Central Federal Corporation DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Central Federal Corporation
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Form, Schedule or Registration Statement No.:
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2923
Smith Road
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Fairlawn,
Ohio 44333
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(330) 666-7979
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April 15,
2008
Fellow Shareholders:
You are cordially invited to attend the Annual Meeting of
shareholders of Central Federal Corporation which will be held
at Fairlawn Country Club, located at 200 North Wheaton Road,
Fairlawn, Ohio, on Thursday, May 15, 2008 at
10:00 a.m., local time.
The attached notice of the Annual Meeting and proxy statement
describe the formal business to be transacted at the Meeting.
Directors and officers of the Company, as well as a
representative of Crowe Chizek and Company LLC, the
Companys independent registered public accounting firm,
will be present at the Meeting to respond to any questions
shareholders may have regarding the business to be transacted.
In addition, the Meeting will include managements report
on the Companys financial performance for 2007.
The Board of Directors of Central Federal Corporation has
determined that matters to be considered at the Annual Meeting
are in the best interests of the Company and its shareholders,
and the Board unanimously recommends that you vote
FOR the nominees as directors specified under
Proposal 1, and FOR ratification of the
appointment of Crowe Chizek and Company LLC as independent
registered public accounting firm for the Company for 2008 as
specified under Proposal 2.
Your vote is very important. Whether or not you expect to
attend, please read the enclosed proxy statement and then
complete, sign and return the enclosed proxy card promptly in
the postage-paid envelope provided so that your shares will be
represented. If you attend the Meeting, you may vote in person
even if you have previously mailed a proxy card.
On behalf of the Board of Directors and all of the employees,
thank you for your continued interest and support.
Sincerely yours,
Mark S. Allio
Chairman, President and Chief Executive Officer
2923 Smith Road
Fairlawn, Ohio 44333
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on May 15, 2008
NOTICE IS HEREBY GIVEN that the Annual Meeting of shareholders
of Central Federal Corporation will be held Thursday,
May 15, 2008 at the Fairlawn Country Club, located at 200
North Wheaton Road, Fairlawn, Ohio at 10:00 a.m., local
time.
The purpose of the Meeting is to consider and vote upon the
following matters:
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1.
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The election of two Directors for terms of three years each, or
until their successors are elected and qualified;
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2.
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The ratification of the appointment of Crowe Chizek and Company
LLC as independent registered public accounting firm for the
Company for the year ending December 31, 2008; and
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3.
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Such other matters as may properly come before the Meeting. The
Board of Directors is not aware of any other business to come
before the Meeting.
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Record holders of the common stock of Central Federal
Corporation at the close of business on April 4, 2008 are
entitled to receive notice of the Meeting and to vote at the
Meeting and any adjournment or postponement of the Meeting. The
Meeting may be adjourned to permit the Company to solicit
additional proxies in the event that there are insufficient
votes for a quorum or to approve or ratify any of the
aforementioned proposals at the time of the Meeting. A list of
shareholders entitled to vote will be available at the Meeting
and for the ten days preceding the Meeting at CFBank, 2923 Smith
Road, Fairlawn, Ohio 44333.
By the Order of the Board of Directors
Eloise L. Mackus
Corporate Secretary
Fairlawn, Ohio
April 15, 2008
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE
COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO
ENSURE A QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
INFORMATION
CONCERNING SOLICITATION AND VOTING
The Company is soliciting your proxy. Your vote is very
important. This proxy statement, proxy card and 2007 Annual
Report are being first sent or given on or about April 15,
2008 to shareholders of Central Federal Corporation (the
Company), whose principal executive offices are
located at 2923 Smith Road, Fairlawn, Ohio 44333, in connection
with the solicitation of proxies by the Board of Directors for
the Annual Meeting of Shareholders (the Meeting) to
be held at Fairlawn Country Club, 200 North Wheaton Road,
Fairlawn, Ohio, at 10:00 a.m. local time on May 15,
2008. The Board of Directors encourages you to read this proxy
statement thoroughly and to take this opportunity to vote on the
matters to be decided at the Meeting.
VOTING
PROCEDURES
WHO IS
ENTITLED TO VOTE?
You are entitled to vote your common stock if the Companys
records show that you held your shares as of the close of
business on April 4, 2008. As of the close of business on
that date, a total of 4,467,662 shares of common stock were
outstanding and entitled to vote. Each share of common stock is
entitled to one vote on each matter presented at the Meeting,
except that, as provided in the Companys Certificate of
Incorporation, record holders of common stock who beneficially
own, either directly or indirectly, in excess of 10% of the
outstanding shares of common stock (the 10% limit)
are not entitled to any vote of their shares that are in excess
of the 10% limit, and those shares are not treated as
outstanding for voting purposes.
A person or entity is deemed to beneficially own shares owned by
an affiliate of, as well as by persons acting in concert with,
such person or entity. The Companys Certificate of
Incorporation authorizes the Board of Directors (i) to make
all determinations necessary to implement and apply the 10%
limit, including determining whether persons or entities are
acting in concert, and (ii) to demand that any person who
is reasonably believed to beneficially own stock in excess of
the 10% limit supply information to the Company to enable the
Board of Directors to implement and apply the 10% limit.
As of the record date, April 4, 2008, there were three
persons, each of whom was known to the Company to be the
beneficial owner of more than 5% of the Companys
outstanding common stock; however, no person was known to the
Company to be subject to the 10% limit.
HOW DO I
VOTE?
Other than by attending the Meeting and voting in person,
shareholders are requested to vote by completing the enclosed
proxy card and returning it signed and dated in the enclosed
postage-paid envelope. If you hold your shares through a broker,
bank or other nominee, (i.e. in street name), you
will receive separate instructions from the nominee describing
how to vote your shares.
WHAT ARE THE MATTERS TO BE PRESENTED?
Two proposals will be presented for your consideration at the
Meeting:
1) Election of two directors; and
2) Ratification of appointment of the independent
registered public accounting firm for 2008.
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WHAT ARE THE VOTING RECOMMENDATIONS OF THE BOARD OF DIRECTORS?
The Companys Board of Directors is sending you this proxy
statement for the purpose of requesting that you allow your
shares of Company common stock to be represented at the Meeting
by persons named on the enclosed proxy card. All shares of
Company common stock represented at the Meeting by properly
executed proxies will be voted according to the instructions
indicated on the proxy card. If you sign and return a proxy card
without giving voting instructions, your shares will be voted as
recommended by the Companys Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH
NOMINEE TO THE BOARD OF DIRECTORS AND FOR
RATIFICATION OF CROWE CHIZEK AND COMPANY LLC AS INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
WHAT VOTE IS
REQUIRED FOR EACH PROPOSAL?
In voting on the election of directors (Proposal 1), you
may vote in favor of any or all of the nominees or withhold
authority to vote for any or all of the nominees. Directors are
elected by a plurality of the votes cast. This means that the
nominees receiving the greatest number of votes will be elected.
Votes that are withheld and broker non-votes (as defined below
under WHAT CONSTITUTES A QUORUM FOR THE MEETING?)
will have no effect on the outcome of the election.
In voting on the ratification of Crowe Chizek and Company LLC as
independent registered public accounting firm for the Company
(Proposal 2) and all other matters that may properly
come before the Meeting, you may vote in favor of the proposal,
vote against the proposal or abstain from voting. Under the
Companys Bylaws and Delaware law, an affirmative vote of
the holders of a majority of the votes cast at the Meeting on
Proposal 2 is required to ratify the appointment of Crowe
Chizek and Company LLC as independent registered public
accounting firm of the Company. Shares underlying broker
non-votes or in excess of the 10% limit will not be counted as
present and entitled to vote or as votes cast, and, accordingly,
such shares will have no effect on the outcome. Abstentions are
treated as present for purposes of constituting a quorum but are
not counted as votes for or against proposals, which are decided
by a majority of votes cast.
If there are not sufficient votes for a quorum or to approve or
ratify any proposal at the time of the Meeting, the Meeting may
be adjourned in order to permit the further solicitation of
proxies.
The Company is not aware of any other matters to be presented at
the Meeting. If any matters not described in this proxy
statement are properly presented at the Meeting, the persons
named in the proxy card will use their best judgment to
determine how to vote your shares. This includes a motion to
adjourn or postpone the Meeting in order to solicit additional
proxies. If the Meeting is postponed or adjourned, your Company
common stock may be voted by the persons named on the proxy card
on the new Meeting date as well, unless you have revoked your
proxy.
WHAT
CONSTITUTES A QUORUM FOR THE MEETING?
The Meeting will be held if a quorum, consisting of a majority
of outstanding shares of common stock entitled to vote (after
subtracting any shares in excess of the 10% limit) is
represented at the Meeting. If you return valid proxy
instructions or attend the Meeting in person, your shares will
be counted for purposes of determining whether there is a
quorum, even if you abstain from voting. Broker non-votes also
will be counted for purposes of determining a quorum. A broker
non-vote occurs when a broker, bank, or other nominee holding
shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting
power with respect to the item and has not received voting
instructions from the beneficial owner.
CAN I REVOKE
OR CHANGE MY VOTE AFTER I SUBMIT MY PROXY?
