On February 23, 2023, the Board of Directors voted unanimously to submit for stockholder approval a proposed amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from 5,000,000 shares to 7,500,000 shares. The Board of Directors has declared the proposed amendment to be advisable and in the best interests of the Company and its stockholders and recommends that the stockholders approve the amendment. The text of the proposed amendment is set forth as Appendix A to this proxy statement.
Currently, the Company’s Articles of Incorporation authorizes the issuance of up to 5,000,000 shares of Common Stock. As of February 28, 2023, there were 2,554,752 shares of Common Stock issued and outstanding and approximately 504,000 shares reserved for issuance under the Company’s options, employee stock purchase, and employee stock bonus plans.
At this time, the Company has no present plans, understandings, or agreements for the issuance or use of the proposed additional shares of Common Stock. Nevertheless, the Board of Directors believes that the proposal is desirable so that, as the need may arise, the Company will have more financial flexibility and be able to issue shares of Common Stock, without the expense and delay of a special shareholders’ meeting, in connection with future opportunities for expanding the business through investments or acquisitions, possible stock splits or stock dividends, equity financing, management incentive and employee benefit plans, and for other general corporate purposes.
Authorized but unissued shares of the Company’s Common Stock may be issued at such times, for such purposes and for such considerations as the Board of Directors may determine to be appropriate without further authority from the Company’s stockholders, except as otherwise required by applicable corporate law or stock exchange policies.
Each share of Common Stock authorized for issuance has the same rights and is identical in all respects with each other share of Common Stock. The newly authorized shares of Common Stock will not affect the rights, such as voting and liquidation rights, of the shares of Common Stock currently outstanding. Under the Articles of Incorporation, stockholders do not have pre-emptive rights. Therefore, should the Board of Directors elect to issue additional shares of Common Stock, existing shareholders would not have any preferential rights to purchase those shares and such issuance could have a dilutive effect on earnings per share, book value per share, and the voting power and shareholdings of current stockholders, depending on the particular circumstances in which the additional shares of Common Stock are issued. The Board of Directors does not intend to issue any additional shares of Common Stock except on terms that it deems to be in the best interests of the Company and its shareholders. The Company currently has no current plans to issue newly authorized shares of Common Stock.
The issuance of additional shares of Common Stock by the Company also may potentially have an anti-takeover effect by making it more difficult to obtain shareholder approval of various actions, such as a merger. The proposed increase in the number of authorized shares of Common Stock could enable the Board of Directors to render more difficult an attempt by another person or entity to obtain control of the Company, though the Board of Directors has no present intention of issuing additional shares for such purposes and has no present knowledge of any such takeover efforts.
If the proposed amendment is adopted, it will become effective upon the filing of Articles of Amendment to the Company’s Articles of Incorporation with the Commonwealth of Pennsylvania. The affirmative vote of a majority of the votes cast required to approve the proposed amendment.
The Board of Directors unanimously recommends a vote “FOR” the approval of the amendment to the Company’s Articles of Incorporation to increase the total number of authorized shares of Common Stock from 5,000,000 shares to 7,500,000 shares.
Directors Continuing in Office
Name and Positions with Company |
Age (1) |
Year First Elected or Appointed (2) |
Current Term To Expire |
Shares of Common Stock Beneficially Owned (1)(3) |
Percent Owned |
Peter Bochnovich - President, Chief Executive Officer and Director |
61
|
2020 |
2024 |
11,980 |
* |
Barbara J. Genzlinger -Director |
71
|
1998 |
2024 |
19,540 |
* |
John S. Kiesendahl - Director, Chairman of the Board |
76 |
1993 |
2024 |
37,889 |
1.5% |
John F. Spall - Director, Secretary |
76 |
1999 |
2024 |
72,580 |
2.8% |
Gregory J. Frigoletto - Director |
53 |
2018 |
2025 |
4,354 |
* |
Henry M. Skier - Director |
82 |
1993 |
2025 |
181,887 |
7.1% |
Todd J. Stephens - Director, Vice Chairman of the Board |
53 |
2010 |
2025 |
14,680 |
* |
Executive Officers Who Are Not Directors
Name and Positions with Company |
Age (1) |
Year First Elected or Appointed (2) |
Current Term To Expire |
Shares of Common Stock Beneficially Owned (1)(3) |
Percent Owned |
William R. Boyle - Senior Vice President, Chief Lending Officer |
63 |
- |
- |
3,628 |
* |
Jeffrey J. Roche - Senior Vice President, Chief Financial Officer, Treasurer and Asst. Secretary |
53 |
- |
- |
4,697 |
* |
Directors, nominees and named executive officers of the Company (13 persons) |
- |
- |
- |
462,995 |
18.0% |
(1) As of Record Date.
