On
February 20, 2009, Mr. Sloane was paid a bonus in the amount of $30,000,
which represented the minimum cash incentive he had been guaranteed for
2008 upon joining Peoples.
|
|
(3)
|
The
amounts in column (e) reflect the grant date fair value for awards of
restricted shares pursuant to Peoples’ 2006 Plan, and are reported for the
fiscal year during which the restricted shares were
granted. These amounts excluded the impact of estimated
forfeitures related to service-based vesting conditions, as required by
the SEC. Assumptions used in the calculation of these amounts
are included in the “Notes to the Consolidated Financial Statements, Note
18. Stock-Based Compensation” on pages 88 through 90 of
Peoples’ Annual Report on Form 10-K for the Fiscal Year Ended December 31,
2009.
|
|
(4)
|
The
amounts in column (f) reflect the grant date fair value for SAR awards to
be settled in common shares pursuant to Peoples’ 2006 Plan, and are
reported for the fiscal year during which the SAR awards were
granted. These amounts exclude the impact of estimated
forfeitures related to service-based vesting conditions, as required by
the SEC. Assumptions used in the calculation of these amounts
are included in the “Notes to the Consolidated Financial Statements, Note
18. Stock-Based Compensation” on pages 88 through 90 of
Peoples’ Annual Report on Form 10-K for the Fiscal Year Ended December 31,
2009.
|
|
(5)
|
The
amounts in column (g) represent cash incentives earned under the Incentive
Plan, and are reported for the fiscal year with respect to which the cash
incentives were earned. Executive officers did not earn a cash
incentive under the Incentive Plan for 2009 and 2008 fiscal year
performance. Executive officers were required to defer 25% of
their cash incentive for a period of three years and have the option to
defer any of the remaining cash incentive until they retire or their
employment is terminated. The amounts shown for 2007 include
the following deferred portion of the cash incentive earned by each
executive officer: (a) Mr. Bradley - $9,562; (b) Ms. Schneeberger -
$5,619; (c) Mr. Yazombek - $31,932; and (d) Mr. Wesel -
$12,568. The non-deferred portions of the cash incentives
earned for the 2007 fiscal year performance were paid February 22,
2008.
|
|
(6)
|
The
amounts in column (h) represent the increase in the actuarial present
value of the executive officer’s accumulated benefits under Peoples’
pension plan (the Retirement Plan) determined using assumptions consistent
with those used in Peoples’ consolidated financial statements and include
amounts the executive officer may not be entitled to receive because such
amounts are not vested. The amounts shown do not include the
decline in the actuarial present value of the accumulated benefit under
Peoples’ pension plan in 2007 for: (a) Mr. Bradley - $1,894 and (b) Ms.
Schneeberger - $5,598. No amount is included in column (h) for
the amount of interest accrued on the cumulative amount of cash incentives
deferred by each executive officer under the terms of the Incentive Plan
since the rate earned was not above-market or
preferential.
|
|
(7)
|
All
other compensation for each executive officer for 2009 includes: (a) Mr.
Bradley - 401(k) Plan company match, country club membership, and
dividends on restricted shares; (b) Mr. Sloane – 401(k) Plan company
match, Executive Health Program, dividends on restricted shares, and
country club membership; (c) Mr. Yazombek - 401(k) Plan company match,
country club membership, Executive Health Program, and dividends on
restricted shares; (d) Ms. Schneeberger - 401(k) Plan company match and
dividends on restricted shares and (e) Mr. Wesel - 401(k) Plan company
match, country club membership, Executive Health Program, and dividends on
restricted shares. All other compensation for each executive
officer in 2008 includes: (a) Mr. Bradley - 401(k) Plan company match,
dividends on restricted shares, and country club membership; (b) Mr.
Sloane – relocation expense in the amount of $14,740, 401(k) Plan company
match, dividends on restricted shares, and country club membership; (c)
Ms. Schneeberger - 401(k) Plan company match, Executive Health Program,
dividends on restricted shares, and expenses associated with a weekend
vacation related to Peoples’ appreciation to Ms. Schneeberger for serving
as interim Chief Financial Officer and Treasurer from April 2007 to May
2008 (represents the incremental cost to Peoples of weekend vacation); (d)
Mr. Yazombek - 401(k) Plan company match, personal use of company-provided
vehicle, country club membership and Executive Health Program; and (e) Mr.
Wesel - 401(k) Plan company match, country club membership and dividends
on restricted shares. All other compensation for
each executive officer for 2007 includes: (a) Mr. Bradley - 401(k) Plan
company match, country club membership, Executive Health Program, and
dividends on restricted shares; (b) Ms. Schneeberger - 401(k) Plan company
match and dividends on restricted shares; (c) Mr. Yazombek - 401(k) Plan
company match, country club membership, and dividends on restricted
shares; and (d) Mr. Wesel - 401(k) Plan company match, country club
membership and dividends on restricted
shares.
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
(m)
|
|
Name
|
Grant
Date
|
Approval
Date
|
Estimated
Future Payouts Under Non-Equity Incentive Plan Awards
(1)
|
Estimated
Future Payouts Under Equity Incentive Plan Awards
(2)
|
All
Other Stock Awards: Number of Shares of Stock or Units (#)
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Option Awards ($/Share)
|
Grant
Date Fair Value of Stock and Option Awards
|
||||
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
(6)
|
(7)
|
|||||
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||
|
Mark
F. Bradley
|
-
|
-
|
$0
|
$140,000
|
$210,000
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
$0
|
$70,000
|
$105,000
|
-
|
-
|
-
|
-
|
|
|
Edward
G. Sloane
|
-
|
-
|
$0
|
$68,600
|
$102,900
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
$0
|
$39,200
|
$58,800
|
-
|
-
|
-
|
-
|
|
|
Joseph
S. Yazombek
|
-
|
-
|
$0
|
$77,000
|
$115,500
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
-
|
-
|
-
|
-
|
-
|
$0
|
$44,000
|
$66,000
|
-
|
-
|
-
|
-
|
|
Carol
A. Schneeberger
|
-
|
-
|
$0
|
$66,500
|
$99,750
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
$0
|
$38,000
|
$57,000
|
-
|
-
|
-
|
-
|
|
|
David
T. Wesel
|
-
|
-
|
$0
|
$62,300
|
$93,450
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
$0
|
$31,150
|
$46,725
|
-
|
-
|
-
|
-
|
|
|
(1)
|
Annual
cash incentive potential available for payment through the Incentive Plan
if the indicated level of performance was achieved for the 2009 fiscal
year. Refer to the discussion under the caption “Annual Cash Incentives”
on page 30 of the “COMPENSATION DISCUSSION AND
ANALYSIS” for additional information regarding the Incentive
Plan.
|
|
(2)
|
Economic
value of equity grants available for award through the 2006 Plan if the
indicated level of performance was achieved for the 2009 fiscal
year. Equity-based incentive awards are denominated in dollars,
rather than number of common shares. As a result, the
threshold, target and maximum amounts are shown in “dollars” rather than
the “number of common shares.” At the time of payout, the
economic value of the actual award earned would have been translated into
awards of restricted shares and SARs to be settled in common shares made
under Peoples’ 2006 Plan. Fifty percent of the economic value
would have been awarded in restricted shares, using the closing price of
Peoples’ common shares on the grant date. The remaining 50% of
the economic value would have been awarded in SARs to be settled in common
shares, using the Black-Scholes value of the SARs as of the award
date. Refer to the discussion under the caption “Long-Term Equity-Based
Incentive Compensation” on page 31 of the “COMPENSATION DISCUSSION AND
ANALYSIS” for additional information regarding grants of
equity-based awards.
