SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
ASB FINANCIAL CORP.
-------------------
(Name of Registrant as Specified In Its Charter)
___________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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2) Aggregate number of securities to which transaction applies:
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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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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
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4) Date Filed:
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ASB FINANCIAL CORP.
503 Chillicothe Street
Portsmouth, Ohio 45662
(740) 354-3177
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 2004 Annual Meeting of Shareholders of ASB Financial Corp. ("ASB")
will be held at Shawnee State Park Resort and Conference Center, 4404B State
Route 125, West Portsmouth, Ohio 45663, on October 27, 2004, at 11:00 a.m.,
local time (the "Annual Meeting"), for the following purposes, all of which
are more completely set forth in the accompanying Proxy Statement:
1. To elect six directors of ASB for terms expiring in 2005;
2. To ratify the selection of Grant Thornton LLP as the auditor of
ASB for the current fiscal year; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Only ASB shareholders of record at the close of business on September
1, 2004, will be entitled to receive notice of and to vote at the Annual
Meeting and at any adjournment thereof. Whether or not you expect to attend
the Annual Meeting, we urge you to consider the accompanying Proxy Statement
carefully and to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT
YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A
QUORUM MAY BE ASSURED. Submitting a Proxy does not affect your right to vote
in person in the event you attend the Annual Meeting.
By Order of the Board of Directors
/s/ Robert M. Smith
Portsmouth, Ohio Robert M. Smith, President
September 24, 2004
ASB FINANCIAL CORP.
503 Chillicothe Street
Portsmouth, Ohio 45662
(740) 354-3177
PROXY STATEMENT
PROXIES
The Board of Directors of ASB Financial Corp. ("ASB" or the "Company")
is soliciting the enclosed Proxy for use at the 2004 Annual Meeting of
Shareholders of ASB to be held at Shawnee State Park Resort and Conference
Center, 4404B State Route 125, West Portsmouth, Ohio 45663, on October 27,
2004, at 11:00 a.m., local time, and at any adjournment thereof (the "Annual
Meeting"). The Proxy will not be used for any other meeting.
Each properly executed Proxy received prior to the Annual Meeting and
not revoked will be voted as directed by the shareholder or, in the absence
of specific instructions to the contrary, will be voted:
FOR the reelection of William J. Burke, Gerald R. Jenkins,
Christopher H. Lute, Larry F. Meredith, Louis M. Schoettle and
Robert M. Smith as directors of ASB for terms expiring in 2005;
and
FOR the ratification of the selection of Grant Thornton LLP
("Grant Thornton") as the auditor of ASB for the current fiscal
year.
Without affecting any vote previously taken, you may revoke your Proxy
by either (i) submitting a later dated proxy or a written revocation which is
received by ASB before the Proxy is exercised or (ii) by attending the Annual
Meeting and voting in person or giving notice of revocation in open meeting
before the Proxy is exercised. Attending the Annual Meeting will not, by
itself, revoke a Proxy.
Proxies may be solicited by the directors, officers and other employees
of ASB and its subsidiary, American Savings Bank, fsb ("American"), in person
or by telephone, telegraph or mail only for use at the Annual Meeting. ASB
will bear the cost of preparing, assembly, printing and mailing this Proxy
Statement and the enclosed Proxy and will pay all other costs in the
solicitation of Proxies by the Board of Directors.
Only ASB shareholders of record at the close of business on September
1, 2004 are entitled to vote at the Annual Meeting. Each shareholder will be
entitled to cast one vote for each share then owned. According to ASB's
records, as of September 1, 2004, there were 1,661,063 votes entitled to be
cast at the Annual Meeting.
This Proxy Statement is first being mailed to ASB shareholders on or
about September 24, 2004.
1
REQUIRED VOTE
Election of Directors
Each ASB shareholder is entitled to cast one vote for each share owned
on September 1, 2004. Under Ohio law and ASB's Code of Regulations (the
"Regulations"), the following proposals must receive the corresponding vote
to be adopted:
Proposal Required vote
-------- -------------
1) Election of directors The six nominees receiving the
greatest number of votes will be
elected to the Board of Directors.
2) Ratification of the The affirmative vote of a majority
selection of Grant of the shares represented in person
Thornton as the auditor or by proxy at the Annual Meeting
of ASB for the current is necessary to ratify the
fiscal year selection of Grant Thornton as the
auditor of ASB.
Shareholders holding shares in "street name" should review the
information provided to them by the broker/dealer or other record holder of
the shares. This information will describe the procedures to follow to
instruct the record holder how to vote the street name shares and how to
revoke previously given instructions.