You may revoke your proxy at any time before the vote is taken
at the Meeting. To revoke your proxy, you must either advise the
Corporate Secretary of the Company in writing before your common
stock has been voted at the Meeting, deliver to the Company
another proxy that bears a later date, or attend the Meeting and
vote your shares in person. Attendance at the Meeting will not
in itself revoke your proxy. If your Company common stock is
held in street name and you wish to change your voting
instructions after you have returned your voting instruction
form to your broker or bank, you must contact your broker or
bank.
2
WHO WILL
COUNT THE VOTE?
The Companys transfer agent, Registrar and Transfer
Company, will tally the vote, which will be certified by an
independent Inspector of Election. The Board of Directors has
designated Stanley L. Apple of Apple Growth Partners to act as
the Inspector of Election. Mr. Apple is not otherwise
employed by, or a director of, the Company or any of its
affiliates. After the final adjournment of the Meeting, the
proxies will be returned to the Company.
WHO CAN
ATTEND THE MEETING?
If you are a shareholder of record as of the close of business
on April 4, 2008, you may attend the Meeting. However, if
you are a beneficial owner of Company common stock held by a
broker, bank or other nominee, you will need proof of ownership
to be admitted to the Meeting. A recent brokerage statement or
letter from a bank or broker would serve as proof of ownership.
If you want to vote your shares of Company common stock held in
street name in person at the Meeting, you must obtain a written
proxy in your name from the broker, bank, or other nominee who
holds your shares.
GENERAL
The Company continues to review its corporate governance
policies and practices. This includes comparing its current
policies and practices to policies and practices suggested by
various groups and authorities active in corporate governance
and practices of other public companies. Based upon this review,
the Company expects to adopt any changes that the Board of
Directors believes are the best corporate governance policies
and practices for the Company. The Company will adopt changes,
as appropriate, to maintain compliance with the Sarbanes-Oxley
Act of 2002 and any rule changes made by the Securities and
Exchange Commission and the
Nasdaq®
Stock Market, Inc.
CODE OF
ETHICS AND BUSINESS CONDUCT
Since the Companys inception in 1998, it has had a Code of
Ethics and Business Conduct (Code of Conduct). The
Company requires all directors, officers and other employees of
the Company and its wholly owned subsidiary, CFBank, to adhere
to the Code of Conduct in addressing the legal and ethical
issues encountered in conducting their work. The Code of Conduct
requires that the Companys and CFBanks employees
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 the
Companys and CFBanks best interest. All of the
Companys and CFBanks employees are required to
certify that they have reviewed and understand the Code of
Conduct. In addition, all officers and senior level executives
are required to certify as to any actual or potential conflicts
of interest involving them and the Company or CFBank. The
Company and CFBank also provide training for employees on the
Code of Conduct and their legal obligations. The Companys
Code of Conduct is applicable to all employees of the Company
and CFBank, including its principal executive officer, principal
financial officer and controller, and meets the requirements of
the Sarbanes-Oxley Act of 2002 with respect to the obligations
of such persons.
Employees are required to report any conduct that they believe
in good faith to be an actual or apparent violation of the Code
of Conduct. The Code of Conduct includes procedures to receive,
retain and treat complaints received regarding accounting,
internal accounting controls or auditing matters and to allow
for the confidential and anonymous submission by employees of
concerns regarding questionable accounting or auditing matters.
The Companys Code of Ethics and Business Conduct is
available on the Companys website at www.CFBankonline.com
under the caption CF News and Links Investor
Relations Corporate Governance.
3
PROPOSAL 1. ELECTION OF DIRECTORS
The number of directors is fixed at seven. Two directors,
Mr. Downing and Mr. Grace, have been nominated to be
elected to hold office until the Annual Meeting in 2011.
Notwithstanding the foregoing, each director will serve until
his successor is duly qualified and elected. The nominees are
listed below. Should any nominee decline or be unable to accept
such nomination or be unable to serve, an event which management
does not now expect, the Board of Directors reserves the right
in its discretion to substitute another person as a nominee or
to reduce the number of nominees. In this event, the proxy
holders may vote your shares in their discretion for any
substitute nominee proposed by the Board of Directors unless you
indicate otherwise.
All nominees currently are directors of the Company. There are
no family relationships among any of the directors and executive
officers. No directors hold directorships in other reporting
companies, except Mr. Vernon, as described below. No person
being nominated as a director is being proposed for election
pursuant to any agreement or understanding between any such
person and the Company. The following is information regarding
each nominee and each director continuing in office. Unless
otherwise stated, each individual has held his current
occupation for at least five years.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE ELECTION OF THE NOMINEES NAMED IN THIS PROXY
STATEMENT.
NOMINEES
William R. Downing has been President of R. H. Downing, Inc., an
automotive supply, sales and marketing agency in Akron, Ohio,
since June 1973. He is also Chairman and Chief Executive Officer
of JohnDow Industries, Inc., a manufacturer and distributor of
lubrication and fluid handling equipment which he founded in
1988, and Chairman of Dowco, LLC, a manufacturer and processor
of tire cord for use in the power transmission belt industry
which he acquired in 2006. Age 62. Director since 2003.
Gerry W. Grace, retired, was President of Grace Services, Inc.,
a weed and pest control company located in Canfield, Ohio, from
April 1980 through 2005. He was the Chairman of CFBank, then
known as Central Federal Savings & Loan Association of
Wellsville, from 1994 to early 2003, and the Chairman of Central
Federal Corporation, then known as Grand Central Financial
Corp., from 1998 to early 2003. Mr. Grace also served as a
Trustee of Ellsworth Township, Ohio from 1976 through 2005.
Age 68. Director since 1986.
CONTINUING
DIRECTORS
Jeffrey W. Aldrich, retired, was President and Chief Executive
Officer of Sterling China Co., a dishware manufacturing company
in Wellsville, Ohio, from November 1970 through 2005.
Age 65. Director since 1979. Current term as director
expires on the date of the Annual Meeting in 2009.
Mark S. Allio has been the Chairman of the Company and CFBank
since January 1, 2006 and President and Chief Executive
Officer of the Company and Chief Executive Officer of CFBank
since February 1, 2005. He was the Vice Chairman of the
Company and CFBank from February 1, 2005 through
December 31, 2005. Mr. Allio was President and Chief
Executive Officer of Rock Bank, an affiliate of Quicken Loans,
Inc. in Livonia, Michigan, from April 2003 to December
2004, President of Third Federal Savings, MHC in Cleveland, Ohio
from January 2000 to December 2002, Chief Financial Officer of
Third Federal from 1988 through 1999, and has more than
30 years of banking and banking-related experience.
Age 53. Director since 2003. Current term as director
expires on the date of the Annual Meeting in 2009.
Thomas P. Ash has been Director of Governmental Relations at the
Buckeye Association of School Administrators since August 2005.
Prior to that time, Mr. Ash was Superintendent of Schools,
Mid-Ohio Educational Service Center in Mansfield, Ohio from
January 2000 through July 2005. Mr. Ash was the
Superintendent of Schools, East Liverpool City School District
in East Liverpool, Ohio from August 1984 to December 1999. As
Superintendent at Mid-Ohio Educational Service Center and East
Liverpool City School District, his experience included
financial
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reporting and analysis, supervising and directing financial
staff members, implementing and complying with GAAP reporting
requirements and developing internal controls. Age 58.
Director since 1985. Current term as director expires on the
date of the Annual Meeting in 2010.
David C. Vernon has been a director, President and Chief
Executive Officer of National Bancshares Corporation and First
National Bank, Orville, Ohio since November 2006.
Mr. Vernon continues as Chairman Emeritus of the Company
and CFBank, positions he has held since February 29, 2008.
He also served as Vice Chairman of the Company and CFBank, from
January 1, 2006 to February 28, 2008 and Chairman of
the Company and CFBank from January 2003 to December 2005.
Mr. Vernon was Chief Executive Officer of the Company and
CFBank from January 2003 to January 2005 and President of the
Company from March 2003 through January 2005. He was Chairman,
President and Chief Executive Officer of Founders Capital
Corporation in Akron, Ohio from September 2002 to February 2003;
a Strategic Planning Consultant to Westfield Bank in Westfield,
Ohio from May 2000 to July 2002; a Consultant to Champaign
National Bank in Urbana, Ohio from July 1999 to April 2002; and
a Consultant to First Place Bank in Warren, Ohio from April 1999
to February 2001. While serving as a Consultant to Champaign
National Bank, Mr. Vernon also served as a director and
member of the Audit and Compensation Committees of that
banks parent company, Futura Banc Corp. In February 1999,
Mr. Vernon retired as Chairman, President and Chief
Executive Officer of Summit Bank, a community bank he founded in
January 1991. Age 67. Director since 2003. Current term as
director expires on the date of the Annual Meeting in 2010.
Jerry F. Whitmer is Of Counsel to Brouse McDowell, LPA, a law
firm in Akron, Ohio, where he was a shareholder from 1971
through 2005. Mr. Whitmer served as Managing Partner of the
firm from 1997 through 2005. Age 72. Director since 2003.
Current term as director expires on the date of the Annual
Meeting in 2010.
