Terry B. Osborne
About Terry B. Osborne
Independent director of Citizens Financial Services, Inc. (CZFS); age 71. Retired in 2020 as Executive Vice President and Chief Credit Officer of First Citizens Community Bank after beginning at the Bank in 1975; served as Secretary of the Company and Bank from 1983 to 2018. Director of the Company since 2024 and director of the Bank since 2018; nominated as a Class 2 director for a term expiring at the 2028 Annual Meeting .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| First Citizens Community Bank | Executive Vice President, Chief Credit Officer | 1991–2020 | Led lending and credit oversight; hands-on experience in lending, strategic planning, operations . |
| Citizens Financial Services, Inc. / First Citizens Community Bank | Corporate Secretary | 1983–2018 | Corporate governance and administration . |
| First Citizens Community Bank | Employee | 1975–2020 | Broad institutional knowledge of FCCB and banking operations . |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| First Citizens Community Bank (subsidiary of CZFS) | Director | Since 2018 | Bank board service (non-public company) . |
Board Governance
- Independence: Independent under Nasdaq; Board notes independence for all directors except CEO Randall E. Black, Senior EVP David Z. Richards Jr., and former SEVP Mickey L. Jones .
- Committee memberships:
- Audit and Examination Committee member (not Chair). 2024 meetings: 6 .
- Not listed on Compensation/Human Resource or Governance and Nominating Committees .
- Audit Committee composition includes Osborne; routine private sessions with auditors and management; recommended inclusion of audited financials in Form 10-K .
- Attendance: In 2024, the Board held 12 regular meetings; each director attended at least 83% of total Board and committee meetings; all 12 directors then serving attended the 2024 Annual Meeting .
- Board leadership: Separate Chair (R. Joseph Landy) and CEO roles; Lead Independent Director (Rinaldo DePaola). Executive sessions: 4; independent directors met twice in 2024 .
- Director stock ownership requirement: Greater of 3x prior year cash retainer (using prior Dec 31 stock price) or 1,000 unencumbered shares .
- Hedging/Clawback: Hedging prohibited for directors; clawback applies to executives upon accounting restatement (scope noted for covered executives) .
Fixed Compensation
| Component (2024) | Amount | Notes |
|---|---|---|
| Fees earned or paid in cash | $30,423 | Joined Board July 16, 2024; pro-rata annual retainer $17,838 vs standard $26,375; Board meeting fee $675 per meeting; committee meeting monthly fee $350; conference call $185; regional board meeting $225; committee chair retainer $2,400 applies to specified chairs (not Osborne) . |
| Stock awards (fully vested common stock) | $9,209 | 160 shares granted in 2024 under the 2016 Equity Incentive Plan; fully vested upon grant; aggregate grant date fair value . |
| All other compensation | $229 | Life insurance benefit and holiday gifts; active director life insurance benefit $100,000 (reduced to $65,000 at age 70 for active directors) . |
| Total | $39,861 | Sum of 2024 director compensation . |
Director stock awards are purchased quarterly per a Board-approved schedule (Mar 15, Jun 15, Sep 15, Dec 15 using 30-day VWAP); Osborne’s 2024 awards are fully vested stock under the 2016 Plan .
Performance Compensation
| Performance Feature | Disclosure | Terms |
|---|---|---|
| Bonus/Annual incentive (Director) | None disclosed | CZFS does not disclose performance-based bonuses for non-employee directors; director equity grants are fully vested time-based stock awards . |
| Options / PSUs tied to metrics | None disclosed | No stock options outstanding for named executives at 12/31/2024; director grants disclosed as fully vested stock, not performance-based units . |
Other Directorships & Interlocks
| Company | Type | Role | Interlock/Conflict Notes |
|---|---|---|---|
| None disclosed | — | — | Proxy does not list other public company directorships for Osborne . |
Expertise & Qualifications
- Extensive credit and lending expertise; strategic planning and daily operations experience from decades at FCCB; positions him well to serve as a director .
- Audit Committee service, with Board-designated financial sophistication designee on Audit Committee being Roger Graham; Board believes all Audit Committee members have sufficient financial/auditing knowledge .
Equity Ownership
| Metric | Value | Notes |
|---|---|---|
| Total beneficial ownership | 12,675 shares | Jointly with spouse . |
| Ownership % of class | <1% | Asterisk denotes less than 1% . |
| Shares pledged as collateral | 3,477 shares | Pledged on a loan (risk indicator) . |
| Unencumbered shares (calculated) | 9,198 | 12,675 − 3,477; calculated from disclosed figures . |
| Ownership guideline | ≥3× cash retainer or ≥1,000 unencumbered shares | Director guideline; compliance assessed by Board; unencumbered shares threshold stated explicitly . |
| Hedging policy | Prohibited | No officer, employee, or director may engage in hedging CZFS stock . |
Governance Assessment
- Strengths
- Independence affirmed under Nasdaq; deep institutional credit expertise; Audit Committee participation enhances oversight of financial reporting and internal controls .
- Engagement: ≥83% attendance; presence at Annual Meeting; Board maintains robust evaluation (annual third-party BoardEvals process) and executive sessions .
- Ownership alignment: substantial share ownership; director stock ownership requirement in place; hedging prohibited .
- Potential Conflicts / Red Flags
- Shares pledged (3,477) as collateral—pledging is a common investor concern due to forced-sale risk; monitor for changes or increases in pledged amounts .
- Related-party exposure (director/officer loans): Board independence determinations considered loans/lines of credit to certain directors including Osborne; policy requires advance Board approval above thresholds ($300,000 aggregate for directors), and loans must be on market terms .
- Prior executive role at the Bank (Chief Credit Officer) creates familiarity advantages but warrants ongoing independence vigilance; Board affirms independence .
No Section 16 reporting exceptions were noted for Osborne; the Company stated directors complied with beneficial ownership reporting in 2024, with one late filing attributed to Chair R. Joseph Landy (not Osborne) .