If your shares are held in street name and you do not return a proxy
card, broker/dealers have the authority, under applicable rules of the Nasdaq
and other self-regulatory organizations of which the broker/dealers are
members, to vote your shares in their discretion on certain routine matters.
The election of directors and the ratification of auditors are considered
routine. Consequently, if you do not provide a proxy to vote your shares,
your broker/dealer firm may elect to vote or not vote your shares for you.
Proxies signed and submitted by broker/dealers which have not been voted are
referred to as "non-votes." Broker non-votes and Proxies as to which the
authority to vote is withheld are counted toward the establishment of a
quorum, but are not counted toward the election of directors or the
ratification of the selection of auditors. A non-vote or an abstention on
the ratification of the selection of auditors has the same effect as a vote
against such proposal.
If you sign and date a Proxy but do not specify how you wish for it to
be voted, it will be voted FOR the reelection of the six nominees for
director and FOR the ratification of the selection of Grant Thornton as the
auditor of ASB for the current fiscal year.
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OWNERSHIP OF ASB SHARES
The following table provides certain information regarding the number
of ASB common shares beneficially owned by the directors and executive
officers of ASB as of September 1, 2004:
Percent of
Name (1) Number of shares (2) shares outstanding (3)
-------- -------------------- ----------------------
William J. Burke 44,385(4) 2.67
Gerald R. Jenkins 129,400(5) 7.66
Christopher H. Lute 2,842(6) 0.17
Larry F. Meredith 1,682(7) 0.10
Louis M. Schoettle 60,000(8) 3.61
Robert M. Smith 122,199(9) 7.36
All directors and executive
officers of ASB
as a group (10 persons) 446,160(10) 26.29
___________________
(1) Each of the persons listed in this table may be contacted at ASB's
address.
(2) All shares are owned directly with sole voting or investment power
unless otherwise indicated by footnote.
(3) Assumes a total of 1,661,063 common shares outstanding, plus the number
of shares such person or group has the right to acquire within 60 days
upon the exercise of options granted under the ASB Financial Corp. 1995
Stock Option and Incentive Plan, if any.
(4) Includes 27,099 phantom shares held in the Deferred Compensation Plan
of American Savings Bank, f.s.b. (the "Deferred Compensation Plan")
which represent common shares that may be acquired under the plan in
the next 60 days.
(5) Includes 28,942 shares which may be acquired upon the exercise of
options, 51,147 shares as to which Mr. Jenkins has shared voting and
investment power and 18,227 phantom shares held in the Deferred
Compensation Plan which represent common shares that may be acquired
under the plan in the next 60 days.
(6) Includes 830 phantom shares held in the Deferred Compensation Plan
which represent common shares that may be acquired under the plan in
the next 60 days.
(7) Includes 1,200 shares which may be acquired upon the exercise of
options and 482 phantom shares held in the Deferred Compensation Plan
which represent common shares that may be acquired under the plan in
the next 60 days.
(8) Includes 21,883 shares as to which Dr. Schoettle has shared voting and
investment power, and 12,745 phantom shares held in the Deferred
Compensation Plan which represent common shares that may be acquired
under the plan in the next 60 days.
(9) Includes 26,494 shares held in the ASB Financial Corp. Employee Stock
Ownership Plan (the "ESOP") as to which Mr. Smith has shared investment
power, 7,998 shares held by the ASB Management Recognition Plan (the
"MRP") as to which Mr. Smith has shared voting power as Trustee of the
MRP, 72,998 shares as to which Mr. Smith has shared voting and
investment power, and 12,295 phantom shares held in the Deferred
Compensation Plan which represent common shares that may be acquired
under the plan in the next 60 days.
(10) Includes 35,816 shares which may be acquired upon the exercise of
options, 65,313 shares held in the ESOP, 71,678 phantom shares held in
the Deferred Compensation Plan which represent common shares that may
be acquired under the plan in the next 60 days and 177,843 shares over
which a person has shared voting or investment power.
3
The following table sets forth certain information regarding the only
persons known to ASB to beneficially own more than five percent of the
outstanding common shares of ASB as of September 1, 2004:
Percent of
Name and address Number of shares shares outstanding
---------------- ---------------- ------------------
First Bankers Trust Company, N.A. 200,485 (1) 12.07
ASB Financial Corp. Employee
Stock Ownership Plan
1201 Broadway
Quincy, Illinois 62301
Gerald R. Jenkins 129,400 (2) 7.66
503 Chillicothe Street
Portsmouth, Ohio 45662
Robert M. Smith 122,199 (3) 7.36
503 Chillicothe Street
Portsmouth, Ohio 45662
___________________
(1) Includes 128,805 shares held as Trustee for the ESOP as to which First
Bankers Trust has limited investment power and 71,680 shares held as
Trustee of the Deferred Compensation Plan as to which First Bankers
Trust Company, N.A. has sole investment power. All shares held in the
ESOP have been allocated to the accounts of participants. The ESOP
Trustee has voting power over shares that have been allocated to the
account of an ESOP participant but as to which no voting instructions
are given by the participant.
