UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __ )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
DSA FINANCIAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing:
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DSA FINANCIAL CORPORATION
118 WALNUT STREET
LAWRENCEBURG, INDIANA 47025
(812) 537-0940
October 13, 2006
Dear Stockholder:
You are cordially invited to attend the 2006 Annual Meeting of Stockholders of
DSA Financial Corporation (the "Company"), which will be held at the office of
Dearborn Savings Association, F.A. (the "Association") located at 141 Ridge
Avenue, Lawrenceburg, Indiana at 4:00 p.m. (Eastern Time) on November 9, 2006.
The enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted. During the meeting we will also report on the
operations of the Company and the Association, the wholly owned subsidiary of
the Company. Directors and officers of the Company and the Association will be
present to respond to any questions that stockholders may have. Also enclosed
for your review is our Annual Report to Stockholders, which contains detailed
information concerning the activities and operating performance of the Company.
The business to be conducted at the Annual Meeting consists of the election of
two directors and the ratification of the appointment of the independent
registered public accounting firm for the fiscal year ending June 30, 2007. The
Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interest of the Company and its
stockholders, and the Board of Directors unanimously recommends a vote "FOR"
each matter to be considered.
On behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy card as soon as possible even if you currently plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will assure
that your vote is counted if you are unable to attend the meeting.
Sincerely,
\s\ Edward L. Fischer
Edward L. Fischer
President and Chief Executive Officer
DSA FINANCIAL CORPORATION
118 WALNUT STREET
LAWRENCEBURG, INDIANA 47025
(812) 537-0940
NOTICE OF
2006 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On November 9, 2006
Notice is hereby given that the Annual Meeting of Stockholders of DSA
Financial Corporation (the "Company") will be held at the office of Dearborn
Savings Association, F.A. (the "Association") located at 141 Ridge Avenue,
Lawrenceburg, Indiana, on November 9, 2006 at 4:00 p.m., Eastern Time.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of two directors;
2. The ratification of Grant Thornton LLP as the Company's
independent registered public accounting firm for the fiscal
year ending June 30, 2007; and
such other matters as may properly come before the Annual Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
to come before the Annual Meeting.
Any action may be taken on the foregoing proposals at the Annual
Meeting on the date specified above, or on any date or dates to which the Annual
Meeting may be adjourned. Stockholders of record at the close of business on
October 5, 2006, are the stockholders entitled to vote at the Annual Meeting,
and any adjournments thereof. A list of stockholders entitled to vote at the
Annual Meeting will be available at the Association, 118 Walnut Street,
Lawrenceburg, Indiana for a period of ten days prior to the Annual Meeting and
will also be available for inspection at the meeting itself.
By Order of the Board of Directors
\s\ Karleen McGraw
Karleen McGraw
Secretary
Lawrenceburg, Indiana
October 13, 2006
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
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DSA FINANCIAL CORPORATION
118 WALNUT STREET
LAWRENCEBURG, INDIANA 47025
(812) 537-0940
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
November 9, 2006
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SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of DSA Financial Corporation to
be used at the Annual Meeting of Stockholders of DSA Financial Corporation (the
"Annual Meeting"), which will be held at the office of Dearborn Savings
Association, F.A. located at 141 Ridge Avenue, Lawrenceburg, Indiana, on
November 9, 2006, at 4:00 p.m., Eastern Time, and at all adjournments of the
Annual Meeting. The accompanying Notice of Annual Meeting of Stockholders and
this Proxy Statement are first being mailed to stockholders on or about October
13, 2006.
Regardless of the number of shares of common stock owned, it is
important that stockholders be represented by proxy or be present in person at
the Annual Meeting. Stockholders are requested to vote by completing the
enclosed Proxy Card and returning it, signed and dated, in the enclosed
postage-paid envelope. Stockholders are urged to indicate the way they wish to
vote in the spaces provided on the proxy card. Proxies solicited by the Board of
Directors of DSA Financial Corporation will be voted in accordance with the
directions given therein. Where no instructions are indicated, signed proxies
will be voted "FOR" the election of the nominees for director named in this
Proxy Statement and "FOR" the ratification of Grant Thornton LLP as the
independent registered public accounting firm for the fiscal year ending June
30, 2007.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxyholders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting or any adjournments
thereof.
Stockholders who execute proxies in the form solicited hereby retain
the right to revoke them in the manner described below. Unless so revoked, the
shares represented by such proxies will be voted at the Annual Meeting and all
adjournments thereof.
Proxies may be revoked at any time prior to exercise by sending written
notice of revocation to the Secretary of DSA Financial Corporation, Karleen
McGraw, at the address of
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DSA Financial Corporation shown on the cover page of this Proxy Statement, or by
delivering to DSA Financial Corporation a duly executed proxy bearing a later
date. The presence at the Annual Meeting of any stockholder who had given a
proxy shall not revoke the proxy unless the stockholder delivers his or her
ballot in person at the Annual Meeting or delivers a written revocation to the
Secretary of DSA Financial Corporation prior to the voting of such proxy. If you
are a stockholder whose shares are not registered in your own name, however, you
will need appropriate documentation from your record holder to vote personally
at the Annual Meeting.
The cost of solicitation of proxies in the form enclosed herewith will
be borne by DSA Financial Corporation. Proxies may also be solicited personally
or by mail and telephone by DSA Financial Corporation's directors, officers and
regular employees, without additional compensation therefor. DSA Financial
Corporation will also request persons, firms and corporations holding shares in
their names, or in the name of their nominees, which are beneficially owned by
others, to send proxy material to and obtain proxies from such beneficial
owners, and will reimburse such holders for their reasonable expenses in doing
so.