INDEPENDENCE
OF DIRECTORS
The Board of Directors has adopted Director Independence
Standards to assist in determining the independence of each
director, or nominee for director. In order for a director or
nominee to be considered independent, the Board of Directors
must affirmatively determine that the director or nominee has no
material relationship with the Company. In each case, the Board
of Directors broadly considers all relevant facts and
circumstances, including the directors or nominees
commercial, industrial, banking, consulting, legal, accounting,
charitable and familial relationships and such other criteria as
the Board of Directors may determine from time to time. These
Director Independence Standards are available on the
Companys website at www.CFBankonline.com under the caption
CF News and Links Investor
Relations Corporate Governance.
The Board of Directors has determined that Messrs. Aldrich,
Ash, Downing, Grace and Whitmer meet these standards and are
independent and, in addition, satisfy the independence
requirements of the
Nasdaq®
Stock Market, Inc.
Absent unusual circumstances, each director is expected to
attend all annual and special meetings of shareholders. All the
directors who were board members at the time of the 2007 Annual
Meeting of Shareholders attended that meeting.
MEETINGS AND
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company is responsible for
establishing broad corporate policies and for the overall
performance of the Company. Directors discharge their
responsibilities at Board meetings and committee meetings. The
members of the Board of Directors of the Company also serve as
members of the Board of Directors of CFBank. The Board of
Directors of the Company holds regular meetings at least three
times annually. The Board of Directors of CFBank meets on a
monthly basis. Both Boards may have additional meetings as
needed. During the year ended December 31, 2007, the Board
of Directors of the Company held six meetings, three of which
were special meetings, the independent directors of the Company
held two meetings, and the Board of Directors of CFBank held 12
meetings. No director attended fewer than 75% of the aggregate
number of Board meetings and meetings of the committees on which
he served. The Board of Directors of the Company maintains
committees, the nature and composition of which are described
below:
AUDIT COMMITTEE. The Audit Committee consists of
Messrs. Ash, Grace and Whitmer. Each member of the
Committee is independent as defined in the corporate governance
listing standards of the
Nasdaq®
Stock Market,
5
Inc. and the Companys Director Independence Standards.
Mr. Ash is the Audit Committee financial expert and is
independent of management. The Audit Committee operates under a
written charter adopted by the Board of Directors. The Audit
Committee Charter is attached to this proxy statement as
Appendix A and is available on the Companys website
at www.CFBankonline.com under the caption CF News and
Links Investor Relations Corporate
Governance. This committee is primarily responsible for
overseeing the engagement, independence and services of our
independent registered public accounting firm and is also
responsible for the review of audit reports and
managements actions regarding the implementation of audit
findings and review of compliance with all relevant laws and
regulations. The Audit Committee met eight times during 2007.
AUDIT
COMMITTEE REPORT
The Audit Committee operates under a written charter adopted by
the Board of Directors. The Board of Directors has determined
that each Audit Committee member is independent in accordance
with the listing standards of the
Nasdaq®
Stock Market, Inc.
The Companys management is responsible for the
Companys internal controls and financial reporting
process. The independent registered public accounting firm is
responsible for performing an independent audit of the
Companys consolidated financial statements and issuing an
opinion on the conformity of those financial statements with
U.S. generally accepted accounting principles. The Audit
Committee oversees the Companys internal controls and
financial reporting process on behalf of the Board of Directors.
In this context, the Audit Committee has met and held
discussions with management and representatives of the
independent registered public accounting firm. Management
represented to the Audit Committee that the Companys
consolidated financial statements were prepared in accordance
with U.S. generally accepted accounting principles, and the
Audit Committee has reviewed and discussed the consolidated
financial statements with management and the independent
registered public accounting firm. The Audit Committee discussed
with the independent registered public accounting firm matters
required to be discussed by Statement on Auditing Standards
No. 61 (Communication With Audit Committees), including the
quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the
clarity of the disclosures in the financial statements.
In addition, the Audit Committee has received the written
disclosures and the letter from the independent registered
public accounting firm required by the Independence Standards
Board Standard No. 1 (Independence Discussions with Audit
Committees) and has discussed with the independent registered
public accounting firm the accountants independence from
the Company and its management. In concluding that the
accountants are independent, the Audit Committee considered,
among other factors, whether the non-audit services provided by
the independent registered public accounting firm were
compatible with its independence.
The Audit Committee discussed with representatives of the
Companys independent registered public accounting firm the
overall scope of plans for their audit. The Audit Committee
meets with such representatives, with and without management
present, to discuss the results of their examination, their
evaluation of the Companys internal controls, and the
overall quality of the Companys financial reporting.
In performing all of these functions, the Audit Committee acts
only in an oversight capacity. In its oversight role, the Audit
Committee relies on the work and assurances of the
Companys management, which has a primary responsibility
for financial statements and reports, and of the independent
registered public accounting firm which, in its report,
expresses an opinion on the conformity of the Companys
financial statements to U.S. generally accepted accounting
principles. The Audit Committees oversight does not
provide it with an independent basis to determine that
management has maintained appropriate accounting and financial
procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the
Audit Committees considerations and discussions with
management and the independent registered public accounting firm
do not assure that the Companys financial statements are
presented in accordance with U.S. generally accepted
accounting principles, that the audit of the Companys
financial statements has been carried out in accordance with
generally accepted auditing standards or that the Companys
independent registered public accounting firm is, in fact,
independent.
In reliance on the review and discussions referred to above, the
Audit Committee recommended to the Board of Directors, and the
Board has approved, that the audited consolidated financial
statements be included in the
6
Companys Annual Report on
Form 10-K
for the year ended December 31, 2007 for filing with the
Securities and Exchange Commission. The Audit Committee and the
Board of Directors also have approved the selection of the
Companys independent registered public accounting firm.
Thomas P. Ash, Chairman, Gerry W. Grace and Jerry F. Whitmer
COMPENSATION AND MANAGEMENT DEVELOPMENT
COMMITTEE. The Compensation and Management
Development Committee consists of Mssrs. Ash, Downing and
Whitmer. Each member of the Committee is independent as defined
in the corporate governance listing standards of the
Nasdaq®
Stock Market, Inc. and the Companys Director Independence
Standards. The committee is responsible for
(i) establishing compensation and benefits for the Chief
Executive Officer, (ii) reviewing, when necessary, the
incentive compensation programs of the Company and CFBank, and
(iii) reviewing matters regarding compensation and fringe
benefits for other officers and employees of the Company and
CFBank. The Compensation and Management Development Committee of
the Company met three times in 2007. The Compensation and
Management Development Committee has a charter, which is
available on the Companys website at www.CFBankonline.com
under the caption CF News and Links Investor
Relations Corporate Governance.
COMPENSATION
AND MANAGEMENT DEVELOPMENT COMMITTEE REPORT
This report is made under the Committees charter and the
rules and regulations of the Securities and Exchange Commission.
The Compensation and Management Development Committee operates
under a written charter adopted by the Board of Directors. The
Board of Directors has determined that each member or the
Compensation and Management Development Committee is independent
in accordance with the listing standards of the
Nasdaq®
Stock Market, Inc. and the Companys Director Independence
Standards.
The Committee has overall responsibility for approving and
evaluating the director and officer compensation plans, policies
and programs of the Company and CFBank.
Under its charter, the Compensation and Management Development
Committee may delegate all or a portion of its duties and
responsibilities to a subcommittee, which the Committee has
chosen not to do. The Committee must meet at least three times
annually, which is the number of times the Committee met during
2007. Mr. Allio periodically makes recommendations to the
Committee for the Companys and CFBanks
directors and executive officers compensation,
including stock-based incentive awards. The Compensation and
Management Development Committee, under its charter, is vested
with the authority to retain compensation consultants, for which
the Company would pay a fee. The Committee did not retain
compensation consultants in 2007.
William R. Downing, Chairman, Thomas P. Ash and Jerry F. Whitmer
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE. The
Corporate Governance and Nominating Committee actively seeks
individuals to become Board members who have the highest
personal and professional character and integrity, who possess
appropriate characteristics, skills, experience and time to make
a significant contribution to the Board of Directors, the
Company and its shareholders, who have demonstrated exceptional
ability and judgment, and who will be most effective, in the
context of the whole Board of Directors and other nominees to
the Board of Directors, in perpetuating the success of the
Company and in representing shareholders interests. The
Committee may employ professional search firms, for which the
Company would pay a fee to assist it in identifying potential
members of the Board of Directors with the desired skills and
disciplines.
The Committee will consider shareholder nominations for director
on the same basis and in the same manner as it considers
nominations for director from any other source. Any shareholder
may submit a nomination in writing to the Chair, Corporate
Governance and Nominating Committee,
c/o Corporate
Secretary, Central Federal Corporation, 2923 Smith Road,
Fairlawn, Ohio 44333. The nominations must be accompanied by all
the information relating to the nominee required by the
Companys Bylaws and the Securities and Exchange
Commissions proxy rules. The Companys Bylaws provide
that, to be considered timely, any shareholder nomination for
director generally must be received in writing by the Corporate
Secretary at least 90 days before the date fixed for the
next Annual Meeting of shareholders; provided, however, under
certain unusual circumstances a nomination received as late as
the 10th day after the mailing of a notice of an Annual
Meeting of Shareholders may be considered. A copy of
7
the full text of the Bylaw provisions relating to shareholder
nominations may be obtained by writing to the Corporate
Secretary at 2923 Smith Road, Fairlawn, Ohio 44333.