(2) See footnote (5) in the preceding table.
(3) See footnote (9) in the preceding table.
ELECTION OF DIRECTORS AND BOARD INFORMATION
There are six members of ASB's Board of Directors, each of whom, with
the exception of Mr. Smith, the Board has determined is an "independent
director" under applicable Nasdaq rules. Directors are elected to serve for
one-year terms and until their respective successors are duly elected and
qualified.
Nominations Process and Candidate Selection
ASB's Nominating Committee oversees the nominations process and
recommends to the Board a slate of nominees for election as directors. The
members of the Nominating Committee are Mr. Burke, Mr. Jenkins, Mr. Lute,
Mr. Meredith and Mr. Schoettle, each of whom is independent under
applicable Nasdaq rules. The Nominating Committee operates pursuant to a
charter that sets forth its various responsibilities regarding the
nominations process. A copy of
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the Nominating Committee Charter is attached to this Proxy Statement as
Exhibit A. The charter is not available on ASB's website.
The Nominating Committee has not established a formal process for
identifying and evaluating nominees due to the committee's desire to
approach the process according to the composition of the Board at the time.
However, the process for identifying and evaluating nominees is generally
as follows: In the case of incumbent directors, the Nominating Committee
reviews each director's overall service to ASB during his term of service,
including the number of meetings attended, level of participation and
quality of performance and the director's desire to continue to serve. The
Nominating Committee will then either nominate the incumbent director for
reelection or, if the committee feels a new director is necessary or
desirable, will use its network of contacts to compile a list of potential
candidates. The committee then meets to discuss and consider each
candidate's qualifications and chooses the nominees by majority vote.
The Nominating Committee does not have any specific criteria that it
believes nominees for election as directors of ASB must meet. However, the
committee looks for candidates who will be most effective in meeting the
long term interests of ASB and its shareholders, who possess high personal
values, integrity and judgment and who have an understanding of the
environment in which ASB does business. Factors such as financial and
business development expertise and business experience are all considered
when evaluating potential nominees. In the case of new director
candidates, the committee looks whether the nominee is "independent" for
Nasdaq purposes and whether the new director must be independent for ASB to
remain in compliance with Nasdaq requirements.
As provided in its charter, the Nominating Committee will receive and
evaluate director candidates recommended by shareholders. Other than as
set forth in the charter, the Nominating Committee does not have any
policies regarding the consideration of such recommendations. The lack of
policies regarding shareholder recommendations is primarily due to ASB's
lack of experience with such recommendations and the need to evaluate any
shareholder recommendations on a case-by-case basis.
A shareholder who wishes to make a recommendation for a director
candidate should contact the Board of Directors in the manner described in
this Proxy Statement under the heading "Shareholder Communications with
Directors." Any shareholder wishing to make a formal nomination for a
director candidate must follow the procedures set forth in Section 2.03 of
the Regulations. This section requires that nominees for election as
directors may be proposed only by the directors or by a shareholder
entitled to vote for directors if the shareholder has submitted a written
nomination to the Secretary of ASB by the later of the August 15th
immediately preceding the annual meeting of shareholders or the sixtieth
day before the first anniversary of the most recent annual meeting of
shareholders held for the election of directors. Each written nomination
must state the name, age, business or residence address of the nominee, the
principal occupation or employment of the nominee, the number of common
shares of ASB owned either beneficially or of record by the nominee and the
length of time such shares have been so owned.
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Election of Directors
Pursuant to the Nominating Committee's recommendation, the Board of
Directors proposes the election of the following persons to serve as
directors of ASB until the annual meeting of shareholders in 2005 and until
their successors are duly elected and qualified:
Director of
Name Age ASB since
---- --- -----------
William J. Burke 63 1995
Gerald R. Jenkins 69 1995
Christopher H. Lute 55 2003
Larry F. Meredith 63 2003
Louis M. Schoettle 78 1995
Robert M. Smith 58 1995
Mr. Burke is a director, the chief executive officer and the marketing
manager of OSCO Industries, Inc., a manufacturing company which has its
principal place of business in Portsmouth, Ohio. He has been employed by
OSCO Industries, Inc., since 1967.
