CSB BANCORP, INC. DEF 14A
SCHEDULE 14A INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to 240.14a-12 |
CSB 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):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies:. |
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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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Proposed maximum aggregate value of transaction
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Fee paid previously with preliminary materials. |
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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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Date Filed: |
CSB BANCORP, INC.
91 North Clay Street
Millersburg, Ohio 44654
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
APRIL 26, 2006
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the Meeting) of CSB Bancorp,
Inc. (CSB) will be held at Carlisle Inn, Walnut Creek, Ohio, on Wednesday, April 26, 2006, at
7:00 p.m. local time, for the following purposes:
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To elect three directors for three-year terms ending in 2009; and |
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To transact any other business that may properly come before the Meeting or any
adjournments thereof. |
Shareholders of record at the close of business on March 1, 2006, are entitled to vote at the
Meeting and at any adjournments thereof.
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BY ORDER OF THE BOARD OF DIRECTORS
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/s/ Robert K. Baker
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Robert K. Baker |
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Chairman of the Board |
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Millersburg, Ohio
March 24, 2006
THE PROMPT RETURN OF PROXIES WILL SAVE CSB THE EXPENSE OF A
FURTHER REQUEST FOR PROXIES IN ORDER TO INSURE A QUORUM. PLEASE
NOTE THAT YOUR VOTE CANNOT BE COUNTED UNLESS YOU SIGN AND RETURN
THE PROXY CARD OR ATTEND THE MEETING AND VOTE IN PERSON.
CSB BANCORP, INC.
91 North Clay Street
Millersburg, Ohio 44654
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 26, 2006
GENERAL
The enclosed proxy is solicited by the Board of Directors of CSB Bancorp, Inc. (CSB), the
principal executive offices of which are located at 91 North Clay Street, Millersburg, Ohio 44654,
in connection with the Annual Meeting of Shareholders (the Meeting) of CSB to be held on
Wednesday, April 26, 2006, at the Carlisle Inn, Walnut Creek, Ohio, at 7:00 p.m. local time. This
proxy statement and the accompanying notice of meeting are first being mailed to shareholders on or
about March 24, 2006.
The Meeting has been called for the following purposes: (i) to elect three directors, each for
a three-year term and; (ii) to transact any other business that may properly come before the
Meeting or any adjournment thereof.
REVOCATION OF PROXIES, DISCRETIONARY AUTHORITY
AND CUMULATIVE VOTING
Shares of CSBs common stock, par value $6.25 per share (the Common Shares), can be voted at
the Meeting only if the shareholder is represented by proxy or is present in person. Shareholders
who execute proxies retain the right to revoke them at any time. Unless so revoked, the shares
represented by such proxies will be voted at the Meeting and all adjournments thereof. Proxies may
be revoked by written notice to the Secretary of CSB (addressed to: CSB Bancorp, Inc., 91 North
Clay Street, Millersburg, Ohio 44654, Attention: Ms. Margaret L. Conn, Secretary) or by the filing
of a later dated proxy prior to a vote being taken on a particular proposal at the Meeting. A
proxy will not be voted if a shareholder attends the Meeting and votes in person. Proxies
solicited by the Board of Directors will be voted in accordance with the directions given therein.
Where no instructions are indicated, proxies will be voted for the nominees for directors set forth
below or as otherwise described herein in the event cumulative voting for directors is properly
requested. The proxy confers discretionary authority on the persons named therein to vote with
respect to (i) the election of any person as a director where the nominee is unavailable or unable
to serve, (ii) matters incident to the conduct of the Meeting and (iii) any other business that may
properly come before the Meeting or any adjournment thereof. At this time, it is not known whether
there will be cumulative voting for the election of directors at the Meeting. If any shareholder
demands cumulative voting for the election of directors at the Meeting, your proxy will give the
individuals named on the proxy full discretion and authority to vote cumulatively, and in their
sole discretion to allocate votes among any or all of the nominees for director, unless authority
to vote for any or all of the nominees is withheld.
The enclosed proxy is being solicited by CSB and the cost of soliciting proxies will be borne
by CSB. In addition to use of the mails, proxies may be solicited personally or by telephone,
telegraph or telefax by directors, officers and employees of CSB.
1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Shareholders of record as of the close of business on March 1, 2006, (the Record Date), are
entitled to (i) notice of the Meeting and (ii) one vote on each matter to be considered at the
Meeting for each Common Share held on that date. As of the Record Date, there were 2,567,405
Common Shares issued and outstanding. The presence at the Meeting in person or by proxy of at
least a majority of such shares will be required to constitute a quorum at the Meeting. Common
Shares held by holders who abstain from voting and all Common Shares held by brokers who do not
have the discretionary authority to vote on certain matters will be included in determining the
presence of a quorum. Consequently, an abstention or a broker non-vote has the same effect as a
vote against a proposal or Director nominees, as each abstention or broker non-vote would be one
less vote in favor of a proposal or for a Director nominee. Shareholders will not be entitled to
dissenters rights with respect to any matter to be considered at the Meeting.
The following table sets forth the Common Shares beneficially owned by each person, group or
entity owning more than five percent of CSBs outstanding Common Shares as of the Record Date.
This information was obtained from a Schedule 13D/A filed with the Securities Exchange Commission
by the Committee of Concerned CSB Shareholders for a Better Bank on January 3, 2002.