VOTING SECURITIES
Holders of record of DSA Financial Corporation's common stock, par
value $0.01 per share, as of the close of business on October 5, 2006 are
entitled to one vote for each share then held, except as described below. As of
October 5, 2006, DSA Financial Corporation had 1,684,362 shares of common stock
issued and outstanding. The presence, in person or by proxy, of at least a
majority of the total number of shares of common stock outstanding and entitled
to vote is necessary to constitute a quorum at the Annual Meeting. In the event
there are not sufficient votes for a quorum, or to approve or ratify any matter
being presented, at the time of the Annual Meeting, the Annual Meeting may be
adjourned in order to permit the further solicitation of proxies.
In accordance with the provisions of DSA Financial Corporation's
Certificate of Incorporation, record holders of common stock who beneficially
own in excess of 10% of the outstanding shares of common stock (the "Limit") are
not entitled to any vote with respect to the shares held in excess of the Limit.
DSA Financial Corporation's Certificate of Incorporation authorizes the Board of
Directors (i) to make all determinations necessary to implement and apply the
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 Limit supply information to DSA Financial Corporation
to enable the Board to implement and apply the Limit.
VOTING PROCEDURES AND METHOD OF COUNTING VOTES
As to the election of Directors, the proxy card being provided by the
Board of Directors enables a stockholder to vote "FOR" the election of the two
nominees proposed by the Board, to WITHHOLD authority for all nominees or to
vote FOR ALL EXCEPT one or more of the nominees being proposed. Under Delaware
law and DSA Financial Corporation's Certificate of Incorporation and Bylaws,
Directors are elected by a plurality of votes cast, without regard to either
broker non-votes, or proxies as to which authority to vote for the nominees
being proposed is withheld.
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As to the ratification of the appointment of the independent registered
public accounting firm, the proxy card being provided by the Board of Directors
enables a stockholder to check the appropriate box on the proxy card to (i) vote
"FOR," (ii) vote "AGAINST," or (iii) vote to "ABSTAIN" from voting on such
matter. The affirmative vote by a majority of the votes cast at the Annual
Meeting, in person or by proxy, is required to constitute ratification by the
stockholders. Broker non-votes and shares as to which the "ABSTAIN" box has been
selected will not be counted as votes cast and will have no effect on the vote
on the matter presented.
Proxies solicited hereby will be returned to DSA Financial Corporation,
and will be tabulated by an inspector of election designated by the Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Persons and groups who beneficially own in excess of 5% of the shares
of DSA Financial Corporation's common stock are required to file certain reports
with DSA Financial Corporation and with the Securities and Exchange Commission
(the "SEC") regarding such ownership pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The following table sets forth, as of
October 5, 2006, the shares of common stock beneficially owned by each person
known to DSA Financial Corporation who was the beneficial owner of more than 5%
of the outstanding shares of common stock.
NAME AND ADDRESS OF AMOUNT OF SHARES OWNED AND PERCENT OF SHARES OF
BENEFICIAL OWNER NATURE OF BENEFICIAL OWNERSHIP (1) COMMON STOCK OUTSTANDING
----------------------- ----------------------------------- --------------------------
David P. Lorey 106,579 6.3%
118 Walnut Street
Lawrenceburg, Indiana 47025
107,954 6.4%
Dr. Dennis Richter
118 Walnut Street
Lawrenceburg, Indiana 47025
_________________________________
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner for purposes of this table, of any shares of Common
Stock if he has shared voting or investment power with respect to such
security, or has a right to acquire beneficial ownership at any time within
60 days from the date as of which beneficial ownership is being determined.
As used herein, "voting power" is the power to vote or direct the voting of
shares and "investment power" is the power to dispose or direct the
disposition of shares, and includes all shares held directly as well as by
spouses and minor children, in trust and other indirect ownership, over
which shares the named individuals effectively exercise sole or shared
voting or investment power.
PROPOSAL 1--ELECTION OF DIRECTORS
Directors of DSA Financial Corporation are generally elected to serve
for a three-year period and until their respective successors shall have been
elected and shall qualify. Two directors will be elected at the Annual Meeting,
each to serve for a three-year period and until a successor has been elected and
qualified. The Board of Directors has nominated Ronald J. Denney and Dr. Dennis
Richter to serve as directors, each of whom currently serves as a member of the
Board of Directors.
The table below sets forth certain information regarding DSA Financial
Corporation's Board of Directors and nominees, as well as DSA Financial
Corporation's executive officers who are not directors. It is intended that the
proxies solicited on behalf of the Board of Directors will be voted at the
Annual Meeting for the election of the nominees identified below (unless
otherwise directed on the proxy card). If a nominee is unable to serve, the
shares represented by all such proxies will be voted for the election of such
substitute as the Board of Directors may
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recommend. At this time, the Board of Directors knows of no reason why the
nominees might be unable to serve, if elected.
POSITION(S) HELD WITH TERM TO EXPIRE SHARES OF COMMON STOCK
DSA FINANCIAL DIRECTOR FOLLOWING FISCAL YEAR BENEFICIALLY OWNED ON PERCENT
NAME AGE CORPORATION SINCE(1) ENDING JUNE 30 OCTOBER 5, 2006 OF CLASS
------------------- ------- ---------------------- ---------- ----------------------- ------------------------- ------------
NOMINEES
Ronald J. Denney 57 Director 1976 2009 47,924(2) 2.8%
Dr. Dennis Richter 57 Director 1986 2009 107,954(3) 6.4
DIRECTORS CONTINUING IN OFFICE
Robert P. Sonntag 70 Chairman of the Board 1971 2007 38,531 2.3
David P. Lorey 49 Director 1992 2007 106,579(4) 6.3
Edward L. Fischer 53 President, Chief 2002 2008 78,145(5) 4.6
Executive Officer and
Director
Richard Meador, III 70 Director 1983 2008 9,116 *
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Thomas J. Sicking 65 Vice President N/A N/A 27,080(6) 1.6
Steven R. Doll 53 Vice President and N/A N/A 10,144(7) *
Chief Financial Officer
Delmar C. Schiferl 44 Vice President/Director N/A N/A 11,264(8) *
of Lending
All directors and executive
officers as a group (9 persons)
________________________________
* Less than 1%.