Mr. Jenkins retired in 1998 as the President and Chief Executive
Officer of ASB and American. Prior to becoming President of American in
1983, he held various positions at American including Secretary and Vice
President.
Mr. Lute is the President and Chief Executive Officer of Lute Plumbing
Supply, Inc., a wholesale distributor of plumbing, heating, cooling, kitchen
and bath products with facilities in Ohio, Kentucky, Indiana and West
Virginia. He has held this position since 1979. Mr. Lute is also immediate
past Chairman of the Southern Ohio Growth Partnership and is President of WIT
& Co., a national buying group. Mr. Lute also serves on the board of the
Southern Ohio Museum and Cultural Center.
Mr. Meredith is a consultant to the Pike County Board of Mental
Retardation and Developmental Disabilities and is a part-time instructor at
Shawnee State University. Mr. Meredith served as a director of The Waverly
Building and Loan Company from 1997 until its acquisition by American in
2002. He has previously served as Superintendent of Pike County Schools,
Supervisor of Scioto County Schools and a member of the Eastern Board of
Education.
Dr. Schoettle is a physician. He retired from active practice in 1994
after over 35 years of practicing medicine in Portsmouth. Dr. Schoettle also
owns and operates a 1,100 acre farm.
Mr. Smith has been employed by American since 1966 and has served as
the President and Chief Executive Officer of American and ASB since 1998.
Prior positions held by Mr. Smith with American include Secretary, Treasurer
and Executive Vice President. Mr. Smith is also a director of Intrieve, Inc.
and serves on the board of the Ohio Bankers League.
If any nominee is unable to stand for election, any Proxies granting
authority to vote for that nominee will be voted for a substitute nominee
recommended by the Board of Directors.
6
Your Board of Directors recommends that you vote FOR the reelection
of the above-named nominees.
Each of the directors of ASB is also a director of American. Messrs.
Burke, Jenkins, Schoettle and Smith each became a director of ASB in
connection with the conversion of American from mutual to stock form and
the formation of ASB as the holding company for American in 1995. Mr. Lute
was appointed to the Board of ASB in April 2003 when the Board increased
the number of directors from five to six and Mr. Meredith was elected as a
director of ASB at the 2003 Annual Meeting of Shareholders.
Meetings and Committees of Directors
The Board of Directors of ASB met twelve times for regularly scheduled
and special meetings during the fiscal year ended June 30, 2004. Except for
Mr. Meredith, each director attended at least 75% of the aggregate of such
meetings and the meetings of the committees on which he served.
The Board of Directors of American met twelve times for regularly
scheduled and special meetings during the fiscal year ended June 30, 2004.
ASB has a standing Audit Committee, Compensation Committee, Executive
Committee and Nominating Committee.
Audit Committee. The Audit Committee is responsible for selecting and
engaging a firm to serve as the independent auditor of ASB and for overseeing
ASB's financial reporting process. The members of the Audit Committee are
Mr. Jenkins, Mr. Lute, Mr. Meredith and Dr. Schoettle, each of whom is
"independent" under applicable Nasdaq rules. The duties of the Audit
Committee are more thoroughly set forth in the Amended and Restated Audit
Committee Charter (the "Audit Charter") which was attached to the proxy
statement for the 2003 Annual Meeting of Shareholders. Pursuant to the terms
of the Audit Charter and applicable law, at least one member of the Audit
Committee must be a "financial expert." The Board of Directors has
determined that Mr. Jenkins is a financial expert. The Audit Committee met
once during the fiscal year ended June 30, 2004.
Compensation Committee. The Compensation Committee is responsible for
determining the compensation of executive officers and other employees and
making decisions regarding employee benefits and related matters. The
members of the Compensation Committee are Mr. Burke, Mr. Jenkins and Mr.
Lute, all of whom are independent under applicable Nasdaq rules. The
Compensation Committee met once during the year ended June 30, 2004.
Executive Committee. All of the directors are members of the Executive
Committee. The Executive Committee is authorized to act on behalf of the
Board of Directors between regular meetings of the Board. The Executive
Committee met once during the fiscal year ended June 30, 2004.
Nominating Committee. As is more thoroughly discussed under
"Nominations Process and Candidate Selection" above, the Nominating Committee
is responsible for recommending to the Board a slate of candidates for
election to the Board of Directors of ASB. The Nominating
7
Committee is comprised of Mr. Burke, Mr. Jenkins, Mr. Lute, Mr. Meredith and
Dr. Schoettle, each of whom is independent under applicable Nasdaq rules.
