SCHEDULE
14A
(RULE
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
PROXY
STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE
ACT OF 1934
Filed by
the Registrant
x
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 Section 240.14a-11c or Section
240.14a-12
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Cheviot
Financial Corp.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement if other than the
Registrant)
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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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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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o
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Fee
paid previously with preliminary materials.
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o
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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March 18,
2009
Dear
Shareholder:
You are
cordially invited to attend the Annual Meeting of Shareholders of Cheviot
Financial Corp. The Annual Meeting will be held at Cheviot Savings Bank, 3723
Glenmore Avenue, Cheviot, Ohio 45211 at 3:00 p.m. (local time) on April 28,
2009.
The
enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted.
We are
furnishing proxy materials to our shareholders over the Internet. You may read,
print and download our 2008 Annual Report to Shareholders and our Proxy
Statement at www.cfpproxy.com/5556. On March 18, 2009, we mailed our
shareholders a notice containing instructions on how to access these materials
and how to vote their shares online. The notice provides instructions on how you
can request a paper copy of these materials by mail, by telephone or by email.
If you requested your materials via email, the email contains voting
instructions and links to the materials on the Internet.
You may
vote your shares by Internet, by telephone, by regular mail or in person at the
Annual Meeting. Instructions regarding the various methods of voting are
contained on the notice card.
The
Annual Meeting is being held so that shareholders will be given an opportunity
to elect directors and ratify the selection of Clark, Schaefer, Hackett &
Co. as our independent registered public accounting firm.
The Board
of Directors has determined that the matters to be considered at the Annual
Meeting are in the best interest of Cheviot Financial Corp. and its
shareholders. For the reasons set forth in the proxy statement, the Board of
Directors unanimously recommends a vote “FOR” the proposals presented at the
Annual Meeting.
On behalf
of the Board of Directors, we urge you to vote your shares as soon as possible
even if you currently plan to attend the Annual Meeting. Your vote is important
regardless of the number of shares that you own. Voting by proxy will not
prevent you from voting in person but will assure that your vote is counted if
you are unable to attend the meeting.
Sincerely,
/s/ Thomas J. Linneman
Thomas J.
Linneman
President
and Chief Executive Officer
Cheviot
Financial Corp.
3723
Glenmore Avenue
Cheviot,
Ohio 45211
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To Be
Held On April 28, 2009
To Our
Shareholders:
The
Annual Meeting of Shareholders of Cheviot Financial Corp. will be held on
Tuesday, April 28, 2009, at 3:00 p.m. Eastern Time at Cheviot Savings Bank, 3723
Glenmore Avenue, Cheviot, Ohio 45211, for the following purposes:
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1.
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To
elect two directors each to serve a three-year term;
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2.
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To
ratify the selection of Clark, Schaefer, Hackett & Co. as Cheviot
Financial Corp.’s independent registered public accounting firm;
and
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3.
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To
consider any other matters that may properly come before the meeting or
any adjournments or postponements of the
meeting.
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The Board
of Directors has established the close of business on March 9, 2009 as the
record date for determining the shareholders entitled to notice of, and to vote
at, the Annual Meeting or any adjournment or postponement of the Annual Meeting.
Only shareholders of record at the close of business on the record date are
entitled to vote on matters to be presented at the Annual Meeting.
IT
IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE ANNUAL MEETING.
SHAREHOLDERS HAVE A CHOICE OF VOTING BY PROXY CARD, TELEPHONE OR THE INTERNET,
AS DESCRIBED ON YOUR NOTICE CARD. CHECK YOUR NOTICE CARD OR THE INFORMATION
FORWARDED BY YOUR BROKER, BANK OR OTHER HOLDER OF RECORD TO SEE WHICH OPTIONS
ARE AVAILABLE TO YOU. ANY STOCKHOLDER PRESENT AT THE ANNUAL MEETING MAY WITHDRAW
HIS OR HER PROXY AND VOTE PERSONALLY ON ANY MATTER PROPERLY BROUGHT BEFORE THE
ANNUAL MEETING.
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By
Order of the Board of Directors
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/s/
James E. Williamson
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James
E. Williamson
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Executive
Secretary
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Cheviot,
Ohio
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March
18, 2009
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PROXY
STATEMENT
of
CHEVIOT
FINANCIAL CORP.
3723
Glenmore Avenue
Cheviot,
Ohio 45211
ANNUAL
MEETING OF SHAREHOLDERS
April
28, 2009
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We are
providing this Proxy Statement to the shareholders of Cheviot Financial Corp. in
connection with the solicitation of proxies by the Board of Directors for use at
the Annual Meeting of Shareholders. The Annual Meeting will be held on Tuesday,
April 28, 2009, at 3:00 p.m. Eastern Daylight Savings Time at Cheviot Savings
Bank, 3723 Glenmore Avenue, Cheviot, Ohio 45211. The Notice of Annual Meeting of
Shareholders, this Proxy Statement, the accompanying proxy card, and our Annual
Report to Shareholders for the year ended December 31, 2008 are first being
made available for shareholders on or about March 18, 2009 to our shareholders
of record on March 9, 2009.
VOTING
AND REVOCATION OF PROXIES
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We are
making our proxy materials available to our shareholders on the Internet. You
may read, print and download our 2008 Annual Report to Shareholders and our
Proxy Statement at www.cfpproxy.com/5556. On March 18, 2009, we mailed a notice
to stockholders containing instructions on how to access our proxy materials and
vote online. On an ongoing basis, shareholders may request to receive proxy
materials in printed form by mail or electronically by email.
You may
revoke your proxy at any time before it is exercised by (i) executing and
delivering a later dated proxy to the President of Cheviot Financial Corp. prior
to the Annual Meeting, (ii) delivering written notice of revocation of the
proxy to the President of Cheviot Financial Corp. prior to the Annual Meeting,
(iii) using the Internet or telephone voting options explained in the notice or
(iv) attending and voting in person at the Annual Meeting. Attendance at
the Annual Meeting, in and of itself, will not constitute a revocation of a
proxy. Proxies will be voted as instructed by the shareholder or shareholders
granting the proxy. Unless contrary instructions are specified, if the proxy is
executed and returned (and not revoked) prior to the Annual Meeting, the shares
of common stock, $0.01 par value per share, represented thereby will be voted:
(1)
FOR
the election of the directors nominated for election to the Board of Directors;
(2)
FOR
the ratification of the selection of our independent registered public
accounting firm for 2009; and (3) in accordance with the best judgment of
the named proxies on any other matters properly brought before the Annual
Meeting.
We are
the parent company of Cheviot Savings Bank. We are the majority-owned subsidiary
of Cheviot Mutual Holding Company. Since Cheviot Mutual Holding Company owns
61.5% of our outstanding shares of common stock, the votes cast by Cheviot
Mutual Holding Company will be determinative in the voting on Proposal 1
(election of directors) and Proposal 2 (ratification of selection of our
independent registered public accounting firm).
The
presence, in person or by proxy, of holders of a majority of the outstanding
shares of common stock is required to constitute a quorum for the transaction of
business at the Annual Meeting. Abstentions and “broker non-votes” (shares held
by a broker or nominee that does not have the authority, either express or
discretionary, to vote on a particular matter) are counted for purposes of
determining the presence or absence of a quorum for the transaction of business
at the Annual Meeting. The two nominees for election to the Board of Directors
who receive the greatest number of affirmative votes cast at the Annual Meeting
will be elected as directors. Approval of the ratification of our registered
public accounting firm requires that the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the proposal.
Abstentions and broker non-votes will not be counted as votes cast in the
election of nominees for director or other proposals. Proxies and ballots will
be received and tabulated by The Registrar and Transfer Company, our transfer
agent for the Annual Meeting.
As of the
record date, we had 8,872,504 shares of common stock issued and outstanding of
which Cheviot Mutual Holding Company owns 5,455,313 shares. Each holder of
shares of our common stock outstanding will be entitled to one vote for each
share held of record.
We will
bear the expense of preparing, printing and distributing this Proxy Statement
and the proxies solicited hereby. Proxies will be solicited by Internet, by
telephone or by mail and may also be solicited by our directors, officers and
other employees, without additional remuneration, in person or by telephone or
facsimile transmission. We will also request brokerage firms, banks, nominees,
custodians and fiduciaries to forward proxy materials to the beneficial owners
of shares of common stock as of the record date and will reimburse such persons
for the cost of forwarding the proxy materials in accordance with customary
practice. Your cooperation in promptly voting your shares and submitting your
proxy will help to avoid additional expense.
Stock
Ownership of Certain Beneficial Owners and Management
The
following table sets forth the beneficial ownership of common stock as of the
record date by (i) each beneficial owner of more than five percent (5%) of such
outstanding stock, (ii) each director and each executive officer, and
(iii) all of our directors and executive officers as a group. Except as
otherwise noted, the beneficial owners, directors and executive officers listed
have sole voting and investment power with respect to shares beneficially owned
by them. Except as described in the footnotes below, none of the shares
beneficially owned by directors, executive officers or nominees to the Board of
Directors have been pledged as security or collateral for any
loans.
Name
and Address of Beneficial Owner
(1)
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Amount
and Nature of
Beneficial
Ownership
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Percent
of Class
(2)
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Cheviot
Mutual Holding Company
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5,455,313
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61.49
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%
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Cheviot
Financial Corp. Employee Stock Ownership Plan
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357,075
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(3)
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4.02
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%
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Steven
R. Hausfeld
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13,262
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(4)
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*
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Edward
L. Kleemeier
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36,408
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(5)
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*
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Thomas
J. Linneman
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158,056
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(6)
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1.78
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%
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John
T. Smith
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40,780
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(7)
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*
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Robert
L. Thomas
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35,180
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(8)
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*
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James
E. Williamson
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33,384
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(9)
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*
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Deborah
A. Fischer
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48,326
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(10)
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*
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Kevin
M. Kappa
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95,895
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(11)
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1.08
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%
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Jeffrey
J. Lenzer
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84,715
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(12)
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*
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Scott
T. Smith
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80,253
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(13)
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*
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All
Directors and Executive Officers as a Group
(10 persons)
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626,259
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(14)
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7.06
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%
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*
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Indicates
beneficial ownership of less than 1%.
