<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __________)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only
/X/ Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Pittsburgh Home Financial Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Pittsburgh Home Financial Corp.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): (previously paid by wire
transfer)
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2), or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies:
---------------------------------------------
(2) Aggregate number of securities to which transactions
applies:
--------------------------------------------------------
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
-----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------
Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
------------------------------------------
(2) Form, schedule or registration statement no.:
-----------------------------------------------------------------
(3) Filing party:
----------------------------------------------------
(4) Date filed:
------------------------------------------------------
<PAGE> 2
Pittsburgh Home
Financial Corp.
[LOGO] 438 Wood Street Pittsburgh, PA 15222
(412) 281-0780 FAX: (412) 281-3750
September 13, 1996
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders
of Pittsburgh Home Financial Corp. The meeting will be held at the Westin
William Penn Hotel, located at 530 William Penn Place, Pittsburgh, Pennsylvania
on Tuesday, October 15, 1996 at 11:00 a.m., Eastern Time. The meeting will be
held in the Canada Room on the Club level. The matters to be considered by
stockholders at the Special Meeting are described in the accompanying
materials.
The Board of Directors of Pittsburgh Home Financial Corp. has
determined that the matters to be considered at the Special Meeting are in the
best interests of the Company and its shareholders. FOR THE REASONS SET FORTH
IN THE PROXY STATEMENT, THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
EACH MATTER TO BE CONSIDERED.
It is very important that your shares be voted at the Special Meeting
regardless of the number you own or whether you are able to attend the meeting
in person. We urge you to mark, sign, and date your proxy card today and
return it in the envelope provided, even if you plan to attend the Special
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
On behalf of the Board of Directors and all of the employees of the
Company and the Bank, I thank you for your continued interest and support.
Sincerely,
/s/J. Ardie Dillen
J. Ardie Dillen
President and Chief Executive Officer
<PAGE> 3
PITTSBURGH HOME FINANCIAL CORP.
438 WOOD STREET
PITTSBURGH, PENNSYLVANIA 15222
(412) 281-0780
----------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 15, 1996
----------------
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders
("Special Meeting") of Pittsburgh Home Financial Corp. (the "Company") will be
held at the Westin William Penn Hotel, located at 530 William Penn Place,
Pittsburgh, Pennsylvania on Tuesday, October 15, 1996 at 11:00 a.m., Eastern
Time, in the Canada Room on the Club level, for the following purposes, all of
which are more completely set forth in the accompanying Proxy Statement:
(1) To consider and approve the adoption of the Company's Stock
Option Plan;
(2) To consider and approve the adoption of the Company's
Recognition and Retention Plan and Trust;
(3) If necessary, to adjourn the Special Meeting to solicit
additional proxies; and
(4) To transact such other business as may properly come before
the meeting or any adjournment thereof. Management is not aware of any other
such business.
The Board of Directors has fixed September 6, 1996 as the voting
record date for the determination of stockholders entitled to notice of and to
vote at the Special Meeting and at any adjournment thereof. Only those
stockholders of record as of the close of business on that date will be
entitled to vote at the Special Meeting or at any such adjournment.
By Order of the Board of Directors
/s/Jess B. Mellor
Jess B. Mellor
Secretary
Pittsburgh, Pennsylvania
September 13, 1996
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN
TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED
PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY
VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
- --------------------------------------------------------------------------------
<PAGE> 4
PITTSBURGH HOME FINANCIAL CORP.
-------------------------
PROXY STATEMENT
-------------------------
SPECIAL MEETING OF STOCKHOLDERS
OCTOBER 15, 1996
This Proxy Statement is furnished to holders of common stock, $.01
par value per share ("Common Stock"), of Pittsburgh Home Financial Corp. (the
"Company"). The Company acquired all of the stock of Pittsburgh Home Savings
Bank (the "Savings Bank") issued in connection with the Savings Bank's
conversion from mutual to stock form in April 1996 (the "Conversion"). Proxies
are being solicited on behalf of the Board of Directors of the Company to be
used at the Special Meeting of Stockholders ("Special Meeting") to be held at
the Westin William Penn Hotel, located at 530 William Penn Place, Pittsburgh,
Pennsylvania in the Canada Room on the Club level, on Tuesday, October 15, 1996
at 11:00 a.m., Eastern Time, and at any adjournment thereof for the purposes
set forth in the Notice of Special Meeting of Stockholders. This Proxy
Statement is first being mailed to stockholders on or about September 13, 1996.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted FOR the matters described below and upon the
transaction of such other business as may properly come before the meeting in
accordance with the best judgment of the persons appointed as proxies. Any
stockholder giving a proxy has the power to revoke it at any time before it is
exercised by (i) filing with the Secretary of the Company written notice
thereof (Secretary, Pittsburgh Home Financial Corp., 438 Wood Street,
Pittsburgh, Pennsylvania 15222); (ii) submitting a duly-executed proxy bearing
a later date; or (iii) appearing at the Special Meeting and giving the
Secretary notice of his or her intention to vote in person. Proxies solicited
hereby may be exercised only at the Special Meeting and any adjournment thereof
and will not be used for any other meeting.
VOTING
Only stockholders of record of the Company at the close of business
on September 6, 1996 ("Voting Record Date") are entitled to notice of and to
vote at the Special Meeting and at any adjournment thereof. On the Voting
Record Date, there were 2,182,125 shares of Common Stock of the Company issued
and outstanding and the Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Special
Meeting on all matters properly presented at the Special Meeting. The
<PAGE> 5
2
affirmative vote of the holders of a majority of the total votes eligible to be
cast in person or by proxy at the Special Meeting is required for approval of
the proposals to approve the Company's Stock Option Plan ("Stock Option Plan")
and the Company's Recognition and Retention Plan and Trust ("Recognition
Plan"). A majority of the total votes present in person and by proxy will be
required to adjourn the Special Meeting, if such action is required to be voted
on. Because of the required votes, abstentions will have the same effect as a
vote against the proposals with respect to the Stock Option Plan and the
Recognition Plan. Under rules of the New York Stock Exchange, the proposal for
adjournment, if necessary, is considered a "discretionary" item upon which
brokerage firms may vote in their discretion on behalf of their clients if such
clients have not furnished voting instructions and for which there will not be
"broker non-votes." The proposals to approve the Stock Option Plan and the
Recognition Plan, however, are considered "non-discretionary" and for which
there may be broker non-votes. A broker non-vote will have the same effect as
a vote against the proposals to approve the Stock Option Plan and the
Recognition Plan.
<PAGE> 6
3
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) each person or
entity, including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), who or which was
known to the Company to be the beneficial owner of more than 5% of the issued
and outstanding Common Stock, (ii) the directors of the Company, (iii) those
executive officers of the Company whose salary and bonus exceeded $100,000 in
fiscal 1996, and (iv) all directors and executive officers of the Company and
the Savings Bank as a group.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial of Beneficial
Owner or Number of Ownership as of Percent of
Persons in Group September 6, 1996(1) Common Stock
-------------------- -------------------- ------------
<S> <C> <C>
Pittsburgh Home Financial Corp. 174,570(2) 8.0%
Employee Stock Ownership Plan Trust
438 Wood Street
Pittsburgh, Pennsylvania 15222
Directors:
Frank J. Malone 20,000 *
J. Ardie Dillen 30,000(3) 1.5
Jess B. Mellor 5,000 *
Joseph G. Lang 2,020 *
Richard F. Lerach 33,000 1.5
Gregory G. Maxcy 19,258 *
Kenneth F. Maxcy, Jr. 7,000 *
Stephen Spolar 8,500 *
Charles A. Topnick 6,500 *
All directors and executive officers 162,443(2) 7.4
of the Company and the Savings Bank
as a group (13 persons)
</TABLE>
(Footnotes on following page)
<PAGE> 7
4
- -----------------
* Represents less than 1% of the outstanding Common Stock.
(1) Based upon filings made pursuant to the Exchange Act and information
furnished by the respective individuals. Under regulations
promulgated pursuant to the Exchange Act, shares of Common Stock are
deemed to be beneficially owned by a person if he or she directly or
indirectly has or shares (i) voting power, which includes the power
to vote or to direct the voting of the shares, or (ii) investment
power, which includes the power to dispose or to direct the
disposition of the shares. Unless otherwise indicated, the named
beneficial owner has sole voting and dispositive power with respect
to the shares.
(2) The Pittsburgh Home Financial Corp. Employee Stock Ownership Plan
Trust ("Trust") was established pursuant to the Pittsburgh Home
Financial Corp. Employee Stock Ownership Plan ("ESOP") by an
agreement between the Company and Messrs. J. Ardie Dillen, Kenneth
F. Maxcy, Jr., and Stephen Spolar who act as trustees of the plan
("Trustees"). As of the Voting Record Date, no shares held in the
Trust had been allocated to the accounts of participating employees.
Under the terms of the ESOP, the Trustees must vote the allocated
shares held in the ESOP in accordance with the instructions of the
participating employees. Unallocated shares held in the ESOP are
required to be voted in the same ratio on any matter as those
allocated shares for which instructions are given. Any allocated
shares which either abstain on the proposal or are not voted will be
disregarded in determining the percentage of stock voted for and
against each proposal by the participants and beneficiaries. Since
no shares held in the Trust were allocated as of the Voting Record
Date, unallocated shares held in the ESOP will be voted by the
Trustees in accordance with their fiduciary duties as Trustees. The
amount of Common Stock beneficially owned by directors who serve as
Trustees of the ESOP and by all directors and executive officers as a
group does not include the unallocated shares held by the Trust.
(3) Includes 1,500 shares held by Mr. Dillen's spouse in her Individual
Retirement Account and 600 shares held by Mr. Dillen as custodian for
his children.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who own more than 10% of the Company's Common Stock to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
Officers, directors and greater than 10% stockholders are required by
regulation to furnish the Company with copies of all forms they file pursuant
to Section 16(a) of the Exchange Act. The Company knows of no person who owns
10% or more of the Company's Common Stock.
<PAGE> 8
5
Based solely on review of the copies of such forms furnished to the
Company, or written representations from its officers and directors, the
Company believes that during, and with respect to, fiscal 1996, the Company's
officers and directors complied in all respects with the reporting requirements
promulgated under Section 16(a) of the 1934 Act.
PROPOSAL TO ADOPT THE STOCK OPTION PLAN
GENERAL
The Board of Directors has adopted the Stock Option Plan which is
designed to attract and retain qualified personnel in key positions, provide
officers and key employees with a proprietary interest in the Company as an
incentive to contribute to the success of the Company and reward key employees
for outstanding performance. The Stock Option Plan is also designed to retain
qualified directors for the Company. The Stock Option Plan provides for the
grant of incentive stock options intended to comply with the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")
("incentive stock options"), non-qualified or compensatory stock options and
stock appreciation rights (collectively "Awards"). Awards will be available
for grant to directors and key employees of the Company and any subsidiaries,
except that directors will not be eligible to receive incentive stock options.
If stockholder approval is obtained, options to acquire shares of Common Stock
will be awarded to key employees of the Company and the Savings Bank and
directors of the Company with an exercise price equal to the fair market value
of the Common Stock on the date of such approval.
DESCRIPTION OF THE STOCK OPTION PLAN
The following description of the Stock Option Plan is a summary of
its terms and is qualified in its entirety by reference to the Stock Option
Plan, a copy of which is attached hereto as Appendix A.