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Amount and Nature of Beneficial |
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Percent of Common Shares |
Name and Address of Beneficial Owner |
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Ownership |
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Outstanding |
The Committee of Concerned
CSB Shareholders for a Better
Bank, 1450 Fox Run Lane,
Canfield, Ohio 444061 |
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231,836.594 |
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9.03 |
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The Committee consists of Richard G. Elliott, Ted W. DeHass, Don E. Sprankle, Gloria
L. Miller, Darwin L. Snyder and Victor R. Snyder. This information is based on the January 3, 2002
Schedule 13D/A filing by the Committee. |
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The percent of Common Shares outstanding was determined based on the January 3, 2002
Schedule 13D/A filing evidencing ownership of the Committee, and the number of CSB Common Shares
outstanding on the Record Date. |
2
The following table sets forth, as of the Record Date, (i) the Common Shares beneficially
owned by each director, nominee for director and named executive officer of CSB or any person who
has acted in such capacity since the beginning of the last fiscal year of CSB and (ii) the Common
Shares beneficially owned by all current executive officers and directors as a group.
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Amount and Nature of |
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Percent of Common Shares |
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Name of Beneficial Owner |
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Beneficial Ownership 1 |
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Outstanding |
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Director |
Robert K. Baker 2 |
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2,469.4618 |
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* |
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Yes |
Ronald E. Holtman 3 |
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1,000 |
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* |
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Yes |
J. Thomas Lang 4 |
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6,058.7380 |
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* |
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Yes |
John J. Limbert 5 |
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25,973.0540 |
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* |
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Yes |
Daniel J. Miller 6 |
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39,285.1151 |
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1.53 |
% |
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Yes |
Jeffery A. Robb, Sr. 7 |
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1,312.2252 |
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* |
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Yes |
Samuel M. Steimel 8 |
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25,322.6153 |
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* |
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Yes |
Eddie L. Steiner 9 |
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1,113.3362 |
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* |
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Yes |
John R. Waltman 10 |
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15,228.2863 |
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* |
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Yes |
Rick L. Ginther 11 |
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2,000 |
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* |
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No |
Paul D. Greig |
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2,000 |
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* |
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No |
Paula J. Meiler |
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3,716.975 |
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* |
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No |
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Total of current Directors and
Executive Officers as a Group
(14 persons) |
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128,729.3939 |
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5.01 |
% |
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Represents less than 1% of Common Shares outstanding as of the Record Date. |
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The Securities and Exchange Commission has defined beneficial owner of a security to
include any person who has or shares voting power or investment power with respect to any such
security or who has the right to acquire beneficial ownership of any such security within sixty
days. |
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Includes 698.2876 shares owned by Bonnie L. or Robert K. Baker in joint tenancy with
right of survivorship, 450 shares owned by Bonnie L. Baker, 500 shares owned by the Robert K. Baker
IRA, and 821.1742 shares owned by Bakerwell, Inc., of which Mr. Baker is co-owner. |
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These shares are owned by the Ronald E. Holtman IRA. |
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Includes 453.7567 shares owned by J. Thomas Lang, 4,649.7095 shares owned by Karen J.
Lang, 259.0760 shares owned by Kendra S. Lang, 494.8176 shares owned by the J. Thomas Lang IRA and
201.3782 shares owned by the Karen J. Lang IRA. |
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Includes 15,000 shares owned by Mr. Limberts IRA and 10,000 stock options granted to
Mr. Limbert that are currently exercisable and 973.054 shares owned by Mr. Limberts 401(k)
plan. Mr. Limbert resigned as a director and executive officer of CSB
and its subsidiaries effective March 3, 2006. |
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Includes 9,786 shares owned by Daniel J. Miller, 10,111 shares owned by Mary F.
Miller, 1,000 shares owned by Daniel J. or Mary F. Miller in joint tenancy with right of
survivorship and 18,388.1151 shares owned by the East Holmes Family Care Employees Pension Plan. |
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Includes 100 shares owned by Jeffery A. Robb, Sr., and 1,212.2252 shares owned by the
Jeffery A. Robb, Sr. IRA. |
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Includes 16,767.5102 shares owned by Samuel M. Steimel, 7,012 shares owned by Ronda P.
Steimel, 881 shares owned by the Samuel M. Steimel IRA, 122.2749 shares owned by the Ronda P.
Steimel IRA, 11.60 shares owned by Samuel M. Steimel, custodian for Benjamin Steimel Ladrach and
William Frederick Ladrach and 538.2302 shares owned by Ronda P. Steimel, custodian for Zaccary
Allen Patterson, Cassandra Faye Patterson, Skylar J. Patterson, and Brogan M. Steimel. |
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These shares are owned by Eddie L. Steiner or Jane M. Steiner in joint tenancy with
right of survivorship. |
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Includes 7,052.0928 shares owned by John R. Waltman, 7,839.2921 shares owned by the
John R. Waltman IRA and 336.9014 shares owned by Ruth A. Waltman. |
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Mr. Ginther was named Interim Chief Executive Officer of CSB effective March 3,
2006. Mr. Ginthers ownership includes 1,000 shares owned by Rick L. Ginther or Helen Ginther in
joint tenancy with right of survivorship and 1,000 stock options granted to Mr. Ginther that are
currently exercisable. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires CSBs officers, directors and
persons who own more than ten percent of a registered class of CSBs equity securities to file
reports of ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten percent shareholders are required to furnish CSB with
copies of all Section 16(a) forms they file. During 2005, based solely on CSBs review of the
copies of such forms received by it and by statements of officers and directors that they complied
with all applicable filing requirements, CSBs officers, directors and greater than ten percent
beneficial owners have complied with all filing requirements applicable to them.
PROPOSAL 1:
ELECTION OF DIRECTORS
CSBs Code of Regulations provide that its business shall be managed by a board of directors
of not less than three and not more than twenty-five persons. CSBs Regulations divide such
directors into three classes, as nearly equal in number as possible, and set their terms at three
years. The Board of Directors, pursuant to CSBs Code of Regulations, has established the number
of directors at nine.