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner for purposes of this table of any shares of common
stock if he has sole or shared voting or investment power with respect to
such security, or has a right to acquire beneficial ownership at any time
within 60 days from the date as of which beneficial ownership is being
determined. As used herein, "voting power" is the power to vote or direct
the voting of shares and "investment power" is the power to dispose or
direct the disposition of shares.
(2) Includes 2,714 shares held by a retirement plan of which Mr. Denney is the
trustee with voting power and 339 shares owned by Mr. Denney's spouse.
(3) Includes 94,040 shares held by family limited partnerships and 1,065 shares
held by Dr. Richter's wife in an individual retirement account.
(4) Includes 7,535 shares held by Mr. Lorey's daughters.
(5) Includes 24,240 shares held by the employee stock ownership plan and 15,080
shares held by Mr. Fischer's spouse.
(6) Includes 7,038 shares held by the employee stock ownership plan.
(7) Includes 1,647 shares held by the employee stock ownership plan.
(8) Includes 1,767 shares held by the employee stock ownership plan.
DIRECTORS
The principal occupation during the past five years of each director
and executive officer of DSA Financial Corporation is set forth below. All
directors have held their present positions for at least five years unless
otherwise stated.
ROBERT P. SONNTAG has served as the Chairman of the Board of Directors
of Dearborn Savings Association since 1992 and Dearborn Financial Corporation
since its formation in 1999. Prior to his retirement in 2006, Mr. Sonntag had
served as the President of Sonntag Accountancy Corporation since 1967.
EDWARD L. FISCHER has served as President of Dearborn Savings
Association since 1996 and Dearborn Financial Corporation since its formation in
1999. Mr. Fischer joined Dearborn Savings Association in 1993 as Chief Financial
Officer and Treasurer.
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RONALD J. DENNEY is the funeral director at Fitch Denney Funeral Home,
Inc., located in Lawrenceburg, Indiana, a position he has held since 1973.
DAVID P. LOREY is a private land owner and developer.
RICHARD MEADOR, III is retired.Prior to 1992, Mr. Meador owned Meador's
Fitness Center, located in Lawrenceburg, Indiana since 1974.
DR. DENNIS RICHTER has been self-employed as an optometrist in
Lawrenceburg, Indiana since 1974.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
THOMAS J. SICKING has served as Vice President of Dearborn Savings
Association since January 1997 and Vice President of Dearborn Financial since
its formation in 1999.
STEVEN R. DOLL was hired by Dearborn Savings Association in March 2002.
Mr. Doll served as accounting manager of Sharefax Credit Union, located in
Batavia, Ohio from March 2001 until March 2002, and was Chief Financial Officer
of Ameriana Bank of Ohio, located in Cincinnati, Ohio, from 1993 until December
2001.
DELMAR C. SCHIFERL was hired by Dearborn Savings Association in March
2002, and serves as Vice President/Director of Lending. Prior to joining
Dearborn Savings Association, Mr. Schiferl worked at Advantage Bank from
February 1996 until March 2002.
INDEPENDENT DIRECTORS
The Board of Directors has determined that Directors Denney, Lorey,
Meador, Richter and Sonntag are "independent" as defined in the Nasdaq corporate
governance listing standards. Director Fischer is not considered "independent"
because of his position as an employee of Dearborn Savings Association.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The business of DSA Financial Corporation and Dearborn Savings
Association is conducted through regular and special meetings of the Board of
Directors and its committees. The Board of Directors of DSA Financial
Corporation met 11 times during the fiscal year ended June 30, 2006. During the
fiscal year ended June 30, 2006, the Board of Directors of Dearborn Savings
Association held 17 meetings. No director, with the exception of Ronald Denney,
attended fewer than 75% of the total meetings held by the Board of Directors and
the committees on which such director served, with respect to each of DSA
Financial Corporation and Dearborn Savings Association. The following is a
discussion of certain committees of Dearborn Savings Association. Dearborn
Savings Association's Audit Committee functions as the audit committee of DSA
Financial Corporation, and Dearborn Savings Association's Compensation Committee
functions as the compensation committee of DSA Financial Corporation.
The Executive Committee is authorized to act with the same authority as
the Board of Directors of DSA Financial Corporation between meetings of the
Board. Messrs. Sonntag,
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Fischer, Meador and Lorey serve as members of this committee. The Executive
Committee did not meet during fiscal 2006.
The Audit Committee consists of Messrs. Sonntag, Richter and Lorey. The
Board of Directors of DSA Financial Corporation has determined that Director
Sonntag qualifies as an "audit committee financial expert" and is serving as
such for the Audit Committee. The Audit Committee met five times during fiscal
2006.
The duties and responsibilities of the Audit Committee include, among
other things:
o retaining, overseeing and evaluating a firm of independent
certified public accountants to audit DSA Financial
Corporation's annual financial statements;
o approving all engagements for audit and non-audit services by
the independent registered public accounting firm;
o reviewing the financial statements and the audit report with
management and the independent registered public accounting
firm; and
o reviewing the adequacy of the audit committee charter.
The Compensation Committee reviews existing compensation, investigates
new and different forms of compensation and makes recommendations with respect
thereto to the Board of Directors. Currently the entire Board serves as this
committee. The Compensation Committee met once during fiscal 2006.
The non-employee directors of DSA Financial Corporation serve as the
Nominating Committee. The Nominating Committee met once during fiscal 2006.
Each member of the Nominating Committee is considered "independent" as
defined in the Nasdaq corporate governance listing standards. DSA Financial
Corporation's Board of Directors has adopted a written charter for the
Committee, which was previously attached as an appendix to DSA Financial
Corporation's Proxy Statement for its 2004 Annual Meeting of Stockholders.
