<PAGE> 1
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only
[ X ] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
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):
[ X ] No fee required.
[ ] 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 transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-1 (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 No.:
---------------------------
(3) Filing Party:
--------------------------------------------------
(4) Date Filed:
----------------------------------------------------
<PAGE> 2
[LOGO]
PITTSBURGH HOME
FINANCIAL CORP.
438 WOOD STREET PITTSBURGH, PA 15222
(412) 281-0780 FAX: (412) 281-3750
December 29, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Pittsburgh Home Financial Corp. The meeting will be held at The Library
Center, GRW Theatre, Second Level, 414 Wood Street, Pittsburgh, Pennsylvania, on
Thursday, January 28, 1999 at 11:00 a.m., Eastern Time. The matters to be
considered by stockholders at the Annual Meeting are described in the
accompanying materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares 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 Annual
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
Your continued support of and interest in Pittsburgh Home Financial
Corp. are sincerely appreciated.
Sincerely,
/s/ J. Ardie Dillen
--------------------------------
J. Ardie Dillen
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 3
PITTSBURGH HOME FINANCIAL CORP.
438 WOOD STREET
PITTSBURGH, PENNSYLVANIA 15222
(412) 281-0780
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 28, 1999
----------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of Pittsburgh Home Financial Corp. (the "Company") will be held at The
Library Center, GRW Theatre, Second Level, 414 Wood Street, Pittsburgh,
Pennsylvania, on Thursday, January 28, 1999 at 11:00 a.m., Eastern Time, for the
following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
(1) To elect three (3) directors for a three-year term or until their
successors are elected and qualified;
(2) To ratify the appointment by the Board of Directors of Ernst &
Young LLP as the Company's independent auditors for the fiscal year ending
September 30, 1999; and
(3) 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 December 18, 1998 as the voting record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting. Only those stockholders of record as of the close of
business on that date will be entitled to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ GREGORY G. MAXCY
--------------------
Gregory G. Maxcy
Secretary
Pittsburgh, Pennsylvania
December 29, 1998
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL 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
----------
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 28, 1999
This Proxy Statement is furnished to holders of common stock, $0.01 par
value per share ("Common Stock"), of Pittsburgh Home Financial Corp. (the
"Company"), a Pennsylvania corporation and registered bank holding company for
Pittsburgh Home Savings Bank (the "Savings Bank"). Proxies are being solicited
on behalf of the Board of Directors of the Company to be used at the Annual
Meeting of Stockholders ("Annual Meeting") to be held at The Library Center, GRW
Theatre, Second Level, 414 Wood Street, Pittsburgh, Pennsylvania, on Thursday,
January 28, 1999 at 11:00 a.m., Eastern Time, for the purposes set forth in the
Notice of Annual Meeting of Stockholders. This Proxy Statement is first being
mailed to stockholders on or about December 29, 1998.
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 nominees for director described herein, FOR
ratification of the appointment of Ernst & Young LLP for fiscal 1999 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 Annual Meeting and giving the Secretary notice of his
or her intention to vote in person. Proxies solicited hereby may be exercised
only at the Annual Meeting and any adjournment thereof and will not be used for
any other meeting.
VOTING
Only stockholders of record at the close of business on December 18,
1998 ("Voting Record Date") will be entitled to vote at the Annual Meeting. On
the Voting Record Date, there were 1,840,501 shares of Common Stock outstanding
and the Company had no other class of equity securities outstanding. Each share
of Common Stock is entitled to one vote at the Annual Meeting on all matters
properly presented at the meeting. Directors are elected by a plurality of the
votes cast with a quorum present. The three persons who receive the greatest
number of votes of the holders
<PAGE> 5
of Common Stock represented in person or by proxy at the Annual Meeting will be
elected directors of the Company. Abstentions are considered in determining the
presence of a quorum and will not affect the vote required for the election of
directors. The affirmative vote of the holders of a majority of the total votes
present in person or by proxy is required to ratify the appointment of the
independent auditors. Abstentions will not be counted as votes cast, and
accordingly will have no effect on the voting of this proposal. Under rules of
the New York Stock Exchange, all of the proposals for consideration at the
Annual Meeting are considered "discretionary" items upon which brokerage firms
may vote in their discretion on behalf of their clients if such clients have not
furnished voting instructions. Thus, there are no proposals to be considered at
the Annual Meeting which are considered "non-discretionary" and for which there
will be "broker non-votes."