Assuming that at least a majority of the issued and outstanding Common Shares are present at
the Meeting so that a quorum exists, the three nominees for director of CSB receiving the most
votes will be elected as directors. Shareholders have the right to vote cumulatively in the
election of directors. In order to exercise the right to vote cumulatively, a shareholder must give
written notice to the President, a Vice President or the Secretary of CSB not less than forty-eight
hours before the time fixed for the meeting, and the shareholders demand for cumulative voting
must be announced at the commencement of the meeting by or on behalf of the shareholder. If
cumulative voting is elected, a shareholder may cast as many votes in an election of directors as
the number of directors to be elected multiplied by the number of shares held. The Board of
Directors has nominated Messrs. Ronald E. Holtman and Eddie L. Steiner, and Dr. Daniel J. Miller,
to serve until the 2009 Annual Meeting of Shareholders, and until their respective successors are
elected and qualified. Messrs. Holtman and Steiner, and Dr. Miller, are incumbent directors whose
present terms expire at the Meeting.
4
If it is intended that Common Shares represented by the accompanying form of proxy will be
voted for the election of nominees, please so indicate on the proxy card. (If you do not wish your
shares to be voted for particular nominees, please so indicate on the proxy card.) If one or more
of the nominees should, at the time of the Meeting, be unavailable or unable to serve as a
director, the shares represented by the proxies will be voted to elect the remaining nominee and
any substitute nominee designated by the Board of Directors. The Board of Directors knows of no
reason why any of the nominees will be unavailable or unable to serve. At this time, it is not
known whether there will be cumulative voting for the election of directors at the Meeting. If any
shareholder properly demands cumulative voting for the election of directors at the Meeting, your
proxy will give the individuals named on the proxy full discretion and authority to vote
cumulatively and in their sole discretion to allocate votes among any or all of the nominees,
unless authority to vote for any or all of the nominees is withheld.
The Board of Directors recommends that shareholders vote FOR the election of the nominees.
The following table sets forth information concerning nominees for director of CSB, including
their principal occupation or employment during the past five years. Each nominee, if elected,
will serve for a term expiring at the Annual Meeting of Shareholders in 2009.
NOMINEES FOR DIRECTOR
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Year First |
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Positions |
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Elected or |
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Current |
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Held with |
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Appointed |
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Term to |
Name |
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Age |
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Principal Occupation 1 |
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CSB |
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Director |
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Expire |
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Attorney; Logee, Hostetler, |
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Ronald E. Holtman |
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63 |
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Stutzman and Lehman |
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Director |
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2001 |
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2006 |
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Retired Physician, East |
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Daniel J. Miller |
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66 |
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Holmes Family Care, Inc. |
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Director |
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1979 |
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2006 |
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Vice President, Production, |
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Eddie L. Steiner |
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50 |
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Smith Dairy Products Company |
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Director |
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2001 |
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2006 |
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Unless otherwise noted herein, each of the Nominees for Director has been engaged in
the occupation and employment described above for the past five years. |
5
The following table sets forth information concerning (i) incumbent directors of CSB who are
not nominees for election at the Meeting and (ii) the other current executive officers of CSB.
Included in the table is information regarding each persons principal occupation or employment
during the past five years.
DIRECTORS AND EXECUTIVE OFFICERS
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Year First |
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Elected or |
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Appointed |
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Director or |
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Current |
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Positions Held with |
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Officer, As |
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Term to |
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Age |
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Principal Occupation1 |
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CSB |
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Applicable |
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Expire |
Robert K. Baker
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51 |
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Co-owner and Controller,
Bakerwell, Inc.
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Director
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2001 |
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2008 |
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J. Thomas Lang
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62 |
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Veterinarian, Dairy Farmer,
Spring Hill Farm, Inc.
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Director
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1993 |
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2008 |
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Jeffery A. Robb, Sr.
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56 |
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President and Chairman, Robb
Companies, Inc. 2
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Director
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2001 |
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2007 |
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Samuel M. Steimel
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48 |
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Attorney, The Steimel Law Office
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Director
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1989 |
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2007 |
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John R. Waltman
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64 |
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Attorney, Critchfield,
Critchfield & Johnston, LLC.
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Director
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2001 |
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2007 |
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Rick L. Ginther3
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55 |
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Banker
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Interim Chief
Executive Officer
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2003 |
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N/A |
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Paul D. Greig4
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60 |
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Banker
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Senior Vice
President and
Chief
Operations/Information Officer
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2003 |
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N/A |
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Paula Meiler5
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51 |
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Banker
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Senior Vice
President and Chief
Financial Officer
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2004 |
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N/A |
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Unless otherwise noted herein, each of the Directors has been engaged in the
occupations and employment described above for the past five years. |
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Mr. Robb held the position of Chairman and Manager of Robb, Dixon & Company until
2000, and President and Chief Executive Officer of Robb Companies, Inc. from 2000 to present. In
2002, he was named Interim President and Chief Executive Officer of Exchange Bancshares, Inc. and
The Exchange Bank. He held that position until December 31, 2003. |
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Mr. Ginther has served as Interim Chief Executive Officer, March 3, 2006 to
present, Senior Vice President and Chief Lending Officer, 2003 to 2006, President, Canton Region,
of Bank One from 2002 to 2003, and in various positions with Bank One Corporation and predecessor
organizations from 1973 to 2002. |
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Mr. Greig retired from Bank One, Corporation in 2002 from the position of National
Retail Support Services Manager. During retirement from 2002 through 2003 he was a substitute
teacher in two public school systems. |
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Ms. Meiler has served as Senior Vice President and Chief Financial Officer of CSB
Bancorp since August 9, 2004. Previous positions include Chief Financial Officer and Treasurer of
Consumers Bancorp Inc. from 1999 through 2004 and Comptroller of The Citizens Banking Company (nka
Sky Bank) and Citizens Bancshares Inc. from 1981 to 1999. |
The Board of Directors conducts its business through meetings of the Board and its committees.