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(1)
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The
address of all persons listed is: c/o Cheviot Financial Corp., 3723
Glenmore Avenue, Cheviot, Ohio 45211.
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(2)
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Based
on 8,872,504 shares of common stock outstanding on March 9,
2009.
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(3)
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These
shares are held in a suspense account and are allocated among participants
annually on the basis of compensation as the employee stock ownership plan
debt is repaid. As of the record date, 178,538 shares have been allocated
to employee stock ownership plan participants. Messrs. Thomas J. Linneman
and Scott T. Smith have been appointed to serve as employee stock
ownership plan administrators for the employee stock ownership plan. First
Bankers Trust is the employee stock ownership plan trustee. The Employee
Stock Ownership Plan Committee directs the vote of all unallocated shares
and shares allocated to participants if timely voting directions are not
received for such shares. Messrs. Linneman and Smith disclaim beneficial
ownership for share voted by the Employee Stock Ownership Plan
Committee.
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(4)
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These
shares include 200 shares as to which Mr. Hausfeld has shared voting
and investment power. Includes 1,710 shares of restricted stock and
options to acquire 5,352 shares which were exercisable within 60 days of
the record date.
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(5)
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These
shares include 1,428 shares owned by jointly Mr. Kleemeier’s spouse
and a third person for which he does not have voting or investment power
and disclaims beneficial ownership. Includes 7,140 shares of restricted
stock and options to acquire 17,840 shares which were exercisable within
60 days of the record date.
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(6)
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These
shares include 12,500 shares owned by Mr. Linneman’s spouse for which he
does not have voting or investment power and as to which he disclaims
beneficial ownership, and 17,356 employee stock ownership plan shares over
which Mr. Linneman has shared voting power, but no investment power. In
addition, includes 35,700 shares of restricted stock and options to
acquire 80,000 shares which are exercisable within 60 days of the
record
date.
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(Footnotes
continued on next page)
(7)
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These
shares include (a) 2,500 shares of common stock owned by Mr. Smith’s
spouse for which he does not have voting or investment power and as to
which he disclaims beneficial ownership. Includes 7,140 shares of
restricted stock and options to acquire 17,840 shares of common stock
which were exercisable within 60 days of the record date. Mr. Smith has
pledged 2,500 shares as security for a loan.
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(8)
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Includes
7,140 shares of restricted stock and options to acquire 17,840 shares
of common stock which were exercisable within 60 days of the record
date.
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(9)
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These
shares include 877 shares of common stock owned by Mr. Williamson’s
spouse for which he does not have voting or investment power. Includes
7,140 shares of restricted stock and options to acquire 17,840 shares
of common stock which were exercisable within 60 days of the record
date.
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(10)
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These
shares include (a) 5,567 shares owned by Mrs. Fischer’s spouse for which
she does not have voting or investment power and as to which she disclaims
beneficial ownership and (b) 11,680 shares of common stock allocated to
Mrs. Fischer’s account under the Cheviot Savings Bank 401(k) Retirement
Savings Plan and (c) 7,199 employee stock ownership plan shares. Includes
4,280 shares of restricted stock and options to acquire 9,600 shares which
are exercisable within 60 days of the record date.
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(11)
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These
shares include (a) 8,385 shares of common stock owned by Mr. Kappa’s
spouse for which he does not have voting or investment power and as to
which he disclaims beneficial ownership and (b) 2,974 shares of
common stock allocated to Mr. Kappa’s account under the Cheviot Savings
Bank 401(k) Retirement Savings Plan and (c) 10,359 employee stock
ownership plan shares. Includes 17,917 shares of restricted stock and
options to acquire 46,400 shares which are exercisable within 60 days of
the record date.
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(12)
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These
shares include 4,402 shares of common stock owned by Mr. Lenzer’s
spouse for which he does not have voting or investment power and as to
which he disclaims beneficial ownership and 11,085 employee stock
ownership plan shares. Includes 16,426 shares of restricted stock and
options to acquire 48,400 shares which are exercisable within 60 days of
the record date. Mr. Lenzer has pledged 16,188 shares as security for a
loan.
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(13)
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These
shares include 11,750 shares of common stock owned by Mr. Smith’s
spouse for which he does not have voting or investment power, 1,500 shares
owned by Mr. Smith’s children and 8,973 employee stock ownership plan
shares. Includes 14,280 shares of restricted stock and options to acquire
32,000 shares which are exercisable within 60 days of the record
date.
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(14)
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These
shares include shares of common stock held directly as well as by spouses
or minor children, in trust and other indirect ownership. In the
aggregate, our directors and executive officers disclaim beneficial
ownership of and do not have voting or investment power for 49,109 of
the
shares.
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PROPOSAL
1 – ELECTION OF DIRECTORS
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Our
Charter requires that the Board of Directors be divided into three classes, as
nearly equal in number as possible, each class to serve for a three-year period,
with approximately one-third of the directors elected each year. The Board of
Directors currently consists of six members. Two directors will be elected at
the Annual Meeting, each to serve for a three-year term expiring in 2012 and
until their successors have been elected and qualified.
The Board
has nominated Steven R. Hausfeld and Thomas J. Linneman, each of whom is a
current director, each to serve until the 2012 Annual Meeting of Shareholders.
Information regarding the business experience of each nominee as well as each of
the other directors is provided below.
Unless
otherwise directed, the persons named in the proxy intend to vote all proxies
FOR
the election of Messrs. Hausfeld and Linneman to the Board of Directors. The
nominees have consented to serve as our directors if elected. If, at the time of
the Annual Meeting, any of the nominees is unable or declines to serve as a
director, the discretionary authority provided in the enclosed proxy will be
exercised to vote for a substitute candidate designated by the Board of
Directors. The Board of Directors has no reason to believe any of the nominees
will be unable or will decline to serve as a director.
Each
director, including the director nominees, who was a director of Cheviot Savings
Bank on the date Cheviot Savings Bank reorganized into the mutual holding
company structure continued to serve as a director of Cheviot Savings Bank and
became a director of each of Cheviot Financial Corp. and Cheviot Mutual Holding
Company as of January 5, 2004, the date of the completion of the mutual holding
company reorganization and offering, other than Mr. Hausfeld, who was elected to
the Board in July 2005.
Director
Nominees
(Terms
Expire at the 2012 Annual Meeting of Shareholders)
Steven R. Hausfeld,
51, is a
Certified Public Accountant who owns a local accounting practice. Mr. Hausfeld
previously served as a school board member for the Oak Hills Local School
District through December, 2005. Mr. Hausfeld has served as a director of
Cheviot Savings Bank since July 2005. Mr. Hausfeld serves as the financial
expert on the Audit Committee.
Thomas J. Linneman
, 55, has
served as our President and Chief Executive Officer and of Cheviot Mutual
Holding Company since our reorganization into the mutual holding company
structure in 2004 and of Cheviot Savings Bank since 1998. Mr. Linneman has
served as a director of Cheviot Savings Bank since 1998.
Directors
Not Standing for Election
(Terms
Expire at the 2010 Annual Meeting of Shareholders)
Edward L. Kleemeier
, 74,
is a retired District
Fire Chief for the City of Cincinnati, Ohio. Mr. Kleemeier has served as a
director of Cheviot Savings Bank since 1978.
James E. Williamson
, 64, is a
retired District Administrator (Director) of Oak Hills Local School District in
Cincinnati, Ohio since 2000. Mr. Williamson was a high school principal in
Cincinnati, Ohio from 1989 to 2000. Mr. Williamson also serves as the Executive
Secretary of Cheviot Mutual Holding Company and Cheviot Financial Corp. Mr.
Williamson has served as a director of Cheviot Savings Bank since
1997.
(Terms
expire at the 2011 Annual Meeting of Shareholders)
John T. Smith
, 64,
is the
Secretary/Treasurer of Hawkstone Associates, Inc. dba Triumph Energy Corp., a
gasoline wholesaler and retailer. Mr. Smith is the father of Scott T. Smith, our
Chief Financial Officer and chief financial officer of Cheviot Mutual Holding
Company and Cheviot Savings Bank. Mr. Smith has served as a director of Cheviot
Savings Bank since 1995.
Robert L. Thomas
, 66, is the
owner/operator of R&R Quality Meats & Catering in Cheviot, Ohio. Mr.
Thomas has served as a director of Cheviot Savings Bank since 1989.
Executive
Officers
Jeffrey J. Lenzer
, 47, has
been our Vice President of Operations since 2005. Prior to that, he served as
the Vice President of Lending.
Kevin M. Kappa
, 51, has been
our Vice President of Compliance since 1993.
Scott T. Smith
, 39, has been
our Chief Financial Officer and Treasurer since 1999. Mr. Smith is the son of
Director John T. Smith.
Deborah A. Fischer
, 55, has
been our Vice President of Lending since 2006. Prior to that, she served as the
Assistant Vice President of Lending.
THE BOARD RECOMMENDS THAT
SHAREHOLDERS VOTE
FOR
THE ELECTION OF MESSRS.
HAUSFELD AND LINNEMAN TO THE BOARD OF DIRECTORS.