(2) Refers to the year the individual first became a director of the Company.
(3) The share amounts include 300 shares for Mr. Beilman, 2,300 shares for Mr. Kelly, 2,600 shares for Dr. Reynolds, 720 shares for Mr. Bochnovich, 300 shares for Ms. Genzlinger, 2,530 shares for Mr. Frigoletto, 100 share for Mr. Stephens, 450 shares for Mr. Boyle, and 2,950 shares for Mr. Roche that may be acquired through the exercise of stock options within sixty days of the Record Date under the stock option plans.
* Less than 1% of Common Stock outstanding.
Biographical Information
The following biographies of each of the nominees and continuing directors contain information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years, and information regarding involvement in certain legal or administrative proceedings, if applicable.
Nominees For Director:
Gary C. Beilman is retired. Prior to Mr. Beilman’s retirement, he served as the President and CEO of the Dime Bank as well as other various capacities. Mr. Beilman provides knowledge and experience of over forty years in the financial services industry. He is actively involved in numerous community, charitable and civic organizations.
Brian T. Kelly is a Certified Public Accountant and owner of Brian T. Kelly CPA & Associates, LLC with offices in Carbondale, Honesdale, and Old Forge. He has over twenty-seven years of experience in public accounting, providing audit, tax, and consulting services to various clients. He is actively involved in numerous professional and civic organizations.
Thomas A. Peifer is retired. Prior to his retirement in 2001, Mr. Peifer was Superintendent of the Wallenpaupack Area School District in Hawley, Pennsylvania which provided him personal relationships with numerous area residents who comprise a significant portion of our marketplace. He was the President of Metlag, Inc., a franchised retail Agway store, a business that he sold in 2014. As a local businessman and lifetime resident of Pike County, he provides knowledge of this market area in which we operate two branch locations. This proficiency is further enhanced by his numerous community and civic affiliations.
David D. Reynolds, M.D. AGAF is the President and Chief Executive Officer of Northeastern Gastroenterology Associates, President, Chief Executive Officer and Medical Director of Mountain Laurel Surgical Center and Maple City Anesthesia, LLC, and a partner of SGR Real Estate. He is board certified in gastroenterology and is active in numerous medical organizations.
The Board of Directors unanimously recommends a vote “FOR” the election of the above nominees.
Continuing Directors:
Peter Bochnovich is the President and Chief Executive Officer of the Company and Bank. Mr. Bochnovich was appointed President and Director on January 1, 2020. He was previously appointed Chief Executive Officer on September 1, 2019. Prior to September 2019, Mr. Bochnovich served the Company and Bank in various capacities. He has been employed in the financial services industry for over thirty-five years. He is actively involved in numerous community, charitable and civic organizations.
Barbara J. Genzlinger is one of the original founders in the early 1980s of The Settlers Inn, a country inn located in Hawley, Pennsylvania. Ms. Genzlinger is personally involved in various hospitality businesses daily and interacts regularly with many area residents. She is active in numerous community and civic organizations along with a national innkeepers’ organization.
John S. Kiesendahl is the Vice President of Woodloch Pines Inc., a resort located in Hawley, Pennsylvania since 1981. He is a principal in certain businesses associated with the resort. Mr. Kiesendahl has been a member of the Bank’s Board of Directors since 1985 and has been an active member or chair of several committees. His extensive business experience in the operation of a family resort, its affiliated golf course, world-class spa, and residential community includes all aspects of the business including hospitality operations, real estate development and financing.
John F. Spall is an attorney, practicing in Hawley, Pennsylvania since 1971. Mr. Spall has been active in all phases of the legal profession for over fifty years with an emphasis on real estate transactions. He is a former solicitor for numerous municipalities and has been Assistant District Attorney for Wayne County. He currently serves as President of the Wallenpaupack Area School District Board of Education.
Gregory J. Frigoletto is the District Superintendent of Wayne Highlands School District and long-time resident of Wayne County. He has an extensive background serving our community with over twenty-five years in the field of education at Wayne Highlands School District, including over twenty years as an administrator. He is actively involved in numerous local charitable and civic organizations.