ADMINISTRATION. The Stock Option Plan is administered and
interpreted by a committee of the Board of Directors ("Committee") that is
composed solely of two or more "Non-Employee Directors."
STOCK OPTIONS. Under the Stock Option Plan, the Board of Directors
or the Committee determines which officers and key employees will be granted
options, whether such options will be incentive or compensatory options, the
number of shares subject to each option, whether such options may be exercised
by delivering other shares of Common Stock and when such options become
exercisable. The per share exercise price of a stock option shall be equal to
the fair market value of a share of Common Stock on the date the option is
granted.
All options granted to participants under the Stock Option Plan shall
become vested and exercisable at the rate of 20% per year on each annual
anniversary of the date the
<PAGE> 9
6
options were granted, and the right to exercise shall be cumulative.
Notwithstanding the foregoing, no vesting shall occur on or after a
participant's employment with the Company is terminated for any reason other
than his death or disability. Unless the Committee shall specifically state
otherwise at the time an option is granted, all options granted to participants
shall become vested and exercisable in full on the date an optionee terminates
his employment with or service to the Company or a subsidiary company because
of his death or disability. In addition, all stock options will become vested
and exercisable in full on the date an optionee terminates his employment or
service to the Company or a subsidiary company due to retirement or as the
result of a change in control of the Company, each as defined in the Stock
Option Plan, if, as of such date of retirement or change in control of the
Company, such treatment is either authorized or is not prohibited by applicable
laws and regulations.
Each stock option or portion thereof shall be exercisable at any time
on or after it vests and is exercisable until the earlier of ten years after
its date of grant or three months after the date on which the optionee's
employment or service as a non-employee director terminates, unless extended by
the Committee to a period not to exceed one year from such termination.
However, failure to exercise incentive stock options within three months after
the date on which the optionee's employment terminates may result in adverse
tax consequences to the optionee. If an optionee dies while serving as an
employee or a non-employee director or terminates his service as an employee or
a non-employee director as a result of disability without having fully
exercised his options, the optionee's executors, administrators, legatees or
distributees of his estate shall have the right to exercise such options during
the twelve-month period following the earlier of his death or termination due
to disability, provided no option will be exercisable more than ten years from
the date it was granted. Stock options are non-transferable except by will or
the laws of descent and distribution. Notwithstanding the foregoing, an
optionee who holds non-qualified options may transfer such options to his or
her spouse, lineal ascendants, lineal descendants, or to a duly established
trust for the benefit or one or more of these individuals. Options so
transferred may thereafter be transferred only to the optionee who originally
received the grant or to an individual or trust to whom the optionee could have
initially transferred the option. Options which are so transferred shall be
exercisable by the transferee according to the same terms and conditions as
applied to the optionee.
STOCK APPRECIATION RIGHTS. Under the Stock Option Plan, the Board of
Directors or the Committee is authorized to grant stock appreciation rights to
optionees under which an optionee may surrender any exercisable incentive stock
option or compensatory stock option or any portion thereof in return for
payment by the Company to the optionee of cash or Common Stock in an amount
equal to the excess of the fair market value of the shares of Common Stock
subject to option, or portion thereof, at the time over the exercise price of
the option with respect to such shares, or a combination of cash and Common
Stock. A stock appreciation right may be granted concurrently with the stock
option to which it relates or at any time thereafter which is prior to the
exercise or expiration of such option.
<PAGE> 10
7
NUMBER OF SHARES COVERED BY THE STOCK OPTION PLAN. A total of
218,212 shares of Common Stock has been reserved for issuance pursuant to the
Stock Option Plan, which is 10% of the Common Stock issued in connection with
the Conversion. In the event of a stock split, reverse stock split or stock
dividend, the number of shares of Common Stock under the Stock Option Plan, the
number of shares to which any Award relates and the exercise price per share
under any option or stock appreciation right shall be adjusted to reflect such
increase or decrease in the total number of shares of the Common Stock
outstanding.
AMENDMENT AND TERMINATION OF THE STOCK OPTION PLAN. Unless sooner
terminated, the Stock Option Plan shall continue in effect for a period of ten
years from the effective date, which is September 9, 1996, the date the Stock
Option Plan was adopted by the Board and became effective by its terms.
Termination of the Stock Option Plan shall not affect any previously granted
Awards.
FEDERAL INCOME TAX CONSEQUENCES. Under current provisions of the
Code, the federal income tax treatment of incentive stock options and
compensatory stock options is different. As regards incentive stock options,
an optionee who meets certain holding period requirements will not recognize
income at the time the option is granted or at the time the option is
exercised, and a federal income tax deduction generally will not be available
to the Company at any time as a result of such grant or exercise. With respect
to compensatory stock options, the difference between the fair market value on
the date of exercise and the option exercise price generally will be treated as
compensation income upon exercise, and the Company will be entitled to a
deduction in the amount of income so recognized by the optionee. Upon the
exercise of a stock appreciation right, the holder will realize income for
federal income tax purposes equal to the amount received by him, whether in
cash, shares of stock or both, and the Company will be entitled to a deduction
for federal income tax purposes in the same amount.
The above description of tax consequences under federal law is
necessarily general in nature and does not purport to be complete. Moreover,
statutory provisions are subject to change, as are their interpretations, and
their application may vary in individual circumstances. Finally, the
consequences under applicable state and local income tax laws may not be the
same as under the federal income tax laws.
ACCOUNTING TREATMENT. Stock appreciation rights will, in most cases,
require a charge against the earnings of the Company each year representing
appreciation in the value of such rights over periods in which they become
exercisable. Such charge is based on the difference between the exercise price
specified in the related option and the current market price of the Common
Stock. In the event of a decline in the market price of the Common Stock
subsequent to a charge against earnings related to the estimated costs of stock
appreciation rights, a reversal of prior charges is made in the amount of such
decline (but not to exceed aggregate prior charges).
<PAGE> 11
8
Neither the grant nor the exercise of an incentive stock option or a
non-qualified stock option under the Stock Option Plan currently requires any
charge against earnings under generally accepted accounting principles. In
certain circumstances, shares issuable pursuant to outstanding options under
the Stock Option Plan might be considered outstanding for purposes of
calculating earnings per share.
STOCKHOLDER APPROVAL. No Awards will be granted under the Stock
Option Plan unless the Stock Option Plan is approved by stockholders.
Stockholder ratification of the Stock Option Plan will satisfy certain Nasdaq
market listing and tax requirements.
AWARDS TO BE GRANTED. The Board of Directors of the Company adopted
the Stock Option Plan and approved the grant of incentive options to executive
officers and employees of the Company and the Savings Bank and non-qualified
options to non-employee directors thereof. The options shall be effective upon
stockholder approval of the Stock Option Plan with a per share exercise price
equal to the fair market value of a share of Common Stock on the date of such
approval. The following table sets forth certain information with respect to
such grants.
<TABLE>
<CAPTION>
Number of Shares
Name of Individual or Subject to
Number of Persons in Group Title Stock Options
-------------------------- ----- ----------------
<S> <C> <C>
J. Ardie Dillen President and Chief 34,913
Executive Officer
All executive officers as --- 103,645
a group (7 persons)
All non-employee directors --- 49,092
as a group (6 persons)
All employees, not including --- ---
executive officers, as a
group (none)
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ADOPTION
OF THE STOCK OPTION PLAN.
<PAGE> 12
9
PROPOSAL TO ADOPT THE RECOGNITION
AND RETENTION PLAN AND TRUST
GENERAL
The Board of Directors of the Company has adopted the Recognition
Plan, the objective of which is to retain qualified personnel in key positions,
provide officers, key employees and directors with a proprietary interest in
the Company as an incentive to contribute to its success and reward key
employees for outstanding performance. Officers and key employees of the
Company who are selected by the Board of Directors of the Company or a
committee thereof, as well as non-employee directors of the Company, will be
eligible to receive benefits under the Recognition Plan. If stockholder
approval is obtained, shares will be granted to employees and to non-employee
directors as described below.
DESCRIPTION OF THE RECOGNITION PLAN
The following description of the Recognition Plan is a summary of its
terms and is qualified in its entirety by reference to the Recognition Plan, a
copy of which is attached hereto as Appendix B.
ADMINISTRATION. The Recognition Plan is administered and interpreted
by a committee of the Board of Directors ("Committee") that is composed solely
of two or more "Non-Employee Directors."
Upon stockholder approval of the Recognition Plan, the Company will
acquire Common Stock on behalf of the Recognition Plan, in an amount necessary
to purchase the number of shares of Common Stock equal to 4% of the Common
Stock issued in the Conversion, or 87,285 shares. These shares will be
acquired through open market purchases.
GRANTS. Shares of Common Stock granted pursuant to the Recognition
Plan will be in the form of restricted stock payable over a five-year period at
a rate of 20% per year, beginning one year from the anniversary date of the
grant. A recipient will be entitled to all voting and other stockholder rights
with respect to shares which have been earned and allocated under the
Recognition Plan. However, until such shares have been earned and allocated,
they may not be sold, pledged or otherwise disposed of and are required to be
held in the Recognition Plan Trust. Under the terms of the Recognition Plan,
all shares which have not yet been earned and allocated are required to be
voted by the trustees in their sole discretion. In addition, any cash
dividends or stock dividends declared in respect of unvested share awards will
be held by the Recognition Plan Trust for the benefit of the recipients and
such dividends, including any interest thereon, will be paid out
proportionately by the Recognition Plan Trust to the recipients thereof as soon
as practicable after the share awards become earned. Any cash dividends or
stock dividends declared in respect of each vested share held by the
Recognition Plan Trust will be paid by
<PAGE> 13
10
the Recognition Plan Trust as soon as practicable after the Recognition Plan
Trust's receipt thereof to the recipient on whose behalf such share is then
held by the Recognition Plan Trust.
If a recipient terminates employment for reasons other than death,
disability or retirement, the recipient will forfeit all rights to the
allocated shares under restriction. All shares subject to an award held by a
recipient whose employment with or service to the Company or any subsidiary
terminates due to death or Disability, as defined in the Recognition Plan,
shall be deemed earned as of the recipient's last day of employment with or
service to the Company or any subsidiary and shall be distributed as soon as
practicable thereafter; provided, however, that awards shall be distributed in
accordance with the Recognition Plan. In addition, in the event that a
recipient's employment with or service to the Company or any subsidiary
terminates due to retirement, as defined in the Recognition Plan, all shares
subject to an award held by a recipient shall be deemed earned as of the
recipient's last day of employment with or service to the Company or any
subsidiary and shall be distributed as soon as practicable thereafter, provided
that as of the date of such retirement, such treatment is either authorized or
is not prohibited by applicable laws and regulations. All shares subject to an
award held by a recipient also shall be deemed to be earned in the event of a
change in control of the Company, as defined in the Recognition Plan, provided
that as of the date of such change in control of the Company, such treatment is
either authorized or is not prohibited by applicable laws and regulations.
During the lifetime of the recipient, shares subject to an award may
only be earned by and paid to the recipient, provided that shares subject to an
award and rights to such shares shall be transferable by a recipient to his or
her spouse, lineal ascendants, lineal descendants, or to a duly established
trust. Shares subject to an award so transferred may not again be transferred
other than to the recipient who originally received the grant or to an
individual or trust to whom such recipient could have transferred shares
subject to an award. Shares subject to awards which are transferred shall be
subject to the same terms and conditions as would have applied to such shares
subject to awards in the hands of the recipient who originally received the
grant.