|
The
following table provides information relating to the option/SAR awards and stock
awards held by the executive officers at the end of the 2009 fiscal
year. Each grant is shown separately for each named executive
officer. Mr. Sloane did not have any outstanding equity awards as of
December 31, 2009. The market value of the stock awards is based on
the closing price of Peoples’ common shares as reported on The NASDAQ Global
Select Market on December 31, 2009, which was $9.68.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
|
Option
Awards
|
Stock
Awards
|
|||||||||
|
Name
|
Grant
Date
|
Number
of Securities Underlying Unexercised Options/
SARs
|
Number
of Securities Underlying Unexercised Options/
SARs
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options/
SARs
|
Option/
SAR
Exercise Price
|
Option/
SAR
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested
|
Market
Value of Shares or Units of Stock That Have Not Vested
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested
|
|
(#)
|
(#)
|
(#)
|
($)
|
(#)
|
($)
|
(#)
|
($)
|
|||
|
Exercisable
|
Unexercisable
|
|||||||||
|
(1)
|
(2)
|
(2)
|
||||||||
|
Mark
F. Bradley
|
4/27/2000
|
5,082
|
-
|
-
|
$13.58
|
4/27/2010
|
-
|
-
|
-
|
-
|
|
5/9/2002
|
1,563
|
-
|
-
|
$23.59
|
5/9/2012
|
-
|
-
|
-
|
-
|
|
|
5/9/2002
|
1,264
|
-
|
-
|
$23.59
|
5/9/2012
|
-
|
-
|
-
|
-
|
|
|
3/27/2003
|
3,707
|
-
|
-
|
$22.32
|
3/27/2013
|
-
|
-
|
-
|
-
|
|
|
3/27/2003
|
2,090
|
-
|
-
|
$22.32
|
3/27/2013
|
-
|
-
|
-
|
-
|
|
|
2/10/2005
|
459
|
-
|
-
|
$27.38
|
2/10/2015
|
-
|
-
|
-
|
-
|
|
|
2/9/2006
|
2,970
|
-
|
-
|
$28.25
|
2/9/2016
|
-
|
-
|
-
|
-
|
|
|
2/13/2007
|
-
|
1,707
(3)
|
-
|
$29.25
|
2/13/2017
|
-
|
-
|
-
|
-
|
|
|
2/13/2007
|
-
|
-
|
-
|
-
|
-
|
487
(5)
|
$4,714
|
-
|
-
|
|
|
2/20/2008
|
-
|
-
|
-
|
-
|
-
|
402
(6)
|
$3,891
|
-
|
-
|
|
|
2/20/2008
|
-
|
1,734
(4)
|
-
|
$23.77
|
2/20/2018
|
-
|
-
|
-
|
-
|
|
|
Joseph
S.
Yazombek
|
4/27/2000
|
3,812
|
-
|
-
|
$13.58
|
4/27/2010
|
-
|
-
|
-
|
-
|
|
5/9/2002
|
1,928
|
-
|
-
|
$23.59
|
5/9/2012
|
-
|
-
|
-
|
-
|
|
|
5/9/2002
|
2,947
|
-
|
-
|
$23.59
|
5/9/2012
|
-
|
-
|
-
|
-
|
|
|
3/27/2003
|
3,900
|
-
|
-
|
$22.32
|
3/27/2013
|
-
|
-
|
-
|
-
|
|
|
3/27/2003
|
2,779
|
-
|
-
|
$22.32
|
3/27/2013
|
-
|
-
|
-
|
-
|
|
|
2/10/2005
|
1,215
|
-
|
-
|
$27.38
|
2/10/2015
|
-
|
-
|
-
|
-
|
|
|
2/9/2006
|
2,388
|
-
|
-
|
$28.25
|
2/9/2016
|
-
|
-
|
-
|
-
|
|
|
2/13/2007
|
-
|
1,444
(3)
|
-
|
$29.25
|
2/13/2017
|
-
|
-
|
-
|
-
|
|
|
2/13/2007
|
-
|
-
|
-
|
-
|
-
|
412
(5)
|
$3,988
|
-
|
-
|
|
|
2/20/2008
|
-
|
-
|
-
|
-
|
-
|
386
(6)
|
$3,736
|
-
|
-
|
|
|
2/20/2008
|
-
|
1,663
(4)
|
-
|
$23.77
|
2/20/2018
|
-
|
-
|
-
|
-
|
|
40
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
|
Option
Awards
|
Stock
Awards
|
|||||||||
|
Name
|
Grant
Date
|
Number
of Securities Underlying Unexercised Options/
SARs
|
Number
of Securities Underlying Unexercised Options/
SARs
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options/
SARs
|
Option/
SAR
Exercise Price
|
Option/
SAR
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested
|
Market
Value of Shares or Units of Stock That Have Not Vested
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested
|
|
(#)
|
(#)
|
(#)
|
($)
|
(#)
|
($)
|
(#)
|
($)
|
|||
|
Exercisable
|
Unexercisable
|
|||||||||
|
(1)
|
(2)
|
(2)
|
||||||||
| Carol A. |
4/27/2000
|
4,765
|
-
|
- | $13.58 |
4/27/2010
|
- | - | - | - |
| Schneeberger |
5/9/2002
|
1,654
|
-
|
- | $23.59 |
5/9/2012
|
- | - | - | - |
|
5/9/2002
|
1,963
|
-
|
- | $23.59 |
5/9/2012
|
- | - | - | - | |
|
3/27/2003
|
2,279
|
-
|
-
|
$22.32
|
3/27/2013
|
-
|
-
|
-
|
-
|
|
|
2/10/2005
|
792
|
-
|
-
|
$27.38
|
2/10/2015
|
-
|
-
|
-
|
-
|
|
|
2/9/2006
|
1,903
|
-
|
-
|
$28.25
|
2/9/2016
|
-
|
-
|
-
|
-
|
|
|
2/13/2007
|
-
|
938
(3)
|
-
|
$29.25
|
2/13/2017
|
-
|
-
|
-
|
-
|
|
|
2/13/2007
|
-
|
-
|
-
|
-
|
-
|
268
(5)
|
$2,594
|
-
|
-
|
|
|
2/20/2008
|
-
|
-
|
-
|
-
|
-
|
270
(6)
|
$2,614
|
-
|
-
|
|
|
2/20/2008
|
-
|
1,165
(4)
|
- |
$23.77
|
2/20/2018
|
-
|
-
|
- | - | |
|
David
T. Wesel
|
2/16/2004
|
2,000
|
-
|
-
|
$28.25
|
2/16/2014
|
-
|
-
|
-
|
-
|
|
2/10/2005
|
425
|
-
|
-
|
$27.38
|
2/10/2015
|
-
|
-
|
-
|
-
|
|
|
2/9/2006
|
1,184
|
-
|
-
|
$28.25
|
2/9/2016
|
-
|
-
|
-
|
-
|
|
|
2/13/2007
|
-
|
1,303
(3)
|
-
|
$29.25
|
2/13/2017
|
-
|
-
|
-
|
-
|
|
|
2/13/2007
|
-
|
-
|
-
|
-
|
-
|
372
(5)
|
$3,601
|
-
|
-
|
|
|
2/20/2008
|
-
|
-
|
-
|
-
|
-
|
431
(6)
|
$4,172
|
-
|
-
|
|
|
2/20/2008
|
-
|
1,857
(4)
|
-
|
$23.77
|
2/20/2018
|
-
|
-
|
-
|
-
|
|
(1)
|
Stock
options were granted to the executive officers in years prior to
2006.
|
|
(2)
|
Any
amount in these columns would have represented the actual SAR and
restricted share awards approved by the Compensation Committee in the 2010
fiscal year, with respect to corporate and individual performance for the
2009 fiscal year. They would have been considered “unearned” as
they would not have been granted until after the end of the 2009 fiscal
year. No awards were granted in the 2010 fiscal year with
respect to corporate and individual performance for the 2009 fiscal
year.
|
|
(3)
|
SARs
to be settled in common shares were approved by the Compensation Committee
on February 8, 2007 and granted under Peoples’ 2006 Plan on February 13,
2007, and vested on February 13,
2010.
|
|
(4)
|
SARs
to be settled in common shares were approved by the Compensation Committee
on February 14, 2008 and granted under Peoples’ 2006 Plan on February 20,
2008, and will vest on February 20,
2011.
|
|
(5)
|
Restricted
shares were approved by the Compensation Committee on February 8, 2007 and
granted under Peoples’ 2006 Plan on February 13, 2007, and vested on
February 13, 2010.
|
|
(6)
|
Restricted
shares were approved by the Compensation Committee on February 14, 2008
and granted under Peoples’ 2006 Plan on February 20, 2008, and will vest
on February 20, 2011.
|
The
following table provides information for the named executive officers relating
to stock options exercised, including the number of common shares acquired upon
exercise and the value realized, and the restricted shares that vested,
including the number of common shares acquired upon vesting and the value
realized. The values shown below are before payment of any applicable
withholding tax.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
Option
Awards
|
Stock
Awards
|
|||
|
Name
|
Number
of Common Shares Acquired on Exercise
|
Valued
Realized on Exercise
|
Number
of Shares Acquired on Vesting
|
Value
Realized on Vesting
|
|
(#)
|
($)
|
(#)
|
($)
|
|
|
Mark
F. Bradley
|
-
|
-
|
-
|
-
|
|
Edward
G. Sloane
|
-
|
-
|
1,000
|
$9,590
|
|
Joseph
S. Yazombek
|
-
|
-
|
-
|
-
|
|
Carol
A. Schneeberger
|
-
|
-
|
1,125
|
$9,810
|
|
David
T. Wesel
|
-
|
-
|
-
|
-
|
The table
below shows the actuarial present value of accumulated benefits payable to each
of the executive officers, including the number of years of service credited to
each named executive officer, under the Retirement Plan determined using
interest rate and mortality rate assumptions consistent with those used in
Peoples’ Notes to the Consolidated Financial Statements, Note
13. Employee Benefit Plans on pages 81 through 84 of Peoples’ Annual
Report on Form 10-K for the fiscal year ended December 31,
2009. Information regarding the Retirement Plan can be found in the
discussion under the caption “Retirement and Other Benefits”
on page 32 of the “COMPENSATION
DISCUSSION AND ANALYSIS.”