Henry M. Skier is President of A.M. Skier Agency, Inc., an insurance agency, located in Hawley, Pennsylvania since 1973. Mr. Skier has been a member of the Bank’s Board of Directors since 1982. He has participated in many Board committees during his tenure on the board. He is a lifelong resident of Honesdale and is involved in numerous community and civic affairs in Wayne County along with involvement in various summer camping organizations. His business, A.M. Skier Agency, Inc., is one of the largest independent insurers of children’s summer camps in the United States. Additionally, Mr. Skier has been a founder, director, and officer in numerous camp related entities on both the state and national levels. As such, he brings to the Board an expertise regarding this industry in which the Bank has a loan concentration.
Todd J. Stephens was born and raised in Wayne County, Pennsylvania. He is the Chief Operating Officer for the Medical Shoppe, LTD, parent company of Stephens Pharmacy and Northeast Med-Equip., holding this position since 2007. He is also the founder and managing partner of Northeast Accessibility, a provider of specialty equipment and solutions for persons with limited mobility. Prior to that, he was employed with Boston Coach Corp., a wholly owned subsidiary of Fidelity Investments. During his tenure with that Company, he rose to the level of Senior Vice President with responsibilities for national operations, directing marketing and commerce efforts and managing a national sales organization.
Business Background of Our Executive Officers Who Are Not Directors
The business experience for the past five years of each of the Company’s executive officers who are not a director is set forth below. Unless otherwise indicated, the executive officer has held his or her position for more than the past five years.
William R. Boyle is Senior Vice President of the Company and the Bank and is also Assistant Secretary of the Bank. He serves as the Chief Lending Officer and Chief Credit Officer of the Bank. He has served the Company and Bank in various capacities since joining in 2012.
Jeffrey J. Roche is Senior Vice President of the Company and the Bank and is also Assistant Secretary of the Company and Treasurer of the Company and the Bank. He serves as the Chief Financial Officer of the Bank since 2021 and was Controller for four years since joining in 2017.
Corporate Governance
Committees of the Board of Directors
Nominating Committee. The Nominating Committee is comprised of Directors Reynolds, Skier, Stephens, and Spall, each of whom is considered independent under the rules of The NASDAQ Stock Market. Although this is not a standing committee, the Board believes that its procedures are sufficient to ensure that its nominees are approved by a majority of the independent directors. The independent directors met three times as a Nominating Committee during the fiscal year ended December 31, 2022.
Compensation Committee. The 2022 Compensation Committee was comprised of Directors Kiesendahl, Skier and Stephens, each of whom was considered independent under the rules of The NASDAQ Stock Market. Decisions regarding the compensation of our executives are made by the Compensation Committee. They have the strategic and administrative responsibility for ensuring that key management employees are compensated effectively in addition to oversight of all executive compensation plans and employee benefits. The Committee met three times during the fiscal year ended December 31, 2022.
Audit Committee. The Audit Committee was comprised of Directors Beilman, Kelly, Peifer and Reynolds. The Audit Committee is a standing committee that is responsible for developing and maintaining the Company’s and the Bank’s audit program. The Company believes that all members of the Audit Committee qualify as independent directors under the rules of The NASDAQ Stock Market including the specific independence requirements for Audit Committee members. The Committee also meets with the independent auditors to discuss the results of the annual audit and any related matters. The Committee met four times during fiscal year ended December 31, 2022.
Communications with Directors
Stockholders who wish to communicate with the Board of Directors should send their communications to the Secretary at the Company’s main office, PO Box 509, Honesdale, Pennsylvania 18431.
Director Compensation
Set forth below is a table providing information concerning the compensation of the non-employee directors of the Company for the last completed fiscal year. There was no other compensation paid during the last fiscal year.
Name(1)(2) |
Fees Earned
or Paid in Cash
|
Stock Awards (3)
|
Option Awards (4)
|
All other
Compensation (5)(6)
|
Total |
Gary C. Beilman |
$40,000 |
$5,333 |
$13,332 |
$330 |
$58,995 |
Gregory J. Frigoletto |
$40,000 |
$5,333 |
$13,332 |
$204 |
$58,869 |
Barbara J. Genzlinger |
$40,000 |
$5,333 |
$13,332 |
$330 |
$58,995 |
Brian T. Kelly |
$40,000 |
$5,333 |
$13,332 |
$3,781 |
$62,446 |
John S. Kiesendahl |
$40,000 |
$5,333 |
$13,332 |
$330 |
$58,995 |
Thomas A. Peifer |
$40,000 |
$5,333 |
$13,332 |
$330 |
$58,995 |
David D. Reynolds, M.D. |
$40,000 |
$5,333 |
$13,332 |
$3,438 |
$62,103 |
Henry M. Skier |
$40,000 |
$5,333 |
$13,332 |
$330 |
$58,995 |
John F. Spall |
$40,000 |
$5,333 |
$13,332 |
$330 |
$58,995 |
Todd J. Stephens |
$40,000 |
$5,333 |
$13,332 |
$330 |
$58,995 |
(1) Director Peter Bochnovich, as the Company's President and Chief Executive Officer in 2022, did not receive any additional remuneration as a director.