FEDERAL INCOME TAX CONSEQUENCES. Pursuant to Section 83 of the Code,
recipients of Recognition Plan awards will recognize ordinary income in an
amount equal to the fair market value of the shares of Common Stock granted to
them at the time that the shares vest and become transferable. A recipient of a
Recognition Plan award may also elect, however, to accelerate the recognition
of income with respect to his or her grant to the time when shares of Common
Stock are first transferred to him or her, notwithstanding the vesting schedule
of such awards. The Company will be entitled to deduct as a compensation
expense for tax purposes the same amounts recognized as income by recipients of
Recognition Plan awards in the year in which such amounts are included in
income.
<PAGE> 14
11
ACCOUNTING TREATMENT. For accounting purposes, the Company will also
recognize a compensation expense as shares of Common Stock granted pursuant to
the Recognition Plan vest. Unlike the treatment of Recognition Plan awards for
tax purposes, however, the compensation expense recognized for accounting
purposes is limited to the fair market value of the Common Stock at the date of
grant to recipients, rather than the fair market value of the Common Stock at
the time that a Recognition Plan grant vests.
STOCKHOLDER APPROVAL. No shares will be granted under the
Recognition Plan unless the Recognition Plan is approved by stockholders.
Stockholder ratification of the Recognition Plan will satisfy certain Nasdaq
market listing and tax requirements.
SHARES TO BE GRANTED. The Board of Directors of the Company adopted
the Recognition Plan and approved the grant of shares to executive officers and
employees of the Company and the Savings Bank and non-employee directors
thereof. The awards shall be effective upon stockholder approval of the
Recognition Plan. The following table sets forth certain information with
respect to such grants.
<TABLE>
<CAPTION>
Name of Individual or Number of Shares
Number of Persons in Group Title Awarded
-------------------------- ----- ----------------
<S> <C> <C>
J. Ardie Dillen President and Chief 15,711
Executive Officer
All executive officers as --- 47,130
a group (7 persons)
All non-employee directors --- 18,330
as a group (6 persons)
All employees, not --- ---
including executive
officers, as a group
(none)
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ADOPTION
OF THE RECOGNITION AND RETENTION PLAN AND TRUST.
ADJOURNMENT OF SPECIAL MEETING
Each proxy solicited hereby requests authority to vote for an
adjournment of the Special Meeting, if an adjournment is deemed to be
necessary. The Company may seek an adjournment of the Special Meeting for not
more than 30 days in order to enable the Company to solicit additional votes in
favor of the proposals to adopt the Stock Option Plan
<PAGE> 15
12
and/or the Recognition Plan in the event that either or both of such proposals
have not received the requisite vote of stockholders at the Special Meeting and
either or both of such proposals have not received the negative votes of the
holders of a majority of the Company's Common Stock. If the Company desires to
adjourn the meeting with respect to either or both of the foregoing proposals,
it will request a motion that the meeting be adjourned for up to 30 days with
respect to such proposal or proposals (and solely with respect to such proposal
or proposals, provided that a quorum is present at the Special Meeting), and no
vote will be taken on such proposal(s) at the originally scheduled Special
Meeting. Each proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted on any motion for
adjournment in accordance with the instructions contained therein. If no
contrary instructions are given, each proxy received will be voted in favor of
any motion to adjourn the meeting. Unless revoked prior to its use, any proxy
solicited for the Special Meeting will continue to be valid for any adjournment
of the Special Meeting, and will be voted in accordance with instructions
contained therein, and if no contrary instructions are given, for the
proposal(s) in question.
Any adjournment will permit the Company to solicit additional proxies
and will permit a greater expression of the stockholders' views with respect to
such proposal(s). Such an adjournment would be disadvantageous to stockholders
who are against the proposal(s), because an adjournment will give the Company
additional time to solicit favorable votes and thus increase the chances of
passing such proposal(s).
If a quorum is not present at the Special Meeting, no proposal will
be acted upon and the Board of Directors of the Company will adjourn the
Special Meeting to a later date in order to solicit additional proxies on each
of the proposal(s) being submitted to stockholders.
An adjournment for up to 30 days will not require either the setting
of a new record date or notice of the adjourned meeting as in the case of an
original meeting. The Company has no reason to believe that an adjournment of
the Special Meeting will be necessary at this time.
BECAUSE THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE PROPOSALS TO ADOPT THE STOCK OPTION PLAN AND RECOGNITION PLAN, AS DISCUSSED
ABOVE, THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
POSSIBLE ADJOURNMENT OF THE SPECIAL MEETING. THE HOLDERS OF A MAJORITY OF THE
COMPANY'S COMMON STOCK PRESENT, IN PERSON OR BY PROXY, AT THE SPECIAL MEETING
WILL BE REQUIRED TO APPROVE A MOTION TO ADJOURN THE SPECIAL MEETING.
<PAGE> 16
13
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of certain information
concerning the compensation paid by the Savings Bank for services rendered in
all capacities during the year ended September 30, 1995 to the President and
Chief Executive Officer of the Savings Bank. No executive officers of the
Savings Bank had total compensation during the fiscal year which exceeded
$100,000.
<TABLE>
<CAPTION>
Annual Compensation
------------------------------------------------------------------------
Other
Name and Annual
Principal Position Salary Bonus Compensation(1)
------------------------------------ ----------------- -------------------- ------------------------------
<S> <C> <C> <C>
J. Ardie Dillen $86,167 $8,500 $ ---
President and Chief
Executive Officer
</TABLE>
- ---------------
(1) Does not include amounts attributable to miscellaneous benefits
received by the named executive officer. In the opinion of
management of the Savings Bank, the costs to the Savings Bank of
providing such benefits to the named executive officer during the
year ended September 30, 1995 did not exceed the lesser of $50,000 or
10% of the total of annual salary and bonus reported for the
individual.
COMPENSATION OF DIRECTORS
The Company began paying non-employee directors a quarterly retainer
of $500 beginning with the third quarter of fiscal 1996. Prior to September 1,
1995, non-employee directors of the Savings Bank were paid a monthly retainer
fee of $200 per month as well as a fee of $300 for each Board meeting attended.
Effective September 1, 1995, the fee to non-employee directors of the Savings
Bank for each Board meeting attended was increased to $450 per meeting. As of
May 1, 1996, the monthly Savings Bank Board retainer was increased to $300.
Members of committees of the Board of the Savings Bank are paid $200 ($250 for
committee chairmen) for each committee meeting attended. In addition to the
foregoing, Messrs. Malone and Mellor received $5,250 and $3,750, respectively,
for service as Chairman of the Board and Secretary of the Savings Bank,
respectively, for fiscal 1995.
<PAGE> 17
14
EMPLOYMENT AGREEMENTS
The Company and the Savings Bank (the "Employers") have entered into
employment agreements with each of Messrs. Dillen, Kirk, Archer and Winters
(the "Executives"). Messrs. Dillen and Kirk are the President and Chief
Executive Officer and the Senior Vice President and Chief Financial Officer of
the Company and the Savings Bank, respectively, and Messrs. Archer and Winters
are the Senior Vice Presidents of Lending and Operations, respectively, of the
Savings Bank. The Employers have agreed to employ Mr. Dillen for a term of
three years and each of the other Executives for a term of two years in their
current respective positions at their current salary levels. The employment
agreements will be reviewed annually by the Boards of Directors of the
Employers, and the term of employment agreements shall be extended each year
for a successive additional one-year period upon approval of the Employers'
Board of Directors, unless either party elects, not less than 30 days prior to
the annual anniversary date, not to extend the employment term.
Each of the employment agreements are terminable with or without
cause by the Employers. The Executives shall have no right to compensation or
other benefits pursuant to the employment agreement for any period after
voluntary termination or termination by the Employers for cause. The
agreements provide for certain benefits in the event of an Executives' death,
disability or retirement. In the event that (i) the Executive terminates his
employment (a) because of failure of the Employers to comply with any material
provision of the agreement or (b) as a result of certain adverse actions which
are taken with respect to the officer's employment following a Change in
Control of the Company, as defined, or (ii) the employment agreement is
terminated by the Employers other than for cause, disability, retirement or
death, the Executive will be entitled to a cash severance amount equal to three
times the officer's base salary, as defined, in the case of Mr. Dillen, and two
times base salary for the other Executives payable in installments over three
years (in the case of Mr. Dillen) or two years (in the case of the other
Executives). Based upon compensation levels at September 30, 1995, in the
event of a termination of employment following a Change in Control, Mr. Dillen
would receive $292,500 in cash severance and each of the other three Executives
would receive between $100,000 and $120,000. Mr. Dillen's agreement also
provides for a severance payment in the event of a termination of the agreement
resulting from a change by the Employers to his title or duties. Severance
payments are generally reduced by 50% of the compensation paid by another
employer during the payment period. In certain cases of voluntary resignation,
the reduction would not apply.
A Change in Control is generally defined in the employment agreement
to include any change in control of the Company required to be reported under
the federal securities laws, as well as (i) the acquisition by any person of
25% or more of the Company's outstanding voting securities and (ii) a change in
a majority of the directors of the Company during any two-year period without
the approval of at least two-thirds of the persons who were directors of the
Company at the beginning of such period.
<PAGE> 18
15
Each employment agreement provides that in the event that any of the
payments to be made thereunder or otherwise upon termination of employment are
deemed to constitute "excess parachute payments" within the meaning of Section
280G of the Code, then such payments and benefits received thereunder shall be
reduced, in the manner determined by the officer, by the amount, if any, which
is the minimum necessary to result in no portion of the payments and benefits
being non-deductible by the Employers for federal income tax purposes. Excess
parachute payments generally are payments contingent on a change of control
with a present value equal to or in excess of three times the base amount,
which is defined to mean the recipient's average annual compensation from the
employer includable in the recipient's gross income during the most recent five
taxable years ending before the date on which a change in control of the
employer occurred. Recipients of excess parachute payments are subject to a
20% excise tax on the amount by which such payments exceed the base amount, in
addition to regular income taxes, and payments in excess of the base amount are
generally not deductible by the employer as compensation expense for federal
income tax purposes.
Although the above-described employment agreements could increase the
cost of any acquisition of control of the Company, management of the Company
does not believe that the terms thereof would have a significant anti-takeover
effect.
BENEFITS
Employee Stock Ownership Plan. The Company has established the ESOP
for employees of the Company and the Savings Bank. Employees of the Company
and the Savings Bank who have been credited with at least 1,000 hours of
service during a twelve month period and who have attained age 21 are eligible
to participate in the ESOP.
The ESOP borrowed funds from the Company to purchase 174,570 shares
of Common Stock in the Savings Bank's Conversion. The loan to the ESOP will be
repaid from the Company's contributions to the ESOP over a period of 10 years,
and the collateral for the loan is the Common Stock purchased by the ESOP. The
Company may, in any plan year, make additional discretionary contributions for
the benefit of plan participants in either cash or shares of Common Stock,
which may be acquired through the purchase of outstanding shares in the market
or from individual stockholders, upon the original issuance of additional
shares by the Company or upon the sale of treasury shares by the Company. Such
purchases, if made, would be funded through additional borrowing by the ESOP or
additional contributions from the Company. The timing, amount and manner of
future contributions to the ESOP will be affected by various factors, including
prevailing regulatory policies, the requirements of applicable laws and
regulations and market conditions.