Board
Structure and Compensation
We are a
“controlled company” under NASDAQ Marketplace Rules because more than 50% of our
voting power is held by Cheviot Mutual Holding Company. Therefore, we are exempt
from the NASDAQ Marketplace Rules requiring (a) that we have a majority of
independent directors on the Board, (b) any compensation committee and
nominating committee to be composed solely of independent directors, (c) the
compensation of executive officers being determined by a majority of the
independent directors or a compensation committee composed solely of independent
directors, and (d) the election or recommendation of director nominees for the
Board’s selection, either by a majority of the independent directors or a
nominating committee composed solely of independent directors.
Affirmative
Determinations Regarding Director Independence and Other Matters
Based on
information supplied to it by the directors, the Board of Directors has
determined each of the following directors to be an “independent director” as
such term is defined in the NASDAQ Marketplace Rules:
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Steven
R. Hausfeld
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Robert
L. Thomas
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Edward
L. Kleemeier
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James
E. Williamson
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In this
proxy statement these four directors are referred to individually as an
“Independent Director” and collectively as the “Independent Directors.” The
Independent Directors constitute a majority of the Board of Directors. Although
Mr. Smith is not an employee of the company or any of its affiliates, Mr. Smith
is determined not to be independent because of a family relationship; Mr. Smith
is the father of Scott T. Smith, our Chief Financial Officer and the Chief
Financial Officer of Cheviot Mutual Holding Company and Cheviot Savings
Bank.
The Board
of Directors has also determined that each member of the Audit Committee of the
Board meets the independence requirements applicable to that committee
prescribed by the NASDAQ Marketplace Rules, the Securities and Exchange
Commission and the Internal Revenue Service.
In
determining the independence of our directors we considered our relationships
with these individuals, which consist of making loans to our directors. We will
originate mortgage loans secured by the borrower’s residence to our employees,
executive officers and directors. All of these loans are made in accordance with
applicable banking regulations. All employee and director loans must be approved
by the Board of Directors.
Board
and Committee Meetings
We have
six directors and the following two committees: (1) Audit Committee and
(2) Nominating Committee. The Board of Directors has the responsibility for
establishing broad corporate policies and for our overall performance, although
it is not involved in the day-to-day operating details. Directors are kept
informed of our business by various reports and documents sent to them, as well
as by operating and financial reports presented at Board and Committee meetings
by the Chief Executive Officer and other officers.
Our
directors also serve as the Board of Directors for Cheviot Savings Bank. For the
year ended December 31, 2008, the Board of Directors held 13 regular and 2
special meetings. No director attended fewer than 75 percent of the total
meetings of the Board of Directors and the committees on which such director
served.
Audit Committee.
The Audit
Committee consists of three of the Independent Directors, Messrs. Hausfeld,
Thomas and Williamson. The committee is responsible for engaging our independent
registered public accounting firm, overseeing our financial reporting process,
evaluating the adequacy of our internal controls, reviewing our compliance with
federal, state and local laws and regulations, and monitoring the legal and
ethical conduct of our management and employees. In addition, the committee
reviews our financial affairs, including our capital structure, borrowing
limits, financing of corporate acquisitions and the performance of our benefit
plans. The Audit Committee membership meets the audit committee composition
requirements of the NASDAQ Marketplace Rules. Mr. Hausfeld has been designated
as the audit committee’s financial expert. Mr. Hausfeld is a certified public
accountant. The Audit Committee also serves as the audit committee for the Board
of Directors of Cheviot Savings Bank.
The Audit
Committee met 10 times for the year ended December 31, 2008. Pursuant to
applicable regulations, the Audit Committee has adopted a written charter, a
copy of which is available on our website
www.cheviotsavings.com
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Nominating Committee.
The
Nominating Committee consists of the entire Board of Directors, as required by
our Bylaws except for directors who are under consideration for re-election,
including both independent and non-independent directors. As a “controlled
company,” we are not required to have the Nominating Committee comprised solely
of the Independent Directors. The non-independent members of the Nominating
Committee are Messrs. Linneman and Smith. The Committee recommends nominees for
the election of directors and officers, monitors the performance of the other
Board committees, and informs the Board of shareholder concerns. The Nominating
Committee does not operate under a formal written charter.
We do
not pay any third party
a fee to assist us in identifying and evaluating potential
nominees.
The
Nominating Committee of the Company met 1 time during 2008.
Compensation Committee.
We do
not have a Compensation Committee because we do not independently compensate our
executive officers, directors or employees. These persons are compensated by
Cheviot Savings Bank. As a “controlled company,” we are not required to adhere
to the NASDAQ Marketplace Rules with respect to the Board’s determination of the
compensation of officers.
Other Board Committees of Cheviot
Savings Bank.
In addition to the committees of the Board of Cheviot
Financial Corp., the Board of Directors of Cheviot Savings Bank also maintains a
loan committee, a compensation committee and information technology committee.
The loan committee has the principal responsibility of approving certain loans
to be provided by Cheviot Savings Bank in its ordinary course of business. Since
we do not independently compensate our executive officers, directors or
employees, the compensation committee has the principal responsibility for
setting and reviewing the compensation benefits provided to officers and
employees of Cheviot Savings Bank, who are also employees of Cheviot Financial
Corp. The information technology committee has the responsibility of monitoring
the technology environment relating to controls, updates and
expansion.
Attendance
at Annual Meeting of Shareholders
We do not
have a policy regarding director attendance at the annual meetings of
shareholders. Directors Hausfeld, Kleemeier, Smith, Thomas, Williamson and
Linneman attended the prior year’s annual meeting of shareholders.
Executive
Sessions of Non-Management Directors
Our
non-management directors meet in executive session without management present
from time to time as deemed necessary by the non-management directors, but at
least two times per year. Shareholders or other interested parties may
communicate with the presiding director or to the non-management directors as a
group.
The
Director Nominations Process
The
purpose of the Nominating Committee is to consider both management and
shareholder recommended candidates for possible inclusion in our recommended
slate of director nominees.
Minimum Criteria for
Candidates.
At a minimum, each candidate must (a) agree to accept the
nomination for Board candidacy, (b) meet the standards of independence
established by NASDAQ, and (c) meet all other applicable laws, rules, and
regulations related to service as a Director.
Desirable Qualities and Skills.
In addition, the Nominating Committee will consider the following skills
and characteristics of candidates: (a) judgment, (b) diversity, (c) experience,
(d) skills, (e) accountability and integrity, (f) financial literacy, (g)
industry knowledge, (h) other board appointments, and (i) independence. In
addition, in determining whether an incumbent director should stand for
re-election, the Nominating Committee will consider the director’s attendance at
meetings, achievement of satisfactory performance and other matters determined
by the Board.
Internal Process for Identifying
Candidates.
On a periodic basis, the Nominating Committee solicits ideas
for possible candidates from a number of sources – members of the Board; senior
level executives; individuals personally known to the members of the Board; and
research, including database and Internet searches.
General Nomination Right of All
Shareholders.
Any of our shareholders may nominate one or more persons
for election as a director at an annual meeting of shareholders if the
shareholder complies with the notice, information and consent provisions
contained in our Bylaws. We have an advance notice bylaw provision. In order for
the director nomination to be timely, a shareholder’s notice to our Executive
Secretary must be delivered to our principal executive offices not less than
30 days nor more than 60 days prior to the date of our next annual
meeting. If a shareholder provides timely notice as described above, in
accordance with our Bylaws, the candidate may be voted upon in the election of
directors at the annual meeting and the candidate’s name will be included on the
ballot for election. If a shareholder fails to provide timely notice, but still
provides written notice to our Executive Secretary at least five days prior to
the annual meeting, the candidate will be added to the ballots provided at the
annual meeting, but will not be included on any proxy cards delivered by the
company. Further, the persons named in the proxy cards will be permitted to
exercise discretionary voting authority with respect to any candidate submitted
by a shareholder less than 30 days before the date of the annual
meeting.
A
shareholder entitled to vote may propose a candidate from the floor at the
annual meeting itself only if the Nominating Committee has failed to nominate a
slate of candidates at least 20 days before the date of the annual meeting. If
the Nominating Committee recommends a slate of candidates at least 20 days
before the date of the annual meeting, no votes will be allowed for candidates
who are proposed from the floor during the annual meeting.
Evaluation of Candidates.
The
Nominating Committee will consider all candidates identified through the
processes described above and will evaluate each of them, including incumbents,
based on the same criteria. If, based on the Nominating Committee’s initial
evaluation, a candidate continues to be of interest to the Nominating Committee,
a member of the Nominating Committee will interview the candidate and
communicate such member’s evaluation to the other Nominating Committee members.
Later reviews will be conducted by other members of the Nominating Committee and
our executive officers. Ultimately, background and reference checks will be
conducted and the Nominating Committee will meet to finalize its list of
recommended candidates for the Board’s consideration.
Timing of the Identification and
Evaluation Process.
Our fiscal year ends on December 31. The Nominating
Committee usually meets in February or March to consider and determine, among
other things, candidates to be included in our recommended slate of director
nominees for election by shareholders at the annual meeting.
There
have been no material changes to these procedures since they were previously
disclosed in our proxy statement for the 2008 Annual Meeting of
Shareholders.
Audit
Committee Report
During
2008, Messrs. Hausfeld, Thomas and Williamson served on our Audit
Committee, with Mr. Williamson serving as Chair. The Audit Committee
operates pursuant to a written charter, which complies with the applicable
provisions of the Sarbanes-Oxley Act of 2002 and related rules of the SEC and
Nasdaq. The Audit Committee is responsible for overseeing our accounting and
financial reporting processes, including the quarterly review and the annual
audit of our consolidated financial statements by Clark, Schaefer, Hackett &
Co., our independent registered public accounting firm. As part of fulfilling
its responsibilities, the Audit Committee reviewed and discussed the audited
consolidated financial statements for the year ended December 31, 2008 with
management and Clark, Schaefer, Hackett & Co. and discussed those matters
required by Statement on Auditing Standards No. 61 (Communication with
Audit Committees), as amended, with Clark, Schaefer, Hackett & Co. The Audit
Committee received the written disclosures and the letter required by
Independent Standards Board Statement No. 1 (Independence Discussions with
Audit Committee) from Clark, Schaefer, Hackett & Co. and discussed that
firm’s independence with representatives of the firm.