The Committee considers candidates for director nominees based
on factors it deems appropriate. These factors may include
judgment, character, background, skill, diversity, experience
with businesses and other organizations of comparable size, the
interplay of the candidates experience with the experience
of other Board members and the extent to which the candidate
would be a desirable addition to the Board and any committees of
the Board. In addition, because the Company is primarily a
community financial services company, board candidates must be
highly regarded members of the community in which the Company
provides financial services.
The Corporate Governance and Nominating Committee met two times
in 2007 and is currently composed of three directors:
Messrs. Aldrich, Grace and Whitmer. Mr. Whitmer is
Chairman of the Committee. Each member of the Committee is
independent as defined in the corporate governance listing
standards of the
Nasdaq®
Stock Market, Inc. and the Companys Director Independence
Standards.
The Corporate Governance and Nominating Committee charter is
available on the Companys website at www.CFBankonline.com
under the caption CF News and Links Investor
Relations Corporate Governance.
COMMITTEE CHARTERS AND OTHER CORPORATE GOVERNANCE
DOCUMENTS. The Audit Committee Charter, Compensation
and Management Development Committee Charter, Corporate
Governance and Nominating Committee Charter, Corporate
Governance Guidelines, Director Independence Standards and Code
of Ethics and Business Conduct are available on the
Companys website at www.CFBankonline.com under the caption
CF News and Links Investor
Relations Corporate Governance. You also may
receive copies without charge by writing to: Corporate
Secretary, Central Federal Corporation, 2923 Smith Road,
Fairlawn, Ohio 44333.
COMMUNICATIONS
WITH DIRECTORS
The Board of Directors also has adopted a process by which
shareholders and other interested parties may communicate with
the Board, any individual director, any committee chair or the
non-management directors as a group by
e-mail or
regular mail. Communications by
e-mail
should be sent to EllyMackus@CFBankmail.com. Communications by
regular mail should be sent to the attention of the Board of
Directors; any individual director by name; Chair, Audit
Committee; Chair, Compensation and Management Development
Committee; Chair, Corporate Governance and Nominating Committee
or to the Non-Management Directors,
c/o Corporate
Secretary, Central Federal Corporation, 2923 Smith Road,
Fairlawn, Ohio 44333. All communications will be reviewed by
management to determine whether the communication requires
immediate action. Management will pass on all communications
received, or a summary of such communications, to the
appropriate director or directors.
DIRECTORS
COMPENSATION
DIRECTORS FEES. Each director (including
Mr. Allio) is paid an annual retainer in the amount of
$15,000, which includes a retainer of $3,000 for service as a
director of the Company and a retainer of $12,000 for service as
a director of CFBank. The Chairman of the Board receives an
additional $9,500 per year and, beginning in 2008, the Audit
Committee Chairman, who is also the Committees financial
expert, will receive an additional $3,000 per year to reflect an
increase in demands on him as a result of the Sarbanes-Oxley Act
of 2002.
1999 STOCK-BASED INCENTIVE PLAN AND THIRD AMENDED AND
RESTATED 2003 EQUITY COMPENSATION PLAN. The Company
maintains the 1999 Stock-Based Incentive Plan and the Third
Amended and Restated 2003 Equity Compensation Plan for the
benefit of employees and outside directors of the Company and
CFBank.
8
DIRECTOR COMPENSATION TABLE. The table below
summarizes compensation paid to each director who is not a named
executive officer during the year ended December 31, 2007.
Director compensation for Mr. Allio and Mr. Vernon is
included in the Summary Compensation Table.
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Director Compensation
|
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Fees Earned
|
|
|
Stock
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|
|
Option
|
|
|
All Other
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or Paid in
|
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Awards
|
|
|
Awards
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|
|
Compensation
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|
|
Name
|
|
Cash ($)
|
|
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($) (1)
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($) (2)
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($) (3)
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Total ($)
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Jeffrey W. Aldrich
|
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$
|
15,000
|
|
|
$
|
5,435
|
|
|
$
|
|
|
|
$
|
3,667
|
|
|
$
|
24,102
|
|
Thomas P. Ash
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|
15,000
|
|
|
|
5,435
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|
|
|
|
|
|
|
1,036
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|
|
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21,472
|
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William R. Downing
|
|
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15,000
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|
|
|
5,435
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|
|
|
|
|
|
|
|
|
|
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20,435
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Gerry W. Grace
|
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15,000
|
|
|
|
5,435
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|
|
|
|
|
|
|
6,313
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|
|
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26,748
|
|
Jerry F. Whitmer
|
|
|
15,000
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|
|
|
5,435
|
|
|
|
|
|
|
|
|
|
|
|
20,435
|
|
|
|
|
(1) |
|
The amounts included in the Stock Awards column
represent the compensation cost we recognized in 2007 related to
non-option stock awards, as described in Statement of Financial
Accounting Standards No. 123R. For a discussion of the
assumptions we used to calculate the value of stock awards
reported in this column, see Note 15 to our consolidated
financial statements on pages
41-42 of our
annual report on
Form 10-K
for the year ended December 31, 2007. As of
December 31, 2007, each director had a total of
1,100 shares of restricted stock outstanding. |
|
(2) |
|
We did not grant any option awards to directors in 2007. See
Note 15 to our consolidated financial statements included
in our annual report on
Form 10-K
for a discussion of expense related to awards in prior years. As
of December 31, 2007, Messrs. Aldrich, Ash and Grace
had a total of 11,694 options outstanding. Messrs. Downing and
Whitmer had a total of 2,000 options outstanding. |
|
(3) |
|
The amounts shown in the All Other Compensation
column represent costs associated with life insurance benefits
for Messrs. Aldrich, Ash and Grace. |
9
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE. The following table
summarizes compensation for our Chief Executive Officer and our
two most highly compensated executive officers other than the
CEO for the years ended December 31, 2007 and 2006.
Summary
Compensation Table for 2007
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Nonqualified
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|
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|
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|
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|
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Deferred
|
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|
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|
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Stock
|
|
|
Option
|
|
|
Compensation
|
|
|
All Other
|
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|
|
|
Name and Principal
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|
|
|
|
|
|
|
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Awards
|
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|
Awards
|
|
|
Earnings
|
|
|
Compensation
|
|
|
|
|
Position
|
|
Year
|
|
|
Salary ($)
|
|
|
Bonus ($)
|
|
|
($) (1)
|
|
|
($) (2)
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($) (3)
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|
|
($) (4)
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Total ($)
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|
Mark S. Allio
|
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|
2007
|
|
|
$
|
175,000
|
|
|
$
|
|
|
|
$
|
30,921
|
|
|
$
|
3,347
|
|
|
$
|
|
|
|
$
|
28,000
|
|
|
$
|
237,268
|
|
Chairman, President
|
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2006
|
|
|
|
175,000
|
|
|
|
15,000
|
|
|
|
19,814
|
|
|
|
|
|
|
|
|
|
|
|
24,500
|
|
|
|
234,314
|
|
and Chief Executive Officer
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David C. Vernon
|
|
|
2007
|
|
|
|
120,000
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|
|
|
|
|
|
|
23,876
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|
|
|
|
|
|
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91,964
|
|
|
|
30,600
|
|
|
|
266,440
|
|
Chairman Emeritus
|
|
|
2006
|
|
|
|
120,000
|
|
|
|
|
|
|
|
42,518
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|
|
|
|
|
|
|
72,980
|
|
|
|
28,200
|
|
|
|
263,698
|
|
Raymond E. Heh
|
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|
2007
|
|
|
|
120,000
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|
|
|
10,000
|
|
|
|
21,868
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|
|
|
669
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|
|
|
|
|
|
|
|
|
|
|
152,537
|
|
President and Chief
|
|
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2006
|
|
|
|
119,583
|
|
|
|
10,000
|
|
|
|
23,824
|
|
|
|
|
|
|
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|
|
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|
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153,407
|
|
Operating Officer, CFBank
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|
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(1) |
|
The amounts included in the Stock Awards column
represent the compensation cost we recognized related to
non-option stock awards, as described in Statement of Financial
Accounting Standards No. 123R. For a discussion of the
assumptions we used to calculate the value of the stock awards
reported in this column, see Note 15 to our consolidated
financial statements on pages
41-42 of our
annual report on
Form 10-K
for the year ended December 31, 2007. |
|
(2) |
|
The amounts included in the Option Awards column
represent the compensation cost we recognized related to stock
option grants, as described in Statement of Financial Accounting
Standards No. 123R. For a discussion of the assumptions we
used to calculate the value of option awards reported in this
column, see Note 15 to our consolidated financial
statements included in our annual report on
Form 10-K
for the year ended December 31, 2007. We did not grant any
option awards in 2006. See Note 15 to our consolidated
financial statements in our annual report on
Form 10-K
for a discussion of expense related to awards in prior years. |
|
(3) |
|
The amounts shown in this column are the changes in 2006 and
2007 in the actuarial present value of the accumulated benefits
under Mr. Vernons Salary Continuation Agreement. |
|
(4) |
|
The amounts shown in the All Other Compensation
column are attributable to employer 401(k) plan matching
contributions, director fees and perquisites as follows: For
Mr. Allio, $3,500 employer 401(k) plan match in 2007 and
$24,500 director fees, including a $9,500 annual fee he
received as Chairman of the Board, in 2006 and 2007. For
Mr. Vernon, $2,400 employer 401(k) plan match in 2007;
$15,000 director fees, $7,200 country club dues, and $6,000
auto allowance in 2006 and 2007. |
10
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END. The
following table shows information regarding outstanding equity
awards we have made to our named executive officers which are
outstanding as of December 31, 2007.