The duties of the Nominating Committee include the following:
o evaluating current directors for nomination for re-election to
the Board of Directors;
o evaluating other potential candidates for nomination for
election to the Board of Directors;
o if applicable, evaluating and recommending to the Board of
Directors the persons who should be appointed to the Board; and
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o reviewing and reassessing the adequacy of the Nominating
Committee Charter annually and recommending any proposed changes
to the Board of Directors for approval.
The Nominating Committee identifies nominees by first evaluating the
current members of the Board of Directors willing to continue in service.
Current members of the Board with skills and experience that are relevant to DSA
Financial Corporation's business and who are willing to continue in service are
first considered for re-nomination, balancing the value of continuity of service
by existing members of the Board with that of obtaining a new perspective.
Accordingly, the Nominating Committee may choose not to consider an unsolicited
recommendation if no vacancy exists on the Board of Directors and the Board of
Directors does not perceive a need to increase the size, or change the
composition of the Board of Directors. In addition, the Committee is authorized
by its charter to engage a third party to assist in the identification of
director nominees. The Nominating Committee shall have sole authority to approve
related fees and retention terms. The Nominating Committee may appoint a
sub-committee (so long as such committee is composed solely of independent
directors) to assist the Nominating Committee in performing its duties. The
Nominating Committee will apply the criteria for candidates established by the
Board of Directors.
The Nominating Committee will also take into account whether a
candidate satisfies the criteria for "independence" under the Nasdaq corporate
governance listing standards.
PROCEDURES FOR THE RECOMMENDATION OF DIRECTOR NOMINEES BY STOCKHOLDERS.
The Nominating Committee has adopted procedures for the submission of
recommendations for director nominees by stockholders. If a determination is
made that an additional candidate is needed for the Board of Directors, the
Nominating Committee will consider candidates submitted by DSA Financial
Corporation's stockholders. Stockholders can submit the names of qualified
candidates for Director by writing to our Corporate Secretary at 118 Walnut
Street, Lawrenceburg, Indiana 47025. The Corporate Secretary must receive a
submission not less than 150 days prior to the anniversary date of DSA Financial
Corporation's proxy materials for the preceding year's annual meeting. However,
if the date of the annual meeting is advanced more than 30 days prior to or
delayed by more than 30 days after the anniversary of the preceding year's
annual meeting, to be timely the recommendation for Director must be delivered
no later than the close of business on the 10th day following the day on which
public announcement of the date of such meeting is first made. The submission
must include the following information:
o a statement that the writer is a stockholder and is proposing a
candidate for consideration by the Nominating Committee;
o the name and address of the stockholder as they appear on DSA
Financial Corporation's books, and number of shares of DSA
Financial Corporation's common stock that are owned beneficially
by such stockholder (if the stockholder is not a holder of
record, appropriate evidence of the stockholder's ownership will
be required);
o the name, address and contact information for the candidate, and
the number of shares of common stock of DSA Financial
Corporation that are owned by the
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candidate (if the candidate is not a holder of record,
appropriate evidence of the stockholder's ownership should be
provided);
o a statement of the candidate's business and educational
experience;
o such other information regarding the candidate as would be
required to be included in the proxy statement pursuant to SEC
Regulation 14A;
o a statement detailing any relationship between the candidate and
DSA Financial Corporation;
o a statement detailing any relationship between the candidate and
any customer, supplier or competitor of DSA Financial
Corporation and its affiliates;
o detailed information about any relationship or understanding
between the proposing stockholder and the candidate; and
o a statement of the candidate that the candidate is willing to be
considered and willing to serve as a Director if nominated and
elected.
A nomination submitted by a stockholder for presentation by the
stockholder at an annual meeting of stockholders must comply with the procedural
and informational requirements described in DSA Financial Corporation's Bylaws.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD. A stockholder of DSA
Financial Corporation who wants to communicate with the Board of Directors or
with any individual director can write to the Board of Directors or the
individual director, c/o DSA Financial Corporation, 118 Walnut Street,
Lawrenceburg, Indiana 47025. The letter should indicate that the author is a
stockholder and, if shares are not held of record, should include appropriate
evidence of stock ownership. Depending on the subject matter, the President and
Chief Executive Officer will:
o forward the communication to the director or directors to whom
it is addressed;
o attempt to handle the inquiry directly, or forward the
communication for response by another employee of DSA Financial
Corporation. For example, a request for information about DSA
Financial Corporation or a stock-related matter may be forwarded
to DSA Financial Corporation's stockholder relations officer; or
o not forward the communication if it is primarily commercial in
nature, relates to an improper or irrelevant topic, or is unduly
hostile, threatening, illegal or otherwise inappropriate.
The President and Chief Executive Officer shall make those
communications that were not forwarded available to the Directors on request.
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ATTENDANCE AT ANNUAL MEETINGS OF STOCKHOLDERS
DSA Financial Corporation does not have a policy regarding director
attendance at annual meetings of stockholders. All of DSA Financial
Corporation's directors attended the prior year's annual meeting of
stockholders.
CODE OF ETHICS
DSA Financial Corporation has adopted a Code of Ethics that is
applicable to the principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions. The Code of Ethics was previously attached as an appendix to DSA
Financial Corporation's Proxy Statement for its 2004 Annual Meeting of
Stockholders. Amendments to and waivers from the Code of Ethics will be
disclosed on DSA Financial Corporation's website.
AUDIT COMMITTEE REPORT
In accordance with rules established by the SEC, the Audit Committee
has prepared the following report. The Board of Directors has adopted a written
charter for the Audit Committee, which was previously attached as an appendix to
DSA Financial Corporation's Proxy Statement for its 2004 Annual Meeting of
Stockholders.