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
Name
|
Plan
Name
|
Number
of Years of Credited Service
|
Present
Value of Accumulated Benefit
|
Payments
During Last Fiscal Year
|
|
(#)
|
($)
|
($)
|
||
|
Mark
F. Bradley
|
Retirement
Plan
|
18
|
$87,307
|
-
|
|
Edward
G. Sloane
|
Retirement
Plan
|
1
|
$7,161
|
-
|
|
Joseph
S. Yazombek (1)
|
Retirement
Plan
|
26
|
$400,792
|
-
|
|
Carol
A. Schneeberger (1)
|
Retirement
Plan
|
32
|
$375,424
|
-
|
|
David
T. Wesel
|
Retirement
Plan
|
6
|
$19,211
|
-
|
|
(1)
|
Mr.
Yazombek and Ms. Schneeberger had reached retirement eligibility (50 years
of age or older and 10 years of service with Peoples) as of December 31,
2009.
|
The
following table provides information regarding cash incentives earned by the
named executive officers under the Incentive Plan but deferred in accordance
with the terms of that Plan. Executive officers were required to
defer 25% of any annual cash incentives earned under the terms of the Incentive
Plan. If the executive officer terminates his or her employment for
any reason other than death, disability or retirement prior to the end of the
three-year deferral period, the deferred portion of the annual cash incentive is
forfeited. This mandatory deferral is another way to promote
retention of key executive officers, as the executive officers must remain with
Peoples until the required deferral period lapses or they forfeit that portion
of their incentive payout. Once the mandatory deferral period lapses,
executive officers may either take a cash distribution or further defer receipt
of the cash incentive, as discussed in the following paragraph, based on an
election made under the terms of the Incentive Plan prior to the year the cash
incentive was earned, until they retire or their employment is
terminated. Interest on the deferred compensation is accrued at a
rate equal to 50% of Peoples’ Return on Average Equity achieved during each
calendar year throughout the deferral period.
In
addition to the mandatory 25% deferral, the executive officers also had the
option to (i) defer any remaining annual cash incentive compensation to be paid
to them and (ii) further defer the mandatory amount after the original
three-year period has lapsed until they retire or until their employment with
Peoples is terminated. The amount an executive officer elected to
voluntarily defer was chosen by the executive officer prior to the beginning of
the calendar year in which the cash incentive compensation was
earned. Interest on the deferred compensation is accrued at a rate
equal to 50% of Peoples’ Return on Average Equity achieved during each calendar
year throughout the deferral period. No cash incentive payments were
made for 2009 fiscal year performance.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
|
Name
|
Executive
Contributions in Last Fiscal Year
|
Registrant
Contributions in Last Fiscal Year
|
Aggregate
Earnings in Last Fiscal Year
|
Aggregate
Withdrawals/ Distributions
|
Aggregate
Balance at Last Fiscal Year-End
|
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
|
(1)
|
(2)
|
(3)
|
(4)
|
||
|
Mark
F. Bradley
|
-
|
-
|
$223
|
$16,910
|
$24,993
|
|
Edward
G. Sloane
|
-
|
-
|
-
|
-
|
-
|
|
Joseph
S. Yazombek
|
$13,300
|
-
|
$2,361
|
$13,300
|
$264,741
|
|
Carol
A. Schneeberger
|
-
|
-
|
$280
|
$10,297
|
$31,379
|
|
David
T. Wesel
|
-
|
-
|
$297
|
-
|
$33,280
|
|
(1)
|
Amounts
in column (b) represent any accumulated balance of mandatory deferrals
awarded for performance for the 2005 fiscal year and voluntarily further
deferred by the executive officer at the end of the original three-year
deferral period.
|
|
(2)
|
Amounts
in column (d) represent the aggregate earnings on the accumulated
mandatory and voluntary deferrals of cash incentives for each of the
executive officers. Interest is accrued at a rate equal to 50%
of Peoples’ Return on Average Equity achieved during each calendar year
throughout the deferral period. The accrual rate for 2009 was
0.9%. None of these amounts are included in the Summary
Compensation Table for 2009 since the rate earned was not above-market or
preferential.
|
|
(3)
|
Amounts
in column (e) represent the aggregate withdrawals or distributions for
each executive officer of amounts deferred in accordance with terms of the
Incentive Plan, which also includes the accumulated balance voluntarily
re-deferred by the executive officer at the end of the mandatory
three-year deferral period.
|
|
(4)
|
Of
the amount reported in column (f) for each executive officer, the
following amount was reported in the “SUMMARY COMPENSATION TABLE FOR
2008” on page 34 included in Peoples’ Proxy Statement for the 2009
Annual Meeting of Shareholders and the “SUMMARY COMPENSATION TABLE FOR
2007” on page 28 included in Peoples’ Proxy Statement for the 2008
Annual Meeting of Shareholders, and are reported within the amount shown
in the Non-Equity Incentive Plan Compensation column for 2007: (a) Mr.
Bradley - $9,562; (b) Mr. Yazombek - $31,932; (c) Ms. Schneeberger -
$5,619; and (d) Mr. Wesel - $12,568. The foregoing amounts are
also reported in the “SUMMARY COMPENSATION TABLE FOR
2009” on page 37 within the amount shown in the Non-Equity
Incentive Plan Compensation column for
2007.
|
The
amount of compensation payable to each named executive officer upon voluntary
termination, early retirement, normal retirement, involuntary not-for-cause
termination, for cause termination, termination following a change in control of
Peoples and termination in the event of disability or death of the named
executive officer is described below.
In the
event of the retirement, disability or death of a named executive officer, or a
change in control of Peoples, the vesting period is accelerated with regard to
the mandatory deferrals of the cash incentives earned under the Incentive Plan
and unvested outstanding equity-based awards.
Regardless
of the manner in which a named executive officer’s employment terminates,
including termination for cause with the exception noted below, he or she is
entitled to receive amounts earned during his or her term of
employment. These amounts are not included in the table
below. Such amounts would include:
|
·
|
cash
incentives earned under the Incentive Plan during the fiscal year in which
termination occurs less the mandatory deferral amount, if he or she is
employed as of the payment date;
|
|
·
|
all
vested equity-based awards earned through the long-term equity-based
incentive compensation programs;
|
|
·
|
all
cash incentives voluntarily deferred under the Incentive Plan; These
amounts are included in the table under the heading “NON-QUALIFIED DEFERRED
COMPENSATION FOR 2009” on page 35 within the amount shown in the
Aggregate Balance at Last Fiscal Year-End column: Mr. Yazombek
- $245,283; Ms. Schneeberger - $18,250; and Mr. Wesel -
$13,875.
|
|
·
|
the
balance of the executive officer’s Retirement Savings Plan (Peoples 401(k)
Plan) account;
|
|
·
|
pay
for unused paid time off (except in the case of termination for cause);
and
|
|
·
|
amounts
accrued and vested through the Retirement Plan (Peoples’ pension
plan). These amounts are included in the table under the
heading “PENSION BENEFITS
FOR 2009” on page 42in the amount shown in the Present Value of
Accumulated Benefit column. Except for Mr. Sloane, all
executive officers have met the five or more years of service requirement
and would be paid upon termination of
employment.
|
In the
event of the retirement of a named executive officer, in addition to the items
identified above, he or she would receive the following benefits:
|
·
|
all
previously unvested equity-based awards would vest;
and
|
|
·
|
all
previously unvested mandatory deferrals under the Incentive Plan would
vest.
|
In the
event of the death or disability of a named executive officer, in addition to
the benefits listed under the headings “Payments Made
Upon Termination”
and “Payments
Made Upon Retirement” above,
the named executive officer will also receive benefits under Peoples’ disability
plan or payments under Peoples’ life insurance plan, as
appropriate.