Based
upon the Audit Committee’s review of the audited consolidated financial
statements and its discussions with management, the internal audit function and
our independent registered public accounting firm, the Audit Committee
recommended that the Board of Directors include our audited financial statements
for the year ended December 31, 2008 in the Annual Report on Form 10-K as filed
with the SEC.
This
report shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, expect to the extent that we specifically incorporate this information
by reference, and shall not otherwise be deemed filed under such
Acts.
Respectfully
submitted,
Steven R.
Hausfeld
Robert L.
Thomas
James E.
Williamson
Compensation
Committee
Overview of Compensation
Program
. The Compensation Committee (for purposes of this analysis, the
“Committee”) of the Board of Directors of Cheviot Savings Bank has the
responsibility for establishing, implementing and continually monitoring
adherence with our compensation philosophy. The Committee ensures that the total
compensation paid is fair, reasonable and competitive. The members of the
Compensation Committee of Cheviot Savings Bank are directors Hausfeld, Thomas
and Kleemeier, all of whom are independent directors. The Compensation Committee
does not operate under a written charter. The Compensation Committee of Cheviot
Savings Bank met three times during the year ended December 31,
2008.
Throughout
this proxy statement, the individual who served as our Chief Executive Officer
during 2008 as well as the other individuals included in the Summary
Compensation Table, are referred to as the “named executive
officers.”
Compensation Philosophy and
Objectives
. The Committee believes that the most effective executive
compensation program is one that is designed to reward the achievement of
specific annual, long-term and strategic goals. The Committee evaluates both
performance and current compensation to ensure that we maintain our ability to
attract and retain superior employees in key positions. The compensation
provided to key employees remains competitive relative to the compensation paid
to similarly situated executives of our industry and in our market
area.
Role of Executive Officers in
Compensation Decisions
. The Committee makes all compensation decisions
for the named executive officers and approves recommendations made by the Chief
Executive Officer for other employees. The Chief Executive Officer annually
reviews the performance of each one of the named executive officers. The
conclusions reached and recommendations made based on these reviews are
presented to the Committee. The Committee can exercise its discretion in
modifying any recommendation or awards.
Compensation Components
. For
the fiscal year ended December 31, 2008, the principal components of
compensation include base salary, performance-based incentive compensation,
retirement, stock based incentive plan and other benefits.
Code
of Business Conduct and Ethics
We have
adopted a Code of Business Conduct and Ethics that applies to our directors,
executive officers and employees, including our principal executive officer,
principal financial officer, principal accounting officer or controller, or
other persons performing similar functions. The Code of Ethics requires our
directors, executive officers and employees to avoid conflicts of interest,
comply with all laws and other legal requirements, conduct business in an honest
and ethical manner and otherwise act with integrity and in our best interest.
Under the terms of the Code of Ethics, directors, executive officers and
employees are required to report any conduct that they believe in good faith to
be an actual or apparent violation of the Code of Ethics.
Executive
Compensation
Summary Compensation Table
.
The following table shows for the years ended December 31, 2008 and 2007, the
compensation of Thomas J. Linneman, our principal executive officer and our two
highest compensated
executive officers who
received total compensation of $100,000 for services to us or any of our
subsidiaries during the year ended December 31, 2008.
Summary
Compensation Table
|
|
Name
and
Principal
Position
|
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
awards
(1)
($)
|
|
|
Option
awards
(2)
($)
|
|
|
All
other
compensation
($)
|
|
|
Total
($)
|
|
Thomas
J. Linneman,
President
and Chief Executive Officer
|
|
|
2008
|
|
|
$
|
199,484
|
(3)
|
|
$
|
9,974
|
|
|
$
|
103,262
|
|
|
$
|
67,200
|
|
|
$
|
60,890
|
(9)
|
|
$
|
440,810
|
|
|
|
|
2007
|
|
|
$
|
194,333
|
(4)
|
|
$
|
4,858
|
|
|
$
|
103,262
|
|
|
$
|
67,200
|
|
|
$
|
62,320
|
(10)
|
|
$
|
431,973
|
|
Kevin
M. Kappa,
Vice
President--Compliance of the Bank
|
|
|
2008
|
|
|
$
|
115,047
|
(5)
|
|
$
|
5,752
|
|
|
$
|
61,900
|
|
|
$
|
38,976
|
|
|
$
|
27,177
|
(11)
|
|
$
|
248,852
|
|
|
|
|
2007
|
|
|
$
|
111,755
|
(6)
|
|
$
|
2,794
|
|
|
$
|
61,900
|
|
|
$
|
38,976
|
|
|
$
|
28,375
|
(12)
|
|
$
|
243,800
|
|
Jeffrey
J. Lenzer,
Vice
President--Operations of the Bank
|
|
|
2008
|
|
|
$
|
128,990
|
(7)
|
|
$
|
6,450
|
|
|
$
|
61,900
|
|
|
$
|
40,656
|
|
|
$
|
29,765
|
(13)
|
|
$
|
267,761
|
|
|
|
|
2007
|
|
|
$
|
125,704
|
(8)
|
|
$
|
3,143
|
|
|
$
|
61,900
|
|
|
$
|
40,656
|
|
|
$
|
31,056
|
(14)
|
|
$
|
262,459
|
|
(1)
|
The
amounts reflect the dollar amount recognized for financial statement
reporting purposes for the fiscal years ended December 31, 2008 and 2007,
in accordance with FAS 123 (R) of awards pursuant to the Stock-Based
Incentive Plan and this includes amounts from awards granted prior to
2007. Assumptions used in the calculation of these amounts are included in
Note A to our audited financial statements for the year ended December 31,
2008.
|
(2)
|
The
amounts reflect the dollar amount recognized for financial statement
reporting purposes for the fiscal years ended December 31, 2008 and 2007,
in accordance with FAS 123 (R) of awards pursuant to the Stock-Based
Incentive Plan and this includes amounts from awards granted prior to
2007. Assumptions used in the calculation of these amounts are included in
Note A to our audited financial statements for the year ended December 31,
2008.
|
(3)
|
The
amounts include salary earned during the fiscal year ended December 31,
2008. In relation to the salary amounts earned Mr. Linneman contributed
$4,147 to the Cheviot Savings Bank 401(k) Plan.
|
(4)
|
The
amounts include salary earned during the fiscal year ended December 31,
2007. In relation to the salary amounts earned Mr. Linneman contributed
$3,817 to Cheviot Savings Bank’s 401(k) Plan.
|
(5)
|
The
amounts include salary earned during the fiscal year ended December 31,
2008. In relation to the salary amounts earned Mr. Kappa contributed
$10,606 to Cheviot Savings Bank’s 401(k) Plan.
|
(6)
|
The
amounts include salary earned during the fiscal year ended December 31,
2007. In relation to the salary amounts earned Mr. Kappa contributed
$10,787 to Cheviot Savings Bank’s 401(k) Plan.
|
(7)
|
The
amounts include salary earned during the fiscal year ended December 31,
2008. In relation to the salary amounts earned Mr. Lenzer contributed
$7,928 to Cheviot Savings Bank’s 401(k) Plan.
|
(8)
|
The
amounts include salary earned during the fiscal year ended December 31,
2007. In relation to the salary amounts earned Mr. Lenzer contributed
$8,082 to Cheviot Savings Bank’s 401(k) Plan.
|
(9)
|
The
amounts include dividends paid on stock awards, contributions by Cheviot
Savings Bank to Cheviot Savings Bank’s 401(k) Plan and employee stock
ownership plan, premiums paid on behalf of Mr. Linneman and director’s
fees of $8,836, $12,804, $21,268, $982 and $17,000.
|
(10)
|
The
amounts include dividends paid on stock awards, contributions by Cheviot
Savings Bank to Cheviot Savings Bank’s 401(k) Plan and employee stock
ownership plan, premiums paid on behalf of Mr. Linneman and director’s
fees of $10,353, $12,952, $21,418, $597 and $17,000.
|
(11)
|
The
amounts include dividends paid on stock awards, contributions by Cheviot
Savings Bank to Cheviot Savings Bank’s 401(k) Plan and employee stock
ownership plan and premiums paid on behalf of Mr. Kappa of $5,296, $9,076,
$12,265, and $540.
|
(12)
|
The
amounts include dividends paid on stock awards, contributions by Cheviot
Savings Bank to Cheviot Savings Bank’s 401(k) Plan and employee stock
ownership plan and premiums paid on behalf of Mr. Kappa of 6,206, $9,324,
$12,316 and $529.
|
(13)
|
The
amounts include dividends paid on stock awards, contributions by Cheviot
Savings Bank to Cheviot Savings Bank’s 401(k) Plan and employee stock
ownership plan and premiums paid on behalf of Mr. Lenzer of $5,296,
$10,362, $13,753, and $354.
|
(14)
|
The
amounts include dividends paid on stock awards, contributions by Cheviot
Savings Bank to Cheviot Savings Bank’s 401(k) Plan and employee stock
ownership plan and premiums paid on behalf of Mr. Lenzer of $6,206,
$10,661, $13,842 and
$347.
|
Employment
Contracts and Termination of Employment and Change-in-Control
Arrangements
Employment Agreement with
Mr. Linneman.