Regular meetings of the Board of Directors are held on a monthly basis. The Board of Directors held
12 regular, and 1 special meeting during the year ended December 31, 2005. Each incumbent
director attended at least 75% of the aggregate of the total meetings of the Board of Directors and
the total number of meetings held by all committees of the Board on which directors served in 2005.
Due to medical reasons, Mr. Steimel attended 38% of the board meetings in 2005, and 83% of board
committee meetings in 2005. Mr. Steimels absences were excused by the remainder of the board.
Directors receive no compensation from CSB. In addition, each director of CSB also serves as a
director of The Commercial and Savings Bank, a wholly-owned banking subsidiary of CSB (the Bank),
for which outside directors were compensated at a rate of $10,000 annually, plus $500 per Board
Meeting attended and $500 per Committee Meeting. During 2005, CSB directors could elect to
participate in The Commercial and Savings Bank employee benefit health insurance plan on the same
basis as bank employees.. For the year ended December 31, 2005, indirect compensation in the form
of employer paid health benefits aggregated $31,003, for all outside directors, with the exception
of Mr. Steiner, who did not participate in 2005. Effective December 2005, with the exception of
three directors whose coverage has been grandfathered, all directors waived coverage. Mr. Limbert,
a former inside Director, received no compensation for director fees in 2005.
CSB has a Nominating Committee, which recommends to the Board the nominees for election as
directors. The Nominating Committee currently consists of Messrs. Steimel, Waltman and Baker. The
Nominating Committee will consider candidates for nomination as a director, which are recommended
by shareholders, directors and other sources. The Nominating Committee met two times in 2005. Under
the terms of the Nominating Committee Charter, which is available on the Companys website, the
Committee is responsible for developing and implementing a process and guidelines for the selection
of individuals for nomination to the Board of Directors and considering incumbent directors for
nomination and re-election.
In considering and evaluating potential candidates for positions on the CSB Board of
Directors, and consistent with its Charter, the Nominating Committee considers, among other things,
the potential candidates knowledge of the communities in which CSB and the Bank operate; their
experience and any special business, financial, or other expertise; their reputation for honesty
and integrity; and their ability to provide independent and objective oversight and supervision for
matters which may impact CSB and the Bank. The Nominating Committee also considers applicable
requirements of the CSB Code of Regulations and requirements of applicable law and regulations with
respect to evaluating potential candidates, as well as other matters which the Nominating Committee
deems appropriate in light of the specific circumstances and the potential candidate. To that end,
the Nominating Committee may conduct its own analysis and may also seek information from a variety
of outside sources in order to ascertain whether a potential candidate meets the referenced
criteria.
The Nominating Committee utilizes the same standards and criteria in considering and
evaluating potential candidates for positions on the CSB Board of Directors who are recommended by
CSB shareholders, when appropriate. For the year ended December 31, 2005, a majority of the
members of the Nominating Committee are independent, as defined by the National Association of
Securities Dealers, Inc., listing standards.
The Compensation Committee develops and recommends executive compensation principles, policies
and programs to the CSB Board of Directors. The Compensation Committee currently consists of
Messrs. Baker, Steimel and Waltman. The Compensation Committee met 12 times in 2005.
CSB has an Audit Committee, the members of which currently consist of Messrs. Holtman, Robb,
and Steiner. All of the members of the Audit Committee are independent directors. Among other
things, the Audit Committee is responsible for the engagement of independent auditors, reviewing
with the independent auditors the plans and results of the audit, and reviewing the adequacy of
internal accounting controls. The Audit Committee met a total of 12 times in 2005. The Board of
Directors has determined that Messrs. Robb and Steiner meet the requirements of an audit committee
financial expert as defined by the Securities and Exchange Commission.
7
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for developing and recommending CSBs executive
compensation principles, policies and programs to the Board of Directors. The Compensation
Committee believes that in representing the Board of Directors, it must act in the best interest of
the shareholders as it reviews and determines CSBs executive compensation principles, policies and
programs. The Compensation Committees essential goal is to create a balance by which CSB is able
to attract and retain qualified management personnel, while at the same time providing for
maximization of CSBs financial performance and safeguarding CSBs assets. In compensating CSBs
executive officers, the Committee seeks to achieve the following goals:
1. |
|
motivate executive officers to strive for and achieve outstanding corporate performance that
provides a direct benefit to shareholders; |
|
2. |
|
attract highly-qualified key management personnel; and |
|
3. |
|
reward superior performance in reaching corporate objectives with aggressive compensation
levels and provide that a significant portion of compensation will be dependent on CSBs
annual performance. |
Base salaries for executive management in 2005 were determined after review of an analysis
of salaries paid for comparable positions and consideration of the competition for executive talent
within CSBs industry. The Committees review included a survey of public filings made by industry
peers. CSBs compensation philosophy is to target executive salaries close to the mean of the
market rate paid for comparable positions by similarly sized bank holding companies. CSBs senior
officers recommend to the Committee an aggregate amount of cash and options to offer as bonuses to
employees each fiscal year, based upon the performance of CSB and the Bank during the prior fiscal
year, and an allocation of these bonuses among the employees of CSB and the Bank. After
consideration of this recommendation, the Committee approves and the Board of Directors ratifies
the issuance of bonuses each year. The Committee also considers the recommendations of the chief
executive officer for annual salary adjustments and bonus awards for the other executive officers.
THE COMPENSATION COMMITTEE
Robert K. Baker
Samuel M. Steimel
John R. Waltman
8
REPORT OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS
The following Audit Committee Report is provided in accordance with the rules and regulations
of the Securities and Exchange Commission. The Audit Committee has reviewed and discussed the
audited consolidated financial statements with management and the Board of Directors of CSB.