The Nominating Committee was not formed until after the end of the 2004
fiscal year and thus did not meet during the year ended June 30, 2004.
Shareholder Communications with Directors
A shareholder may communicate with the Board of Directors by mailing
a written communication addressed to the Board of Directors or to an
individual director or group of directors at ASB's address at 503
Chillicothe Street, Portsmouth, Ohio 45662. All such communications will
be forwarded unopened to an independent director if addressed to the full
Board, to the specified director, or if addressed to a group of directors,
to a member of the group.
Director Attendance at the Annual Meeting
ASB encourages and expects all directors and nominees for election as
a director to attend each annual meeting of shareholders. Any director or
nominee who cannot attend an annual meeting is expected to notify ASB of
his inability to attend as far in advance of the annual meeting as
possible. Five of the six then incumbent directors and the only nominee
for election as a director attended the 2003 annual meeting.
EXECUTIVE OFFICERS
In addition to Mr. Smith, who is the President of both ASB and
American, the following persons are executive officers of ASB and American
and hold the designated positions:
Carlisa R. Baker, age 42, has served as the Treasurer of ASB since
1995. She has served as Treasurer of American since 1993 and has been
employed by American since 1979.
Mary Kathryn Fish, age 53, is the Secretary of ASB and American, and
has been employed by American since 1984. She has served as Secretary of
American since 1993 and of ASB since 1995.
Michael L. Gampp, age 35, has served as the Vice President and Chief
Financial Officer of ASB and American since 2000. From 1997 until joining
ASB and American, Mr. Gampp was a principal with Reynolds & Co., Certified
Public Accountants, and from 1995 to 1997 he served as Chief Financial
Officer of Buckeye Rural Electric.
Jack Stephenson, age 52, has served as American's Vice President
responsible for lending activities and has served as Vice President of ASB
since 1995.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Officer Compensation
The following table sets forth compensation paid to Mr. Smith, the
President of ASB and American, for the fiscal years shown. No other
executive officer of ASB or American earned salary and bonus in excess of
$100,000 during the periods reported.
8
Summary Compensation Table
--------------------------
Annual compensation (1) Long-term compensation
------------------------ -----------------------------------------------------------
Awards Payouts
-------------------------------- -----------------------
Restricted Securities LTIP
Name and principal Salary Bonus stock awards underlying payouts All other
position Year ($) ($) ($) options/SARs (#) ($) compensation
------------------ ---- ------ ----- ------------ ---------------- ------- ------------
Robert M. Smith 2004 $141,500 $30,000 - - - $35,792 (2)
President 2003 $134,750 $20,000 - - - $45,249 (3)
2002 $128,250 $15,000 - - - $52,462 (4)
___________________
(1) Does not include amounts attributable to other miscellaneous benefits
received by Mr. Smith, the cost of which was less than 10% of his
annual salary and bonus.
(2) Consists of director's fees of $21,300 and allocations of $14,492 to
Mr. Smith's ESOP account.
(3) Consists of director's fees of $21,000 and allocations of $24,249 to
Mr. Smith's ESOP account.
(4) Consists of director's fees of $20,700 and allocations of $31,762 to
Mr. Smith's ESOP account.
Director Compensation
Each director currently receives a fee of $600 per month for service as
a director of ASB and a fee of $1,200 per month for service as a director of
American. In addition, each non-employee committee member receives $100 per
committee meeting attended.
American maintains a deferred compensation benefit plan under which the
directors may defer payment of their director's fees. The amounts deferred
are used by the trustee of the plan to purchase common shares of ASB at
various times throughout the year and phantom shares representing the shares
purchased by the trustee are allocated to the individual director's account.
After a director ceases to be an active director of American, the director
may elect to receive the deferred amount in cash, in a number of ASB common
shares equal to the number of phantom shares that have been allocated to his
account, or in a combination of cash and stock. If cash payment is chosen,
American will pay, at the director's option, the director's deferred amount
in a lump sum or in equal monthly payments for a period of not less than five
nor more than ten years. If a director dies while serving as a director,
equal monthly payments for a period of ten years will be made to the
director's beneficiary equivalent to the amount the director would have
received if he had retired on the day of his death.
10
Salary Plan
American maintains a non-qualified retirement plan (the "Salary
Plan") for the benefit of Mr. Smith. The Salary Plan provides for
continued monthly compensation to Mr. Smith, or his beneficiary, for 180
months following his retirement from American at age 65, provided he has
completed 15 consecutive years of service to American. The Salary Plan
provides for a reduced benefit if Mr. Smith retires after age 55 but before
age 65. The benefit payable to Mr. Smith under the Salary Plan, assuming
his retirement at age 65, is $5,000 per month for 180 months.