(2) Non-employee directors.
(3) Based on the aggregate grant date fair value of the restricted stock award computed in accordance with FASB ASC Topic 718. For assumptions used in determining the grant date fair value of the stock awards see Note 12 of Notes to the Consolidated Financial Statements in the 2022 Annual Report to Stockholders. At December 31, 2022, Mr. Beilman, Mr. Frigoletto, Mrs. Genzlinger, Mr. Kelly, Mr. Kiesendahl, Mr. Peifer, Dr. Reynolds, Mr. Skier, Mr. Spall and Mr. Stephens each had 120 shares of restricted stock. These awards vest in three equal installments over a three-year period.
(4) Based on the aggregate grant date fair value of the award computed in accordance with FASB ASC Topic 718. For assumptions used in determining the grant date fair value of the stock options see Note 12 of Notes to the Consolidated Financial Statements in the 2022 Annual Report to Stockholders. Directors stock option awards outstanding at December 31, 2022 were: 300 each for Mr. Beilman, Mr. Frigoletto, Mrs. Genzlinger, Mr. Kelly, Mr. Kiesendahl, Mr. Peifer, Dr. Reynolds, Mr. Skier, Mr. Spall and Mr. Stephens.
(5) Cash dividends of $882 paid on unvested 2020 granted restricted stock awards and $2,040 paid on unvested 2021 granted restricted stock awards.
(6) Travel expenses of $3,577 were reimbursed to Mr. Kelly for travel related to conference attendance and travel expenses of $3,234 were reimbursed to Dr. Reynolds for travel related to conference attendance
For the year ended December 31, 2022, the annual retainer fee paid to each non-employee director was $40,000, regardless of meeting attendance. There are no additional fees paid in connection with attendance at board or committee meetings. Directors’ fees are paid by the Bank, on whose board each director sits; no additional fees are paid for service as a director of the Company. No other compensation was paid to the above-named directors in 2022.
Proposal 2. Ratification of Independent Auditors
S.R. Snodgrass, P.C. was the Company’s independent public accountants for the 2022 fiscal year. The Board of Directors has appointed Snodgrass to be its accountants for the fiscal year ending December 31, 2023 and is seeking ratification by the Company’s stockholders of such appointment. A representative of S.R. Snodgrass, P.C. is expected to be available at the Annual Meeting to respond to stockholders’ questions and will have the opportunity to make a statement if they so desire.
The Board of Directors unanimously recommends that stockholders vote “FOR” the ratification of the appointment of S.R. Snodgrass, P.C. as the Company’s independent auditors for the 2023 fiscal year.
Stockholder Proposals
In order to be considered for possible action by stockholders at the 2024 Annual Meeting of Stockholders, stockholder nominations for director and stockholder proposals must be submitted to the Secretary at the Company’s main office, PO Box 509, 820 Church Street, Honesdale, Pennsylvania 18431, no later than February 26, 2024.
Stockholders Sharing a Single Address
Only one copy of this Proxy Statement and the accompanying Annual Report to Stockholders is being delivered to multiple stockholders sharing an address unless the Company has previously received contrary instructions from one or more of such stockholders. On written or oral request to Dimeco, Inc., PO Box 509, 820 Church Street, Honesdale, Pennsylvania 18431, (570) 253-1970, the Company will deliver promptly a separate copy of this Proxy Statement and the Annual Report to Stockholders at a shared address to which a single copy of the documents was delivered. Stockholders sharing an address who wish, in the future, to receive separate copies or a single copy of our proxy statements and annual reports should provide written or oral notice to the Secretary at the address and telephone number set forth above.
Miscellaneous
The cost of soliciting proxies will be borne by the Company. The Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of Common Stock. In addition to solicitations by mail, directors, officers, and regular employees of the Company may solicit proxies personally or by e mail or telephone without additional compensation.
By Order of the Board of Directors
John F. Spall
Secretary
Honesdale, Pennsylvania
March 23, 2023