Shares purchased by the ESOP with the proceeds of the loan are held
in a suspense account and will be released on a pro rata basis as debt service
payments are made. Discretionary contributions to the ESOP and shares released
from the suspense account will be allocated among participants on the basis of
compensation. Forfeitures will be
<PAGE> 19
16
reallocated among remaining participating employees and may reduce any amount
the Company might otherwise have contributed to the ESOP. Participants will be
100% vested in their rights to receive their account balances within the ESOP
after completing five years of service. Credit is given for years of service
with the Savings Bank prior to adoption of the ESOP. In the case of a "change
in control," as defined, however, participants will become immediately fully
vested in their account balances, subject to certain tax considerations.
Benefits may be payable upon retirement or separation from service. The
Company's contributions to the ESOP are not fixed, so benefits payable under
the ESOP cannot be estimated.
The ESOP is subject to the requirements of the Employment Retirement
Income Securities Act of 1974, as amended, and the regulations of the IRS and
the Department of Labor thereunder.
Pension Plan. The Savings Bank participates in a multiple employer
defined benefit pension plan that covers all employees that have attained 21
years of age and have completed one full year of service (consisting of 1,000
hours worked during the year). In general, the pension plan provides for
benefits payable monthly at retirement or normal retirement age 65 in an amount
equal to a percentage of the participant's average annual salary for the five
consecutive years of highest salary during his service with the Savings Bank,
multiplied by the number of his years of service, with a reduced level of
benefits in the event of early retirement prior to having attained age 65.
Payment of benefits under the pension plan generally will be made in
the form of a life annuity to an unmarried participant or in the form of a
qualified joint and survivor annuity to a married participant, although
alternative forms of benefits are available. The pension plan also provides a
death benefit payment, in the event of death prior to retirement.
For the years ended September 30, 1995, 1994 and 1993 pension expense
amounted to $60,000, $62,000 and $72,000, respectively. The amounts expended
as contributions to the pension plan for financial reporting purposes on behalf
of any particular individual or group of individuals participating in the
pension plan cannot be determined.
Thrift Plan. Effective October 1, 1996, the Bank began maintaining a
Thrift Plan for the benefit of employees who have been employed for at least
one year and who have attained the age of 21. The Thrift Plan is a
contributory defined contribution plan which is intended to qualify under
Section 401(k) of the Code. Participants may contribute to the Thrift Plan by
salary reduction up to 15% of annual compensation for the year. Such
contributions defer the employee's earnings up to a maximum of $9,500 in each
plan year, indexed annually. The Bank matches 50% of an employee's
contribution to the Thrift Plan up to 6% of an employee's compensation. An
employee is immediately vested in his or her contributions to the Thrift Plan
and is vested in the Bank's matching contributions after five years of service.
All funds contributed to the Thrift Plan are held in a trust fund, which are
<PAGE> 20
17
invested at the direction of the employee in five separate funds: a short term
government money market fund, a diversified equity portfolio fund, a government
bond fund, a fund that invests solely in companies that make up the Standard &
Poor's Stock Index, and a fund that invests solely in companies that make up
the Standard & Poor's MidCap Index.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
All loans or extensions of credit to executive officers and trustees
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.
The Savings Bank's policy provides that all loans made by the Savings
Bank to its trustees and officers are made in the ordinary course of business,
are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectibility or
present other unfavorable features. As of September 30, 1995, mortgage and
consumer loans to executive officers and trustees aggregated $278,000 or 2.6%
of the Savings Bank's equity as of such date. The Savings Bank believes that
such loans do not involve more than the normal risk of collectibility.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the first annual meeting of stockholders
of the Company, which is scheduled to be held in January 1997, must be received
at the principal executive offices of the Company, 438 Wood Street, Pittsburgh,
Pennsylvania 15222, Attention: Jess B. Mellor, Secretary, no later than
October 24, 1996. If such proposal is in compliance with all of the
requirements of Rule 14a-8 under the Exchange Act, it will be included in the
proxy statement and set forth on the form of proxy issued for such annual
meeting of stockholders. It is urged that any such proposals be sent certified
mail, return receipt requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Article 10.D. of the Company's
Amended and Restated Articles of Incorporation, which provides that business at
an annual meeting of stockholders must be (a) properly brought before the
meeting by or at the direction of the Board of Directors, or (b) otherwise
properly brought before the meeting by a stockholder. For business to be
properly brought before an annual meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of the
Company. To be timely, a stockholder's notice must be delivered to, or mailed
and received at, the principal executive offices of the Company not later than
90 days prior to the anniversary date of the immediately preceding annual
meeting of stockholders of the Company; provided, however,
<PAGE> 21
18
that with respect to the first scheduled annual meeting following the
completion of the conversion of the Savings Bank from mutual to stock form,
which is expected to be held on the fourth Thursday of January 1997, notice by
the stockholder must be so delivered or received no later than the close of
business on the fourth Thursday of October 1996, notwithstanding a
determination by the Company to schedule such annual meeting at a date later
than the fourth Thursday of January 1997. Such stockholder's notice shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting (a) a brief description of the proposal desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (b) the name and address, as they appear on the Company's books, of
the stockholder proposing such business and, to the extent known, any other
stockholders known by such stockholder to be supporting such proposal, (c) the
class and number of shares of the Company stock which are beneficially owned by
the stockholder on the date of such stockholder notice and, to the extent
known, by any other stockholders known by such stockholder to be supporting
such proposal on the date of such stockholder notice, and (d) any financial
interest of the stockholder in such proposal (other than interests which all
stockholders would have).
OTHER MATTERS
Management is not aware of any business to come before the Special
Meeting other than the matters described above in this Proxy Statement.
However, if any other matters should properly come before the meeting, it is
intended that the proxies solicited hereby will be voted with respect to those
other matters in accordance with the judgment of the persons voting the
proxies.
<PAGE> 22
19
The cost of the solicitation of proxies will be borne by the Company.
The Company has retained Regan & Associates, Inc., a professional proxy
solicitation firm, to assist in the solicitation of proxies. Such firm will be
paid a fee of $4,000, which amount will be renegotiated in the event of a proxy
contest, plus reimbursement for out-of-pocket expenses. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending the proxy materials to the
beneficial owners of the Company's Common Stock. In addition to solicitations
by mail, directors, officers and employees of the Company may solicit proxies
personally or by telephone without additional compensation.
By Order of the Board of Directors
/s/Jess B. Mellor
Jess B. Mellor
Secretary
September 13, 1996
<PAGE> 23
EXHIBIT A
PITTSBURGH HOME FINANCIAL CORP.
STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Pittsburgh Home Financial Corp. (the "Corporation") hereby
establishes this Stock Option Plan (the "Plan") upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability
of the Corporation and its Subsidiary Companies by providing Employees and
Non-Employee Directors with a proprietary interest in the Corporation as an
incentive to contribute to the success of the Corporation and its Subsidiary
Companies, and rewarding those Employees for outstanding performance and the
attainment of targeted goals. All Incentive Stock Options issued under this
Plan are intended to comply with the requirements of Section 422 of the Code,
and the regulations thereunder, and all provisions hereunder shall be read,
interpreted and applied with that purpose in mind.
ARTICLE III
DEFINITIONS
3.01 "Award" means an Option or Stock Appreciation Right granted
pursuant to the terms of this Plan.
3.02 "Board" means the Board of Directors of the Corporation or of
the Savings Bank.
3.03 "Change in Control of the Corporation" shall be deemed to have
occurred if: (i) any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Corporation and any trustee or other
fiduciary holding securities under any employee benefit plan of the
Corporation), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities; (ii) during any period of two
consecutive years (not including any period prior to the adoption of the Plan),
individuals who at the beginning of such period constitute the Board of
Directors, and any new director whose election by the Board of Directors or
nomination for election by the Corporation's stockholders was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of the two-year period or whose election or
nomination for election was
<PAGE> 24
previously so approved, cease for any reason to constitute at least a majority
of the Board of Directors; (iii) the stockholders of the Corporation approve a
merger or consolidation of the Corporation with any other corporation, other
than a merger or consolidation that would result in the voting securities of
the Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity) more than 50% of the combined voting power of the
voting securities of the Corporation outstanding immediately after such merger
or consolidation; or (iv) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the Corporation's
assets. If any of the events enumerated in clauses (i) through (iv) occur, the
Board shall determine the effective date of the Change in Control resulting
therefrom for purposes of the Plan.
3.04 "Code" means the Internal Revenue Code of 1986, as amended.
3.05 "Committee" means a committee of two or more directors
appointed by the Board pursuant to Article IV hereof, each of whom shall be a
Non-Employee Director.
3.06 "Common Stock" means shares of the common stock, $.01 par
value per share, of the Corporation.
3.07 "Disability" means any physical or mental impairment which
qualifies an Employee for disability benefits under the applicable long-term
disability plan maintained by the Corporation or a Subsidiary Company, or, if
no such plan applies, which would qualify such Employee for disability benefits
under the Federal Social Security System.
3.08 "Effective Date" means the day upon which the Board approves
this Plan.
3.09 "Employee" means any person who is employed by the Corporation
or a Subsidiary Company, or is an Officer of the Corporation or a Subsidiary
Company, but not including directors who are not also Officers of or otherwise
employed by the Corporation or a Subsidiary Company.
3.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
3.11 "Fair Market Value" shall be equal to the fair market value
per share of the Corporation's Common Stock on the date an Award is granted.
For purposes hereof, the Fair Market Value of a share of Common Stock shall be
the closing sale price of a share of Common Stock on the date in question (or,
if such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the
composite of the markets, if more than one) or national quotation system in
which such shares are then traded, or if no such closing prices are reported,
the mean between the high bid and low asked prices that day on the principal
market or national
A-2
<PAGE> 25
quotation system then in use, or if no such quotations are available, the price
furnished by a professional securities dealer making a market in such shares
selected by the Committee.
3.12 "Incentive Stock Option" means any Option granted under this
Plan which the Board intends (at the time it is granted) to be an incentive
stock option within the meaning of Section 422 of the Code or any successor
thereto.
3.13 "Non-Employee Director" means a member of the Board who is not
an Officer or Employee of the Corporation or any Subsidiary Company and shall
include any individual who, at any time after the date of adoption of the Plan,
services the Board in an advisory or emeritus capacity.
3.14 "Non-Qualified Option" means any Option granted under this
Plan which is not an Incentive Stock Option.
3.15 "Offering" means the offering of Common Stock to the public
pursuant to a Plan of Conversion adopted by the Savings Bank.
3.16 "Officer" means an Employee whose position in the Corporation
or Subsidiary Company is that of a corporate officer, as determined by the
Board.
3.17 "Option" means a right granted under this Plan to purchase
Common Stock.
3.18 "Optionee" means an Employee or Non-Employee Director or
former Employee or Non-Employee Director to whom an Option is granted under the
Plan.
3.19 "Retirement" means a termination of employment upon or after
attainment of age sixty-five (65) or such earlier age as may be specified in
any applicable plans or policies maintained by the Corporation or a Subsidiary
Company.
3.20 "Savings Bank" means Pittsburgh Home Savings Bank, the
wholly-owned subsidiary of the Corporation.
3.21 "Stock Appreciation Right" means a right to surrender an
Option in consideration for a payment by the Corporation in cash and/or Common
Stock, as provided in the discretion of the Committee in accordance with
Section 8.11.