As part of its ongoing activities, the Audit Committee has:
o Reviewed and discussed with management DSA Financial
Corporation's audited consolidated financial statements for the
fiscal year ended June 30, 2006;
o Discussed with the independent registered public accounting firm
the matters required to be discussed by Statement on Auditing
Standards No. 61, COMMUNICATIONS WITH AUDIT COMMITTEES, as
amended; and
o Received the written disclosures and the letter from the
independent registered public accounting firm required by
Independence Standards Board Standard No. 1, INDEPENDENCE
DISCUSSIONS WITH AUDIT COMMITTEES, and has discussed with the
independent registered public accounting firm their
independence.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements be included in DSA Financial Corporation's Annual Report on
Form 10-KSB for the fiscal year ended June 30, 2006 and be filed with the SEC.
This report shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933, as amended, or the Exchange Act, as
amended, except to the extent that DSA Financial Corporation specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
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The Audit Committee
Robert P. Sonntag
Dennis Richter
David P. Lorey
DIRECTOR COMPENSATION
DIRECTORS FEES. Directors of DSA Financial Corporation are not
compensated for service on DSA Financial Corporation's Board of Directors or
Committees of DSA Financial Corporation's Board of Directors. Each non-employee
director of Dearborn Savings Association receives $14,900 per year, in addition
to the amounts as described below, for service on the Board of Directors. Mr.
Sonntag receives an additional $2,000 as Chairman of the Board of Dearborn
Savings Association, Messrs. Meador and Denney receive $5,000 per year as
members of Dearborn Savings Association's Loan Committee, and Messrs. Lorey,
Richter and Sonntag receive $1,200 per year as members of Dearborn Savings
Association's Asset and Liability and Strategic Planning Committee and $2,400
per year as members of Dearborn Savings Association's Audit Committee.
DIRECTOR DEFERRED COMPENSATION AGREEMENTS. Dearborn Savings Association
entered into Director Deferred Compensation Agreements with Messrs. Denney,
Meador, Richter and Sonntag in January 1992 and with Mr. Lorey in August 1992
("Director Agreements"). Pursuant to the Director Agreements, the Directors of
Dearborn Savings Association defer receipt of monthly Board fees of $142 ($250
for Messrs. Lorey and Denney) for a period of up to 156 months. The Director
Agreements provide that at each director's normal retirement following his 70th
birthday, Dearborn Savings Association will begin paying a monthly deferred
compensation benefit of $2,269, $4,221, $659, $1,465 and $595, respectively, for
Messrs. Denney, Lorey, Meador, Richter and Sonntag. In the event a director
defers fees for a period of less than the full deferral period, he shall be
entitled to receive, upon reaching his normal retirement age, a deferred
compensation benefit determined by multiplying the amounts listed above by a
fraction, the numerator of which is equal to the total amount of Board fees that
were actually deferred and the denominator of which is the total amount of Board
fees that would have been deferred during the entire deferral period if all
deferrals had been made. Such benefits shall be payable for 15 years, or at the
election of each director or his beneficiary, in a lump sum. In the event of
death or disability prior to termination of service, a death benefit of the full
amount payable if fees were deferred for the entire deferral period shall be
payable to the director's beneficiaries for 15 years.
Dearborn Savings Association has funded its obligations under the
Director Agreements by purchasing single premium life insurance policies. The
directors and their beneficiaries have no rights to the insurance policies
acquired by Dearborn Savings Association and have only the rights of unsecured
general creditors of Dearborn Savings Association. The cash surrender value of
these policies is an asset of Dearborn Savings Association that was valued at
approximately $2.8 million as of June 30, 2006. Each year Dearborn Savings
Association will record an expense which is calculated ratably over the
remaining anticipated years of service of the directors. This expense was
approximately $57,000 during the year ended June 30, 2006.
10
DIRECTORS' RETIREMENT PLAN. Effective August 1, 2005, Dearborn Savings
Association adopted a retirement plan for directors, which replaces the
directors emeritus program previously adopted by Dearborn Savings Association.
Directors Richter, Denney, Meador and Sonntag participate in the directors'
retirement plan. Upon reaching the benefit age determined in each director's
joinder agreement, a director is entitled to a retirement benefit as set forth
in the joinder agreement, payable in monthly installments over 120 consecutive
months. In the event a director dies after commencement of his retirement
benefit payments but before completion of such payments, the director's
beneficiary will receive a continuation of the monthly benefits for the
remainder of the payout period. If a director dies while in the service of
Dearborn Savings Association but prior to attaining his benefit age, the
director's beneficiary will receive a survivor's benefit equal to the director's
full retirement benefit, commencing within 30 days of the director's death and
payable over 120 consecutive months. In addition, upon a director's death, the
beneficiary generally will be entitled to a one-time lump sum death benefit of
$10,000, unless the beneficiary receives a supplemental death benefit for burial
expenses of at least $10,000 under any other non-qualified deferred compensation
plan sponsored by Dearborn Savings Association. In the event a director's
service is voluntarily or involuntarily terminated prior to the director's
benefit age for any reason other than cause, death, disability, or following a
change in control, the director will be entitled to the annuitized value of his
accrued benefit, plus interest accrued on such benefit from the date of the
director's termination until the director's benefit age, payable in monthly
installments throughout the payout period. In the event of a director's
voluntary or involuntary separation from service within three years following a
change in control, other than due to termination for cause, the director will be
entitled to his full retirement benefit as if the director had served until his
benefit age, commencing within 30 days following his separation from service and
payable in monthly installments throughout the payout period.
EXECUTIVE COMPENSATION
The following table sets forth for the three years ended June 30, 2006,
certain information as to the total remuneration paid by DSA Financial
Corporation to its Chief Executive Officer. No other officer received total
annual compensation in excess of $100,000 during the fiscal year ended June 30,
2006.