Outstanding
Equity Awards at Fiscal Year-End
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|
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Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
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Market
|
|
|
|
Number of
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Value of
|
|
|
|
Securities
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Shares or
|
|
|
|
Underlying
|
|
|
Unexercised
|
|
|
|
|
|
|
|
|
Stock That
|
|
|
Units of
|
|
|
|
Unexercised
|
|
|
Options (#)
|
|
|
Option
|
|
|
Option
|
|
|
Have Not
|
|
|
Stock That
|
|
|
|
Options (#)
|
|
|
Unexercisable
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Vested (#)
|
|
|
Have Not
|
|
Name
|
|
Exercisable
|
|
|
(1)
|
|
|
Price ($)
|
|
|
Date
|
|
|
(2)
|
|
|
Vested ($) (3)
|
|
|
Mark S. Allio
|
|
|
24,474
|
|
|
|
|
|
|
|
10.42
|
|
|
|
5/19/15
|
|
|
|
8,000
|
|
|
|
30,880
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
7.35
|
|
|
|
2/15/17
|
|
|
|
|
|
|
|
|
|
David C. Vernon
|
|
|
11,390
|
|
|
|
|
|
|
|
10.05
|
|
|
|
1/16/13
|
|
|
|
3,575
|
|
|
|
13,800
|
|
|
|
|
28,000
|
|
|
|
|
|
|
|
11.50
|
|
|
|
4/17/13
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
12.60
|
|
|
|
4/15/14
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
10.42
|
|
|
|
5/19/15
|
|
|
|
|
|
|
|
|
|
Raymond E. Heh
|
|
|
12,000
|
|
|
|
|
|
|
|
12.57
|
|
|
|
6/9/13
|
|
|
|
4,800
|
|
|
|
18,528
|
|
|
|
|
3,632
|
|
|
|
|
|
|
|
13.76
|
|
|
|
3/18/14
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
|
|
|
|
12.60
|
|
|
|
4/15/14
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
10.42
|
|
|
|
5/19/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
7.35
|
|
|
|
2/15/17
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The unexercisable Option Awards as of December 31, 2007
have a vesting date or will vest as follows: |
|
|
|
|
|
|
|
|
|
Date
|
|
Mr. Allio
|
|
|
Mr. Heh
|
|
|
1/31/08
|
|
|
1,667
|
|
|
|
333
|
|
1/31/09
|
|
|
1,666
|
|
|
|
333
|
|
1/31/10
|
|
|
1,667
|
|
|
|
334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
The Stock Awards that have not vested as of December 31,
2007 have a vesting date or will vest as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
Mr. Allio
|
|
|
Mr. Vernon
|
|
|
Mr. Heh
|
|
|
1/16/08
|
|
|
|
|
|
|
775
|
|
|
|
|
|
1/31/08
|
|
|
1,667
|
|
|
|
1,000
|
|
|
|
1,000
|
|
5/31/08
|
|
|
1,000
|
|
|
|
600
|
|
|
|
600
|
|
1/31/09
|
|
|
1,667
|
|
|
|
|
|
|
|
1,000
|
|
5/31/09
|
|
|
1,000
|
|
|
|
600
|
|
|
|
600
|
|
1/31/10
|
|
|
1,666
|
|
|
|
|
|
|
|
1,000
|
|
5/31/10
|
|
|
1,000
|
|
|
|
600
|
|
|
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
3,575
|
|
|
|
4,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
Based on the $3.86 closing price of our common stock as of
December 31, 2007. |
11
EMPLOYMENT AGREEMENTS. CFBank and the Company have
maintained employment agreements with David C. Vernon, who was
President and Chief Executive Officer of the Company and Chief
Executive Officer of CFBank until January 31, 2005.
The Employment Agreements were amended in December 2004 in
connection with a management succession plan whereby Mark S.
Allio was appointed President and Chief Executive Officer of the
Company and Chief Executive Officer of CFBank effective
February 1, 2005. The terms of the amended Employment
Agreements provided that effective February 1, 2005 and so
long as Mr. Vernon continued to serve, if elected, as a
director, Mr. Vernon would be Chairman of the Board of
Directors through December 31, 2005 and, thereafter, Vice
Chairman of the Board of Directors until his expected retirement
date in February 2008. On February 28, 2008,
Mr. Vernon retired and was named Chairman Emeritus. He will
remain a director, if elected and, if not elected, he will
continue to serve as a consultant or employee and be available
to perform special project services for and on behalf of the
Company and CFBank at a compensation level commensurate with his
duties and responsibilities, but in any event not less than $100
per month, until April 17, 2014.
All reasonable costs and legal fees paid or incurred by
Mr. Vernon pursuant to any dispute or question of
interpretation relating to the Employment Agreements are to be
paid by CFBank or the Company, respectively, if Mr. Vernon
is successful on the merits pursuant to a legal judgment,
arbitration or settlement. The Employment Agreements also
provide that CFBank and the Company indemnify Mr. Vernon to
the fullest extent allowable under federal, Ohio and Delaware
law, respectively. Payments to Mr. Vernon under
CFBanks Employment Agreement are guaranteed by the Company
in the event that payments or benefits are not paid by CFBank.
SALARY CONTINUATION AGREEMENT. In 2004, CFBank
initiated a nonqualified Salary Continuation Agreement for
Mr. Vernon. Under the plan, CFBank pays him, or his
beneficiary, a retirement benefit of $25,000 annually for
20 years beginning March 2008.
ADDITIONAL
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE. Section 16(a) of the Securities
Exchange Act of 1934 requires the Companys executive
officers and directors and persons who own more than 10% of any
registered class of the Companys equity securities to file
reports of ownership and changes in ownership with the
Securities and Exchange Commission. Executive officers,
directors and greater than 10% shareholders are required by
regulations of the Securities and Exchange Commission to furnish
the Company copies of all Section 16(a) reports they file.
Based solely on a review of the copies of all such reports of
ownership furnished to the Company, or written representations
that no forms were necessary, we believe there were no known
failures to file a required Form. For the year ended
December 31, 2007, two reports were filed late for
Mr. Allio, which resulted in the transactions not being
reported on a timely basis. The late transactions were
subsequently reported on Form 4s.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS. Federal regulations related to insured
financial institutions and CFBank policy require that any and
all loans or extensions of credit made by CFBank to related
persons of the Company or CFBank, including executive officers,
directors or their immediate family members (i) be made in
the ordinary course of business on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with persons not related to
CFBank, (ii) do not involve more than the normal risk of
collectability and (iii) do not present any other
unfavorable features. All outstanding loans or extensions of
credit made by CFBank to such related persons comply with these
regulations and policies. In addition, loans made to a director
or executive officer in an amount that, when aggregated with the
amount of all other loans to such person and his or her related
interests, exceed the greater of $25,000 or 5% of CFBanks
capital and surplus (up to a maximum of $500,000) must be
approved in advance by a majority of the disinterested members
of the Board of Directors. Total loans outstanding to such
related persons totaled $2.7 million at December 31,
2007.
12
PROPOSAL 2.
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Audit Committee, with the approval of the Board of
Directors, has appointed Crowe Chizek and Company LLC to be its
independent registered public accounting firm for 2008, subject
to ratification by shareholders. A representative of Crowe
Chizek and Company LLC is expected to be present at the Meeting
to respond to appropriate questions from shareholders and will
have the opportunity to make a statement should he or she desire
to do so.
If shareholders do not ratify the appointment of Crowe Chizek
and Company LLC as the Companys independent registered
public accounting firm for 2008, the Audit Committee may replace
them with another independent registered public accounting firm
for the balance of the year or may continue to use Crowe Chizek
and Company LLC if the Audit Committee deems it to be in the
best interest of the Company under the circumstances.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR RATIFICATION OF THE APPOINTMENT OF CROWE CHIZEK
AND COMPANY LLC AS THE COMPANYS INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR 2008.
The following table sets forth the fees billed to the Company
for 2007 and 2006 by Crowe Chizek and Company LLC:
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Audit Fees
|
|
$
|
56,000
|
|
|
$
|
52,000
|
|
Audit-Related Fees
|
|
|
31,950
|
|
|
|
47,950
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
87,950
|
|
|
$
|
99,950
|
|
|
|
|
|
|
|
|
|
|
Audit-related fees related to Crowe Chizek and Company
LLCs review of the Companys filings with the
Securities and Exchange Commission during 2007 and 2006.