3.22 "Subsidiary Companies" means those subsidiaries of the
Corporation, including the Savings Bank, which meet the definition of
"subsidiary corporations" set forth in Section 425(f) of the Code, at the time
of granting of the Option in question.
A-3
<PAGE> 26
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 DUTIES OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority to adopt,
amend and rescind such rules, regulations and procedures as, in its opinion,
may be advisable in the administration of the Plan, including, without
limitation, rules, regulations and procedures which (i) deal with satisfaction
of an Optionee's tax withholding obligation pursuant to Section 12.02 hereof,
(ii) include arrangements to facilitate the Optionee's ability to borrow funds
for payment of the exercise or purchase price of an Award, if applicable, from
securities brokers and dealers, and (iii) include arrangements which provide
for the payment of some or all of such exercise or purchase price by delivery
of previously-owned shares of Common Stock or other property and/or by
withholding some of the shares of Common Stock which are being acquired. The
interpretation and construction by the Committee of any provisions of the Plan,
any rule, regulation or procedure adopted by it pursuant thereto or of any
Award shall be final and binding in the absence of action by the Board of
Directors.
4.02 APPOINTMENT AND OPERATION OF THE COMMITTEE. The members of
the Committee shall be appointed by, and will serve at the pleasure of, the
Board. The Board from time to time may remove members from, or add members to,
the Committee, provided the Committee shall continue to consist of two or more
members of the Board, each of whom shall be a Non-Employee Director. The
Committee shall act by vote or written consent of a majority of its members.
Subject to the express provisions and limitations of the Plan, the Committee
may adopt such rules, regulations and procedures as it deems appropriate for
the conduct of its affairs. It may appoint one of its members to be chairman
and any person, whether or not a member, to be its secretary or agent. The
Committee shall report its actions and decisions to the Board at appropriate
times but in no event less than one time per calendar year.
4.03 REVOCATION FOR MISCONDUCT. The Board of Directors or the
Committee may by resolution immediately revoke, rescind and terminate any
Option, or portion thereof, to the extent not yet vested, or any Stock
Appreciation Right, to the extent not yet exercised, previously granted or
awarded under this Plan to an Employee who is discharged from the employ of the
Corporation or a Subsidiary Company for cause, which, for purposes hereof,
shall mean termination because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order. Options granted to a Non-Employee Director who
is removed for cause pursuant to the Corporation's Articles of Incorporation
shall terminate as of the effective date of such removal.
A-4
<PAGE> 27
4.04 LIMITATION ON LIABILITY. Neither the members of the Board of
Directors nor any member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan, any rule, regulation
or procedure adopted pursuant thereto or for any Awards granted hereunder. If
any members of the Board of Directors or a member of the Committee is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of anything done or not done by him in such capacity
under or with respect to the Plan, the Corporation shall, subject to the
requirements of applicable laws and regulations, indemnify such member against
all liabilities and expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in the best interests of the
Corporation and its Subsidiary Companies and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
4.05 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted
hereunder shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as may
be required. The Corporation shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any federal or state law or any rule or regulation
of any government body, which the Corporation shall, in its sole discretion,
determine to be necessary or advisable. Moreover, no Option or Stock
Appreciation Right may be exercised if such exercise would be contrary to
applicable laws and regulations.
4.06 RESTRICTIONS ON TRANSFER. The Corporation may place a legend
upon any certificate representing shares acquired pursuant to an Award granted
hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.
ARTICLE V
ELIGIBILITY
Awards may be granted to such Employees or Non-Employee Directors of
the Corporation and its Subsidiary Companies as may be designated from time to
time by the Board of Directors or the Committee. Awards may not be granted to
individuals who are not Employees or Non-Employee Directors of either the
Corporation or its Subsidiary Companies. Non-Employee Directors shall be
eligible to receive only Non-Qualified Options.
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ARTICLE VI
COMMON STOCK COVERED BY THE PLAN
6.01 OPTION SHARES. The aggregate number of shares of Common Stock
which may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 218,212 shares, which is equal to 10.0% of the shares of
Common Stock issued in the Offering. None of such shares shall be the subject
of more than one Award at any time, but if an Option as to any shares is
surrendered before exercise, or expires or terminates for any reason without
having been exercised in full, or for any other reason ceases to be
exercisable, the number of shares covered thereby shall again become available
for grant under the Plan as if no Awards had been previously granted with
respect to such shares. Notwithstanding the foregoing, if an Option is
surrendered in connection with the exercise of a Stock Appreciation Right, the
number of shares covered thereby shall not be available for grant under the
Plan. During the time this Plan remains in effect, grants to each Employee and
each Non-Employee Director shall not exceed 25% and 5% of the shares of Common
Stock available under the Plan, respectively.
6.02 SOURCE OF SHARES. The shares of Common Stock issued under the
Plan may be authorized but unissued shares, treasury shares, shares purchased
by the Corporation on the open market or from private sources for use under the
Plan, or, if applicable, shares held in a grantor trust created by the
Corporation.
ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
The Board of Directors or the Committee shall, in its discretion,
determine from time to time which Employees and Non-Employee Directors will be
granted Awards under the Plan, the number of shares of Common Stock subject to
each Award, whether each Option will be an Incentive Stock Option or a
Non-Qualified Stock Option and the exercise price of an Option. In making
determinations with respect to Employees there shall be taken into account the
duties, responsibilities and performance of each respective Employee, his
present and potential contributions to the growth and success of the
Corporation, his salary and such other factors as the Board of Directors or the
Committee shall deem relevant to accomplishing the purposes of the Plan.
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ARTICLE VIII
OPTIONS AND STOCK APPRECIATION RIGHTS
Each Option granted hereunder shall be on the following terms and
conditions:
8.01 STOCK OPTION AGREEMENT. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which
shall set forth the total number of shares of Common Stock to which it
pertains, the exercise price, whether it is a Non-Qualified Option or an
Incentive Stock Option, and such other terms, conditions, restrictions and
privileges as the Board of Directors or the Committee in each instance shall
deem appropriate, provided they are not inconsistent with the terms, conditions
and provisions of this Plan. Each Optionee shall receive a copy of his
executed Stock Option Agreement.
8.02 AWARDS TO EMPLOYEES AND NON-EMPLOYEE DIRECTORS. Specific
Awards to Employees and Non-Employee Directors shall be made to such persons
and in such amounts as are determined by the Board of Directors or the
Committee. However, Awards up to 65,463 shares (or 30% of the number of shares
available under this Plan) shall be made to Non-Employee Directors in the
aggregate and no individual Non-Employee Director may receive Awards in excess
of 10,910 shares (or 5% of the number of shares available under this Plan).
8.03 OPTION EXERCISE PRICE.
(a) INCENTIVE STOCK OPTIONS. The per share price at
which the subject Common Stock may be purchased upon exercise of an Incentive
Stock Option shall be no less than one hundred percent (100%) of the Fair
Market Value of a share of Common Stock at the time such Incentive Stock Option
is granted, except as provided in Section 8.10(b), and subject to any
applicable adjustment pursuant to Article IX hereof.
(b) NON-QUALIFIED OPTIONS. The per share price at which
the subject Common Stock may be purchased upon exercise of a Non-Qualified
Option shall be no less than one hundred percent (100%) of the Fair Market
Value of a share of Common Stock at the time such Non-Qualified Option is
granted, and subject to any applicable adjustment pursuant to Article IX
hereof.
8.04 VESTING AND EXERCISE OF OPTIONS.
(a) GENERAL RULES. Incentive Stock Options and
Non-Qualified Options granted hereunder shall become vested and exercisable at
the rate of 20% per year on each annual anniversary of the date the Option was
granted, and the right to exercise shall be cumulative. Notwithstanding the
foregoing, no vesting shall occur on or after an Employee's employment with the
Corporation and all Subsidiary Companies is terminated for any reason other
than his death or Disability. In determining the number of shares of Common
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Stock with respect to which Options are vested and/or exercisable, fractional
shares will be rounded up to the nearest whole number if the fraction is 0.5 or
higher, and down if it is less.
(b) ACCELERATED VESTING. Unless the Committee shall
specifically state otherwise at the time an Option is granted, all Options
granted hereunder shall become vested and exercisable in full on the date an
Optionee terminates his employment with or service to the Corporation or a
Subsidiary Company because of his death or Disability. All options hereunder
shall become immediately vested and exercisable in full on the date an Optionee
terminates his employment or service to the Corporation or a Subsidiary Company
due to Retirement or as the result of a Change in Control of the Corporation
if, as of such date of such Retirement or Change in Control of the Corporation,
such treatment is either authorized or is not prohibited by applicable laws and
regulations.
8.05 DURATION OF OPTIONS.
(a) GENERAL RULE. Except as provided in Sections 8.05(b)
and 8.10, each Option or portion thereof granted to Employees and Non-Employee
Directors shall be exercisable at any time on or after it vests and becomes
exercisable until the earlier of (i) ten (10) years after its date of grant or
(ii) three (3) months after the date on which the Optionee ceases to be
employed (or in the service of the Board of Directors in the case of
Non-Employee Directors) by the Corporation and all Subsidiary Companies, unless
the Board of Directors or the Committee in its discretion decides at the time
of grant or thereafter to extend such period of exercise upon termination of
employment or service from three (3) months to a period not exceeding one (1)
year.
(b) EXCEPTIONS. If an Employee dies while in the employ
of the Corporation or a Subsidiary Company or terminates employment with the
Corporation or a Subsidiary Company as a result of Disability without having
fully exercised his Options, the Optionee or the executors, administrators,
legatees or distributees of his estate shall have the right, during the
twelve-month period following the earlier of his death or termination due to
Disability, to exercise such Options. If a Non-Employee Director dies while
serving as a Non-Employee Director or terminates his service to the Corporation
or a Subsidiary Company as a result of Disability without having fully
exercised his Options, the Non-Employee Director or the executors,
administrators, legatees or distributees of his estate shall have the right,
during the twelve-month period following the earlier of his death or
termination due to Disability, to exercise such Options. In no event, however,
shall any Option be exercisable more than ten (10) years from the date it was
granted. In the event of Retirement, an Employee or Non-Employee Director
shall be entitled to the same time period set forth above in this Section
8.05(b) to exercise an Option if, as of the date of such Retirement, such
treatment is either authorized or is not prohibited by applicable laws and
regulations.
8.06 NONASSIGNABILITY. Options shall not be transferable by an
Optionee except by will or the laws of descent or distribution, and during an
Optionee's lifetime shall be exercisable only by such Optionee or the
Optionee's guardian or legal representative.
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Notwithstanding the foregoing, or any other provision of this Plan, an Optionee
who holds Non-Qualified Options may transfer such Options to his or her spouse,
lineal ascendants, lineal descendants, or to a duly established trust for the
benefit of one or more of these individuals. Options so transferred may
thereafter be transferred only to the Optionee who originally received the
grant or to an individual or trust to whom the Optionee could have initially
transferred the Option pursuant to this Section 8.06. Options which are
transferred pursuant to this Section 8.06 shall be exercisable by the
transferee according to the same terms and conditions as applied to the
Optionee.
8.07 MANNER OF EXERCISE. Options may be exercised in part or in
whole and at one time or from time to time. The procedures for exercise shall
be set forth in the written Stock Option Agreement provided pursuant to Section
8.01.