LONG-TERM COMPENSATION
-------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------------------- --------------------- --------------------------
YEAR RESTRICTED OPTIONS/
NAME AND PRINCIPAL ENDED OTHER ANNUAL STOCK SARS LTIP ALL OTHER
POSITION 6/30 SALARY BONUS COMPENSATION (1) AWARDS (2) (#) PAYOUTS COMPENSATION (3)
--------------------------- ------ ----------- ---------- ----------------- ---------- --------- -------- ----------------
Edward L. Fischer, 2006 $ 96,165 $ 20,000 $ 14,675 $ -- -- $ -- $ 11,479
President, Chief Executive 2005 92,465 20,000 13,618 -- -- -- 3,423
Officer and Director 2004 88,910 20,000 12,100 -- -- -- 5,228
_________________________
(1) Includes employer payments for auto insurance, health insurance and annual
dues at a golf club.
(2) At June 30, 2006, 13,217 shares of unvested restricted stock awards were
held by Mr. Fischer.
(3) Includes employer contributions to the Simplified Employee Pension Plan,
and director's fees of $8,050 for the fiscal year ended June 30, 2006.
EMPLOYMENT AGREEMENTS. Dearborn Savings Association entered into an
employment agreement with President and Chief Executive Officer Edward L.
Fischer on June 23, 2005. DSA Financial Corporation is the signatory to the
agreement for the sole purpose of guaranteeing payments thereunder. The
agreement has an initial term of three years, and automatically renews
11
on each day so that the remaining term is 36 full calendar months, subject to
termination on notice as provided in the agreement. Under the agreement, the
current base salary for Mr. Fischer is $100,010. In addition to the base salary,
the agreement provides for, among other things, participation in bonus programs
and other employee pension benefit and fringe benefit plans applicable to
executive employees. The executive's employment may be terminated for cause at
any time, in which event the executive would have no right to receive
compensation or other benefits for any period after termination.
Certain events resulting in the executive's termination or resignation
entitle the executive to payments of severance benefits following termination of
employment. In the event the executive's employment is terminated for reasons
other than for cause, disability or retirement, or in the event the executive
resigns during the term of the agreement following (i) failure to elect or
reelect or to appoint or reappoint the executive to his executive position, (ii)
a significant change in the nature or scope of the executive's authority, (iii)
the liquidation or dissolution of Dearborn Savings Association or DSA Financial
Corporation that would affect the status of the executive, or (iv) a breach of
the employment agreement by the applicable corporation, then the executive would
be entitled to a severance payment under the agreement. The severance payment
would be equal to three times the sum of the executive's base salary and the
highest rate of bonus awarded to the executive during the prior three years,
payable, at the executive's election, either in a lump sum or in bi-weekly
installments during the remaining term of the agreement. In the event of a
change in control (as defined in the plan) followed by the involuntary
termination or voluntary resignation of the executive from Dearborn Savings
Association, the executive would be entitled to the payment of a sum equal to
three times base salary and the highest rate of bonus awarded to the executive
during the prior three years, payable, at his election, in a lump sum or
bi-weekly during the remaining term of the agreement. In addition, the executive
would be entitled, at Dearborn Savings Association's expense, to the
continuation of substantially comparable life, medical, dental and disability
coverage for a period of 36 months from the date of termination. In the event
payments to the executive include an "excess parachute payment" as defined in
the Internal Revenue Code, payments under the employment agreements with
Dearborn Savings Association would be reduced in order to avoid this result.
Upon termination of the executive's employment other than in connection
with a change in control, the executive agrees not to compete with Dearborn
Savings Association for a period of one year following termination of employment
within 25 miles of any existing branch of Dearborn Savings Association, or
within 25 miles of any office in which Dearborn Savings Association has filed an
application for regulatory approval to establish an office. Should the executive
become disabled, he would be entitled to the payment of 100% of his base salary
for one year following such termination provided that any amount paid to the
executive pursuant to any disability insurance would reduce the compensation he
would receive. In the event the executive dies while employed by Dearborn
Savings Association, the executive's estate will be paid the executive's base
salary for one year and the executive's family will be entitled to continuation
of medical, dental and other insurance benefits normally provided for an
executive's family for one year.
CHANGE IN CONTROL AGREEMENTS. Dearborn Savings Association, F.A.
entered into agreements with three officers of Dearborn Savings Association on
June 23, 2005, which would
12
provide certain benefits in the event of a change in control of Dearborn Savings
Association or DSA Financial Corporation. Each of the agreements provides for a
term of 24 months. Commencing on each anniversary date, the Board of Directors
may extend any change in control agreement for an additional year. The change in
control agreements enable Dearborn Savings Association to offer to designated
officers certain protections against termination without cause in the event of a
change in control (as defined in the agreements).
Following a change in control of DSA Financial Corporation or Dearborn
Savings Association, F.A., an officer is entitled to a payment under a change in
control agreement if the officer's employment is involuntarily terminated during
the term of such agreement, other than for cause, as defined, or if the officer
voluntarily terminates employment during the term of such agreement as the
result of a demotion, loss of office or significant authority, reduction in his
annual compensation or benefits, or relocation of his principal place of
employment by more than 30 miles from its location immediately prior to the
change in control. In the event that an officer who is a party to a change in
control agreement is entitled to receive payments pursuant to the change in
control agreement, he will receive a cash payment, subject to applicable
withholding taxes, equal to the product of (x) one-fourth of the sum of (i) base
salary, and (ii) highest rate of bonus awarded to the executive during the prior
three years, multiplied by (y) the number of years the executive has been
employed by Dearborn Savings Association, with a maximum severance payment equal
to two (2) times the product of (i) and (ii), above. In addition to the
severance payment, each covered officer shall receive continued life, health and
dental coverage for a number of months from the date of termination equal to the
number of years the executive has been employed by Dearborn Savings Association.
Notwithstanding any provision to the contrary in the change in control
agreement, payments under the change in control agreements are limited so that
they will not constitute an "excess parachute payment" under Section 280G of the
Internal Revenue Code.