Peoples
has entered into amended and restated change in control agreements with the
named executive officers. Under these agreements, a change in control
occurs when one or more of the following events take place:
|
|
●
|
a
“person” or “group” (as defined in Section 409A of the Internal Revenue
Code) acquires ownership of shares of Peoples that, together with shares
held by such person or group, constitutes more than 50% of the total fair
market value or total voting power of the shares of
Peoples;
|
|
|
●
|
any
person or group acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or group)
ownership of shares of Peoples possessing 35% or more of the total voting
power of the shares of Peoples;
|
|
|
●
|
a
majority of the members of Peoples’ Board of Directors is replaced during
any 12-month period by directors whose appointment or election is not
endorsed by a majority of the members of Peoples’ Board of Directors prior
to the date that such appointments or elections are made;
or
|
|
|
●
|
any
person or group acquires (or has acquired) during the 12-month period
ending on the date of the most recent acquisition by such person or group,
assets from Peoples that have a total gross fair market value equal to or
more than 40% of the total gross fair market value of all of the assets of
Peoples immediately prior to such acquisition or
acquisitions.
|
Generally,
the agreements provide for severance compensation to the named executive
officers if their employment is terminated by Peoples or its successor for any
reason other than cause (defined as gross negligence or gross neglect of duties;
commission of a felony or a gross misdemeanor involving moral turpitude; fraud,
disloyalty, dishonesty or willful violation of any law or significant policy of
Peoples; or issuance of an order by the banking regulators of Peoples for
removal of the named executive officer) within six months prior to or 24 months
after a defined change in control occurs. In addition, compensation
will be paid if the named executive officer voluntarily terminates employment
during the same periods because of: (i) the assignment to the
named executive officer of any material duties or responsibilities inconsistent
with the named executive officer’s positions, or a change in the named executive
officer’s reporting responsibilities, titles, or offices, or any removal of the
named executive officer from or any failure to re-elect the named executive
officer to any of such positions, except in connection with the named executive
officer’s termination of employment for cause, disability, retirement, or as a
result of the named executive officer’s death; (ii) a reduction in the
named executive officer’s base salary; (iii) the taking of any action
by Peoples which would adversely affect the named executive officer’s
participation in or materially reduce the named executive officer’s benefits
under any benefit plans; (iv) any failure of Peoples to obtain the assumption of
the agreement by any successor; or (v) geographic relocation of the executive
officer to an office location more than 50 miles from the executive officer's
current location without the named executive officer's consent or without
reimbursement of reasonable moving expenses incurred by the executive officer
relating to a change of the named executive officer’s principal residence in
connection with relocation.
The named
executive officer’s base annual compensation for purpose of his or her
respective agreement is calculated as the average annualized compensation paid
by Peoples, prior to any deferred arrangements, during the most recent five
taxable years ending before the date of the change in control, subject to
certain adjustments in the event that Section 280G of the Internal Revenue Code
is triggered. For named executive officers that have worked for
Peoples for less than five years, the average annualized compensation paid by
Peoples is calculated for the number of years employed by Peoples.
Under the
agreements, severance provisions include: (i) a lump sum cash payment of two and
one half times base annual compensation for Mr. Bradley and two times base
annual compensation for Ms. Schneeberger and Messrs. Sloane, Yazombek, and
Wesel, in each case payable within 30 days following the named executive
officer’s termination date with such payment delayed until the first business
day of the seventh month following the named executive officer’s terminatation
date if the named executive officer is a “specified employee” for purposes of
Section 409(A) of the Internal Revenue Code; (ii) continuing participation in
life, medical, and dental insurance for 12 months substantially in the form and
expense to the named executive officer as that received on the date of
termination; (iii) the named executive officer agreeing not to disclose to
others any confidential information; and (iv) the named executive officer
entering into a non-compete agreement for 12 months immediately following the
date of termination. In the case of Mr. Bradley, the duration of the
non-compete agreement and continuing participation in life, medical and dental
insurance is 15 months immediately following the date of
termination. The non-compete agreement prohibits the named executive
officer from directly or indirectly engaging in any business in which Peoples
directly or indirectly engages within Peoples’ geographic market.
The ARRA
and the Interim Final Rule prohibit Peoples from making any golden parachute
payments to its Senior Executive Officers or five next most highly-compensated
employees. Payments under the amended and restated change in control
agreements to the named executive officers will be considered to be golden
parachute payments. Peoples and each named executive officer entered
into a letter agreement in which the named executive officer agreed to amend the
compensation and benefits plans of Peoples in which the named executive officer
participates, including the amended and restated change in control agreements,
to the extent necessary to give effect to this prohibition. These
letter agreements were later amended to incorporate the additional restrictions
imposed by the ARRA and the Interim Final Rule.
The
following table summarizes payments which would have been made to the named
executive officers if a termination event had occurred on December 31,
2009. Actual amounts to be paid out can only be determined at the
time of a named executive officer’s actual separation from service with
Peoples.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Compensation
& Benefits Payable Upon Termination
|
Voluntary
Termination
|
Early
Retirement
|
Normal
Retirement
|
Involuntary
Not for Cause Termination
|
For
Cause Termination
|
CIC
Involuntary or Good Reason Termination
|
Death
or Disability
|
|
(1)
|
|||||||
|
Mark
F. Bradley
|
|||||||
|
2
times Base Annual Compensation
|
-
|
-
|
-
|
-
|
-
|
$610,299
|
-
|
|
Welfare
(2)
|
-
|
-
|
-
|
-
|
-
|
$13,347
|
-
|
|
Unvested
Deferrals under Incentive Award Plan
|
-
|
-
|
$24,993
|
-
|
-
|
$24,993
|
$24,993
|
|
Intrinsic Value of Unvested
Stock Options & SARs (3)
|
-
|
-
|
$0
|
-
|
-
|
$0
|
$0
|
|
Value
of Unvested Restricted Shares
|
-
|
-
|
$8,606
|
-
|
-
|
$8,606
|
$8,606
|
|
Total:
|
$0
|
$0
|
$33,598
|
$0
|
$0
|
$657,245
|
$33,599
|
|
Total Allowable Under the ARRA:
(4)
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$33,599
|
|
Edward
G. Sloane
|
|||||||
|
2
times Base Annual Compensation
|
-
|
-
|
-
|
-
|
-
|
$392,000
|
-
|
|
Welfare
(2)
|
-
|
-
|
-
|
-
|
-
|
$6,247
|
-
|
|
Unvested
Deferrals under Incentive Award Plan
|
-
|
-
|
$0
|
-
|
-
|
$0
|
$0
|
|
Intrinsic Value of Unvested
Stock Options & SARs (3)
|
-
|
-
|
$0
|
-
|
-
|
$0
|
$0
|
|
Value
of Unvested Restricted Shares
|
-
|
-
|
$0
|
-
|
-
|
$0
|
$0
|
|
Total:
|
$0
|
$0
|
$0
|
$0
|
$0
|
$398,247
|
$0
|
|
Total Allowable Under the ARRA:
(4)
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
Joseph
S. Yazombek
|
|||||||
|
2
times Base Annual Compensation
|
-
|
-
|
-
|
-
|
-
|
$423,299
|
-
|
|
Welfare
(2)
|
-
|
-
|
-
|
-
|
-
|
$1,111
|
-
|
|
Unvested
Deferrals under Incentive Award Plan
|
-
|
$19,457
|
$19,457
|
-
|
-
|
$19,457
|
$19,457
|
|
Intrinsic Value of Unvested
Stock Options & SARs (3)
|
-
|
$0
|
$0
|
-
|
-
|
$0
|
$0
|
|
Value
of Unvested Restricted Shares
|
-
|
$7,725
|
$7,725
|
-
|
-
|
$7,725
|
$7,725
|
|
Total:
|
$0
|
$27,182
|
$27,182
|
$0
|
$0
|
$451,592
|
$27,182
|
|
Total Allowable Under the ARRA:
(4)
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$27,182
|
46
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Compensation
& Benefits Payable Upon Termination
|
Voluntary
Termination
|
Early
Retirement
|
Normal
Retirement
|
Involuntary
Not for Cause Termination
|
For
Cause Termination
|
CIC
Involuntary or Good Reason Termination
|
Death
or Disability
|
| (1) |
|
Carol
A. Schneeberger
|
|||||||
|
2
times Base Annual Compensation
|
-
|
-
|
-
|
-
|
-
|
$377,195
|
-
|
|
Welfare
(2)
|
-
|
-
|
-
|
-
|
-
|
$5,190
|
-
|
|
Unvested
Deferrals under Incentive Award Plan
|
-
|
$13,129
|
$13,129
|
-
|
-
|
$13,129
|
$13,129
|
|
Intrinsic Value of Unvested
Stock Options & SARs (3)
|
-
|
$0
|
$0
|
-
|
-
|
$0
|
$0
|
|
Value
of Unvested Restricted Shares
|
-
|
$5,208
|
$5,208
|
-
|
-
|
$5,208
|
$5,208
|
|
Total:
|
$0
|
$18,337
|
$18,337
|
$0
|
$0
|
$400,722
|
$18,337
|
|
Total Allowable Under the ARRA:
(4)
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$18,337
|
|
David
T. Wesel
|
|||||||
|
2
times Base Annual Compensation
|
-
|
-
|
-
|
-
|
-
|
$259,216
|
-
|
|
Welfare
(2)
|
-
|
-
|
-
|
-
|
-
|
$7,380
|
-
|
|
Unvested
Deferrals under Incentive Award Plan
|
-
|
-
|
$19,405
|
-
|
-
|
$19,405
|
$19,405
|
|
Intrinsic Value of Unvested
Stock Options & SARs (3)
|
-
|
-
|
$0
|
-
|
-
|
$0
|
$0
|
|
Value
of Unvested Restricted Shares
|
-
|
-
|
$7,773
|
-
|
-
|
$7,773
|
$7,773
|
|
Total:
|
$0
|
$0
|
$27,178
|
$0
|
$0
|
$293,774
|
$27,178
|
|
Total Allowable Under the ARRA:
(4)
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$27,178
|
|
(1)
|
Mr.