The Companys Audit Committee must pre-approve all
engagements of the independent registered public accounting firm
by the Company and its subsidiaries, including CFBank, as
required by the Audit Committees charter and the rules of
the Securities and Exchange Commission. Prior to the beginning
of each fiscal year, the Audit Committee approves an annual
estimate of fees for engagements, taking into account whether
the services are permissible under applicable law and the
possible impact of each non-audit service on the independent
registered public accounting firms independence from
management. In addition, the Audit Committee evaluates known
potential engagements of the independent registered public
accounting firm, including the scope of the proposed work to be
performed and the proposed fees, and approves or rejects each
service. Management may present additional services for approval
at subsequent committee meetings. The Audit Committee has
delegated to the Audit Committee Chairman the authority to
evaluate and approve engagements on behalf of the Audit
Committee in the event a need arises for pre-approval between
Committee meetings and in the event the engagement for services
was within the annual estimate but not specifically approved. If
the Chairman so approves any such engagements, he reports that
approval to the full Committee at the next Committee meeting.
Since the effective date of the Securities and Exchange
Commissions rules that strengthen independent registered
public accounting firm independence, all audit, audit-related,
tax and other services provided by Crowe Chizek and Company LLC
have been pre-approved in accordance with the Audit
Committees policies and procedures.
13
STOCK
OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table provides information as of March 20,
2008 about the persons known by the Company to be beneficial
owners of more than 5% of the Companys outstanding common
stock. A person may be considered to beneficially own any shares
of common stock over which he or she has, directly or
indirectly, sole or shared voting or investment power.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
|
|
Nature of
|
|
|
Percent of
|
|
|
|
Beneficial
|
|
|
Common Stock
|
|
Name and Address of Beneficial
Owner
|
|
Ownership
|
|
|
Outstanding
|
|
|
First Manhattan Co. (1)
|
|
|
371,808
|
|
|
|
8.4
|
%
|
437 Madison Avenue
|
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
Wellington Management Co., LLP (2)
|
|
|
333,088
|
|
|
|
7.5
|
%
|
75 State Street
|
|
|
|
|
|
|
|
|
Boston, MA 02109
|
|
|
|
|
|
|
|
|
Uni Capital LP (3)
|
|
|
260,000
|
|
|
|
5.9
|
%
|
7111 Valley Green Road
|
|
|
|
|
|
|
|
|
Fort Washington, PA 19304
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Based on information contained in a
statement on Schedule 13G/A dated December 31, 2007
and filed February 11, 2008, First Manhattan Co. has sole
voting power over 349,026 shares of the outstanding common
stock of the Company, shared voting power over
22,782 shares of the outstanding common stock of the
Company, sole investment power over 349,026 shares of the
outstanding common stock of the Company, and shared investment
power over 22,782 shares of the outstanding common stock of
the Company.
|
|
(2)
|
|
Based on information contained in a
statement on Schedule 13G/A dated December 31, 2007
and filed February 14, 2008, Wellington Management Co., LLP
has shared voting power over 251,388 shares of the
outstanding common stock of the Company and shared investment
power over 333,088 shares of the outstanding common stock
of the Company.
|
|
(3)
|
|
Based on information contained in a
statement on Schedule 13G dated January 28, 2008 and
filed February 4, 2008, Uni Capital LP has sole voting
power over 260,000 shares of the outstanding common stock
of the Company and sole investment power over
260,000 shares of the outstanding common stock of the
Company.
|
14
SECURITY
OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of March 20,
2008 with respect to the number of shares of Company common
stock considered to be owned by each director or nominee for
director of the Company, by each executive officer named in the
Summary Compensation Table and by all directors and executive
officers of the Company as a group. A person may be considered
to own any shares of common stock over which he or she has,
directly or indirectly, sole or shared voting or investment
power.
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of
|
|
|
|
Beneficial Ownership
|
|
|
|
Shares
|
|
|
Percent
|
|
|
Mark S. Allio, Chairman of the Board, President and Chief
Executive Officer (1)
|
|
|
156,023
|
|
|
|
3.5
|
%
|
David C. Vernon, Chairman Emeritus (2)
|
|
|
119,881
|
|
|
|
2.6
|
%
|
Jeffrey W. Aldrich, Director (3)
|
|
|
37,290
|
|
|
|
0.8
|
%
|
Thomas P. Ash, Director (4)
|
|
|
37,172
|
|
|
|
0.8
|
%
|
William R. Downing, Director (5)
|
|
|
36,192
|
|
|
|
0.8
|
%
|
Gerry W. Grace, Director (4)
|
|
|
53,072
|
|
|
|
1.2
|
%
|
Jerry F. Whitmer, Director (6)
|
|
|
10,000
|
|
|
|
0.2
|
%
|
Raymond E. Heh, President and Chief Operating Officer, CFBank (7)
|
|
|
47,465
|
|
|
|
1.1
|
%
|
All directors and executive officers as a group
(11 persons) (8)
|
|
|
666,099
|
|
|
|
14.2
|
%
|
|
|
|
(1)
|
|
Includes 18,833 shares awarded
to Mr. Allio pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 26,141 shares
which may be acquired by exercising stock options within
60 days. Also includes 1,300 shares owned by Michele
Allio, Mr. Allios spouse.
|
|
(2)
|
|
Includes 1,800 shares awarded
to Mr. Vernon pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 61,390 shares
which may be acquired by exercising stock options within
60 days. Also includes 412 shares owned by M.
Catherine Vernon, Mr. Vernons spouse.
|
|
(3)
|
|
Includes 600 shares awarded to
Mr. Aldrich pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 11,694 shares
which may be acquired by exercising stock options within
60 days. Also includes 23,322 shares owned by Jean
Aldrich, Mr. Aldrichs spouse.
|
|
(4)
|
|
Includes 600 shares awarded to
these outside directors pursuant to the Companys equity
compensation plans which have not yet vested, but as to which
they may provide voting recommendations. Includes
11,694 shares which may be acquired by exercising stock
options within 60 days.
|
|
(5)
|
|
Includes 600 shares awarded to
Mr. Downing pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 2,000 shares
which may be acquired by exercising stock options within
60 days. Also includes 16,192 shares owned by R.H.
Downing, Inc., which is 100% owned by Mr. Downing, and
10,000 shares owned by Mary Downing Trust, of which
Mr. Downing is trustee.
|
|
(6)
|
|
Includes 600 shares awarded to
Mr. Whitmer pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 2,000 shares
which may be acquired by exercising stock options within
60 days.
|
|
(7)
|
|
Includes 8,800 shares awarded
to Mr. Heh pursuant to the Companys equity
compensation plans which have not yet vested, but as to which he
may provide voting recommendations. Includes 30,465 shares
which may be acquired by exercising stock options within
60 days.
|
|
(8)
|
|
Includes 49,500 shares awarded
to all directors and executive officers as a group pursuant to
the Companys equity compensation plans which have not yet
vested, but as to which they may provide voting recommendations.
Includes 220,161 shares which may be acquired by exercising
stock options within 60 days.
|
15
EQUITY COMPENSATION PLAN INFORMATION. The following
table sets forth information about Company common stock that may
be issued upon exercise of options, warrants and rights under
all of the Companys equity compensation plans as of
December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
Securities to be
|
|
|
|
|
|
Securities
|
|
|
|
Issued Upon
|
|
|
Weighted-Average
|
|
|
Remaining
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
Available for Future
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Issuance under
|
|
|
|
Options, Warrants
|
|
|
Options, Warrants
|
|
|
Equity Compensation
|
|
Plan Category
|
|
and Rights
|
|
|
and Rights
|
|
|
Plans
|
|
|
Equity compensation plans
approved by shareholders
|
|
|
299,622
|
|
|
$
|
10.94
|
|
|
|
195,125
|
|
Equity compensation plans
not approved by shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
299,622
|
|
|
$
|
10.94
|
|
|
|
195,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MISCELLANEOUS
The Company will pay the cost of this proxy solicitation. 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 the
Companys common stock. Directors, officers and regular
employees of the Company may also solicit proxies personally or
by telephone and will not receive additional compensation for
these activities.
SHAREHOLDER
PROPOSALS
If a shareholder desires to have a proposal included in the
Companys proxy statement and form of proxy for the 2009
annual meeting of shareholders, the proposal must conform to the
requirements of Exchange Act
Rule 14a-8
and other applicable proxy rules and interpretations of the
Securities and Exchange Commission concerning the submission and
content of proposals and must be received by the Company, at
2923 Smith Road, Fairlawn, Ohio 44333, prior to the close
of business on December 17, 2008.
The Companys Bylaws provide an advance notice procedure
for a shareholder to properly bring business before an annual
meeting of shareholders. For business to be properly brought
before an annual meeting by a shareholder, the business must
relate to a proper subject matter for shareholder action and the
shareholder must have given timely notice thereof in writing to
the Corporate Secretary of the Company. To be timely, a
shareholders notice must be delivered or mailed to and
received at the principal executive offices of the Company not
less than ninety (90) days prior to the date of the annual
meeting; provided, however, that in the event that less than one
hundred (100) days notice or prior public disclosure
of the date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be received not
later than the close of business on the 10th day following
the day on which such notice of the date of the annual meeting
was mailed or such public disclosure was made. A
shareholders notice to the Corporate Secretary shall set
forth as to each matter such shareholder proposes to bring
before the annual meeting: (i) a brief description of the
business desired to be brought before the annual meeting and the
reasons for conducting such business at the annual meeting;
(ii) the name and address, as they appear on the
Companys books, of the shareholder proposing such
business; (iii) the class and number of shares of the
Companys capital stock that are beneficially owned by such
shareholder; and (iv) any material interest of such
shareholder in such business.