ASB is not a party to any other agreements that, upon the resignation
or retirement of an executive officer or upon the occurrence of a change in
control would result in payments to an executive officer exceeding
$100,000.
STOCK OPTION AND OTHER BENEFIT PLANS
Stock Option Plan
ASB reserved 171,396 common shares were for issuance by ASB under the
ASB Financial Corp. 1995 Stock Option and Incentive Plan upon its approval
by the shareholders. In 1997 and again in 2000, pursuant to the terms of
the plan that permit adjustments to reflect changes in capitalization, the
number of shares reserved under the plan was increased in connection with
the payment of special dividends. There are currently 228,627 shares
reserved for issuance under the plan, and options to purchase 222,627
shares have been awarded. Directors, officers and employees of American
and ASB are eligible to receive options under the plan.
The following table sets forth information regarding the number and
value of options held by Mr. Smith at June 30, 2004:
Aggregated Option/SAR Exercises in Last Fiscal Year and 6/30/04
Option/SAR Values
Number of securities Value of unexercised
underlying unexercised in-the-money options/SARs
Shares acquired Value options/SARs at 6/30/04 (#) at 6/30/04 ($)(1)
Name on exercise (#) realized ($) exercisable/unexercisable exercisable/unexercisable
---- --------------- ------------ --------------------------- -------------------------
Robert M. Smith -0- $-0- 25,000/-0- $382,500/$-0-
___________________
(1) The value of the option was determined by multiplying the number of
shares subject to unexercised options by the difference between the
$7.64 per share exercise price of Mr. Smith's options, and the fair
market value of ASB's shares, which was $22.94 per share on June 30,
2004.
10
Management Recognition Plan
There are currently 7,998 common shares remaining in the MRP, all of
which have been awarded to directors and executive officers of ASB and
American. One-fifth of such shares become vested and non-forfeitable on
each of the first five anniversaries of the date of the award.
Employee Stock Ownership Plan
ASB established the ESOP for the benefit of employees of ASB and its
subsidiaries who are age 21 or older and who have completed at least one
year of service with ASB and its subsidiaries. The ESOP provides an
ownership interest in ASB to all full-time employees of ASB and its
subsidiaries. As of June 30, 2004, all of the 128,805 common shares of ASB
held by the ESOP have been allocated to the accounts of participants.
CERTAIN TRANSACTIONS
American makes loans to executive officers and directors of American
and ASB in the ordinary course of business. All amounts owed by directors or
executive officers in excess of $60,000 during the last two fiscal years were
owed pursuant to loans made on substantially the same terms as those
prevailing at the time for comparable transactions with other persons, did
not involve more than the normal risk of collectibility or present other
unfavorable features and are current in their payments.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, ASB's directors and executive
officers and persons holding more than 10% of the common shares of ASB are
required to report their ownership of common shares and any changes in such
ownership to the Securities and Exchange Commission (the "SEC") and ASB.
To ASB's knowledge, based solely upon a review of such reports and written
representations that no other reports were required during the fiscal year
ended June 30, 2004, due to administrative error late Forms 4 were filed
for each of Mr. Smith, Mr. Burke, Mr. Jenkins, Mr. Schoettle, Mr. Lute and
Mr. Lee Fitch, a former director of ASB, to report allocations to their
respective accounts under the Deferred Compensation Plan that occurred on
August 1, 2003. Due to the same error, a late Form 4 was filed for a sale
of shares by Mr. Smith on the same day.
SELECTION OF AUDITORS
The Audit Committee has selected Grant Thornton LLP as ASB's auditor
for the current fiscal year. Although ASB is not required by its governing
documents or applicable law to seek shareholder ratification of its selection
of auditors, the Board of Directors and the Audit Committee believe it is
desirable to do so. If the selection of Grant Thornton is not ratified, the
Audit Committee will reconsider its selection.
11
Your Board of Directors and the Audit Committee recommend that you vote
FOR the ratification of the selection of Grant Thornton as the auditor of
ASB.
Management expects that a representative of Grant Thornton will be
present at the Annual Meeting, will have the opportunity to make a statement
if he or she so desires and will be available to respond to appropriate
questions.