Yazombek and Ms. Schneeberger were eligible to receive the unvested
mandatory deferral balance earned through the Incentive Plan, to exercise
all unvested stock options and SARs and to have the restrictions on
transfer of their unvested restricted shares lapse, if they elected to
retire as of December 31, 2009, as they had reached retirement eligibility
(50 years of age or older and at least 10 years of service with Peoples as
of December 31, 2009). Vesting of the unvested mandatory
deferral balance and unvested stock options and SARs, and lapsing of the
restrictions on transfer applicable to restricted shares accelerate upon
retirement.
|
|
(2)
|
Under
the terms of the amended and restated change in control agreements, the
executive officer continues to participate in life, medical, and dental
insurance during the term of his or her non-compete agreement (15 months
for Mr. Bradley and 12 months for the other executive
officers).
|
|
(3)
|
None
of the stock options and SARs which would have vested as of December 31,
2009 had any intrinsic value because the grant price of each is greater
than the closing market price of $9.68 on December 31, 2009 of Peoples’
common shares.
|
|
(4)
|
The
executive compensation standards under the ARRA and the Interim Final Rule
prohibit Peoples from making any payments to Senior Executive Officers for
departure from Peoples for any reason during the ARRA Covered Period,
except payments for services rendered or benefits
accrued.
|
Peoples
uses a combination of cash and equity-based compensation to attract and retain
qualified directors to serve on the Board of Directors. Director
compensation elements are designed to:
|
·
|
Ensure
alignment with long-term shareholder
interests;
|
|
·
|
Ensure
Peoples can attract and retain outstanding director
candidates;
|
|
·
|
Recognize
the substantial time commitments necessary to oversee the affairs of
Peoples; and
|
|
·
|
Support
the independence of thought and action expected of
directors.
|
In
determining the overall competitiveness of director compensation, the
Compensation Committee reviewed director compensation data from the Peer Group
described in the “COMPENSATION
DISCUSSION AND ANALYSIS.”
The cash
compensation paid to Board members for their service to Peoples did not change
in 2009 except for the fees payable to the Chairman of the Board and the
Chairman of the Compensation Committee. Peoples’ directors, other
than Mark F. Bradley, receive a quarterly cash fee of $1,500 for their
services. In addition, directors, other than Mark F. Bradley, receive
compensation of $1,250 for each meeting of the Board of Directors
attended. The Compensation Committee believes these fees are
necessary to maintain the caliber of directors necessary to promote long-term
shareholder value.
Directors
are also compensated for each committee meeting they attend. Upon
review of Peer Group data for “per meeting fees” and compensation per director,
on July 21, 2009, the Committee recommended the committee fees remain unchanged,
which were approved by the Board: (i) fees paid to members of the
Executive Committee and the Governance and Nominating Committee are $300 for
each committee meeting attended; and (ii) the fees paid to members of the
Compensation Committee, the Audit Committee, and the Risk Committee are $600 for
each committee meeting attended. In addition to the per meeting fees,
the Chairman of the Compensation Committee receives a cash fee of $5,000
annually. The fee is comparative with the Peer Group average and
remained unchanged following the July 21, 2009 review. Likewise, the
Chairman of the Audit Committee receives an additional cash fee of $5,000
annually, the amount of which is comparative with the Peer Group
average. In addition to the per meeting fees, the Chairman of the
Risk Committee receives a cash fee of $5,000 annually. The
Compensation Committee believes that the additional quarterly fees are
appropriate and commensurate with the overall level of responsibility and
accountability of each Chairman. Likewise, the fees are necessary to
attract and retain Committee Chairmen with the talents and skills the
Compensation Committee believes necessary to promote shareholder
value.
Effective
August 1, 2009, all directors of Peoples are also directors of Peoples
Bank. Directors receive compensation for their service as Peoples
Bank directors in addition to compensation received for their service as
directors of Peoples. On July 21, 2009, the Committee recommended the
following changes to the compensation received by each director of Peoples for
their service as a director of Peoples Bank, effective August 1, 2009: (i)
eliminating the $600 per quarter retainer fee; (ii) $500 fee paid for each
regular meeting attended; (iii) eliminating the $300 fee for each Audit
Committee meeting attended; (iv) $300 fee paid for each meeting attended by
members of the Information Technology Committee and the Investment Committee;
(v) the fees paid to members of the Loan Committee are $600 for each meeting
attended; and (vi) the members of the Trust Investment Committee are
paid a retainer of $300 per quarter.
Mark F.
Bradley received no compensation as a director of Peoples or Peoples Bank during
2009 and continues to receive none in either capacity.
Thomas J.
Wolf also received $150 for each meeting of the Peoples Bank Kentucky/Huntington
Leadership Advisory Board he attended, in addition to the previously-mentioned
fees for his service as a director of Peoples and Peoples Bank.
Directors
who travel a distance of 50 miles or more to attend a Board or committee meeting
of Peoples or Peoples Bank receive a $150 travel fee, which remained unchanged
following the July 21, 2009 review. A single travel fee of $150 is
paid for multiple meetings occurring on the same day. Directors who
stay overnight to attend a meeting are reimbursed for the actual cost of their
overnight accommodations. Peoples believes these fees are reasonable
and partially offset travel expenses incurred by some of the directors living
outside the Marietta, Ohio area, where Board of Directors and committee meetings
are typically held.
In years
prior to 2005, Mark F. Bradley was paid a fee as an employee
director. Mark F. Bradley elected to defer the fees paid to him under
the Deferred Compensation Plan for Directors to be invested in common shares of
Peoples. Under the Deferred Compensation Plan for Directors,
dividends are credited on common shares allocated. The dividends are
converted into a Peoples’ common share equivalent based on the fair market value
of a common share on the first day of each calendar quarter.
The full
Board of Directors approves all equity-based awards made to non-employee
directors of Peoples while the Compensation Committee approves all equity-based
awards made to non-employee directors of Peoples’ subsidiaries. The
grant date for equity-based awards made to non-employee directors of Peoples is
the date of the approval by the Board, the date of election or appointment, or
the third business day following the date on which all material information has
been publicly disclosed, whichever is later. The grant date for the
equity-based awards made to the non-employee directors of Peoples
Bank (only, and not also of Peoples) is the date of the approval by the
Compensation Committee, the date of election or appointment, or the third
business day following the date on which all material information has been
publicly disclosed, whichever is later. The grant price is the
closing price of Peoples’ common shares on The NASDAQ Global Select Market® on
the grant date.
In light
of current business conditions, the Board of Directors did not make any
equity-based awards to directors in 2009 in consideration of Peoples’ recent
financial performance and the decline in the price of Peoples’ common
shares.
The
following summarizes the effect of various termination of service events on the
restricted shares granted to the non-employee directors in past fiscal
years:
|
·
|
Termination of service
as a director of Peoples due to death, disability, or
retirement: The restrictions on the restricted shares
lapse and the restricted shares become fully vested on the termination
date.
|
|
·
|
Termination of service
as a director of Peoples for cause or any reason other than retirement,
death or disability: Any non-vested restricted shares
are forfeited on the termination
date.
|
Since
1991, Peoples has maintained the Deferred Compensation Plan for
Directors. Voluntary participation in the Deferred Compensation Plan
for Directors allows a non-employee director of Peoples, or one of our
subsidiaries, to defer all or part of his or her director’s fees, including the
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 certificate of deposit interest
rate) and a stock account (under which common shares of Peoples are allocated at
fair market value on the first business day of each calendar quarter on (i) the
amount deferred and (ii) subsequent cash dividends on the common shares
previously credited to the account). The only right a participant in
the Deferred Compensation Plan for Directors has with respect to his or her cash
account and/or stock account is to receive distributions upon termination of
service as a director. Distribution of the deferred amounts is made
in a lump sum or annual installments, at the election of the director beginning
(i) on the first business day of the calendar month following the date of the
director's termination of service due to resignation, retirement, death or
otherwise for the portion of the account, if any, that was earned and vested
before January 1, 2005, and any additions attributable to such portion of the
account; and (ii) on the first business day of the calendar month following the
earlier of the directors' death or separation from service as a director for the
remaining portion of the account in the first year in which the person is no
longer a director. For a director who is also a “specified employee”
for purpose of Section 409A of the Internal Revenue Code on the date of the
director’s separation from service, the distribution of the portion of the
account that was earned and vested or after January 1, 2005 will be delayed
until the first business day of the seventh month following the date of
separation of service. The stock account is distributed in common
shares of Peoples or in cash and the cash account is distributed only in
cash.
The
non-employee directors are also eligible to participate in selected employee
benefit programs maintained by Peoples. These include medical and
dental insurance plans and Group Term Life Insurance. During 2009,
Mr. Theisen participated in Peoples’ medical and dental insurance plans pursuant
to the terms of a 1998 agreement in which Peoples agreed to pay his medical and
dental insurance premiums, which includes the individual and company
contributions, as long as he remains a director. The non-employee
directors automatically receive a group term life insurance benefit, the
premiums for which are paid by Peoples. The maximum benefit is
$50,000 for directors age 65 or younger. The maximum benefit
decreases by a percentage for each year beyond age 65 until it reaches a maximum
payout of $5,000 at age 90.