Assuming that the 2009 annual meeting of shareholders is held on
the third Thursday of May, as has been the Companys recent
practice, and that such date is announced at least 100 days
in advance, a shareholders proposal for that meeting must
be received by the Company at 2923 Smith Road, Fairlawn, Ohio
44333, not later than the close of business on February 20,
2009, in order to be considered timely. If any such proposal is
received after such date, it will be considered untimely, and
the persons named in the proxies solicited by the Board of
Directors of the Company may exercise discretionary voting power
with respect to that proposal.
16
Shareholder nominations for director are discussed above under
the caption CORPORATE GOVERNANCE AND NOMINATING
COMMITTEE.
A COPY OF THE
FORM 10-K
(WITHOUT EXHIBITS) FOR THE YEAR ENDED DECEMBER 31, 2007, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE
FURNISHED WITHOUT CHARGE TO SHAREHOLDERS OF RECORD UPON WRITTEN
REQUEST TO THE CORPORATE SECRETARY, CENTRAL FEDERAL CORPORATION,
2923 SMITH ROAD, FAIRLAWN, OHIO 44333.
BY ORDER OF THE BOARD OF DIRECTORS
Eloise L. Mackus
Corporate Secretary
Fairlawn, Ohio
April 15, 2008
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
YOU ARE REQUESTED TO SIGN, DATE AND PROMPTLY RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
17
AUDIT
COMMITTEE CHARTER
PURPOSE
The Audit Committee (the Audit Committee) of the
Board of Directors (the Board) of Central Federal
Corporation (the Company) will be appointed by the
Board: (A) to assist the Board in its oversight of
(i) the integrity of the Companys financial
statements, (ii) the independence and qualifications of the
Companys independent registered public accounting firm,
(iii) the performance of the Companys internal audit
function and independent registered public accounting firm and
(iv) the Companys compliance with legal and
regulatory requirements and (B) to prepare the Audit
Committee report required to be included in the Companys
proxy statement.
MEMBERSHIP
The Audit Committee will be comprised of a minimum of three
members, each a director who is appointed by the Board on
recommendation of the Companys Corporate Governance and
Nominating Committee and who shall serve at the pleasure of the
Board for such term or terms as the Board may determine. Each
member must meet the independence and experience requirements
set forth in NASDAQ Rule 4200(a)(15),
Section 10A(m)(3) of the Securities Exchange Act of 1934
(the Exchange Act) and the rules and regulations of
the Securities Exchange Commission (the Commission),
as such requirements may be amended from time to time, and no
member may have participated in preparation of the financial
statements of the Company at any time during the most recent
three-year period.
Each member must be able to read and understand financial
statements at the time of appointment. At least one member shall
have past employment experience in finance or accounting,
requisite professional certification in accounting or any other
comparable experience that results in the members
financial sophistication, such as service as a chief executive
officer, chief financial officer or other senior officer with
financial oversight responsibilities. At least one member shall
be an audit committee financial expert as defined in
applicable law and regulations; specifically, such member must
have (i) an understanding of generally accepted accounting
principles and financial statements, (ii) the ability to
assess the general application of such principles in connection
with accounting for estimates, accruals and reserves,
(iii) experience in preparing, auditing, analyzing and
evaluating financial statements comparable in breadth and
complexity to the Companys financial statements, or
experience in actively supervising one or more persons engaged
in such activities, (iv) an understanding of internal
controls and procedures for financial reporting and (v) an
understanding of audit committee functions.
No member of the Audit Committee may accept any consulting,
advisory or compensatory fee from the Company, other than in the
members capacity as a member of the Board or a committee
of the Board. No member of the Audit Committee may be an
affiliated person of the Company, except as a member of the
Board or a committee of the Board. No member may serve
simultaneously on the audit committees of more than two other
public companies, unless the Board determines that such
simultaneous service would not impair the ability of such member
to serve effectively on the Audit Committee, and the Company
discloses this determination in its proxy statement.
In addition, if an Audit Committee member ceases to be
independent for reasons outside the members reasonable
control, his or her membership on the Audit Committee may
continue until the earlier of the Companys next annual
shareholders meeting or one year from the occurrence of
the event that caused the failure to qualify as independent. If
the Company is not already relying on this provision, and falls
out of compliance with the requirements regarding Audit
Committee composition due to a single vacancy on the Audit
Committee, then the Company will have until the earlier of the
next annual shareholders meeting or one year from the
occurrence of the event that caused the failure to comply with
this requirement. The Company shall provide notice to NASDAQ
immediately upon learning of the event or circumstances that
caused the non-compliance, if it expects to rely on either of
these provisions for a cure period.
The members of the Audit Committee shall be appointed and may be
replaced by the Board.
APPENDIX A-1
MEETINGS
The Audit Committee will meet as often as it deems necessary,
but not less frequently than quarterly. It will meet
periodically with management, internal auditors and the
independent registered public accounting firm in separate
executive sessions. The Audit Committee may request any officer
or other employee of the Company, the independent registered
public accounting firm or outside legal counsel to attend any
meeting of the Audit Committee or to meet with any member of or
consultant to the Audit Committee.
AUTHORITY
AND RESPONSIBILITY
|
|
|
|
|
The Audit Committee will have sole authority to appoint or
replace the independent registered public accounting firm and
will have direct responsibility for compensation and oversight
of the independent registered public accounting firm with
respect to preparation and issuance of the audit report and
related work. The Audit Committee will resolve disputes between
management and the independent registered public accounting firm
relating to the audit report or related work. The independent
registered public accounting firm will report directly to the
Audit Committee.
|
|
|
|
The Audit Committee must approve in advance all audit services
and permitted non-audit services to be provided to the Company
by the independent registered public accounting firm, including
the fees for such services and the terms of service; provided,
however, that non-audit services that fall within the de
minimis exceptions described in Section 10A (i) (1)
(B) of the Exchange Act will not require advance approval,
if approved by the Audit Committee prior to completion of the
audit.
|
|
|
|
The Audit Committee may form one or more subcommittees,
comprised of one or more members of the Audit Committee, and
delegate to a subcommittee authority to grant advance approval
of audit services and permitted non-audit services; provided,
however, that any decision of a subcommittee shall be presented
to the full Audit Committee at its next scheduled meeting.
|
|
|
|
The Audit Committee shall have the authority, to the extent it
deems necessary or appropriate, to engage and determine funding
for independent legal, accounting, or other advisors. The
Company shall provide for appropriate funding, as determined by
the Audit Committee, for payment of compensation to the
independent registered public accounting firm for the purpose of
rendering or issuing an audit report or for performing other
audit, review, or attest services for the Company and to any
advisors employed by the Audit Committee, as well as funding for
the payment of legal fees and ordinary administrative expenses
of the Audit Committee that are necessary or appropriate in
carrying out its duties.
|
|
|
|
The Audit Committee will make regular reports to the Board. The
Audit Committee will review this charter annually to assess its
adequacy and recommend changes to the Board. The Audit Committee
will review its own performance annually.
|
|
|
|
With respect to financial statements and disclosure matters, the
Audit Committee, to the extent it deems appropriate, will:
|
|
|
|
|
1.
|
Review and discuss with management and the independent
registered public accounting firm the annual audited financial
statements, including disclosures made in managements
discussion and analysis, and recommend to the Board whether the
audited financial statements should be included in the
Companys
Form 10-K.
|
|
|
2.
|
Review and discuss with management and the independent
registered public accounting firm the Companys quarterly
financial statements prior to the filing of its
Form 10-Q,
including the results of the independent registered public
accounting firms review of the quarterly financial
statements.
|
|
|
3.
|
Discuss with management and the independent registered public
accounting firm significant financial reporting issues and
judgments made in connection with the preparation of the
Companys financial statements, including any significant
changes in the Companys selection or application of
accounting principles, any major issues as to the adequacy of
the Companys internal controls and any special steps
adopted in light of material control deficiencies.
|
APPENDIX A-2
|
|
|
|
4.
|
Review and discuss with management and the independent
registered public accounting firm any major issues as to the
adequacy of the Companys internal controls, any special
steps adopted in light of material control deficiencies, and the
adequacy of disclosures about changes in internal control over
financial reporting.
|
|
|
5.
|
Review and discuss with management (including the senior
internal audit executive) and the independent registered public
accounting firm the Companys internal controls report and
the independent registered public accounting firms
attestation of the report prior to the filing of the
Companys
Form 10-K.
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6.
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Review and discuss quarterly reports from the independent
registered public accounting firm on: (a) all critical
accounting policies and practices to be used; (b) all
alternative treatments of financial information within generally
accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the
independent registered public accounting firm; (c) other
material written communications between the independent
registered public accounting firm and management, such as any
management letter or schedule of unadjusted differences.
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7.
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Discuss with management the Companys earnings press
releases, including the use of pro forma or
adjusted non-GAAP information, as well as financial
information and earnings guidance provided to analysts and
rating agencies. Such discussion may be done generally
(consisting of discussing the types of information to be
disclosed and the types of presentations to be made).
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8.
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Discuss with management and the independent registered public
accounting firm the effect of regulatory and accounting
initiatives as well as off-balance sheet structures on the
Companys financial statements.
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9.