8.08 PAYMENT FOR SHARES. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of any Option shall
be made to the Corporation upon exercise of such Option. All shares sold under
the Plan shall be fully paid and nonassessable. Payment for shares may be made
by the Optionee in cash or, at the discretion of the Board of Directors or the
Committee in the case of Awards to Employees, by delivering shares of Common
Stock (including shares acquired pursuant to the exercise of an Option) or
other property equal in Fair Market Value to the purchase price of the shares
to be acquired pursuant to the Option, by withholding some of the shares of
Common Stock which are being purchased upon exercise of an Option, or any
combination of the foregoing.
8.09 VOTING AND DIVIDEND RIGHTS. No Optionee shall have any voting
or dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded
on the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of such Option.
8.10 ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS. All
Options issued under the Plan as Incentive Stock Options will be subject, in
addition to the terms detailed in Sections 8.01 to 8.09 above, to those
contained in this Section 8.10.
(a) Notwithstanding any contrary provisions contained
elsewhere in this Plan and as long as required by Section 422 of the Code, the
aggregate Fair Market Value, determined as of the time an Incentive Stock
Option is granted, of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by the Optionee during any calendar
year, under this Plan and stock options that satisfy the requirements of
Section 422 of the Code under any other stock option plan or plans maintained
by the Corporation (or any parent or Subsidiary Company), shall not exceed
$100,000.
(b) LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at
which shares of Common Stock may be purchased upon exercise of an Incentive
Stock Option granted to
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an individual who, at the time such Incentive Stock Option is granted, owns,
directly or indirectly, more than ten percent (10%) of the total combined
voting power of all classes of stock issued to stockholders of the Corporation
or any Subsidiary Company, shall be no less than one hundred and ten percent
(110%) of the Fair Market Value of a share of the Common Stock of the
Corporation at the time of grant, and such Incentive Stock Option shall by its
terms not be exercisable after the earlier of the date determined under Section
8.04 or the expiration of five (5) years from the date such Incentive Stock
Option is granted.
(c) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. An
Optionee shall immediately notify the Corporation in writing of any sale,
transfer, assignment or other disposition (or action constituting a
disqualifying disposition within the meaning of Section 421 of the Code) of any
shares of Common Stock acquired through exercise of an Incentive Stock Option
within two (2) years after the grant of such Incentive Stock Option or within
one (1) year after the acquisition of such shares, setting forth the date and
manner of disposition, the number of shares disposed of and the price at which
such shares were disposed of. The Corporation shall be entitled to withhold
from any compensation or other payments then or thereafter due to the Optionee
such amounts as may be necessary to satisfy any withholding requirements of
federal or state law or regulation and, further, to collect from the Optionee
any additional amounts which may be required for such purpose. The Committee
may, in its discretion, require shares of Common Stock acquired by an Optionee
upon exercise of an Incentive Stock Option to be held in an escrow arrangement
for the purpose of enabling compliance with the provisions of this Section
8.10(c).
8.11 STOCK APPRECIATION RIGHTS.
(a) GENERAL TERMS AND CONDITIONS. The Board of Directors
or the Committee may, but shall not be obligated to, authorize the Corporation,
on such terms and conditions as it deems appropriate in each case, to grant
rights to Optionees to surrender an exercisable Option, or any portion thereof,
in consideration for the payment by the Corporation of an amount equal to the
excess of the Fair Market Value of the shares of Common Stock subject to the
Option, or portion thereof, surrendered over the exercise price of the Option
with respect to such shares (any such authorized surrender and payment being
hereinafter referred to as a "Stock Appreciation Right"). Such payment, at the
discretion of the Board of Directors or the Committee, may be made in shares of
Common Stock valued at the then Fair Market Value thereof, or in cash, or
partly in cash and partly in shares of Common Stock.
The terms and conditions set with respect to a Stock Appreciation
Right may include (without limitation), subject to other provisions of this
Section 8.11 and the Plan, the period during which, date by which or event upon
which the Stock Appreciation Right may be exercised (which shall be on the same
terms as the Option to which it relates pursuant to Section 8.04 hereunder);
the method for valuing shares of Common Stock for purposes of this Section
8.11; a ceiling on the amount of consideration which the Corporation may pay in
connection with exercise and cancellation of the Stock Appreciation Right; and
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arrangements for income tax withholding. The Board of Directors or the
Committee shall have complete discretion to determine whether, when and to whom
Stock Appreciation Rights may be granted. Notwithstanding the foregoing, the
Corporation may not permit the exercise of a Stock Appreciation Right issued
pursuant to this Plan until the Corporation has been subject to the reporting
requirements of Section 13 of the Exchange Act for a period of at least one
year prior to the exercise of any such Stock Appreciation Right and until a
Stock Appreciation Right issued pursuant to this Plan has been outstanding for
at least six months from the date of grant.
(b) TIME LIMITATIONS. If a holder of a Stock
Appreciation Right terminates service with the Corporation, the Stock
Appreciation Right may be exercised only within the period, if any, within
which the Option to which it relates may be exercised. Notwithstanding the
foregoing, any election by an Optionee to exercise the Stock Appreciation
Rights provided in this Plan shall be made during the period beginning on the
third business day following the release for publication of quarterly or annual
financial information required to be prepared and disseminated by the
Corporation pursuant to the requirements of the Exchange Act and ending on the
twelfth business day following such date. The required release of information
shall be deemed to have been satisfied when the specified financial data
appears on or in a wire service, financial news service or newspaper of general
circulation or is otherwise first made publicly available.
(c) EFFECTS OF EXERCISE OF STOCK APPRECIATION RIGHTS OR
OPTIONS. Upon the exercise of a Stock Appreciation Right, the number of shares
of Common Stock available under the Option to which it relates shall decrease
by a number equal to the number of shares for which the Stock Appreciation
Right was exercised. Upon the exercise of an Option, any related Stock
Appreciation Right shall terminate as to any number of shares of Common Stock
subject to the Stock Appreciation Right that exceeds the total number of shares
for which the Option remains unexercised.
(d) TIME OF GRANT. A Stock Appreciation Right may be
granted concurrently with the Option to which it relates or at any time
thereafter prior to the exercise or expiration of such Option.
(e) NON-TRANSFERABLE. The holder of a Stock Appreciation
Right may not transfer or assign the Stock Appreciation Right otherwise than by
will or in accordance with the laws of descent and distribution, and during a
holder's lifetime a Stock Appreciation Right may be exercisable only by the
holder.
ARTICLE IX
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any Award relates and the
exercise price per share of
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Common Stock under any Option shall be proportionately adjusted for any
increase or decrease in the total number of outstanding shares of Common Stock
issued subsequent to the effective date of this Plan resulting from a split,
subdivision or consolidation of shares or any other capital adjustment, the
payment of a stock dividend, or other increase or decrease in such shares
effected without receipt or payment of consideration by the Corporation. If,
upon a merger, consolidation, reorganization, liquidation, recapitalization or
the like of the Corporation, the shares of the Corporation's Common Stock shall
be exchanged for other securities of the Corporation or of another corporation,
each recipient of an Award shall be entitled, subject to the conditions herein
stated, to purchase or acquire such number of shares of Common Stock or amount
of other securities of the Corporation or such other corporation as were
exchangeable for the number of shares of Common Stock of the Corporation which
such optionees would have been entitled to purchase or acquire except for such
action, and appropriate adjustments shall be made to the per share exercise
price of outstanding Options. Notwithstanding any provision to the contrary,
the exercise price of shares subject to outstanding Awards may be
proportionately adjusted upon the payment of a special large and nonrecurring
dividend that has the effect of a return of capital to the stockholders.
ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate or amend the Plan
with respect to any shares of Common Stock as to which Awards have not been
granted, subject to any applicable regulatory requirements and any required
stockholder approval or any stockholder approval which the Board may deem to be
advisable for any reason, such as for the purpose of obtaining or retaining any
statutory or regulatory benefits under tax, securities or other laws or
satisfying any applicable stock exchange listing requirements. The Board may
not, without the consent of the holder of an Award, alter or impair any Award
previously granted or awarded under this Plan as specifically authorized
herein.
ARTICLE XI
EMPLOYMENT RIGHTS
Neither the Plan nor the grant of any Awards hereunder nor any action
taken by the Committee or the Board in connection with the Plan shall create
any right on the part of any Employee or Non-Employee Director of the
Corporation or a Subsidiary Company to continue in such capacity.
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ARTICLE XII
WITHHOLDING
12.01 TAX WITHHOLDING. The Corporation may withhold from any cash
payment made under this Plan sufficient amounts to cover any applicable
withholding and employment taxes, and if the amount of such cash payment is
insufficient, the Corporation may require the Optionee to pay to the
Corporation the amount required to be withheld as a condition to delivering the
shares acquired pursuant to an Award. The Corporation also may withhold or
collect amounts with respect to a disqualifying disposition of shares of Common
Stock acquired pursuant to the exercise of an Incentive Stock Option, as
provided in Section 8.10(c).
12.02 METHODS OF TAX WITHHOLDING. The Board of Directors or the
Committee is authorized to adopt rules, regulations or procedures which provide
for the satisfaction of an Optionee's tax withholding obligation by the
retention of shares of Common Stock to which the Employee would otherwise be
entitled pursuant to an Award and/or by the Optionee's delivery of
previously-owned shares of Common Stock or other property.
ARTICLE XIII
EFFECTIVE DATE OF THE PLAN; TERM
13.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective
on the Effective Date, and Awards may be granted hereunder as of or after the
Effective Date and prior to the termination of the Plan, provided that no
Incentive Stock Option issued pursuant to this Plan shall qualify as such
unless this Plan is approved by the requisite vote of the holders of the
outstanding voting shares of the Corporation at a meeting of stockholders of
the Corporation held within twelve (12) months of the Effective Date.
Notwithstanding the foregoing or anything to the contrary in this Plan, the
implementation of this Plan and any Awards granted pursuant hereto shall be
subject to the receipt of any applicable regulatory approvals or non-objections
and to the approval of the Corporation's stockholders.
13.02 TERM OF PLAN. Unless sooner terminated, this Plan shall
remain in effect for a period of ten (10) years ending on the tenth anniversary
of the Effective Date. Termination of the Plan shall not affect any Awards
previously granted and such Awards shall remain valid and in effect until they
have been fully exercised or earned, are surrendered or by their terms expire
or are forfeited.
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ARTICLE XIV
MISCELLANEOUS
14.01 GOVERNING LAW. To the extent not governed by federal law,
this Plan shall be construed under the laws of the Commonwealth of
Pennsylvania.
14.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
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EXHIBIT B
PITTSBURGH HOME FINANCIAL CORP.
RECOGNITION AND RETENTION PLAN AND TRUST AGREEMENT
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Pittsburgh Home Financial Corp. (the "Corporation") hereby
establishes a Recognition and Retention Plan (the "Plan") and Trust (the
"Trust") upon the terms and conditions hereinafter stated in this Recognition
and Retention Plan and Trust Agreement (the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the
Trust assets existing on the date of this Agreement and all additions and
accretions thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to retain personnel of experience
and ability in key positions by providing Employees and Non-Employee Directors
of the Corporation and of Pittsburgh Home Savings Bank (the "Savings Bank")
with a proprietary interest in the Corporation as compensation for their
contributions to the Corporation, the Savings Bank, and any other Subsidiaries
and as an incentive to make such contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Agreement with an
initial capital letter, unless the context clearly indicates otherwise, shall
have the meanings set forth below. Wherever appropriate, the masculine pronouns
shall include the feminine pronouns and the singular shall include the plural.