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Name
|
Fees
Earned or Paid in Cash
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
|
All
Other Compensation
|
Total
|
|
(4)
|
(5)
|
(6)
|
(7)
|
(8)
|
|||
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
|
Dave
M. Archer (1)
|
$21,100
|
-
|
-
|
-
|
$7,912
|
$126
|
$29,138
|
|
Carl
L. Baker, Jr.
|
$32,350
|
-
|
-
|
-
|
$220
|
$126
|
$32,696
|
|
Mark
F. Bradley (2)
|
-
|
-
|
-
|
-
|
$1,245
|
-
|
$1,245
|
|
George
W. Broughton
|
$52,850
|
-
|
-
|
-
|
$1,089
|
$126
|
$54,065
|
|
Frank
L. Christy (3)
|
$17,000
|
-
|
-
|
-
|
-
|
$95
|
$17,095
|
|
Wilford
D. Dimit
|
$41,600
|
-
|
-
|
-
|
$20,526
|
$50
|
$62,176
|
|
Richard
Ferguson
|
$39,600
|
-
|
-
|
-
|
$3,883
|
$126
|
$43,609
|
|
Brenda
F. Jones (1)
|
$20,950
|
-
|
-
|
-
|
$7,727
|
$126
|
$28,803
|
|
David
L. Mead
|
$51,650
|
-
|
-
|
-
|
$2,030
|
$126
|
$53,806
|
|
Robert
W. Price
|
$34,500
|
-
|
-
|
-
|
$5,193
|
$126
|
$39,819
|
|
Theodore
P. Sauber
|
$43,050
|
-
|
-
|
-
|
-
|
$38
|
$43,088
|
|
Paul
T. Theisen
|
$42,800
|
-
|
-
|
-
|
$4,925
|
$18,079
|
$65,804
|
|
Joseph
H. Wesel
|
$39,500
|
-
|
-
|
-
|
$7,335
|
$38
|
$46,873
|
|
Thomas
J. Wolf
|
$29,650
|
-
|
-
|
-
|
-
|
$126
|
$29,776
|
|
(1)
|
On
July 23, 2009, Dave M. Archer and Brenda F. Jones were elected directors
of Peoples, effective August 1, 2009. Mr. Archer and Dr. Jones
have served as directors of Peoples Bank since 1993 and 1994,
respectively.
|
|
(2)
|
Mark
F. Bradley, an executive officer and member of the Board of Directors of
both Peoples and Peoples Bank, receives no director
compensation.
|
|
(3)
|
Frank
L. Christy resigned from the Board of Directors of Peoples on September
24, 2009.
|
|
(4)
|
Amounts
in column (b) represent the aggregate quarterly and meeting fees
(including travel fees paid or payable to each
director). Included in these amounts are voluntary elective
deferrals of fees made pursuant to the Deferred Compensation Plan for
Directors. Deferrals of these fees for 2009 were: (a) Dave M.
Archer - $21,100; (b) Wilford D. Dimit - $41,600; (c) Richard Ferguson -
$37,650; (d) Brenda F. Jones - $20,950; (e) David L. Mead - $24,775; and
(f) Robert W. Price - $32,700. All other amounts representing
quarterly, meeting fees, and travel fees for 2009 were paid in
cash. All directors, with the exception of Mr. Bradley, are
non-employee directors of both Peoples and Peoples Bank and are
compensated through retainer fees, board meeting attendance fees and
committee attendance fees, as appropriate, for their service to both
boards.
|
|
(5)
|
No
equity-based awards were granted to Peoples’ directors in
2009.
|
|
(6)
|
No
stock options were granted to Peoples’ directors in 2009. The
aggregate number of common shares underlying non-qualified stock options
outstanding at December 31, 2009 for the following individuals
were: (a) Dave M. Archer – 2,912; (b) Carl L. Baker, Jr. – 7,984; (c)
George W. Broughton – 4,665; (d) Frank L. Christy – 5,313; (e) Wilford D.
Dimit – 7,550; (f) Richard Ferguson – 2,355; (g) Brenda F. Jones – 2,912;
(h) David L. Mead – 600; (i) Robert W. Price – 5,820; (j) Theodore P.
Sauber – 2,355; (k) Paul T. Theisen – 7,550; (l) Joseph H. Wesel – 5,820;
and (m) Thomas J. Wolf – 3,510. All of these outstanding
non-qualified stock options had vested prior to January 1,
2008.
|
|
(7)
|
Amounts
in column (f) represent 2009 earnings on each of the director’s deferred
fees pursuant to the Deferred Compensation Plan for
Directors. For 2009, Mark F. Bradley’s earnings represents
dividends credited on the cumulative amount of director’s fees deferred in
prior years under the terms of the Deferred Compensation Plan for
Directors. Mark F. Bradley has not been paid a fee for his
services as a director of Peoples or of Peoples Bank since December 31,
2004.
|
|
(8)
|
Amounts
in column (g) represent the amount of Peoples’ 2009 annual payment of
premiums for group term life insurance for all directors except Paul T.
Theisen, who also participated in Peoples’ medical and dental insurance
plan. Paul T. Theisen’s group term life insurance premium was
$38 and his medical and dental premium was
$18,041.
|
Each of
Carl L. Baker, Jr., George W. Broughton, David L. Mead, Robert W. Price, and
Paul T. Theisen served as a member of the Compensation Committee of Peoples’
Board of Directors for the entire 2009 fiscal year and continues to serve as a
member. Mr. Frank L. Christy served as a member of the Compensation
Committee until September 24, 2009. On March 10, 2009, Peoples
received notification from Mr. Christy that he intended to resign at some point
in the future from the Peoples Board of Directors due to extensive travel and
meeting commitments associated with his personal business
pursuits. On September 24, 2009, Mr. Christy notified Peoples that
his resignation from the Peoples Board of Directors was to be effective as of
September 24, 2009. The last Compensation Committee meeting Mr.
Christy attended was on March 5, 2009.
None of
the individuals serving on the Compensation Committee has been an officer or
employee of Peoples or any of our subsidiaries. During the 2009
fiscal year, Peoples Bank entered into lending relationships with certain
members of the Compensation Committee, with members of their respective families
and with corporations and organizations as to which they serve as executive
officers or beneficially own more than 10% of the equity
securities. All such loans (i) were made in the ordinary course of
business, (ii) were made on substantially the same terms, including interest
rates charged and collateral required, as those prevailing at the time for
comparable loans with persons not related to Peoples or Peoples Bank, and (iii)
did not involve more than the normal risk of collectability or present other
unfavorable features to Peoples or Peoples Bank. During the 2009
fiscal year, no executive officer of Peoples served on the board of directors or
compensation committee (or other committee serving an equivalent function) of
any other entity, one of whose executive officers served on Peoples’ Board of
Directors or Compensation Committee.
FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2009
Management
has represented to the Audit Committee that Peoples’ audited consolidated
financial statements as of and for the fiscal year ended December 31, 2009,
were prepared in accordance with US GAAP and the Audit Committee has reviewed
and discussed the audited consolidated financial statements with
management.
In
addition, the Audit Committee has discussed and reviewed with E&Y, Peoples’
independent registered public accounting firm, all communications and other
matters required to be discussed by auditing standards generally accepted in the
United States, including those described in Statement on Auditing Standards No.
114, The Auditor’s Communication With Those Charged With Governance, as amended,
and by SEC rules, as well as significant current accounting developments and
issues. The Audit Committee has also reviewed and discussed the
audited consolidated financial statements as of and for the fiscal year ended
December 31, 2009, with E&Y.
The Audit
Committee has received from E&Y the written disclosures and the letter
required by applicable requirements of the Public Company Accounting Oversight
Board regarding E&Y’s communications with the Audit Committee concerning
independence, and has discussed with E&Y the independence of
E&Y. The Audit Committee has discussed with E&Y any
relationships with or services to Peoples or our subsidiaries that may impact
E&Y’s independence and objectivity, including the non-audit services
rendered by E&Y, and has satisfied itself as to E&Y’s
independence.
Based on
the Audit Committee’s reviews and discussions with management and E&Y, and
the Audit Committee’s review of the report of E&Y to the Audit Committee,
the Audit Committee recommended to the Board of Directors that Peoples’ audited
consolidated financial statements be included in Peoples’ Annual Report on
Form 10-K for the fiscal year ended December 31, 2009 for filing with
the SEC.
Submitted
by the Audit Committee of Peoples’ Board of Directors:
David L.
Mead (Chairman), Carl L. Baker, Jr., Richard Ferguson, Dr. Brenda F.
Jones, Theodore P. Sauber and Thomas J. Wolf.