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Discuss with management the Companys major financial risk
exposures and the steps management has taken to monitor and
control such exposures, including the Companys risk
assessment and risk management policies.
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10.
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Discuss with the independent registered public accounting firm
the matters required to be discussed by Statement on Auditing
Standards No. 61 relating to the conduct of the audit,
including any difficulties encountered in the course of the
audit work, any restrictions on the scope of activities or
access to requested information, and any significant
disagreements with management.
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11.
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Review disclosures made to the Audit Committee by the
Companys CEO and CFO during their certification process
for the
Form 10-K
and
Form 10-Q
about any significant deficiencies in the design or operation of
internal controls or material weaknesses therein and any fraud
involving management or other employees who have a significant
role in the Companys internal controls.
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12.
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Ensure that a public announcement of the Companys receipt
of an audit opinion that contains a going concern qualification
is made no later than seven calendar days following the filing
of such an audit opinion with the Securities and Exchange
Commission.
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In connection with its oversight of the Companys
relationship with its independent registered public accounting
firm, the Audit Committee, to the extent it deems appropriate,
will:
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Review and evaluate the lead partner of the independent
registered public accounting firms team.
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2.
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Obtain and review a report from the independent registered
public accounting firm at least annually regarding (a) the
independent registered public accounting firms internal
quality-control procedures, (b) any material issues raised
by the most recent internal quality-control review, or peer
review, of the firm, (c) any steps taken to deal with any
such issues and (d) all relationships between the
independent registered public accounting firm and the Company.
Evaluate the qualifications, performance and independence of the
independent registered public accounting firm, including
considering whether the independent registered public accounting
firms quality controls are adequate and the provision of
permitted non-audit services is compatible with maintaining the
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APPENDIX A-3
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independent registered public accounting firms
independence, taking into account the opinions of management and
internal auditors. The Audit Committee shall present its
conclusions with respect to the independent registered public
accounting firm to the Board.
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3.
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Obtain from the independent registered public accounting firm a
formal written statement delineating all relationships between
the independent registered public accounting firm and the
Company. It is the responsibility of the Audit Committee to
actively engage in a dialogue with the independent registered
public accounting firm with respect to any disclosed
relationships or services that may impact the objectivity and
independence of the independent registered public accounting
firm and for purposes of taking, or recommending that the full
board take, appropriate action to oversee the independence of
the firm.
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4.
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Ensure the rotation of the lead (or coordinating) independent
registered public accounting firm audit partner having primary
responsibility for the audit and the independent registered
public accounting firm audit partner responsible for reviewing
the audit as required by law. Consider whether, in order to
assure continuing registered public accounting firm
independence, it is appropriate to adopt a policy of rotating
the independent registered public accounting firm on a regular
basis.
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5.
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Recommend to the Board policies for the Companys hiring of
employees or former employees of the independent registered
public accounting firm who participated in any capacity in the
audit of the Company.
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6.
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Discuss with the independent registered public accounting firm
material issues on which the national office of the independent
registered public accounting firm was consulted by the
Companys audit team.
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7.
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Meet with the independent registered public accounting firm
prior to the audit to discuss the planning and staffing of the
audit.
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In connection with its responsibility to provide oversight of
the Companys internal audit function, the Audit Committee,
to the extent it deems appropriate, will:
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1.
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Review the appointment and replacement of the senior internal
auditing executive.
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2.
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Review the significant reports to management prepared by the
internal auditing department and managements responses.
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3.
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Discuss with the independent registered public accounting firm
and management the internal audit department responsibilities,
budget and staffing and any recommended changes in the planned
scope of the internal audit.
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In connection with its compliance oversight responsibilities,
the Audit Committee, to the extent it deems appropriate, will:
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1.
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Obtain from the independent registered public accounting firm
assurance that Section 10A (b) of the Exchange Act has
not been implicated.
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2.
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Obtain reports from management, the Companys senior
internal auditing executive and the independent registered
public accounting firm that the Company and its subsidiary
entities are in conformity with applicable legal requirements
and the Companys ethics codes.
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3.
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Review and approve or ratify all related party transactions in
accordance with the Companys Policies and Procedures with
respect to Related Person Transactions.
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4.
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Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting,
internal accounting controls or auditing matters and the
confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters.
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APPENDIX A-4
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5.
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Discuss with management and the independent registered public
accounting firm any correspondence with regulators or
governmental agencies and any published reports which raise
material issues regarding the Companys financial
statements or accounting policies.
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6.
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Discuss with the Companys General Counsel legal matters
that may have a material impact on the financial statements or
the Companys compliance policies.
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LIMITATION
OF AUDIT COMMITTEES ROLE
While the Audit Committee has the responsibilities and powers
set forth in this Charter, it is not the duty of the Audit
Committee to plan or conduct audits or to determine that the
Companys financial statements and disclosures are complete
and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations.
These are the responsibilities of management and the independent
registered public accounting firm.
APPENDIX A-5
CENTRAL FEDERAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 2008
10:00 A.M. LOCAL TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the official proxy committee of the Board of Directors of Central
Federal Corporation (the Company), each with full power of substitution, to act as proxy for the
undersigned, and to vote all shares of common stock of the Company which the undersigned is
entitled to vote only at the Annual Meeting of Shareholders, to be held at the Fairlawn Country
Club located at 200 North Wheaton Road, Fairlawn, Ohio on Thursday, May 15, 2008 at 10:00 a.m.,
local time, and at any and all adjournments thereof as follows:
(1) |
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The election as directors of all nominees listed (except as marked to the contrary below). |
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William R. Downing |
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Gerry W. Grace |
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FOR
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VOTE WITHHELD
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FOR ALL EXCEPT |
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INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK FOR ALL EXCEPT AND WRITE
THAT NOMINEES NAME ON THE LINE PROVIDED BELOW.
(2) |
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The ratification of the appointment of Crowe Chizek and Company LLC as independent registered
public accounting firm for the Company for the year ending December 31, 2008. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED
PROPOSALS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED. IF ANY OTHER
BUSINESS IS PRESENTED AT THE ANNUAL MEETING, INCLUDING WHETHER OR NOT TO ADJOURN THE
MEETING, THIS PROXY WILL BE VOTED BY THE PROXIES IN THEIR BEST JUDGEMENT. AT THE PRESENT
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL
MEETING.
The undersigned acknowledges receipt from the Company prior to the execution of this proxy
of a Notice of Annual Meeting of Shareholders and of a Proxy Statement dated April 15, 2008
and of the Annual Report to Shareholders.
Please
sign exactly as your name appears on this card. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title. If shares are held
jointly, each holder may sign but only one signature is required.
Dated:
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SIGNATURE OF SHAREHOLDER
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SIGNATURE OF SHAREHOLDER
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PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
(Central Federal Corporation Letterhead)
Dear Stock Award Recipient:
On behalf of the Board of Directors, I am forwarding you the Attached Vote Authorization
Form for the purpose of conveying your voting instruction to First Bankers Trust (the
Trustee) on the proposals to be presented at the Annual Meeting of Shareholders of
Central Federal Corporation (the Company) on May 15, 2008. Also enclosed is Notice and
Proxy Statement for the Companys Annual Meeting of Shareholders and a copy of the
Companys Annual Report to Shareholders.
As a participant in the Central Federal Corporation 1999 Stock-Based Incentive Plan (the
Incentive Plan) you are entitled to vote all unvested shares of restricted stock awarded
to you under the Incentive Plan as of April 4, 2008. The Incentive Plan Trustee will vote
those shares of the Company stock in accordance with instructions it receives from you and
the other Stock Award recipients. Shares of restricted stock for which instructions are
not received by May 8, 2008, will not be voted by the Incentive Plan Trustee, as directed
by the Company.
At this time, in order to direct the voting of Company common stock awarded to you under
the Incentive Plan, you must complete and sign the enclosed Vote Authorization Form and
return it in the accompanying postage-paid envelope no later than May 8, 2008.
Sincerely,
Mark S. Allio
Chairman, President & Chief Executive Officer
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Name
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INCENTIVE PLAN |
Shares |
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VOTE AUTHORIZATION FORM
I understand that First Bankers Trust (the Trustee), is the holder of record and custodian
of all shares of Central Federal Corporation (the Company) common stock held in trust for the
Central Federal Corporation 1999 Stock-Based Incentive Plan (Incentive Plan). Further, I
understand that my voting instructions are solicited on behalf of the Companys Board of Directors
for the Annual Meeting of Shareholders to be held on May 15, 2008.
Accordingly, I vote my shares as follows:
(1) |
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The election as directors of all nominees listed (except as marked to the contrary below). |
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William R. Downing |
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Gerry W. Grace |
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FOR
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VOTE WITHHELD
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FOR ALL EXCEPT |
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INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK FOR ALL EXCEPT AND WRITE
THAT NOMINEES NAME ON THE LINE PROVIDED BELOW.
(2) |
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The ratification of the appointment of Crowe Chizek and Company LLC as independent registered
public accounting firm for the Company for the year ending December 31, 2008. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED PROPOSALS.
The Incentive Plan Trustee is hereby authorized to vote all unvested shares of Company
common stock awarded to me under the Incentive Plan in its trust capacity as indicated
above.
Please date, sign and mail this form in the enclosed postage-paid envelope no later than May 8,
2008.