Audit Committee Report
As required by the Audit Charter, the Audit Committee received and
reviewed the report of Grant Thornton regarding the results of their audit,
as well as the written disclosures and the letter from Grant Thornton
required by Independence Standards Board Standard No. 1. The Audit
Committee reviewed the audited financial statements with the management of
ASB. A representative of Grant Thornton also discussed with the Audit
Committee the independence of Grant Thornton from ASB, as well as the
matters required to be discussed by Statement of Auditing Standards 61, as
amended. Discussions between the Audit Committee and the representative of
Grant Thornton included the following:
* Grant Thornton's responsibilities in accordance with generally
accepted auditing standards
* The initial selection of, and whether there were any changes
in, significant accounting policies or their application
* Management's judgments and accounting estimates
* Whether there were any significant audit adjustments
* Whether there were any disagreements with management
* Whether there was any consultation with other accountants
* Whether there were any major issues discussed with management
prior to Grant Thornton's retention
* Whether Grant Thornton encountered any difficulties in
performing the audit
* Grant Thornton's judgments about the quality of ASB's
accounting principles
* Grant Thornton's responsibilities for information prepared by
management that is included in documents containing audited
financial statements
Based on its review of the financial statements and its discussions
with management and the representative of Grant Thornton, the Audit
Committee did not become aware of any material misstatements or omissions
in the financial statements. Accordingly, the Audit Committee recommended
to the Board of Directors that the audited financial statements be included
in the Annual Report on Form 10-KSB for the year ended June 30, 2004, to be
filed with the SEC.
Gerald R. Jenkins Christopher H. Lute
Larry F. Meredith Louis M. Schoettle
12
Audit and Non-Audit Fees
The following table presents fees paid by ASB to Grant Thornton for
the audit of ASB's annual financial statements for the years ended June 30,
2004 and June 30, 2003, and fees billed for other services rendered by
Grant Thornton during those periods.
Year ended Year ended
Type of fees June 30, 2004 June 30, 2003
------------ ------------- -------------
Audit fees (1) $54,800 $51,195
Audit related fees (2) 5,850 3,640
Tax fees (3) 5,400 3,900
All other fees (4) - -
------- -------
Grant Thornton total fees $66,050 $58,735
======= =======
___________________
(1) These are fees for professional services performed by Grant Thornton
for the audit of ASB's annual financial statements and review of
financial statements included in ASB's Forms 10-QSB, and services
that are normally provided in connection with statutory or regulatory
filings or engagements.
(2) These are fees for assurance and related services that are reasonably
related to the performance of the audit or review of ASB's financial
statements and are not reported under the heading "Audit fees" above.
(3) These are fees for professional services performed by Grant Thornton
with respect to tax compliance, tax advice and tax planning, such as
the preparation of federal, state and local tax returns.
(4) These are fees for any other work that is not included in any of the
above categories.
PROPOSALS OF SHAREHOLDERS AND OTHER MATTERS
Shareholders of ASB desiring to submit proposals to be considered for
inclusion in ASB's Proxy Statement and form of Proxy (the "Proxy Materials")
for the 2005 Annual Meeting of Shareholders (the "2005 Annual Meeting") must
provide their proposals by certain deadlines. To be included in the Proxy
Materials, a shareholder proposal must be received by ASB no later than May
27, 2005. If a shareholder intends to present a proposal at the 2005 Annual
Meeting and the proposal was not included in the Proxy Materials, ASB's
management proxies for the 2005 Annual Meeting will be entitled to vote on
such proposal in their discretion, despite the exclusion of any discussion of
the matter in the Proxy Materials, if the proposal is not received by ASB
before August 10, 2005.
Management knows of no other business which may be brought before the
Annual Meeting. It is the intention of the persons named in the enclosed
Proxy to vote such Proxy in accordance with their best judgment on any other
matters which may be brought before the Annual Meeting.
13
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, WE URGE YOU TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
/s/ Robert M. Smith
Portsmouth, Ohio Robert M. Smith, President
September 24, 2004
14
EXHIBIT A
---------
ASB FINANCIAL CORP.
NOMINATING COMMITTEE CHARTER
1. Members. The Nominating Committee (the "Committee") of the Board of
Directors (the "Board") of ASB Financial Corp. (the "Company") shall
consist of at least three independent directors, including a chair and such
other independent directors as the Board shall from time-to-time appoint.
An "independent director" is a director who meets the definition of
"independent" under the listing standards of the The Nasdaq Stock Market,
as determined by the Board.
2. Purpose and Duties. The purpose of the Committee shall be to search
for and identify individuals qualified to become members of the Board;
receive and evaluate recommendations for potential Board members from
shareholders; review the independence of potential directors under the
regulations of the Securities and Exchange Commission and the rules of The
Nasdaq Stock Market; recommend to the Board the slate of director nominees
to be elected by shareholders; recommend directors to be elected by the
Board to fill any vacancies; perform the duties given to it in this
charter; and handle other matters as the Board deems appropriate.