On
February 25, 2010, the Audit Committee appointed E&Y as Peoples’ independent
registered public accounting firm for the fiscal year ending December 31,
2010. E&Y has served as Peoples’ independent auditors/independent
registered public accounting firm since 1995.
Fees for
services rendered by E&Y for each of the 2009 fiscal year and the 2008
fiscal year were:
|
2009
|
2008
|
||
|
Audit
Fees (1)
|
$568,736
|
$591,300
|
|
|
Audit-Related
Fees (2)
|
-
|
37,500
|
|
|
Tax
Fees (3)
|
41,850
|
48,400
|
|
|
Total
|
$610,586
|
$677,200
|
|
____________________
|
(1)
|
Audit
Fees pertain to professional services rendered in connection with the
audit of Peoples’ annual financial statements and review of financial
statements included in Peoples’ Quarterly Reports on Form 10-Q, as well as
internal control testing for compliance with Section 404 of the
Sarbanes-Oxley Act of 2002.
|
|
(2)
|
Audit-Related
Fees pertain to services rendered in connection with statutory audits and
accounting consultation.
|
|
(3)
|
Tax
Fees pertain to services rendered for tax planning and advice, tax
compliance, and assistance with tax audits and
appeals.
|
E&Y
did not render any other services during the 2009 fiscal year or the 2008 fiscal
year. All of the services described under “Audit-Related Fees” or
“Tax Fees” above were pre-approved by the Audit Committee.
The Audit
Committee has adopted, and the Board of Directors has ratified, an Audit and
Non-Audit Services Pre-Approval Policy (the “Pre-Approval Policy”), which sets
forth the procedures and conditions pursuant to which services proposed to be
performed by the independent registered public accounting firm may be
pre-approved. Proposed services may either be pre-approved without
consideration of specific case-by-case services by the Audit Committee (“general
pre-approval”), or require the specific pre-approval of the Audit Committee
(“specific pre-approval”). Appendices to the Pre-Approval Policy
describe the Audit, Audit-Related, Tax and All Other services that have the
general pre-approval of the Audit Committee. The term of any general
pre-approval is 12 months from the date of pre-approval, unless the Audit
Committee states otherwise. The Audit Committee will annually review
and pre-approve the services that may be provided by the independent registered
public accounting firm without obtaining specific pre-approval from the Audit
Committee. The Audit Committee will add to or subtract from the list
of general pre-approved services from time to time, based on subsequent
determinations.
The
Pre-Approval Policy does not delegate to management the Audit Committee’s
responsibilities to pre-approve services performed by the independent registered
public accounting firm. The Audit Committee, however, may delegate
pre-approval authority to one or more of its members. The member(s)
to whom such authority is delegated must report, for informational purposes
only, any pre-approval decisions to the Audit Committee at its next scheduled
meeting.
All
requests or applications for services to be provided by the independent
registered public accounting firm will be submitted to the Chief Financial
Officer of Peoples, and must include a detailed description of the services to
be rendered. The Chief Financial Officer will determine whether such
services are included within the list of services that have received the general
pre-approval of the Audit Committee. The Audit Committee will be
informed on a timely basis of any such services rendered by the independent
registered public accounting firm. Services that require specific
pre-approval by the Audit Committee will be submitted to the Audit Committee by
both the independent registered public accounting firm and the Chief Financial
Officer, and must include a joint statement as to whether, in their view, the
request or application is consistent with the SEC’s rules on auditor
independence. Any proposed services exceeding pre-approved cost
levels or budgeted amounts will also require specific pre-approval by the Audit
Committee.
The Audit
Committee has designated the Auditor of Peoples, as head of the Internal Audit
Department (the “Auditor”), to monitor the performance of all services provided
by the independent registered public accounting firm and to determine whether
such services are in compliance with the Pre-Approval Policy. The
Auditor reports to the Audit Committee on a periodic basis as to the results of
this monitoring. Both the Auditor and management are to immediately
report to the Chairman of the Audit Committee any breach of the Pre-Approval
Policy that comes to the attention of the Auditor or any member of
management.
The Audit
Committee also reviews the Auditor’s annual internal audit plan to determine
whether the plan provides for adequate monitoring of the independent registered
public accounting firm’s services.
PROPOSED
AMENDMENT TO SECTION 2.01 OF PEOPLES’ CODE OF REGULATIONS
The full text of the proposed amendment
to Section 2.01 of Peoples’ Code of Regulations is attached to this Proxy
Statement as Appendix A.
The
Governance and Nominating Committee of Peoples’ Board of Directors has
determined that the recommended adoption of the amendment to Section 2.01 of
Peoples’ Code of Regulations will enhance the ability of the Committee to
identify and consider a more diverse group of candidates as potential Board
members. In accordance with the proposed amendment, when identifying
nominees to serve as director, the Governance and Nominating Committee will
consider candidates with diverse business and professional experience, skills,
gender, and ethnic background, as appropriate, in light of the current
composition and needs of the Board of Directors.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT PEOPLES’ SHAREHOLDERS VOTE “FOR”
THE APPROVAL AND ADOPTION OF THE AMENDMENT TO SECTION 2.01 OF PEOPLES’ CODE OF
REGULATIONS.
The
affirmative vote of the holders of at least a majority of the outstanding common
shares is required to approve and adopt the amendment to Section 2.01 of
Peoples’ Code of Regulations. The effect of an abstention is the same
as a vote “AGAINST.”
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit
Committee of Peoples’ Board of Directors has appointed E&Y to serve as
Peoples’ independent registered public accounting firm for the fiscal year
ending December 31, 2010, and recommends that Peoples’ shareholders vote for the
ratification of that appointment. E&Y audited Peoples’
consolidated financial statements as of and for the fiscal year ended December
31, 2009 and the effectiveness of Peoples’ internal control over financial
reporting as of December 31, 2009. Representatives of E&Y are
expected to be present at the Annual Meeting and will be given the opportunity
to make a statement if they so desire and to respond to appropriate
questions.
The
appointment of Peoples’ independent registered public accounting firm is made
annually by the Audit Committee. Peoples has determined to submit the
appointment of the independent registered public accounting firm to the
shareholders for ratification because of such firm’s role in reviewing the
quality and integrity of Peoples’ consolidated financial statements and internal
control over financial reporting. Before appointing E&Y, the
Audit Committee carefully considered that firm’s qualifications as Peoples’
independent registered public accounting firm and the audit scope.
THE
AUDIT COMMITTEE AND THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT PEOPLES’
SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF
E&Y.
The
affirmative vote of a majority of the common shares represented at the Annual
Meeting, in person or by proxy, and entitled to vote on the proposal, is
required to ratify the appointment of E&Y as Peoples’ independent registered
public accounting firm for the fiscal year ending December 31,
2010. The effect of an abstention is the same as a vote
“AGAINST.” Even if the appointment of E&Y is ratified by the
shareholders, the Audit Committee, in its discretion, could decide to terminate
the engagement of E&Y and to engage another firm if the Audit Committee
determines such action is necessary or desirable. If the appointment
of E&Y is not ratified, the Audit Committee will reconsider (but may decide
to maintain) the appointment.
NON-BINDING
ADVISORY VOTE ON PEOPLES’ EXECUTIVE COMPENSATION
The ARRA
was signed into law on February 17, 2009. In addition to a wide
variety of programs intended to stimulate the economy, the ARRA imposes
significant new requirements for and restrictions relating to the compensation
arrangements of financial institutions that received government funds through
TARP, including institutions like Peoples that participated in the Capital
Purchase Program prior to the ARRA. These requirements and
restrictions apply throughout the ARRA Covered Period.
One of
the requirements is that for any meeting of shareholders held during the ARRA
Covered Period, for which proxies will be solicited for the election of
directors, Peoples must provide a separate, non-binding advisory vote to the
shareholders to approve compensation, as described in Peoples’ proxy
statement. This is commonly referred to as a “Say on Pay”
proposal.
As a
shareholder of Peoples, you are being provided with the opportunity to endorse
or not endorse Peoples’ executive program and policies through the following
resolution:
“RESOLVED, that the shareholders
approve the compensation of Peoples’ executives, as described in the
COMPENSATION DISCUSSION AND ANALYSIS, in the COMPENSATION COMMITTEE REPORT and
the tabular and accompanying narrative disclosure contained on pages 22 – 47 in
this proxy statement.”
Because
your vote is advisory, it will not be binding upon Peoples’ Board of Directors
or the Compensation Committee, overrule any decision made by the Board of
Directors or the Compensation Committee, or create or imply any additional
fiduciary duty by the Board of Directors or the Compensation
Committee. The Compensation Committee may, however, take into account
the outcome of the vote when considering future executive compensation
arrangements.