Effective September 16,
2008, Cheviot Savings Bank entered into an employment agreement with Mr.
Linneman which provides for the employment and retention of Mr. Linneman for a
three-year term. Commencing on the first anniversary date of the employment
agreement and continuing on each anniversary thereafter, the disinterested
members of the Board of Directors of Cheviot Savings Bank may extend the
employment agreement an additional year such that the remaining term of the
agreement shall be 36 months, unless the Board elects not to extend the term by
giving written notice to Mr. Linneman. The employment agreement provides that
Mr. Linneman’s base salary will be reviewed annually and may be increased but
not decreased. The base salary that will be effective for such employment
agreement will be $199,680. Cheviot Savings Bank also provides a bonus program
to Mr. Linneman which provides him with the opportunity to earn up to 50% of his
base salary, on an annual basis, the amount of which shall be determined by
specific performance standards and a formula to be agreed to by Mr. Linneman and
Cheviot Savings Bank’s Board of Directors annually. Performance standards are
measured on a calendar year, and no bonus shall be payable if Mr. Linneman is
not employed on December 31 of the pertinent year. Mr. Linneman is entitled to
participate in such life insurance, medical, dental, 401(k), profit-sharing and
stock-based compensation plans and other programs and arrangements as may be
approved from time to time by Cheviot Savings Bank for the benefit of its
employees. In addition, Cheviot Savings Bank provides Mr. Linneman with a
supplemental life insurance policy with a death benefit of not less than
$200,000.
Under the
employment agreement, if Mr. Linneman dies, retires or is terminated “for cause”
(as defined in the employment agreement) or if he voluntarily terminates his
employment without “good reason” (as defined in the employment agreement), Mr.
Linneman (or his estate) shall be entitled to receive the compensation due him
through the last day of the calendar month in which his death, retirement or
termination occurred. In the event of Mr. Linneman’s disability, Cheviot Savings
Bank will pay him, as disability pay, pursuant to the long-term disability
policy then in effect. Such payments shall be reduced by the amount of any
short- or long-term disability benefits payable to him under any other
disability programs sponsored by Cheviot Savings Bank. In addition, during any
period of his disability, he and his dependents shall, to the greatest extent
possible, continue to be covered under all non-taxable medical, dental and life
insurance plans of Cheviot Savings Bank on the same terms as if he were actively
employed by Cheviot Savings Bank.
Under the
employment agreement, if the employment of Mr. Linneman is terminated by Cheviot
Savings Bank without “cause” or Mr. Linneman terminates his employment with
“good reason,” Mr. Linneman would be entitled to a severance payment equal to
the base salary (determined by reference to his base salary on the termination
date) and bonuses (determined by reference to his average bonus over the three
years preceding his termination date) that would otherwise have been payable
over the remaining term of the agreement. Such amounts shall be paid in one lump
sum within ten calendar days of such termination. In addition, Mr. Linneman will
be paid in a single cash lump sum distribution within ten calendar days, the
present value of the cash equivalent of the amount of benefits Mr. Linneman
would have received under any retirement program (whether tax-qualified or
non-qualified) if he was employed for the remaining term of the employment
agreement, and will continue to participate in any benefit plans of Cheviot
Savings Bank that provide non-taxable health (including medical and dental),
life, or similar coverage for the remaining term of the employment agreement
upon terms no less favorable than the most favorable terms provided to senior
executives of Cheviot Savings Bank during such period. In the event Cheviot
Savings Bank is unable to provide such continued coverage, the Bank will provide
Mr. Linneman with a cash lump sum benefit of the value of such coverage, payable
within ten calendar days following Mr. Linneman’s termination.
If,
within the period ending two years after a change in control (as defined in the
employment agreement), Cheviot Savings Bank shall terminate Mr. Linneman’s
employment without “cause” or Mr. Linneman terminates his employment with “good
reason,” Cheviot Savings Bank shall, within ten calendar days of termination of
his employment, make a lump sum cash payment to him equal to 2.99 times Mr.
Linneman’s average annual compensation over the five most recently completed
calendar years ending with the year immediately preceding the effective date of
the change in control. In addition, Mr. Linneman will be paid in a single cash
lump sum distribution, within ten calendar days, equal to the present value of
the cash equivalent of the amount of benefits Mr. Linneman would have received
if he was employed for 36 months following his termination of employment, and
shall continue to participate in any benefit plans that provide non-taxable
health (including medical and dental), life or similar coverage for 36 months
upon terms no less favorable than the most favorable terms provided to senior
executives during such period. In the event payments made to Mr. Linneman
include an “excess parachute payment” as defined in Section 280G of the Internal
Revenue Code, such payments will be cutback by the minimum dollar amount
necessary to avoid this result. If Mr. Linneman was terminated as a result of a
change of control as of December 31, 2008, total payments he would be entitled
to receive would be $630,000.
Upon
termination of Mr. Linneman for any reason, he must adhere to a two-year
non-competition covenant.
All
reasonable costs and legal fees paid or incurred by Mr. Linneman in any dispute
or question of interpretation relating to the employment agreement will be paid
by Cheviot Savings Bank, if Mr. Linneman is successful on the merits in a legal
judgment, arbitration or settlement. The employment agreement also provides that
Cheviot Savings Bank will indemnify the executive for certain liabilities and
expenses as provided therein.
Potential Payments upon
Termination
. Mr. Linneman would receive payments totaling $626,000 in the
event he were terminated, consisting of $609,000 in salary and bonus payments,
$13,000 in health insurance premium payments for three years and $4,000 in life
insurance premium payments for three years.
Change-in-Control Severance
Agreements with Messrs. Kappa and Lenzer
. Effective September 16,
2008, Cheviot Savings Bank entered into change in control severance agreements
with each of Messrs. Lenzer and Kappa to provide benefits to each of them upon a
change in control of either Cheviot Savings Bank or Cheviot Financial Corp. Each
severance agreement provides for a three-year term. Additionally, on or before
each anniversary date of the effective date of the severance agreement, the term
of the agreement may be extended for an additional one-year period beyond the
then effective expiration date upon a determination and resolution of the Board
of Directors that the performance of the employee has met the requirements and
standards of the board and that the term of the agreement should be extended.
Under the severance agreement, if a change in control of Cheviot Savings Bank or
Cheviot Financial Corp. occurs, Messrs. Lenzer and Kappa, if terminated or if
each terminates his employment for “good reason” (as defined in the severance
agreements) within 12 months after any change in control, will be entitled to
receive a single cash lump sum distribution equal to two times the prior
calendar year’s cash compensation paid to such executive by Cheviot Savings
Bank. Such sum will be paid within 30 days following Messrs. Lenzer’s and
Kappa’s date of termination. In the event payments made to Messrs. Lenzer and
Kappa include an “excess parachute payment” as defined in Section 280G of the
Internal Revenue Code, such payments will be cutback by the minimum dollar
amount necessary to avoid this result. If Messrs. Kappa and Lenzer were
terminated as a result of a change of control as of December 31, 2008, total
payments they would each be entitled to receive would be $487,000.
401(k)
Plan
Cheviot
Savings Bank maintains the Cheviot Savings Bank 401(k) Retirement Savings Plan
which is a qualified, tax-exempt profit sharing plan with a salary deferral
feature under Section 401(k) of the Code. Employees who have attained age 21 and
have completed one year of employment are eligible to participate. Employees are
entitled to enter the 401(k) Plan on the first January 1 or July 1
occurring after the employee becomes eligible to participate in the 401(k)
Plan.
Under the
401(k) Plan participants may elect to defer a percentage of their compensation
each year instead of receiving that amount in cash equal to the lesser of (i) a
maximum percentage of compensation as indicated in a notice received from the
401(k) Plan administrator or (ii) an indexed dollar amount set by the Internal
Revenue Service, which was $15,500 for 2008. In addition, for participants that
are age 50 or older by the end of any taxable year, the participant may elect to
defer additional amounts (called “catch-up contributions”) to the 401(k) Plan.
The additional amounts may be deferred regardless of any other limitations on
the amount that a participant may defer to the 401(k) Plan. The maximum
“catch-up contribution” that a participant can make in 2008 was
$5,000.
Each plan
year (a calendar year), Cheviot Savings Bank will contribute to the 401(k) Plan
the following amounts: (a) the total amount of the salary reduction a
participant elected to defer; (b) in the discretion of Cheviot Savings Bank, a
matching contribution equal to a percentage of the amount of the salary
reduction a participant elected to defer; and (c) an amount equal to 3% of a
participant’s plan compensation (generally the sum of a participant’s Form W-2
wages and other compensation for the year plus a participant’s before-tax
contributions to the 401(k) Plan and any other benefit plans of Cheviot Savings
Bank, up to a legal limit (which was $230,000 for 2008)) for the year plus 3% of
a participant’s plan compensation for the year in excess of 50% of the Social
Security Taxable Wage Base for old-age retirement benefits for the year ($51,000
for 2008) plus any additional amount that does not match a participant’s salary
reduction and that is determined by Cheviot Savings Bank in its
discretion.
The
401(k) Plan permits employees to direct the investment of his or her own
accounts into various investment options, including the opportunity to invest in
a “Cheviot Financial Corp. Stock Fund.” Each participant who directs the trustee
to invest all or part of his or her account in the Cheviot Financial Corp. Stock
Fund will have assets in his or her account applied to the purchase of shares of
common stock. Participants will be entitled to direct the trustee as to how to
vote his or her allocable shares of common stock.