3.Committee Goals and Responsibilities:
* Identify and evaluate prospective candidates for the Board.
The Committee shall look for candidates who, both individually
and as a group, meet the Company's strategic needs and will be
most effective in meeting the long term interests of the
Company and its shareholders; possess the highest personal
values, judgment and integrity; have an understanding of the
regulatory and policy environment in which the Company does its
business; and have diverse experience in the key business,
financial, and other challenges that face the Company.
Criteria for selection shall include:
[ ] whether a current board member wishes to be re-elected;
[ ] if a new nominee is needed, the skills and experience
desired in a new director, such as community involvement,
marketing or sales experience, financial expertise,
business experience, technological knowledge or business
development expertise; and
[ ] whether the potential nominees are shareholders of the
Company.
* Review the structure and composition of the Board's committees
and make recommendations to the Board with respect to such
matters.
* Receive and evaluate suggestions concerning possible candidates
for election to the Board, including nominations made by the
Board and by shareholders.
* Recommend to the Board a slate of potential nominees to be
proposed at the Company's annual meeting of shareholders,
including the nomination of incumbent directors for re-
election, as appropriate.
* Consider and recommend to the Board the appropriate size of the
Board and retirement and other tenure policies for directors.
* Review directorships in other public companies held by or
offered to directors of the Company.
* Annually evaluate the performance of the Committee and the
adequacy of the Committee's charter.
* Review senior management membership on outside boards.
4. Outside Advisors. The Committee shall have the authority to retain
such outside counsel, experts, and other advisors, including search firms
to identify director candidates, as it determines appropriate to assist it
in the full performance of its functions.
5. Meetings. The Committee shall meet as often as it deems necessary or
appropriate and at such times and places as it may determine. A majority
of the Committee shall constitute a quorum. Meetings of the Committee may
be held through any communications equipment if all persons participating
can hear each other, and participation in a meeting pursuant to this
provision shall constitute presence at such meeting. Minutes shall be kept
and provided to the Board. The Committee shall make reports to the Board
on its activities at such times as the Committee deems appropriate.
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ASB FINANCIAL CORP.
ASB FINANCIAL CORP. 2004 ANNUAL MEETING OF SHAREHOLDERS
October 27, 2004
IMPORTANT
Please complete both sides of the Proxy Card.
Sign, date and return the attached Proxy Card in the postage
paid envelope as soon as possible. Your vote is important,
regardless of the number of shares that you own.
The undersigned shareholder of ASB Financial Corp. ("ASB") hereby
constitutes and appoints the Proxy Committee of ASB as the Proxy or Proxies
of the undersigned with full power of substitution and resubstitution, to
vote at the Annual Meeting of Shareholders of ASB to be held at Shawnee
State Park Resort and Conference Center, 4404B State Route 125, West
Portsmouth, Ohio 45663, on October 27, 2004, at 11:00 a.m. local time (the
"Annual Meeting"), all of the shares of ASB which the undersigned is
entitled to vote at the Annual Meeting, or at any adjournment thereof, on
each of the following proposals, all of which are described in the
accompanying Proxy Statement:
1. The election of six directors for terms expiring in 2005:
[ ] FOR all nominees [ ] WITHHOLD authority to
listed below vote for all nominees
(except as marked to the listed below:
contrary below):
William J. Burke Christopher H. Lute Louis M. Schoettle
Gerald R. Jenkins Larry F. Meredith Robert M. Smith
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below).
_______________________________________________________________________
2. The ratification of the selection of Grant Thornton LLP, certified
public accountants, as the auditor of ASB for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
IMPORTANT: Please sign and date this Proxy on the reverse side.
Your Board of Directors recommends a vote "FOR" the election of the
nominees and "FOR" the ratification of the selection of Grant Thornton.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. Unless otherwise specified,
the shares will be voted FOR the election of the nominees for director and
FOR the ratification of the selection of Grant Thornton.
All Proxies previously given by the undersigned are hereby revoked.
Receipt of the Notice of the 2004 Annual Meeting of Shareholders of ASB and
of the accompanying Proxy Statement is hereby acknowledged.
Please sign exactly as your name appears above. When signing as
attorney, executor, administrator, trustee, guardian or agent, please give
your full title. If share are held jointly, each holder should sign.
____________________________ ______________________________
Signature Signature
Dated: _______________, 2004 Dated: _________________, 2004
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED FOR MAILING IN THE U.S.A.