Management of CSB is responsible for CSBs reporting process, including its system of internal
control, and for the preparation of consolidated financial statements in accordance with U.S.
generally accepted accounting principles. CSBs auditors are responsible for auditing those
financial statements. The Audit Committees responsibility is to monitor and review these
processes.
Mr. Robb and Mr. Steiner are certified public accountants, and Mr. Holtman is an attorney
licensed to practice law in the State of Ohio. Mr. Robb and Mr. Steiner have been designated as
financial experts under Section 401(h) of Regulation S-K.
The Audit Committee has reviewed and discussed with S.R. Snodgrass A.C. (S.R. Snodgrass),
CSBs independent registered public accounting firm for the year ended December 31, 2005, the
matters required to be discussed by Statement of Accounting Standards 61, as may be modified or
supplemented. The Audit Committee also has received the written disclosures and the letter from
the independent accountants, as required, and has discussed with S.R. Snodgrass its independence.
Based on the forgoing discussions, the Audit Committee recommended to the Board of Directors that
the audited consolidated financial statements be included in CSBs Annual Report on Form 10-K for
the fiscal year ended December 31, 2005.
THE AUDIT COMMITTEE
Ronald E. Holtman
Jeffery A. Robb, Sr.
Eddie L. Steiner
9
INDEPENDENT PUBLIC ACCOUNTANTS
On August 26, 2005, the Audit Committee of the Board of Directors of CSB Bancorp, Inc.
engaged S.R. Snodgrass, A.C. (Snodgrass) as the Companys independent public accountants, and
notified Clifton Gunderson LLP (Clifton) they had been dismissed as the Companys independent
public accountants, effective immediately. The dismissal of Clifton involved a business analysis
and decision by CSB, and was not the result of any disagreements between CSB and Clifton. The
appointment of Snodgrass and the dismissal of Clifton were approved and effected by the Audit
Committee.
Clifton performed audits of the Companys consolidated financial statements for the years
ended December 31, 2004 and 2003. Cliftons reports did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or
accounting principles.
During the years ended December 31, 2003 and 2004, and from December 31, 2004 through the
effective date of Cliftons termination, there have been no disagreements between the Company and
Clifton on any matter of accounting principles or practice, financial statement disclosure, or
auditing scope or procedure, which disagreements would have caused Clifton to make reference to the
subject matter of such disagreements in connection with its report. None of the reportable events
described in Item 304 (a) (1) (v) of Regulation S-K promulgated by the Securities and Exchange
Commission (the SEC) pursuant to the Securities Exchange Act of 1934, as amended, have occurred
during the two years ended December 31, 2004, or through the effective date of Cliftons
termination.
Snodgrass, certified public accountants, acted as CSBs auditors for the 2005 fiscal year and
will act in such capacity for the 2006 fiscal year. During CSBs most recent fiscal year ended
December 31, 2005, there were no disagreements with Snodgrass on any matter of accounting
principles or practices, financial disclosure, or auditing scope or procedure.
A representative of Snodgrass is expected to be present at the Meeting, will have the
opportunity to make a statement if he or she desires to do so and will be available to respond to
appropriate questions.
Audit Fees. Fees billed for audit services totaled $93,649 in 2005, and $64,700 in 2004,
including fees associated with the annual audit and the reviews of CSBs quarterly reports on Form
10-Q.
Audit-Related Fees. Fees billed for audit-related services totaled $9,200 in 2005, and
$7,400 in 2004. Audit-related services related to an audit of CSBs 401(k) Plan.
Tax Fees. Fees billed for tax services, including tax compliance, tax advice and tax
planning, totaled $13,725 in 2005, and $16,200 in 2004.
All Other Fees. In 2005, there were no other fees paid to Snodgrass or Clifton.. No other
fees were paid to Clifton in 2004.
All services were pre-approved by the Audit Committee.
Audit Committee Procedures for Approval of Services by Independent Accountants
|
|
The Audit Committee will annually approve the scope of, and fees payable for, the
year-end audit to be performed by CSBs independent accountants for the next fiscal
year. |
|
|
|
Management may not engage the independent accountants for any services unless they
are approved by the Audit Committee in advance of the engagement. |
|
|
|
If Management wishes to engage the independent accountants for any services,
Management will define and present to the Audit Committee specific projects and
categories of service, and fee estimates, for which the advance approval of the Audit
Committee is required. The Audit Committee will review these requests and determine
whether to pre-approve the engagement of the independent accountants for the specific
projects and categories of service. |
10
|
|
Management will report to the Audit Committee regarding the actual spending for
these projects and services, compared to the approved amounts on a quarterly basis. |
|
|
|
The Audit Committee Chairperson will report to the Committee at each regularly
scheduled meeting the nature and amount of any non-audit services that he has
approved . |
11
EXECUTIVE COMPENSATION
The following table sets forth the compensation received for the three years ended December
31, 2005 by CSBs Chief Executive Officer and the persons who were, at December 31, 2005, the three
other most highly paid executive officers.