RECOGNITION AND RETENTION PLAN. During the fiscal year ended June 30,
2002, Dearborn Financial Corporation adopted, and Dearborn Financial
Corporation's stockholders approved, the Dearborn Financial Corporation 2002
Recognition and Retention Plan (the "Recognition and Retention Plan"). Pursuant
to the Recognition and Retention Plan, 4,240 shares (split adjusted) of common
stock were awarded to each of our non-employee directors, Messrs. Denney, Lorey,
Meador, Richter and Sonntag, and 11,534 shares (split adjusted) were awarded to
President, Chief Executive Officer and Director Fischer. Grants vest over five
years, commencing February 26, 2004.
STOCK-BASED INCENTIVE PLAN. During the fiscal year ended June 30, 2006,
DSA Financial Corporation adopted, and DSA Financial Corporation's stockholders
approved, the DSA Financial Corporation 2005 Stock-Based Incentive Plan (the
"Stock-Based Incentive Plan"). Pursuant to the Stock-Based Incentive Plan,
110,298 shares of common stock of DSA Financial Corporation have been reserved
for issuance pursuant to grants of incentive and non-statutory stock options,
reload options or restricted stock awards, provided that no more than 42,422
shares may be issued as restricted stock awards, and no more than 67,876 shares
may be issued pursuant to exercise of stock options. Pursuant to the Stock-Based
Incentive Plan, 3,400 shares of common stock were awarded to each of our
non-employee directors, Messrs. Denney, Lorey, Meador, Richter and Sonntag, and
8,605 shares were awarded to President, Chief Executive
13
Officer and Director Fischer. Grants vest over five years, commencing April 20,
2007. As of June 30, 2006, no stock options had been granted under the
Stock-Based Incentive Plan.
The following table sets forth information with respect to equity
compensation plans (other than the employee stock ownership plan) that have been
approved by stockholders.
====================================================================================================================
NUMBER OF SECURITIES TO BE NUMBER OF SECURITIES
EQUITY COMPENSATION PLANS ISSUED UPON EXERCISE OF WEIGHTED AVERAGE REMAINING AVAILABLE FOR
APPROVED BY STOCKHOLDERS OUTSTANDING OPTIONS AND RIGHTS EXERCISE PRICE ISSUANCE UNDER PLAN
--------------------------------------------------------------------------------------------------------------------
Recognition and Retention Plan 13,092 (1) N/A 0
--------------------------------------------------------------------------------------------------------------------
Stock-Based Incentive Plan 42,420 (1) N/A 67,878
--------------------------------------------------------------------------------------------------------------------
Total 55,512 N/A 67,878
====================================================================================================================
_______________
(1) Represents shares that have been granted but have not yet vested.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The common stock of DSA Financial Corporation is registered pursuant to
Section 12(g) of the Exchange Act. The officers and directors of DSA Financial
Corporation and beneficial owners of greater than 10% of the Common Stock ("10%
beneficial owners") are required to file reports on Forms 3, 4 and 5 with the
SEC disclosing beneficial ownership and changes in beneficial ownership of the
shares of common stock. SEC rules require disclosure in DSA Financial
Corporation's Proxy Statement and Annual Report on Form 10-KSB of the failure of
an officer, director or 10% beneficial owner of the shares of common stock to
file a Form 3, 4 or 5 on a timely basis. Based on DSA Financial Corporation's
review of such ownership reports, DSA Financial Corporation believes that no
officer, director or 10% beneficial owner of DSA Financial Corporation failed to
file such ownership reports on a timely basis for the fiscal year ended June 30,
2006.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
Federal law and regulations generally require that all loans or
extensions of credit to executive officers and directors must be made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with the general public and
must not involve more than the normal risk of repayment or present other
unfavorable features. However, regulations permit executive officers and
directors to receive the same terms through benefit or compensation plans that
are widely available to other employees, as long as the director or executive
officer is not given preferential treatment compared to the other participating
employees, and Dearborn Savings Association has extended loans to certain of its
executive officers and directors pursuant to these regulations.
Other than as described above, all loans, the principal balances of
which exceeded $60,000 at any time during the fiscal year ended June 30, 2006,
made by Dearborn Savings Association to executive officers, directors, immediate
family members of executive officers and directors, or organizations with which
executive officers and directors are affiliated, were 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
other persons.
14
PROPOSAL 2--RATIFICATION OF THE APPOINTMENT OF THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
DSA Financial Corporation's independent registered public accounting
firm for the fiscal year ended June 30, 2006 was Grant Thornton LLP. The Audit
Committee of the Board of Directors has reappointed Grant Thornton LLP to
continue as the independent registered public accounting firm of DSA Financial
Corporation for the fiscal year ending June 30, 2007, subject to ratification of
such appointment by the stockholders. It is expected that a representative of
Grant Thornton LLP will attend the Annual Meeting and will be given the
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions from stockholders present at the Annual
Meeting.
Set forth below is certain information concerning aggregate fees billed
for professional services rendered by Grant Thornton LLP during the fiscal years
ended June 30, 2006 and 2005:
AUDIT FEES. The aggregate fees billed to DSA Financial Corporation by
Grant Thornton LLP for professional services rendered by Grant Thornton LLP for
the audit of DSA Financial Corporation's annual financial statements and
services that are normally provided by Grant Thornton LLP in connection with
statutory and regulatory filings and engagements was $52,475 and $50,480 during
the years ended June 30, 2006 and 2005, respectively.
AUDIT RELATED FEES. The aggregate fees billed to DSA Financial
Corporation by Grant Thornton LLP for assurance and related services rendered by
Grant Thornton LLP that are reasonably related to the performance of the audit
of and review of the financial statements and that are not already reported in
"Audit Fees," above, was $-0- and $5,880 during the years ended June 30, 2006
and 2005, respectively. Included in audit-related fees for the year ended June
30, 2005 was $3,000 in fees in connection with DSA Financial Corporation's stock
offering.