Plan
benefits will be paid to each participant in the form of a single cash payment
at normal retirement age unless earlier payment is selected. If a participant
dies prior to receipt of the entire value of his or her 401(k) Plan accounts,
payment will generally be made to the beneficiary in a single cash payment as
soon as possible following the participant’s death. Payment will be deferred if
the participant had previously elected a later payment date. If the beneficiary
is not the participant’s spouse, payment will be made within one year of the
date of death. If the spouse is the designated beneficiary, payment will be made
no later than the date the participant would have attained age 70 1/2. Normal
retirement age under the 401(k) Plan is age 65. Early retirement age is age
55.
Employee
Stock Ownership Plan and Trust
In
January 2004, we implemented the Cheviot Financial Corp. Employee Stock
Ownership Plan in connection with the reorganization and stock offering.
Employees who are at least 21 years old, who have at least one year of
employment with Cheviot Savings Bank or an affiliated corporation and who have
completed at least 1,000 hours of service, are eligible to participate. As part
of the reorganization and stock offering, the employee stock ownership plan
borrowed funds from us and used those funds to purchase 357,075 shares of common
stock. Collateral for the loan is the common stock purchased by the employee
stock ownership plan. The loan is being repaid principally from the
participating employers’ discretionary contributions to the employee stock
ownership plan over a period of up to 10 years. The loan bears interest at an
annual percentage rate fixed at 4.0%. Shares purchased by the employee stock
ownership plan are held in a suspense account for allocation among participants
as the loan is repaid.
Contributions
to the employee stock ownership plan and shares released from the suspense
account in an amount proportional to the repayment of the employee stock
ownership plan loan are allocated among employee stock ownership plan
participants on the basis of compensation in the year of allocation. Benefits
under the plan are 100% vested upon completion of five years of credited
service. A participant’s interest in his or her account under the plan also
fully vest in the event of termination of service due to a participant’s early
or normal retirement, death, disability, or upon a change in control (as defined
in the plan). Vested benefits are payable in the form of common stock and/or
cash. Contributions to the employee stock ownership plan are discretionary,
subject to the loan terms and tax law limits. Therefore, benefits payable under
the employee stock ownership plan cannot be estimated. Under generally accepted
accounting principles, a participating employer will be required to record
compensation expense each year in an amount equal to the fair market value of
the shares released from the suspense account for the year.
Effect
of Change in Control on Certain Executive Compensation Plans
In the
event of a change in control, the employee stock ownership plan will terminate
and participants will become fully vested in their account balances, which will
be paid to them.
Outstanding Equity Awards at Year
End
.
The
following table sets forth information with respect to our outstanding equity
awards as of December 31, 2008 for our named executive officers.
Outstanding
Equity Awards at Fiscal Year-End
|
|
|
|
Option
awards
|
|
Stock
awards
|
|
Name
|
|
Number
of
securities
underlying
unexercised
options
(#)
exercisable
|
|
Number
of
securities
underlying
unexercised
options
(#)(1)
unexercisable
|
|
Equity
incentive
plan
awards:
number
of
securities
underlying
unexercised
earned
options
(#)
|
|
Option
exercise
price
($)
|
|
Option
expiration
date
|
|
Number
of
shares
or
units
of
stock
that
have
not
vested
(#)(2)
|
|
Market
value
of
shares
or
units
of
stock
that
have
not
vested
($)
|
|
Equity
incentive
plan
awards:
number
of
unearned
shares,
units
or
other
rights
that
have
not
vested
(#)
|
|
Equity
incentive
plan
awards:
market
or
payout
value
of
unearned
shares,
units
or
other
rights
that
have
not
vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
J. Linneman,
|
|
|
60,000
|
|
40,000
|
|
—
|
|
$
|
11.15
|
|
5/5/2015
|
|
17,850
|
|
$
|
115,133
|
|
—
|
|
$
|
—
|
|
President
and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin
M. Kappa,
|
|
|
34,800
|
|
23,200
|
|
—
|
|
$
|
11.15
|
|
5/5/2015
|
|
10,700
|
|
$
|
69,015
|
|
—
|
|
$
|
—
|
|
Vice
President--Compliance of the Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
J. Lenzer,
|
|
|
36,300
|
|
24,200
|
|
—
|
|
$
|
11.15
|
|
5/5/2015
|
|
10,700
|
|
$
|
69,015
|
|
—
|
|
$
|
—
|
|
Vice
President--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
of the Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
All
options awards listed above vest at a rate of 20% per year over the first
five years commencing on May 5, 2005 of the ten year option
term.
|
(2)
|
All
stock awards listed above vest at a rate of 20% per year over five years
commencing on May 5,
2005.
|
Plan-Based Awards
. There were
no grants of plan-based awards for our named executive officers in
2008.
Stock
Benefit Plans
Stock-Based Incentive Plan.
The 2005 Cheviot Financial Corp. Stock-Based Incentive Plan provides
officers, employees and directors of Cheviot Financial Corp. or Cheviot Savings
Bank with additional incentives to share in our growth and
performance.
The 2005
Stock-Based Incentive Plan authorizes the issuance of up to 680,426 shares of
our common stock pursuant to grants of incentive and non-statutory stock
options, reload options or restricted stock awards, provided that no more than
194,408 shares may be issued as restricted stock awards, and no more than
486,018 shares may be issued pursuant to exercise of stock options.
Employees
and outside directors and our subsidiaries are eligible to receive awards under
the 2005 Stock Based-Incentive Plan.
The
Compensation Committee may determine the type and terms and conditions of awards
under the 2005 Stock-Based Incentive Plan. Awards may be granted in a
combination of incentive and non-statutory stock options, reload options or
restricted stock awards. Awards may include the following:
|
(i)
Stock Options.
A stock option gives
the recipient or “optionee” the right to purchase shares of common stock
at a specified price for a specified period of time. The exercise price
shall not be less than the fair market value of the underlying common
stock on the date the stock option is granted. Fair market value for
purposes of the 2005 Stock-Based Incentive Plan means the average of the
closing high bid and low asked price of the common stock as reported on
the OTC Electronic Bulletin Board (or the average of the high and low
quoted sales prices of the common stock on the Nasdaq Stock Market) on the
day the option is granted or, if the common stock is not traded on the
date of grant, the fair market value shall be determined by the
Compensation Committee in good faith on an appropriate
basis.
|
|
Stock
options are either “incentive” stock options or “non-qualified” stock
options. Incentive stock options have certain tax advantages and must
comply with the requirements of Section 422 of the Internal Revenue Code.
Only employees are eligible to receive incentive stock options. Shares of
common stock purchased upon the exercise of a stock option must be paid
for in full at the time of exercise (i) either in cash, check payable to
Cheviot Financial Corp. or electronic funds transfer; or (ii) with stock
of Cheviot Financial Corp. which was owned by the participant for at least
six months prior to delivery; or (iii) by reduction in the number of
shares deliverable pursuant to the stock option, or (iv) subject to a
“cashless exercise” through a third party. Cash may be paid in lieu of any
fractional shares under the 2005 Stock-Based Incentive Plan and generally
no fewer than 100 shares may be purchased on exercise of an award unless
the total number of shares available for purchase or exercise pursuant to
an award is less than 100 shares. Stock options are subject to vesting
conditions and restrictions as determined by the Compensation
Committee.
|
|
|
|
(ii) Reload
Options.
Reload options entitle the holder, who has delivered
shares that he or she owns as payment of the exercise price for option
stock, to a new option to acquire additional shares equal in amount to the
shares he or she has traded. Reload options may also be granted to replace
option shares retained by the employer for payment of the option holder’s
withholding tax. The option price at which additional shares of stock can
be purchased by the option holder through the exercise of a reload option
is equal to the market value of the shares on the date the original option
is exercised. The option period during which the reload option may be
exercised expires at the same time as that of the original option that the
holder has exercised. Reload options issued on the exercise of incentive
stock options may be incentive stock options or non-statutory stock
options.
|
|
|
|
(iii) Stock
Awards.
Stock awards under the 2005 Stock-Based Incentive Plan will
be granted only in whole shares of common stock. Stock awards will be
subject to conditions established by the Compensation Committee which are
set forth in the award agreements. Any stock award granted under the 2005
Stock-Based Incentive Plan will be subject to vesting as determined by the
Compensation Committee. Awards will be evidenced by agreements approved by
the Compensation Committee which set forth the terms and conditions of
each award.
|
Transferability of Awards.
Generally, all awards, except non-statutory stock options, granted under
the 2005 Stock-Based Incentive Plan will be nontransferable except by will or in
accordance with the laws of intestate succession. Stock awards may be
transferable pursuant to a qualified domestic relations order. At the
Compensation Committee’s sole discretion, non-statutory stock options may be
transferred for valid estate planning purposes that are permitted by the Code
and the Exchange Act. During the life of the participant, awards can only be
earned by him or her. The Compensation Committee may permit a participant to
designate a beneficiary to exercise or receive any rights that may exist under
the 2005 Stock-Based Incentive Plan upon the participant’s death.
Change in Control.
Upon the
occurrence of an event constituting a change in control of the company as
defined in the 2005 Stock-Based Incentive Plan, all stock options will become
fully vested, and all stock awards then outstanding shall vest free of
restrictions. A conversion of Cheviot Mutual Holding Company from mutual to
stock form will not be considered as a change of control.
Effect of Termination of Service.
Unless the Compensation Committee specifies otherwise at the time an
award is granted, upon the occurrence of the participant’s termination of
service due to death or disability, all unvested stock options and stock awards
made to the participant will become fully vested. Subject to OTS regulations and
policy (or the receipt of any required waivers from the OTS), and unless the
Compensation Committee specifies otherwise at the time an award is granted, in
the event of a normal retirement of a participant any unvested award of stock
options and/or restricted stock shall become fully vested in the participant.
Unless the Committee specifies otherwise, a person who is a member of the Board
of Directors shall not be deemed to have retired until service as a director or
director emeritus has ceased.