Summary Compensation Table
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Annual Compensation |
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Long Term Compensation |
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Other |
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Options/ |
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All |
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Annual |
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SARs |
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Other |
Name and |
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Compen- |
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(# of |
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Compen- |
Principal Position |
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Year |
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Salary($) |
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Bonus($) |
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sation($) |
|
Shares) |
|
sation($)(1) |
John J. Limbert |
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2005 |
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154,500 |
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50,000 |
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-0- |
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-0- |
|
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7,780 |
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Former, President and Chief |
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2004 |
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150,503 |
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40,000 |
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-0- |
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-0- |
|
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5,400 |
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Executive Officer |
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2003 |
|
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92,308 |
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30,000 |
|
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-0- |
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10,000 |
|
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35,688 |
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Rick L. Ginther |
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2005 |
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126,500 |
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30,000 |
|
|
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-0- |
|
|
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-0- |
|
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23,711 |
|
Interim Chief Executive Officer |
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2004 |
|
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123,269 |
|
|
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20,000 |
|
|
|
-0- |
|
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-0- |
|
|
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4,140 |
|
Former Sr. Vice President and
Chief Lending Officer |
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Paul D. Greig |
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2005 |
|
|
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111,000 |
|
|
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30,000 |
|
|
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-0- |
|
|
|
-0- |
|
|
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5,240 |
|
Senior Vice President and Chief |
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2004 |
|
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106,503 |
|
|
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20,000 |
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-0- |
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-0- |
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3,630 |
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Operations/Information Officer |
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Paula J. Meiler |
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2005 |
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103,000 |
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20,000 |
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-0- |
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-0- |
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4,320 |
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Senior Vice President and |
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2004 |
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38,462 |
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5,000 |
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-0- |
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1,000 |
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-0- |
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Chief Financial Officer |
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(1) |
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In 2005, all other compensation for Messrs. Limbert, Ginther and Greig and Ms. Meiler
consist of contributions by CSB under the CSB 401(k) and Profit Sharing Plan. Contributions under
the plan were as follows: Mr. Limbert $7,780, Mr. Ginther $6,273, Mr. Greig $5,240 and Ms. Meiler
$4,320. Also included for Mr. Ginther is a relocation payment of $14,276, club dues of $3,062 and
$100 referral bonus. |
12
Option/SAR Grants in Last Fiscal Year
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Potential Realizable Value at |
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Assumed Rates of Stock Price |
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Individual Grants |
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Appreciation for Option Term (2) |
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Number of |
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% of Total |
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Securities |
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Options |
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Underlying |
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Granted to |
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Exercise |
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Options/SARs |
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Employees in |
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Price Per |
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Expiration |
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Name |
|
Granted (1) |
|
Fiscal Year |
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Share |
|
Date |
|
5% |
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10% |
John J. Limbert |
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Rick L. Ginther |
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Paul D. Greig |
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Paula J. Meiler |
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(1) |
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No options were granted during 2005. |
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(2) |
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The dollar amounts under these columns are the result of calculations at the 5% and 10% rates
set by the Securities and Exchange Commission and are not intended to forecast possible future
appreciation, if any, in the market value of the common stock. |
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
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Number of Securities Underlying |
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Value of Unexercised In-the- |
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Unexercised Options/SARs at |
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Money Options/SARS at |
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12/31/05 |
|
12/31/051 |
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Shares |
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Acquired on |
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Value |
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Exercisable |
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Unexercisable |
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Exercisable |
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Unexercisable |
Name |
|
Exercise (#) |
|
Realized ($) |
|
(#) |
|
(#) |
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($) |
|
($) |
John J. Limbert2 |
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10,000 |
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32,500 |
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Rick L. Ginther |
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1,000 |
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3,500 |
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Paul D. Greig |
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1,000 |
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3,500 |
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Paula J. Meiler |
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1,000 |
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2,000 |
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1 |
|
Based on the closing price of a common share
of CSB of $21.00 as reported by the Wall Street Journal on December 31, 2005.
The ultimate realization of profit, if any, on the sale of common shares
underlying the option is dependent upon the market price of the shares on the
date of sale. |
|
2 |
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Mr. Limbert held the positions of Director, President and
Chief Executive Officer of CSB until March 3, 2006. While no longer a
director or Executive Officer of CSB, information regarding Mr. Limbert is
provided pursuant to requirements of the Securities and Exchange
Commission. |
13
Employment Contracts and
Termination of Employment and Change-in-Control Arrangements
Employment agreements are in effect between the Company and each of the Executives identified
in the Summary Compensation Table.
The Company entered into an employment agreement with Mr. Limbert on December 5, 2005 (the
New Agreement) in replacement of an employment agreement from 2003. Mr. Limbert
held the position of President and Chief Executive Officer of CSB until March 3, 2006. While no
longer a director or Executive Officer of CSB, information regarding Mr. Limbert is provided
pursuant to requirements of the Securities and Exchange Commission. The terms of the New Agreement
provided for a three-year term, an annual base salary of $154,500, a bonus to be paid at the
discretion of the Board of Directors, vacation, benefits, and certain stock options. In the event
that Mr. Limberts employment was terminated without cause (as defined in the agreement), the
agreement entitles him to a severance payment equal to the unpaid amount otherwise due under the
agreement plus six months of the base salary in effect on the date of termination and limited
continued benefits for a six month period. The agreement also contained a non-compete provision,
prohibiting Mr. Limbert from competing for a period of one year following the date of termination
of the agreement, as well as a change in control provision which provided Mr. Limbert with
certain benefits, including continuation of compensation, stock options, and certain health
benefits for a period of three years following a change in control as defined therein and
termination of employment within a 90-day period before or after such change in control. Such
change in control benefits are subject to being reduced so that no excess parachute payment (as
defined in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended; the IRS Code) is
received by Mr. Limbert. The resignation of Mr. Limbert effective March 3, 2006, terminated the
obligations of CSB and the Bank under the New Agreement effective that date.
The agreement provided that Mr. Limbert receives no additional compensation for serving as a
director (including service on any committee) of the Bank or CSB.
An employment agreement dated June 30, 2003, was entered into with Paul D. Greig providing,
among other things, for employment of Mr. Greig as Senior Vice President, Chief Operations Officer,
and Chief Information Officer of the Bank pursuant to the terms of the agreement. The agreement is
for a two-year term with annual renewals commencing at the first anniversary, and provides for
compensation to Mr. Greig consisting of an annual base salary of $100,000, a bonus to be paid at
the discretion of the Board of Directors, vacation, benefits, and certain stock options. In the
event that Mr. Greigs employment is terminated without cause (as defined in the agreement), the
agreement entitles him to a severance payment equal to the unpaid amount otherwise due under the
agreement plus six months of the base salary in effect on the date of termination and limited
continued benefits for a six month period. The agreement also contains a non-compete provision,
prohibiting Mr. Greig from competing for a period of one year following the date of termination of
the agreement, as well as a change in control provision which provides Mr. Greig with certain
benefits, including continuation of compensation, stock options, and certain health benefits for
stated periods following a change in control as defined therein and termination of employment
within a 90-day period before or after such change in control. Such change in control benefits
are subject to being reduced so that no excess parachute payment (as defined in Section
280G(b)(1) of the IRS Code) is received by Mr. Greig.