3.01 "Beneficiary" means the person or persons designated by a
Recipient to receive any benefits payable under the Plan in the event of such
Recipient's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time
to time by similar written notice to the Committee. In the absence of a
written designation, the Beneficiary shall be the Recipient's surviving spouse,
if any, or if none, his estate.
3.02 "Board" means the Board of Directors of the Corporation or of
the Savings Bank.
<PAGE> 38
3.03 "Change of Control of the Corporation"shall be deemed to have
occurred if: (i) any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Corporation and any trustee or other
fiduciary holding securities under any employee benefit plan of the
Corporation), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities; (ii) during any period of two
consecutive years (not including any period prior to the adoption of the Plan),
individuals who at the beginning of such period constitute the Board of
Directors, and any new director whose election by the Board of Directors or
nomination for election by the Corporation's stockholders was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors; (iii) the
stockholders of the Corporation approve a merger or consolidation of the
Corporation with any other corporation, other than a merger or consolidation
that would result in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Corporation outstanding immediately after such merger or consolidation; or
(iv) the stockholders of the Corporation approve a plan of complete liquidation
of the Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's assets. If any of
the events enumerated in clauses (i) through (iv) occur, the Board shall
determine the effective date of the Change in Control resulting therefrom for
purposes of the Plan.
3.04 "Code" means the Internal Revenue Code of 1986, as amended.
3.05 "Committee" means the committee appointed by the Board
pursuant to Article IV hereof.
3.06 "Common Stock" means shares of the common stock, $.01 par
value per share, of the Corporation.
3.07 "Disability" means any physical or mental impairment which
qualifies an Employee for disability benefits under the applicable long-term
disability plan maintained by the Corporation or any Subsidiary or, if no such
plan applies, which would qualify such Employee for disability benefits under
the Federal Social Security System.
3.08 "Effective Date" means the day upon which the Board approves
this Plan.
3.09 "Employee" means any person who is employed by the
Corporation, the Savings Bank, or any Subsidiary, or is an officer of the
Corporation, the Savings Bank, or any Subsidiary, including officers or other
employees who may be directors of the Corporation.
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3.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
3.11 "Non-Employee Director" means a member of the Board who is not
an Employee, and shall include any individual who, at any time after the date
of adoption of the Plan, serves the Board in an advisory or emeritus capacity.
3.12 "Plan Shares" or "Shares" means shares of Common Stock held in
the Trust which may be distributed to a Recipient pursuant to the Plan.
3.13 "Plan Share Award" or "Award" means a right granted under this
Plan to receive a distribution of Plan Shares upon completion of the service
requirements described in Article VII.
3.14 "Recipient" means an Employee or Non-Employee Director who
receives a Plan Share Award under the Plan.
3.15 "Retirement" means a termination of employment upon or after
attainment of age sixty-five (65) or such earlier age as may be specified in
applicable plans or policies of the Corporation, a Subsidiary or in a
Recipient's Plan Share Award.
3.16 "Subsidiary" means Pittsburgh Home Savings Bank and any other
subsidiaries of the Corporation or the Savings Bank which, with the consent of
the Board, agree to participate in this Plan.
3.17 "Savings Bank" means Pittsburgh Home Savings Bank, the
wholly-owned subsidiary of the Corporation.
3.18 "Trustee" means such firm, entity or persons approved by the
Board of Directors to hold legal title to the Plan for the purposes set forth
herein.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, which shall consist of two or more members of the
Board, each of whom shall be a Non-Employee Director. The Committee shall have
all of the powers allocated to it in this and other Sections of the Plan. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Plan Share Award granted hereunder shall be final and binding in the
absence of action by the Board of Directors. The Committee shall act by vote
or written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. The Committee shall report its actions and decisions with respect to
the Plan to the Board at appropriate times, but in no event less than one time
per calendar year.
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4.02 ROLE OF THE BOARD. The members of the Committee and the
Trustee shall be appointed or approved by, and will serve at the pleasure of,
the Board. The Board may in its discretion from time to time remove members
from, or add members to, the Committee, and may remove or replace the Trustee,
provided that any directors who are selected as members of the Committee shall
be Non-Employee Directors.
4.03 LIMITATION ON LIABILITY. No member of the Board or the
Committee shall be liable for any determination made in good faith with respect
to the Plan or any Plan Shares or Plan Share Awards granted under it. If a
member of the Board or the Committee is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of anything
done or not done by him in such capacity under or with respect to the Plan, the
Corporation shall, subject to the requirements of applicable laws and
regulations, indemnify such member against all liabilities and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in the best interests of the Corporation and any Subsidiaries and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
4.04 COMPLIANCE WITH LAWS AND REGULATIONS. All Awards granted
hereunder shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as may
be required.
ARTICLE V
CONTRIBUTIONS
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall determine
the amount (or the method of computing the amount) and timing of any
contributions by the Corporation and any Subsidiaries to the Trust established
under this Plan. Such amounts may be paid in cash or in shares of Common Stock
and shall be paid to the Trust at the designated time of contribution. No
contributions by Employees or Directors shall be permitted.
5.02 INVESTMENT OF TRUST ASSETS; NUMBER OF PLAN SHARES. Subject to
Section 8.02 hereof, the Trustee shall invest all of the Trust's assets
primarily in Common Stock. The aggregate number of Plan Shares available for
distribution pursuant to this Plan shall be 87,285 shares of Common Stock,
which shares shall be purchased from the Corporation and/or from stockholders
thereof by the Trust with funds contributed by the Corporation. During the
time this Plan remains in effect, Awards to each Employee and each Non-Employee
Director shall not exceed 25% and 5% of the shares of Common Stock available
under the Plan, respectively.
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ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 AWARDS TO NON-EMPLOYEE DIRECTORS. Plan Share Awards to
Non-Employee Directors shall be made to such persons and in such amounts as
determined by the Board of Directors of the Committee. However, Plan Share
Awards up to 26,185 shares (or 30% of the number of shares available under this
Plan) shall be made to Non-Employee Directors in the aggregate and no
individual Non-Employee Director may receive Plan Share Awards in excess of
4,364 shares (or 5% of the number of shares available under this Plan). In the
event of a forfeiture of the right to any Shares subject to an Award, such
forfeited Shares shall be reallocated on the first day of the month following
such forfeiture to the remaining Non-Employee Directors who are eligible to
receive such re-allocation by dividing the number of forfeited shares of Common
Stock by such remaining number of Non-Employee Directors at such time.
6.02 AWARDS TO EMPLOYEES. Plan Share Awards may be made to such
Employees as may be selected by the Board of Directors or the Committee. In
selecting those Employees to whom Plan Share Awards may be granted and the
number of Shares covered by such Awards, the Committee shall consider the
duties, responsibilities and performance of each respective Employee, his
present and potential contributions to the growth and success of the
Corporation, his salary and such other factors as shall be deemed relevant to
accomplishing the purposes of the Plan. The Board of Directors or the
Committee may but shall not be required to request the written recommendation
of the Chief Executive Officer of the Corporation other than with respect to
Plan Share Awards to be granted to him.
6.03 FORM OF ALLOCATION. As promptly as practicable after a
determination is made pursuant to Sections 6.01 or 6.02 that a Plan Share Award
is to be issued, the Board of Directors or the Committee shall notify the
Recipient in writing of the grant of the Award, the number of Plan Shares
covered by the Award, and the terms upon which the Plan Shares subject to the
Award shall be distributed to the Recipient. The date on which the Board of
Directors or the Committee makes the determination with respect to Plan Share
Awards shall be considered the date of grant of the Plan Share Award. The
Board of Directors or the Committee shall maintain records as to all grants of
Plan Share Awards under the Plan.
6.04 ALLOCATIONS NOT REQUIRED TO ANY SPECIFIC EMPLOYEE.
Notwithstanding anything to the contrary in Section 6.02 hereof, no Employee
shall have any right or entitlement to receive a Plan Share Award hereunder,
such Awards being at the total discretion of the Board of Directors or the
Committee.
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ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) GENERAL RULES. Subject to the terms hereof, Plan
Share Awards shall be earned by a Recipient at the rate of twenty percent (20%)
of the aggregate number of Shares covered by the Award as of each annual
anniversary of the date of grant of the Award. If the employment of an
Employee or service as a Non-Employee Director is terminated prior to the fifth
(5th) annual anniversary of the date of grant of a Plan Share Award for any
reason (except as specifically provided in subsections (b), (c) and (d) below),
the Recipient shall forfeit the right to any Shares subject to the Award which
have not theretofore been earned. In the event of a forfeiture of the right to
any Shares subject to an Award by an Employee, such forfeited Shares shall
become available for allocation pursuant to Section 6.02 hereof as if no Award
had been previously granted with respect to such Shares. No fractional shares
shall be distributed pursuant to this Plan.
(b) EXCEPTION FOR TERMINATIONS DUE TO DEATH, DISABILITY
OR RETIREMENT. Notwithstanding the general rule contained in Section 7.01(a),
all Plan Shares subject to a Plan Share Award held by a Recipient whose
employment with or service to the Corporation or any Subsidiary terminates due
to death or Disability shall be deemed earned as of the Recipient's last day of
employment with or service to the Corporation or any Subsidiary and shall be
distributed as soon as practicable thereafter; provided, however, that Awards
shall be distributed in accordance with Section 7.03(a). In addition, in the
event that a Recipient's employment with or service to the Corporation or any
Subsidiary terminates due to Retirement, all Plan Shares subject to a Plan
Share Award held by a Recipient shall be deemed earned as of the Recipient's
last day of employment with or service to the Corporation or any Subsidiary and
shall be distributed as soon as practicable thereafter; provided, however, that
Awards shall be distributed in accordance with Section 7.03(a) and, as of the
date of such Retirement, such treatment is either authorized or is not
prohibited by applicable laws and regulations.
(c) EXCEPTION FOR TERMINATIONS AFTER A CHANGE IN CONTROL
OF THE CORPORATION. Notwithstanding the general rule contained in Section
7.01(a), all Plan Shares subject to a Plan Share Award held by a Recipient
shall be deemed to be earned in the event of a Change in Control of the
Corporation if, as of the date of such Change in Control of the Corporation,
such treatment is either authorized or is not prohibited by applicable laws and
regulations.
(d) REVOCATION FOR MISCONDUCT. Notwithstanding anything
hereinafter to the contrary, the Board may by resolution immediately revoke,
rescind and terminate any Plan Share Award, or portion thereof, previously
awarded under this Plan, to the extent Plan Shares have not been distributed
hereunder, whether or not yet earned, in the case of an Employee who is
discharged from the employ of the Corporation or any Subsidiary for cause
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(as hereinafter defined). Termination for cause shall mean termination because
of the Employee's personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses) or final cease-and-desist order. Plan
Share Awards granted to a Non-Employee Director who is removed for cause
pursuant to the Corporation's Articles of Incorporation shall terminate as of
the effective date of such removal.
7.02 DISTRIBUTION OF DIVIDENDS. Any cash dividends (including
special large and nonrecurring dividends including one that has the effect of a
return of capital to the Corporation's stockholders) or stock dividends
declared in respect of each unvested Plan Share Award will be held by the Trust
for the benefit of the Recipient on whose behalf such Plan Share Award is then
held by the Trust and such dividends, including any interest thereon, will be
paid out proportionately by the Trust to the Recipient thereof as soon as
practicable after the Plan Share Awards become earned. Any cash dividends or
stock dividends declared in respect of each vested Plan Share held by the Trust
will be paid by the Trust, as soon as practicable after the Trust's receipt
thereof, to the Recipient on whose behalf such Plan Share is then held by the
Trust.