We do not
have any pension benefits, defined contribution or other non-qualified deferred
compensation plans.
Compensation
of Directors
Directors’ Summary Compensation
Table.
Set
forth below is summary compensation for each of our non-employee directors for
the year ended December 31, 2008.
Director
Compensation
|
|
Name
|
|
Fees
earned
or
paid in
cash
($)
|
|
|
Stock
awards
($)(1)
|
|
|
Option
awards
($)(2)
|
|
|
Non-equity
incentive
plan
compensation
($)
|
|
|
Change
in
pension
value
and
non-
qualified
deferred
compensation
earnings
($)
|
|
|
All
other
compensation
($)
|
|
|
Total
($)
|
|
Steven
R. Hausfeld
|
|
$
|
22,500
|
|
|
$
|
16,487
|
|
|
$
|
5,120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
846
|
(3)
|
|
$
|
44,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward
L. Kleemier
|
|
$
|
20,000
|
|
|
$
|
20,652
|
|
|
$
|
14,986
|
|
|
$
|
—
|
|
|
$
|
3,922
|
|
|
$
|
1,767
|
(4)
|
|
$
|
61,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
T. Smith
|
|
$
|
20,000
|
|
|
$
|
20,652
|
|
|
$
|
14,986
|
|
|
$
|
—
|
|
|
$
|
3,411
|
|
|
$
|
7,444
|
(5)
|
|
$
|
66,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
L. Thomas
|
|
$
|
22,500
|
|
|
$
|
20,652
|
|
|
$
|
14,986
|
|
|
$
|
—
|
|
|
$
|
3,927
|
|
|
$
|
8,981
|
(6)
|
|
$
|
71,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
E. Williamson
|
|
$
|
22,500
|
|
|
$
|
20,652
|
|
|
$
|
14,986
|
|
|
$
|
—
|
|
|
$
|
3,430
|
|
|
$
|
7,444
|
(7)
|
|
$
|
69,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The
amounts reflect the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended December 31, 2008, in
accordance with FAS 123(R) of awards pursuant to the Stock-Based Incentive
Plan and thus may include amounts from awards granted prior to 2008.
Assumptions used in the calculation of these amounts are included in Note
A to our audited financial statement for the year ended December 31,
2008.
|
(2)
|
The
amounts reflect the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended December 31, 2008, in
accordance with FAS 123(R) of awards pursuant to the Stock-Based Incentive
Plan and thus may include amounts from awards granted prior to 2008.
Assumptions used in the calculation of these amounts are included in Note
A to our audited financial statement for the year ended December 31,
2008.
|
(3)
|
The
amount reflects dividends paid on stock awards during the fiscal year
ended December 31, 2008 totaling $846.
|
(4)
|
The
amount reflects dividends paid on stock awards during the fiscal year
ended December 31, 2008 totaling $1,767.
|
(5)
|
The
amount reflects dividends paid on stock awards during the fiscal year
ended December 31, 2008 totaling $1,767. It also reflects $5,677 which
represents 50% of health insurance premiums paid by Cheviot Financial
Corp.
|
(6)
|
The
amount reflects dividends paid on stock awards during the fiscal year
ended December 31, 2008 totaling $1,767. It also includes $7,214 which
represents 50% of health insurance premiums paid by Cheviot Financial
Corp.
|
(7)
|
The
amount reflects dividends paid on stock awards during the fiscal year
ended December 31, 2008 totaling $1,767. It also includes $5,677 which
represents 50% of health insurance premiums paid by Cheviot Financial
Corp.
|
The
Boards of Cheviot Financial Corp., Cheviot Mutual Holding Company and Cheviot
Savings Bank are comprised of the same persons. To date, Cheviot Savings Bank
has compensated its directors for their services. Cheviot Financial Corp. has
not paid any additional compensation to the directors for this service, though
it may choose to do so in the future.
Compensation of Non-Employee
Directors.
During the year ended December 31, 2008, directors received a
$17,000 annual retainer for board membership (on Cheviot Savings Bank), an
additional $2,500 retainer for membership on the Audit Committee and $1,500
retainer for each membership on any other committee.
Compensation of Directors Who are
Also Employees.
During the year ended December 31, 2008, Mr. Linneman,
the only director who is also an employee of Cheviot Financial Corp. or Cheviot
Savings Bank, received $17,000 in compensation for board membership (on Cheviot
Savings Bank). Mr. Linneman did not receive any compensation for committee
membership.
Directors Deferred Compensation
Plan
. Cheviot Savings Bank adopted, effective March 31, 2003, a directors
deferred compensation plan as an additional benefit for its directors. Each
person who was a member of the board on March 31, 2003 became a participant in
the plan on such date. Any subsequent member of the board shall become a
participant in the plan only if he or she is a member of the Board of Directors
on the last day of the first plan year that ends after the date on which he or
she completes ten years of service, which such date is designated as his or her
participation date in the plan. After becoming a participant under the plan, a
person remains a participant until the entire balance of his or her account
under the plan has been paid or forfeited under the terms of the
plan.
The plan
provides that upon the later of (i) the participant’s 65
th
birthday, or (ii) the earlier of (a) the date on which the participant is no
longer a member of the Board of Directors, or (b) the participant’s 70
th
birthday, the participant will be entitled to a retirement benefit in the amount
of $11,400 per year, payable for ten years. A participant will have the right,
within 30 days of joining the plan, to elect to be paid the retirement benefit
above in the form of a single cash lump sum distribution. If a change in control
occurs after the commencement of a participant’s retirement benefit, any
remaining installment payments will be paid in the form of a single cash lump
sum distribution within 30 days following the effective date of the change in
control. In the event a participant is entitled to receive the retirement
benefit in the form of a single cash lump sum distribution, such benefit will be
determined using a discount rate of 7%, compounded annually.
Cheviot
Savings Bank recorded an expense of approximately $21,000 for the directors
deferred compensation plan for the year ended December 31, 2008.
A
participant shall forfeit the entire balance of his or her account and any right
to future payment of a plan benefit if he or she violates certain standards of
conduct as set forth in the plan.
Certain
Transactions With Related Persons
Cheviot
Savings Bank’s current policy is that no loans are to be extended to directors
or executive officers of Cheviot Savings Bank without the approval of Cheviot
Savings Bank’s Board of Directors. Current directors, officers and employees are
eligible for any type of credit offered by Cheviot Savings Bank. Federal
regulations permit executive officers and directors to participate in loan
programs that are available to other employees, as long as the director or
executive officer is not given preferential treatment compared to other
participating employees. In accordance with banking regulations, such loans to
directors are made on substantially the same terms as those available to Cheviot
Savings Bank’s employees. Loans made to directors or executive officers,
including any modification of such loans, must be approved by a majority of
disinterested members of the Board of Directors. As of December 31, 2008, there
were a total of ten loans to directors/officers of Cheviot Savings Bank with a
total balance of approximately $1.5 million. The loans made to directors and
executive officers were made in the ordinary course of business and did not
involve more than a normal risk of collectibility. Any future loans made to any
directors, executive officers, officers or employees of Cheviot Savings Bank
will be made under the same terms and conditions.
All
transactions involving related parties require the approval of full Board of
Directors.
Section
402 of the Sarbanes-Oxley Act of 2002 generally prohibits a company from
extending credit, arranging for the extension of credit or renewing an extension
of credit in the form of a personal loan to an officer or director of the
company. There are several exceptions to this general prohibition, including
loans made by an FDIC insured depository institution that is subject to the
insider lending restrictions of the Federal Reserve Act. All loans to our
directors and officers comply with the Federal Reserve Act and the Federal
Reserve Board’s Regulation O and, therefore, are excepted from the prohibitions
of Section 402.
PROPOSAL
2 – RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
|
The Audit
Committee requests that shareholders ratify the Audit Committee’s selection of
Clark, Schaefer, Hackett & Co. to serve as our independent registered public
accounting firm for the fiscal year ending December 31, 2009. Representatives of
Clark, Schaefer, Hackett & Co. will be present at the Annual Meeting and
will have an opportunity to make a statement if they so desire and to respond to
questions by shareholders.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE RATIFICATION
OF THE SELECTION OF CLARK, SCHAEFER, HACKETT & CO. AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
On July
10, 2007, Cheviot Financial Corp. engaged Clark, Schaefer, Hackett & Co. as
its independent registered public accounting firm, replacing Grant Thornton LLP.
Cheviot Financial Corp.’s engagement of Clark, Schaefer, Hackett & Co. has
been approved by our Audit Committee. On July 10, 2007, our Audit Committee
elected to terminate the engagement of Grant Thornton LLP as its independent
registered public accounting firm.
The
report of Grant Thornton LLP on our consolidated financial statements as of and
for the fiscal year ended December 31, 2006, contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope, or accounting principles.
During
the year ended December 31, 2006, and in connection with the audit of our
financial statements for such period, as well as the interim period subsequent
to the most recent fiscal year end and through July 10, 2007, there were no
disagreements between us and Grant Thornton LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which, if not resolved to the satisfaction of Grant Thornton LLP,
would have caused Grant Thornton LLP to make reference to such matter in
connection with its audit reports on our financial statements.
During
the two most recent fiscal years and subsequent interim periods prior to
engaging Clark, Schaefer, Hackett & Co. neither Cheviot Financial Corp. nor
anyone on our behalf consulted Clark, Schaefer, Hackett & Co. regarding
either (i) the application of accounting principles to a specific transaction,
either completed or proposed; or the type of audit opinion that might be
rendered on our financial statements. No written report or oral advice was
provided that Clark, Schaefer, Hackett & Co. concluded was an important
factor considered by us in reaching a decision as to the accounting, auditing or
financial reporting issue; or (ii) any matter that was either the subject of a
disagreement as defined in Item 304(a)(l)(iv) of Regulation S-K or a reportable
event as described in Item 304(a)(l)(v) of Regulation S-K.