An employment agreement dated July 21, 2003, was entered into with Rick L. Ginther providing,
among other things, for employment of Mr. Ginther as Senior Vice President and Chief Loan Officer
of the Bank pursuant to the terms of the agreement. The agreement is for a two-year term with
annual renewals commencing at the first anniversary, and provides for compensation to Mr. Ginther
consisting of an annual base salary of $120,000, a bonus to be paid at the discretion of the Board
of Directors, vacation, benefits, and certain stock options. In the event that Mr. Ginthers
employment is terminated without cause (as defined in the agreement), the agreement entitles him
to a severance payment equal to the unpaid amount otherwise due under the agreement plus six months
of the base salary in effect on the date of termination and limited continued benefits for a six
month period. The agreement also contains a non-compete provision, prohibiting Mr. Ginther from
competing for a period of one year following the date of termination of the agreement, as well as a
change in control provision which provides Mr. Ginther with certain benefits, including
continuation of compensation, stock options, and certain health benefits for stated periods
following a change in control as defined therein and termination of employment within a 90-day
period before or after such change in control. Such change in control benefits are subject to
being reduced so that no excess parachute payment (as defined in Section 280G(b)(1) of the IRS
Code) is received by Mr. Ginther.
14
An employment agreement dated August 9, 2004, was entered into with Paula J. Meiler providing,
among other things, for employment of Ms. Meiler as Senior Vice President and Chief Financial
Officer of CSB and the Bank pursuant to the terms of the agreement. The agreement is for a two-year
term with annual renewals commencing at the first anniversary, and provides for compensation to Ms.
Meiler consisting of an annual base salary of $100,000, a bonus to be paid at the discretion of the
Board of Directors, vacation, benefits, relocation reimbursement up to a stated amount for a
limited time, and certain stock options. In the event that Ms. Meilers employment is terminated
without cause (as defined in the agreement), the agreement entitles her to a severance payment
equal to the unpaid amount otherwise due under the agreement plus six months of the base salary in
effect on the date of termination and limited continued benefits for a six month period. The
agreement also contains a non-compete provision, prohibiting Ms. Meiler from competing for a
period of one year following the date of termination of the agreement, as well as a change in
control provision which provides Ms. Meiler with certain benefits, including continuation of
compensation, stock options, and certain health benefits for stated periods following a change in
control as defined therein and termination of employment within a 90-day period before or after
such change in control. Such change in control benefits are subject to being reduced so that
no excess parachute payment (as defined in Section 280G(b)(1) of the IRS Code) is received by
Ms. Meiler.
15
PERFORMANCE GRAPH
The following graph compares the yearly stock change and the cumulative total shareholder
return on CSBs Common Shares during the five-year period ended December 31, 2005, with the
cumulative total return on the NASDAQ Bank Stock Index and the Standard and Poors 500 Stock Index.
The comparison assumes $100 was invested on December 31, 2000 in CSBs Common Shares and in each of
the indicated indices and assumes reinvestment of dividends.
|
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2000 |
|
|
2001 |
|
|
2002 |
|
|
2003 |
|
|
2004 |
|
|
2005 |
|
CSBB |
|
$ |
100.00 |
|
|
$ |
100.67 |
|
|
$ |
109.56 |
|
|
$ |
119.33 |
|
|
$ |
146.82 |
|
|
$ |
155.59 |
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|
NASDAQ Bank |
|
$ |
100.00 |
|
|
$ |
110.08 |
|
|
$ |
115.05 |
|
|
$ |
149.48 |
|
|
$ |
165.92 |
|
|
$ |
158.73 |
|
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|
S & P |
|
$ |
100.00 |
|
|
$ |
86.96 |
|
|
$ |
66.64 |
|
|
$ |
84.22 |
|
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$ |
91.79 |
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94.55 |
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CSB has engaged and intends to continue to engage in the lending of money through the Bank to
various directors and officers of CSB. These loans to such persons were made in the ordinary
course of business on substantially the same terms, including interest rates and collateral, as
prevailing at the time for comparable transactions with other persons and did not involve more than
a normal risk of collectibility or other unfavorable features.
In addition to those banking transactions conducted in the ordinary course, the following
related transactions were conducted. Each of these transactions was made on terms similar to those
that could have been negotiated with an unaffiliated third party
CSB and the Bank hired Holmes County Title Co. from time to time during 2005 for title work
and real estate closing services in connection with various matters arising in the ordinary course
of the business of CSB and the Bank. Ronda P. Steimel, owner of Holmes County Title Co., is the
wife of Director Samuel M. Steimel. CSB and the Bank contemplate using Holmes County Title Co. in
the future on similar terms, as needed.
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CSB and the Bank hired Critchfield, Critchfield & Johnston, Ltd. and Heartland Title Agency
from time to time during 2005 for legal services and real estate closing services in connection
with various matters arising in the ordinary course of the business of CSB and the Bank. John R.
Waltman is a partner of both Critchfield, Critchfield & Johnston, Ltd. and Heartland Title Agency.
CSB and the Bank contemplate using both Critchfield, Critchfield & Johnston, Ltd. and Heartland
Title Agency in the future on similar terms, as needed.