We
believe that Peoples’ compensation policies and procedures are reasonable in
comparison both to Peoples’ peer bank holding companies and to Peoples’
performance during the 2009 fiscal year. We also believe that
Peoples’ compensation program aligns with the interests of our shareholders in
the long-term value of Peoples as well as the components that drive long-term
value.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL, IN A
NON-BINDING ADVISORY VOTE, OF PEOPLES’ EXECUTIVE COMPENSATION
The
affirmative vote of a majority of the common shares represented at the Annual
Meeting, in person or by proxy, and entitled to vote on the proposal is required
to approve, in a non-binding advisory vote, Peoples’ executive compensation
disclosed in this proxy statement. The effect of an abstention is the
same as a vote “AGAINST” the
proposal.
The SEC
has implemented rules regarding the delivery of proxy materials to
households. This method of delivery, often referred to as
“householding,” would permit Peoples to send a single annual report, proxy
statement or Notice of Internet Availability of Proxy Materials, as applicable,
to any household at which two or more different shareholders reside if Peoples
reasonably believes such shareholders are members of the same family or
otherwise share the same address or that one shareholder has multiple
accounts. In each case, the shareholder(s) must consent to the
householding process, and may at any time request that Peoples promptly deliver
to such shareholder(s) a separate copy of the proxy materials subject to
householding. Each shareholder would continue to receive a separate
notice of meeting of shareholders and proxy card. The householding
procedure is intended to reduce the volume of duplicate information shareholders
receive and reduce Peoples’ expenses. Peoples does not currently
practice householding, but may institute householding in the future and will
notify registered shareholders affected by householding at that
time.
Many
brokers, financial institutions and other holders of record have instituted
householding. If your family has one or more “street name” accounts
under which you beneficially own common shares of Peoples, you may have received
householding information from your broker, financial institution or other record
holder in the past. Please contact the record holder directly if you
have questions, require additional copies of this proxy statement or Peoples’
2009 Annual Report or if you wish to revoke your decision to household and
thereby receive multiple copies of proxy materials. You should also
contact the record holder if you wish to institute householding.
As of the
date of this proxy statement, the Board of Directors knows of no matter that
will be presented for action by the shareholders at the Annual Meeting other
than those matters discussed in this proxy statement. However, if any
other matter requiring a vote of the shareholders is properly presented at the
Annual Meeting, the individuals acting under the proxies solicited by the Board
of Directors will vote and act according to their best judgment in light of the
conditions then prevailing, to the extent permitted under applicable
law.
It is
important that your proxy card be completed, signed and returned
promptly. If you do not expect to attend the Annual Meeting in
person, please complete, sign and return the accompanying proxy card in the
self-addressed envelope furnished herewith.
By
Order of the Board of Directors,
|
|
Mark
F. Bradley
|
|
|
President
and Chief Executive Officer
|
Appendix
A
Proposed
Amendment to Section 2.01
of
Code of Regulations of
Peoples
Bancorp Inc.
Section
2.01 shall be amended and restated in its entirety as follows:
Section 2.01. Authority and
Qualifications.
Except where the law, the Articles or
the Regulations otherwise provide, all authority of the corporation shall be
vested in and exercised by its directors. Directors must be
shareholders of the corporation.
No person shall be
eligible to be elected as a director unless he shall be in the position of chief
executive officer or active leadership within his business or professional
interest which shall be located within the geographic area in which the
corporation or any of its subsidiaries operate or do business or shall serve as
an executive officer of the corporation or any of its subsidiaries; except that
this qualification shall not apply to a person elected as an initial director of
the corporation. Any person nominated by the directors of the
corporation for election as a director shall conclusively be deemed, for all
corporate purposes, to have all of the qualifications required by this Section
2.01, other than the required ownership of shares of the
corporation. A director shall not be eligible for nomination and
re-election as a director of the corporation after five years after such
person's executive or leadership position within his business or professional
interest which qualifies such person as a director of the corporation
terminates; provided, however, that such five-year limitation shall not be
applicable to a person who retires as chairman of the board or chief executive
officer of the corporation. When a person's eligibility as a director
of the corporation terminates, whether because of change in share ownership,
position or residency, such person shall submit his resignation as a director
effective at the pleasure of the board; provided, however, that in no event
shall such person be nominated and re-elected as a
director.
Peoples Bancorp (w/logo)® is a
federally registered service mark of Peoples Bancorp Inc.
PEOPLES
BANCORP INC.
ANNUAL
MEETING OF SHAREHOLDERS
Thursday,
April 22, 2010
10:00
a.m., Eastern Daylight Saving Time
Holiday
Inn
701
Pike Street
Marietta,
Ohio 45750
|
|
Peoples Bancorp Inc.
P.O.
Box 738
Marietta,
Ohio 45750
|
proxy
|
This
proxy is solicited by the Board of Directors for use at the Annual Meeting of
Shareholders to be held on April 22, 2010.
The
common shares of Peoples Bancorp Inc. ("Peoples") as to which you have voting
authority, including those held on your behalf in a trust account, under
Peoples' Dividend Reinvestment and Stock Purchase Plan or under Peoples’
Retirement Savings Plan, will be voted as you specify on the reverse side of
this proxy card.
If
no choice is specified, the common shares of Peoples represented by this proxy
card will be voted, except in the case of common shares held under Peoples’
Retirement Savings Plan and broker non-votes, where applicable, “FOR” the
election of the director nominees listed in Item No. 1, “FOR” the Proposal in
Item No. 2, “FOR” the Proposal in Item No. 3 and “FOR” the Proposal in Item No.
4.
By
signing this proxy card, you revoke all prior proxies to vote the common shares
of Peoples you are entitled to vote at the Annual Meeting of Shareholders and
appoint Mark F. Bradley and Richard Ferguson, and each of them with full power
of substitution, as your proxies to attend the Annual Meeting of Shareholders
and vote your common shares of Peoples on the matters shown on the reverse side
and in their discretion, to the extent permitted by applicable law, on any other
matters (none known at the time of solicitation of this proxy) which may
properly come before the Annual Meeting of Shareholders and all adjournments
thereof.
Peoples Bancorp (w/logo)® is
a federally registered service mark of Peoples Bancorp Inc.
See
reverse for voting instructions.
Shareowner ServicesSM
P.O.
Box 64945
St. Paul, MN 55164-0945
Address Change? Mark box, sign, and
indicate changes below: □
TO
VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS
BELOW,
SIMPLY
SIGN, DATE, AND RETURN THIS PROXY CARD.
The
Board of Directors Recommends a Vote “FOR” All Director Nominees Listed in Item
No. 1, “FOR” the Proposal in Item No. 2, “FOR” the Proposal in Item No. 3 and
“FOR” the Proposal in Item No. 4.
1. Election of
directors 01 Dave M.
Archer
04 Paul T.
Theisen
□ Vote FOR
□ Vote
WITHHELD
for a three-year
term 02 David L. Mead
05 Thomas J.
Wolf all
nominees from
all nominees
expiring in
2013:
03 Robert W.
Price (except
as marked)
(Instructions:
To withhold authority to vote for any indicated nominee,
write
the number(s) of the nominee(s) in the box provided to the right.)
2. Approval
and adoption of an amendment to Section 2.01 of Peoples’
Code
of Regulations to clarify the qualifications required for an individual to
be
o For
o
Against
o
Abstain
eligible to be elected as a director of Peoples.
3. Ratification
of the appointment of Ernst & Young LLP as Peoples’
independent registered public accounting firm for the fiscal year
ending
o For
o
Against
o
Abstain
December 31, 2010.
4. Approval,
in a non-binding advisory vote, of Peoples’ executive
compensation
disclosed in the Proxy Statement for the
Annual Meeting of
Shareholders.
o For
o
Against
o Abstain
THE
COMMON SHARES REPRESENTED BY THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE
VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED EXCEPT IN THE CASE
OF COMMON SHARES HELD UNDER PEOPLES’ RETIREMENT SAVINGS PLAN AND BROKER
NON-VOTES, WHERE APPLICABLE, FOR THE ELECTION OF
ALL DIRECTOR NOMINEES LISTED IN ITEM NO. 1, FOR THE PROPOSAL IN
ITEM NO. 2, FOR
THE PROPOSAL IN ITEM NO. 3 AND FOR THE PROPOSAL IN
ITEM NO. 4. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE
ANNUAL MEETING OF SHAREHOLDERS OR ANY ADJOURNMENT THEREOF OR IF A NOMINEE FOR
ELECTION AS A DIRECTOR NAMED IN THE PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE, THE COMMON
SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED IN THE DISCRETION OF THE
INDIVIDUALS DESIGNATED TO VOTE THIS PROXY, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ON SUCH MATTERS OR FOR SUCH SUBSTITUTE NOMINEE(S) AS THE DIRECTORS MAY
RECOMMEND.
Date
_____________________________________
Signature(s)
in Box
|
|
Please
sign exactly as your name(s) appears on the proxy card. If held in joint
tenancy, all persons must sign. Trustees, administrators, executors, guardians,
attorneys, agents, etc., must include title and authority. Corporations must
provide full name of corporation and title of authorized officer signing the
proxy card.