Independent
Registered Public Accounting Firm Fees
The
following table sets forth the aggregate fees billed to us (or Cheviot Savings
Bank) for the years ended December 31, 2008 and 2007 by Clark, Schaefer, Hackett
& Co.
|
|
2008
|
|
|
2007
|
|
Audit
Fees
|
|
$
|
36,150
|
|
|
$
|
15,700
|
|
Audit
Related Fees
|
|
|
16,635
|
|
|
|
8,000
|
|
Tax
Fees
|
|
|
7,250
|
|
|
|
—
|
|
All
Other Fees
|
|
|
—
|
|
|
|
—
|
|
|
|
$
|
60,035
|
|
|
$
|
23,700
|
|
The
following table sets forth the aggregate fees billed to us (or Cheviot Savings
Bank) for the years ended December 31, 2007 by Grant Thornton.
|
|
2007
|
|
Audit
Fees
|
|
$
|
48,200
|
|
Audit
Related Fees
|
|
|
14,544
|
|
Tax
Fees
|
|
|
5,213
|
|
|
|
$
|
67,957
|
|
Fees paid
to Grant Thornton in 2008 consist of $10,000 for preparation of their consent
letter and $3,100 for amended tax return preparation.
Audit Fees
consist of the
aggregate fees billed for each of the last two fiscal years for professional
services rendered by our principal accountant for the audit of our annual
financial statements and review of financial statements included in our Form
10-Q or services that are normally provided by our accountant in connection with
statutory and regulatory filings or engagements for those fiscal
years.
Audit-Related Fees
consist of
fees for assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements. This category
includes fees related to audit and attest services not required by statute or
regulations, acquisitions and investments, and consultations concerning
financial accounting and reporting standards.
Tax Fees
consist of fees for
professional services for tax compliance, tax advice and tax planning. These
services include assistance regarding federal, state and international tax
compliance, return preparation, tax audits and customs and duties.
All Other Fees.
During 2008
and 2007 no fees were billed for products and services provided by the principal
accountant, other than the services reported above.
The Audit
Committee has considered whether the provision of non-audit services is
compatible with maintaining the independence of Clark, Schaefer, Hackett &
Co. and has concluded that it is.
Pre-approval Policies and
Procedures.
In accordance with rules adopted by the SEC in order to
implement requirements of the Sarbanes-Oxley Act of 2002 and the Audit
Committee’s charter, all audit and audit-related services and all permitted
non-audit work performed by the independent registered public accounting firm,
Clark, Schaefer, Hackett & Co., must be pre-approved by the Audit Committee,
including the proposed fees for such work. The Audit Committee has adopted
policies and procedures pursuant to which audit, audit-related and tax services,
and all permissible non-audit services, are pre-approved, and is informed of
each service actually rendered that was approved through its pre-approval
process. The Audit Committee pre-approved 100% of the audit related fees and tax
fees described above during the fiscal years ended December 31, 2008 and
2007.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a)
of the Exchange Act requires our directors, executive officers and persons who
own more than 10% of a registered class of our equity securities to file reports
of ownership and changes in ownership with the SEC. Directors, executive
officers and greater than 10% shareholders are required by regulations of the
SEC to furnish us with copies of all Section 16(a) reports they file. Such
reports are filed on Forms 3, 4 and 5 under the Exchange Act. Based solely on
our review of the copies of such forms received by us, we believe that during
the year ended December 31, 2008, all such persons complied on a timely basis
with the filing requirements of Section 16(a).
Shareholder
Proposals for Next Year’s Annual Meeting
Shareholder
proposals intended for inclusion in next year’s Proxy Statement should be sent
to the Executive Secretary, Cheviot Financial Corp., 3723 Glenmore Avenue,
Cheviot, Ohio 45211 and must be received by November 25, 2009. Any such proposal
must comply with Rule 14a-8 promulgated by the SEC pursuant to the Exchange
Act. Any shareholder who intends to propose any other matter to be acted upon at
the 2010 annual meeting of shareholders without inclusion of such proposal in
the Company’s proxy statement must inform the company no later than 30 days
prior to our 2010 annual meeting date. If notice is not provided by that date,
the persons named in our proxy for the 2010 annual meeting will be allowed to
exercise their discretionary authority to vote upon any such proposal without
the matter having been discussed in the proxy statement for the 2010 annual
meeting. All shareholder proposals and notices must also meet all requirements
set forth in our Charter and Bylaws.
Other
Matters to Come Before the Meeting
At the
time this Proxy Statement was released for distribution on March 18, 2009, we
knew of no other matters that might be presented for action at the meeting. If
any other matters properly come before the meeting, it is intended that the
voting shares represented by proxies will be voted with respect thereto in
accordance with the judgment of the persons voting them.
Miscellaneous/Financial
Statements
We will
bear the cost of solicitation of proxies. We will reimburse brokerage firms and
other custodians, nominees and fiduciaries for reasonable expenses incurred by
them in forwarding proxy materials to the beneficial owners of our common stock.
In addition to solicitations by mail, our directors, officers and regular
employees may solicit proxies personally or by telegraph or telephone without
additional compensation.
Annual
Report to Shareholders
Our
Annual Report to Shareholders for the year ended December 31, 2008, has been
made available to shareholders concurrently with this Proxy Statement, but is
not incorporated into this Proxy Statement and is not to be considered a part of
these proxy solicitation materials.
If you would like a copy of the
Annual Report to Shareholders or a copy of our Form 10-K that has been filed
with the SEC, including financial statements and schedules, please write to
Kimberly Siener, Investor Relations, Cheviot Financial Corp., 3723 Glenmore
Avenue, Cheviot, Ohio 45211, and we will send copies of each to you free of
charge. The exhibits to the Form 10-K will be furnished for a fee that is
reasonably related to our cost of furnishing such items. You may also make such
a request by email to
fulfillment@rtco.com
and by inserting your
Shareholder Control Number in the subject line.
Proxy
Statements for Shareholders Sharing the Same Household Mailing
Address
If
shareholders residing at the same household mailing address are currently
receiving multiple copies of our communications but would like to receive only
one in the future, please send written notice to The Registrar and Transfer
Company at the below address. In the written notice please indicate the names of
all accounts in your household and The Registrar and Transfer Company will
forward the appropriate forms for completion.
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The
Registrar and Transfer Company
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10
Commerce Drive
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Cranford,
New Jersey 07016-3506
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Any
shareholders participating in the householding program will, however, continue
to receive a separate notice card or voting instruction card for each
account.
Shareholder
Communications with the Board of Directors
Shareholders
who wish to communicate with the Board, specified individual directors and
non-management directors should send any communications to the Executive
Secretary, Cheviot Financial Corp., 3723 Glenmore Avenue, Cheviot, Ohio 45211
and identify the intended recipient. All communications addressed will be
forwarded to the identified person or persons.
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By
Order of the Board of Directors
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/s/
James E. Williamson
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James
E. Williamson
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Executive
Secretary
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March
18, 2009
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REVOCABLE
PROXY
CHEVIOT
FINANCIAL CORP.
ANNUAL
MEETING OF SHAREHOLDERS
April
28, 2009
The
undersigned hereby appoints the official proxy committee consisting of the Board
of Directors of Cheviot Financial Corp. (the “Company”) with full powers of
substitution to act as attorneys and proxies for the undersigned to vote all
shares of common stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Shareholders (“Annual Meeting”) to be held at the
Company’s main office at 3723 Glenmore Avenue, Cheviot, Ohio 45211, on April 28,
2009, at 3:00 p.m., Eastern Daylight Savings Time. The official proxy committee
is authorized to cast all votes to which the undersigned is entitled as
follows:
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FOR
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WITHHOLD
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FOR
ALL EXCEPT
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1.
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The
election as Directors of the nominees listed below each to serve for a
three-year term.
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o
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o
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o
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Steven
R. Hausfeld
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Thomas
J. Linneman
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INSTRUCTION:
To withhold authority to vote for any individual nominee, mark “For All
Except” and write that nominee’s name in the space provided
below.
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FOR
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AGAINST
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ABSTAIN
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2.
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The
ratification of the appointment of Clark, Schaefer, Hackett & Co. as
the Company’s independent registered public accounting firm for the year
ending December 31, 2009.
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o
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o
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The
Board of Directors recommends a vote “FOR” each of the listed
proposals.
THIS
PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE NOMINEE STATED ABOVE. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THE MAJORITY OF
THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THE PROXY HOLDERS MAY
EXERCISE DISCRETIONARY AUTHORITY WITH RESPECT TO MATTERS INCIDENT TO THE ANNUAL
MEETING.
THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should
the undersigned be present and elect to vote at the Annual Meeting or at any
adjournment thereof and after notification to the Secretary of the Company at
the Annual Meeting of the shareholder’s decision to terminate this proxy, then
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. This proxy may also be revoked by sending written
notice to the Secretary of the Company at the address set forth on the Notice of
Annual Meeting of Shareholders, or by the filing of a later proxy prior to a
vote being taken on a particular proposal at the Annual Meeting.
The
undersigned acknowledges receipt from the Company prior to the execution of this
proxy of notice of the Annual Meeting, a proxy statement dated March 18, 2009
and audited financial statements.
Dated:
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Check
Box if You Plan
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to
Attend Annual Meeting
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PRINT
NAME OF SHAREHOLDER
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PRINT
NAME OF SHAREHOLDER
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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 on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give your full
title.
Please
complete and date this proxy and return it promptly
in
the enclosed postage-prepaid envelope.
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