TAX FEES. The aggregate fees billed to DSA Financial Corporation by
Grant Thornton LLP for professional services rendered by Grant Thornton LLP for
tax compliance, tax advice and tax planning was $6,438 and $4,600 during the
years ended June 30, 2006 and 2005, respectively. These services primarily
included the review of tax returns and quarterly tax provisions.
ALL OTHER FEES. The aggregate fees billed to DSA Financial Corporation
by Grant Thornton LLP that are not described above was $4,110 and $220 during
the years ended June 30, 2006 and 2005, respectively. The services for the year
ended June 30, 2006 relate primarily to the issuance of a consent for a
registration statement on Form S-8 and consulting with respect to our corporate
structure and the construction of our new office building.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES OF
INDEPENDENT AUDITOR
The Audit Committee's policy is to pre-approve all audit and non-audit
services provided by the independent registered public accounting firm. These
services may include audit services, audit-related services, tax services and
other services. Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to particular service or category of services and is
generally subject to a specific budget. The Audit Committee has delegated
pre-approval
15
authority to its Chairman when expedition of services is necessary. The
independent registered public accounting firm and management are required to
periodically report to the full Audit Committee regarding the extent of services
provided by the independent registered public accounting firm in accordance with
this pre-approval, and the fees for the services performed to date. For the
years ended June 30, 2006 and 2005, 100% of audit related fees, tax fees and all
other fees were approved by the Audit Committee prior to engagement.
The Audit Committee has considered whether the provision of non-audit
services, which relate primarily to tax services rendered, is compatible with
maintaining Grant Thornton LLP's independence. The Audit Committee concluded
that performing such services does not affect Grant Thornton LLP's independence
in performing its function as auditor of DSA Financial Corporation.
THE AUDIT COMMITTEE RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF GRANT THORNTON LLP AS THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM OF DSA FINANCIAL CORPORATION FOR THE FISCAL YEAR ENDING JUNE 30,
2007.
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED
AT AN ANNUAL MEETING
The Bylaws of DSA Financial Corporation provide an advance notice
procedure for certain business, or nominations to the Board of Directors, to be
brought before an annual meeting. In order for a stockholder to properly bring
business before an annual meeting, or to propose a nominee to the Board, the
stockholder must give written notice to the Secretary of DSA Financial
Corporation not less than ninety (90) days before the date fixed for such
meeting; provided, however, that in the event that less than one hundred (100)
days notice or prior public disclosure of the date of the annual meeting is
given or made, notice by the stockholder to be timely must be received not later
than the close of business on the tenth day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure
was made. The notice must include the stockholder's name, record address, and
number of shares owned, describe briefly the proposed business, the reasons for
bringing the business before the annual meeting, and any material interest of
the stockholder in the proposed business. In the case of nominations to the
Board of Directors, certain information regarding the nominee must be provided.
Nothing in this paragraph shall be deemed to require DSA Financial Corporation
to include in its proxy statement and proxy relating to an annual meeting any
stockholder proposal that does not meet all of the requirements for inclusion
established by the SEC in effect at the time such proposal is received.
The date on which the 2007 Annual Meeting of Stockholders is expected
to be held is November 8, 2007. Accordingly, advance written notice of business
or nominations to the Board of Directors to be brought before the 2007 Annual
Meeting of Stockholders must be given to DSA Financial Corporation no later than
August 10, 2007.
16
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in DSA Financial Corporation's
proxy material for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at DSA Financial
Corporation's office, 118 Walnut Street, Lawrenceburg, Indiana 47025, no later
than June 25, 2007. Any such proposals shall be subject to the requirements of
the proxy rules adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
\s\ Karleen McGraw
Karleen McGraw
Secretary
Lawrenceburg, Indiana
October 13, 2006
17
REVOCABLE PROXY
DSA FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 9, 2006
The undersigned hereby appoints the proxy committee of the Board of
Directors of DSA Financial Corporation (the "Company"), with full powers of
substitution, to act as attorneys and proxies for the undersigned to vote all
shares of common stock of the Company that the undersigned is entitled to vote
at the 2006 Annual Meeting of Stockholders ("Meeting"), to be held at the office
of Dearborn Savings Association, F.A. located at 141 Ridge Avenue, Lawrenceburg,
Indiana, at 4:00 p.m., (Eastern Time) on November 9, 2006. The proxy committee
is authorized to cast all votes to which the undersigned is entitled as follows:
VOTE
----
FOR WITHHELD
--- --------
1. The election as directors of the nominees [ ] [ ]
listed below (except as marked to the contrary below)
for a three-year term:
Ronald J. Denney
Dr. Dennis Richter
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL
NOMINEE, MARK "WITHHELD" AND WRITE THAT NOMINEE'S NAME ON
THE SPACE PROVIDED.
__________________________________________________________
__________________________________________________________
FOR AGAINST ABSTAIN
--- ------- -------
2. The ratification of the appointment of Grant Thornton LLP [ ] [ ] [ ]
as the Company's independent registered public accounting
firm for the fiscal year ending June 30, 2007.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
--------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED ABOVE. IF ANY OTHER
BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THE PROXY
COMMITTEE. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or
at any adjournment thereof and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect. This proxy may also be revoked by sending written
notice to the Secretary of the Company at the address set forth on the Notice of
Annual Meeting of Stockholders, or by the filing of a later dated proxy
statement prior to a vote being taken on a particular proposal at the Meeting.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of notice of the Meeting, a proxy statement dated
October 13, 2006, and audited financial statements.
Dated: _________________, 2006 [ ] Check Box if You Plan to Attend Meeting
_________________________ __________________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
________________________ __________________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
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 should sign.
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PLEASE COMPLETE AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
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