CSB and the Bank hired Logee, Hostetler, Stutzman & Lehman from time to time prior to 2005 for
legal services in connection with various matters arising in the ordinary course of the business of
CSB and the Bank. Ronald E. Holtman is a partner of Logee, Hostetler, Stutzman & Lehman. CSB and
the Bank contemplate using Logee, Hostetler, Stutzman & Lehman in the future on similar terms, as
needed.
CSB and the Bank hired Steimel Law Office from time to time prior to 2005 for legal services
in connection with various matters arising in the ordinary course of the business of CSB and the
Bank. Samuel M. Steimel is the owner of Steimel Law Office. CSB and the Bank contemplate using
Steimel Law Office in the future on similar terms, as needed.
COMPENSATION AND NOMINATING COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION; CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
During 2005, none of CSBs executive officers or Directors was a member of the Board of
Directors of any other company where the relationship would be construed to constitute a committee
interlock within the meaning of the rules of the Commission.
SHAREHOLDER NOMINATIONS
The Nominating Committee of the Board will consider recommendations for nominations received
by shareholders in accordance with the Companys Code of Regulations. Shareholder recommendations
for nomination should be submitted in writing to the Company at its principal office in
Millersburg, Ohio, and must include the shareholders name, address and the number of shares of the
Company beneficially owned by the shareholder. The recommendation must be provided to the Company
in writing not less than fourteen nor more than fifty days prior to the date of the Meeting. The
recommendation should also include the name, age, business address, residence address, principal
occupation and number of shares of the Company beneficially owned by the recommended candidate for
nomination. Shareholder recommendations must also include the information that would be required
to be disclosed in the solicitation of proxies for the election of directors under federal
securities laws. The Company may also require any nominee to furnish additional information
regarding the eligibility and qualifications of the recommended candidate.
PROPOSALS OF SECURITY HOLDERS
In order to be eligible for inclusion in CSBs proxy materials for the 2007 Annual Meeting of
Shareholders, any shareholders proposal to take action at such meeting must be received at CSBs
main office at 91 North Clay Street, Millersburg, Ohio 44654, no later than November 24, 2006. Any
such proposal shall be subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934, as amended.
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SHAREHOLDER COMMUNICATION WITH BOARD OF DIRECTORS
Shareholders interested in communicating directly with the Board of Directors may do so by
writing to Margaret L. Conn, Secretary, CSB Bancorp, Inc., 91 North Clay Street, Millersburg, Ohio
44654. The mailing envelope and letter must contain a clear notation indicating that the enclosed
letter is a Shareholder-Board of Directors Communication.
The Secretary will review all such correspondence and regularly forward to the Board of
Directors a log and summary of all such correspondence and copies of all correspondence that,
in the opinion of the Secretary, deals with the functions of the Board or Committees of
the Board or that she otherwise determines requires their attention. Directors may at any time
review a log of all correspondence received by CSB that is addressed to members of the Board and
request copies of any such correspondence. Concerns relating to accounting, internal controls or
auditing matters are immediately brought to the attention of CSBs internal audit department and
handled in accordance with procedures established by the Audit Committee for such matters.
OTHER BUSINESS
The Board of Directors is not aware of any business to be addressed at the Meeting other than
those matters described above in this Proxy Statement. However, if any business other than that
set forth in the Notice of the Meeting should be properly presented at the Meeting, it is intended
that the Common Shares represented by proxies will be voted with respect thereto in accordance with
the judgment of the person voting them.
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BY ORDER OF THE BOARD OF DIRECTORS
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/s/ Robert K. Baker
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Robert K. Baker |
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Chairman of the Board |
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Millersburg, Ohio
March 24, 2006
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PROXY CARD
CSB BANCORP, INC.
91 North Clay Street
Millersburg, Ohio 44654
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Messrs. Baker, Steimel, Waltman, and each of them, with full power
of substitution, as proxies to vote, as designated below, for and in the name of the undersigned
all shares of stock of CSB Bancorp, Inc. (CSB) which the undersigned is entitled to vote at the
Annual Meeting for the Shareholders of said Company scheduled to be held on April 26, 2006 at 7:00
p.m. local time at the Carlisle Inn, Walnut Creek, Ohio, or at any adjournments or recesses
thereof.
Shareholders have the right to vote cumulatively in the election of directors. In order to
exercise the right to vote cumulatively, a shareholder must give written notice to the President, a
Vice President or the Secretary of CSB not less than forty-eight hours before the time fixed for
the meeting, and the shareholders demand for cumulative voting must be announced at the
commencement of the meeting by or on behalf of the shareholder. If cumulative voting is elected, a
shareholder may cast as many votes in an election of directors as the number of directors to be
elected multiplied by the number of shares held. If any shareholder demands cumulative voting for
the election of directors at the Meeting, this proxy gives the individuals named on the proxy full
discretion and authority to vote cumulatively, and in their sole discretion to allocate votes among
any or all of the nominees, unless authority to vote for any or all of the nominees is withheld.
Please mark X in the appropriate box. The Board of Directors recommends a FOR vote on the
proposal.
1. ELECTION OF DIRECTORS
FOR:
o Ronald E. Holtman
o Daniel J. Miller
o Eddie L. Steiner
WITHHOLD AUTHORITY:
o Ronald E. Holtman
o Daniel J. Miller
o Eddie L. Steiner
2. In their discretion, the proxies are authorized to vote upon such other business as may properly
come before the meeting or an adjournment thereof.
This proxy when properly executed will be voted in the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will be voted FOR the election of Directors.
ALL FORMER PROXIES ARE HEREBY REVOKED.
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(Signature of Shareholder) |
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(Signature of Shareholder) |
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(Please sign exactly as your name appears hereon.
All joint owners should sign. When signing in a
fiduciary capacity or as a corporate officer, please
give your full title as such.) |
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Dated: , 2006 |
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