7.03 DISTRIBUTION OF PLAN SHARES.
(a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Plan Shares
shall be distributed to the Recipient or his Beneficiary, as the case may be,
as soon as practicable after they have been earned.
(b) FORM OF DISTRIBUTIONS. All Plan Shares, together
with any Shares representing stock dividends, shall be distributed in the form
of Common Stock. One share of Common Stock shall be given for each Plan Share
earned and distributable. Payments representing cash dividends shall be made
in cash.
(c) WITHHOLDING. The Trustee may withhold from any cash
payment or Common Stock distribution made under this Plan sufficient amounts to
cover any applicable withholding and employment taxes, and if the amount of a
cash payment is insufficient, the Trustee may require the Recipient or
Beneficiary to pay to the Trustee the amount required to be withheld as a
condition of delivering the Plan Shares. The Trustee shall pay over to the
Corporation or any Subsidiary which employs or employed such Recipient any such
amount withheld from or paid by the Recipient or Beneficiary.
(d) RESTRICTIONS ON SELLING OF PLAN SHARES. Plan Share
Awards may not be sold, assigned, pledged or otherwise disposed of prior to the
time that they are earned and distributed pursuant to the terms of this Plan.
Following distribution, the Board of Directors or the Committee may require the
Recipient or his Beneficiary, as the case may be, to agree not to sell or
otherwise dispose of his distributed Plan Shares except in accordance with all
then applicable federal and state securities laws, and the Board of Directors
or the
B-7
<PAGE> 44
Committee may cause a legend to be placed on the stock certificate(s)
representing the distributed Plan Shares in order to restrict the transfer of
the distributed Plan Shares for such period of time or under such circumstances
as the Board of Directors or the Committee, upon the advice of counsel, may
deem appropriate.
7.04 VOTING OF PLAN SHARES. All Plan Shares which have not yet
been earned and allocated shall be voted by the Trustee in its sole discretion.
ARTICLE VIII
TRUST
8.01 TRUST. The Trustee shall receive, hold, administer, invest
and make distributions and disbursements from the Trust in accordance with the
provisions of the Plan and Trust and the applicable directions, rules,
regulations, procedures and policies established by the Board of Directors or
the Committee pursuant to the Plan.
8.02 MANAGEMENT OF TRUST. It is the intent of this Plan and Trust
that the Trustee shall have complete authority and discretion with respect to
the arrangement, control and investment of the Trust, and that the Trustee
shall invest all assets of the Trust in Common Stock to the fullest extent
practicable, except to the extent that the Trustee determine that the holding
of monies in cash or cash equivalents is necessary to meet the obligations of
the Trust. In performing their duties, the Trustee shall have the power to do
all things and execute such instruments as may be deemed necessary or proper,
including the following powers:
(a) To invest up to one hundred percent (100%) of all
Trust assets in Common Stock without regard to any law now or hereafter in
force limiting investments for trustees or other fiduciaries. The investment
authorized herein may constitute the only investment of the Trust, and in
making such investment, the Trustee is authorized to purchase Common Stock from
the Corporation or from any other source, and such Common Stock so purchased
may be outstanding, newly issued, or treasury shares.
(b) To invest any Trust assets not otherwise invested in
accordance with (a) above, in such deposit accounts, and certificates of
deposit, obligations of the United States Government or its agencies or such
other investments as shall be considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any
property at any time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be
registered in the name of a nominee, without the addition of words indicating
that such security is an asset of the
B-8
<PAGE> 45
Trust (but accurate records shall be maintained showing that such security is
an asset of the Trust).
(e) To hold cash without interest in such amounts as may
in the opinion of the Trustee be reasonable for the proper operation of the
Plan and Trust.
(f) To employ brokers, agents, custodians, consultants
and accountants.
(g) To hire counsel to render advice with respect to
their rights, duties and obligations hereunder, and such other legal services
or representation as the Trustee deems desirable.
(h) To hold funds and securities representing the amounts
to be distributed to a Recipient or his Beneficiary as a consequence of a
dispute as to the disposition thereof, whether in a segregated account or held
in common with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the
Trustee shall not be required to make any inventory, appraisal or settlement or
report to any court, or to secure any order of court for the exercise of any
power herein contained, or give bond.
8.03 RECORDS AND ACCOUNTS. The Trustee shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Board of Directors or the Committee.
8.04 EXPENSES. All costs and expenses incurred in the operation
and administration of this Plan shall be borne by the Corporation.
8.05 INDEMNIFICATION. Subject to the requirements of applicable
laws and regulations, the Corporation shall indemnify, defend and hold the
Trustee harmless against all claims, expenses and liabilities arising out of or
related to the exercise of the Trustee's powers and the discharge of its duties
hereunder, unless the same shall be due to the Trustee's gross negligence or
willful misconduct.
B-9
<PAGE> 46
ARTICLE IX
MISCELLANEOUS
9.01 ADJUSTMENTS FOR CAPITAL CHANGES. The aggregate number of Plan
Shares available for distribution pursuant to the Plan Share Awards and the
number of Shares to which any Plan Share Award relates shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the effective date of the Plan resulting
from any split, subdivision or consolidation of shares or other capital
adjustment, or other increase or decrease in such shares effected without
receipt or payment of consideration by the Corporation.
9.02 AMENDMENT AND TERMINATION OF PLAN. The Board may, by
resolution, at any time amend or terminate the Plan and the Trust (including
amendments which may result int eh merger of the Plan or the Trust with and
into other plans or trusts of the Corporation or successor thereto), subject to
any applicable regulatory requirements and any required stockholder approval or
any stockholder approval which the Board may deem to be advisable for any
reason, such as for the purpose of obtaining or retaining any statutory or
regulatory benefits under tax, securities or other laws or satisfying any
applicable stock exchange listing requirements. The Board may not, without the
consent of the Recipient, alter or impair his Plan Share Award except as
specifically authorized herein. Upon termination of the Plan, the Recipient's
Plan Share Awards shall be distributed to the Recipient in accordance with the
terms of Article VII hereof.
9.03 NONTRANSFERABLE. During the lifetime of the Recipient, Plan
Shares may only be earned by and paid to the Recipient who was notified in
writing of the Award pursuant to Section 6.03, provided that Plan Share Awards
and rights to Plan Shares shall be transferable by a Recipient to his or her
spouse, lineal ascendants, lineal descendants, or to a duly established trust.
Plan Share Awards so transferred may not again be transferred other than to the
Recipient who originally received the grant of Plan Share Awards or to an
individual or trust to whom such Recipient could have transferred Plan Share
Awards pursuant to this Section 9.03. Plan Share Awards which are transferred
pursuant to this Section 9.03 shall be subject to the same terms and conditions
as would have applied to such Plan Share Awards in the hands of the Recipient
who originally received the grant of such Plan Share Award. No Recipient or
Beneficiary shall have any right in or claim to any assets of the Plan or
Trust, nor shall the Corporation or any Subsidiary be subject to any claim for
benefits hereunder.
9.04 EMPLOYMENT OR SERVICE RIGHTS. Neither the Plan nor any grant
of a Plan Share Award or Plan Shares hereunder nor any action taken by the
Trustee, the Committee or the Board in connection with the Plan shall create
any right on the part of any Employee or Non-Employee Director to continue in
such capacity.
9.05 VOTING AND DIVIDEND RIGHTS. No Recipient shall have any
voting or dividend rights or other rights of a stockholder in respect of any
Plan Shares covered by a Plan Share
B-10
<PAGE> 47
Award, except as expressly provided in Sections 7.02 and 7.04 above, prior to
the time said Plan Shares are actually earned and distributed to him.
9.06 GOVERNING LAW. To the extent not governed by federal law, the
Plan and Trust shall be governed by the laws of the Commonwealth of
Pennsylvania.
9.07 EFFECTIVE DATE. This Plan shall be effective as of the
Effective Date, and Awards may be granted hereunder as of or after the
Effective Date and as long as the Plan remains in effect. Notwithstanding the
foregoing or anything to the contrary in this Plan, the implementation of this
Plan and any Awards granted pursuant hereto are subject to the receipt of any
applicable regulatory approvals or non-objections and approval of the
Corporation's stockholders.
9.08 TERM OF PLAN. This Plan shall remain in effect until the
earlier of (1) ten (10) years from the Effective Date, (2) termination by the
Board, or (3) the distribution to Recipients and Beneficiaries of all assets of
the Trust.
9.09 TAX STATUS OF TRUST. It is intended that the trust
established hereby be treated as a Grantor Trust of the Corporation under the
provisions of Section 671 et seq. of the Code, as the same may be amended from
time to time.
B-11
<PAGE> 48
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and the corporate seal to be affixed
and duly attested, and the initial Trustee established pursuant hereto have
duly and validly executed this Agreement, all on this 9th day of September
1996.
PITTSBURGH HOME FINANCIAL CORP.
By: /s/ J. Ardie Dillen
-------------------------------------
J. Ardie Dillen
President and Chief Executive Officer
ATTEST:
By: /s/ Jess B. Mellor
--------------------------------
Jess B. Mellor
Corporate Secretary
TRUSTEE
By: /s/ Stephen Spolar
-------------------------------------
Stephen Spolar
Trustee
By: /s/ Gregory G. Maxcy
-------------------------------------
Gregory G. Maxcy
Trustee
By: /s/ Kenneth F. Maxcy
-------------------------------------
Kenneth F. Maxcy
Trustee
B-12
<PAGE> 49
REVOCABLE PROXY
PITTSBURGH HOME FINANCIAL CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PITTSBURGH HOME FINANCIAL CORP. ("COMPANY") FOR USE AT THE SPECIAL MEETING OF
STOCKHOLDERS TO BE HELD ON OCTOBER 15, 1996 AND AT ANY ADJOURNMENT THEREOF.
The undersigned, being a stockholder of the Company as of September 6,
1996, hereby authorizes the Board of Directors of the Company or any successors
thereto as proxies with full powers of substitution, to represent the
undersigned at the Special Meeting of Stockholders of the Company to be held at
the Westin William Penn Hotel located at 530 William Penn Place, Pittsburgh,
Pennsylvania on Tuesday, October 15, 1996 at 11:00 a.m., Eastern Time, and at
any adjournment of said meeting, and thereat to act with respect to all votes
that the undersigned would be entitled to cast, if then personally present, as
follows:
1. PROPOSAL to adopt the Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
2. PROPOSAL to adopt the Recognition and Retention Plan and Trust.
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL to adjourn the Special Meeting, if necessary, to solicit
additional proxies.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
(Continued and to be signed on other side)
<PAGE> 50
SHARES OF THE COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF
RETURNED BUT NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1,
2 AND, IF NECESSARY, 3 AND OTHERWISE AT THE DISCRETION OF THE PROXIES. YOU MAY
REVOKE THIS PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED AT THE SPECIAL
MEETING.
Dated: _____________________, 1996
----------------------------------------
----------------------------------------
Signature(s)
PLEASE SIGN THIS EXACTLY AS YOUR
NAME(S) APPEAR(S) ON THIS PROXY. WHEN
SIGNING IN A REPRESENTATIVE CAPACITY,
PLEASE GIVE TITLE. WHEN SHARES ARE
HELD JOINTLY, ONLY ONE HOLDER NEED
SIGN.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