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, each of which
contains approximately one-third of the Board. The directors are elected by the
stockholders of the Company for staggered three year terms, or until their
successors are elected and qualified. Stockholders of the Company are not
permitted to cumulate their votes for the election of directors.
On December 17, 1998, Jess B. Mellor and Kenneth F. Maxcy, Jr. retired
from the Board of Directors, and the Board adopted a resolution to reduce the
size of the Board of Directors from ten members to eight members.
No director, executive officer or nominee for director of the Company
is related to any other director or executive officer of the Company by blood,
marriage or adoption. All of the nominees currently serve as a director of the
Company.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted FOR the election of the nominees for director listed
below. If the person or persons named as nominee should be unable or unwilling
to stand for election at the time of the Annual Meeting, the proxies will
nominate and vote for one or more replacement nominees recommended by the Board
of Directors. At this time, the Board of Directors knows of no reason why the
nominees listed below may not be able to serve as directors if elected.
- 2 -
<PAGE> 6
The following tables present information concerning the nominees for
director of the Company and each director whose term continues.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM EXPIRING IN 2002
Director
Name Age(1) Since(2)
- --------------------------------- ----------------- ----------------------
Stephen Spolar 77 1986
Charles A. Topnick 71 1990
Joseph G. Lang 73 1986
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE
ABOVE NOMINEES FOR DIRECTOR.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
DIRECTORS WHOSE TERMS EXPIRE IN 2000
Director
Name Age(1) Since(2)
- --------------------------------- ----------------- ----------------------
J. Ardie Dillen 40 1992
Kenneth R. Rieger 53 1997
DIRECTORS WHOSE TERMS EXPIRE IN 2001
Director
Name Age(1) Since(2)
- --------------------------------- ----------------- ----------------------
Gregory G. Maxcy 44 1986
Richard F. Lerach 58 1990
James M. Droney, Jr. 46 1997
- ----------
(1) As of December 18, 1998.
(2) Includes service as a director of the Savings Bank.
- 3 -
<PAGE> 7
Information concerning the principal position with the Company and the
Savings Bank and principal occupation of each nominee for director and members
of the Board continuing in office during the past five years is set forth below.
J. Ardie Dillen. Mr. Dillen was named Chairman of the Board of the
Company and the Savings Bank in November 1996 and August 1997, respectively. Mr.
Dillen is President and Chief Executive Officer of the Savings Bank and has held
the same position with the Company since its inception in September 1995. Mr.
Dillen has been President and Chief Executive Officer of the Savings Bank since
1992 and was Senior Vice President of Finance and Administration of the Savings
Bank from 1986 to 1992. Prior to joining the Savings Bank, Mr. Dillen was an
auditor with Main Hurdman, Pittsburgh, Pennsylvania, a certified public
accounting firm, from 1980 to 1986. Mr. Dillen is a certified public accountant.
Joseph G. Lang. Mr. Lang has been retired since 1991. Prior thereto,
from 1961 to 1991, Mr. Lang was an associate architect with W.D. Slowik &
Associates, Pittsburgh, Pennsylvania, an architectural firm, and also was
employed by its predecessor firms.
Richard F. Lerach. Mr. Lerach has been Assistant General Counsel with
U.S. Steel Group, a unit of USX Corporation, Pittsburgh, Pennsylvania, since
1985 and has been an attorney with such corporation since 1968.
Gregory G. Maxcy. Mr. Maxcy has been Executive Vice President of the
Company and the Savings Bank since January 1998 and Secretary of the Company
since July 1997. Mr. Maxcy served as Senior Vice President of the Company and
Senior Vice President of the Savings Bank from May 1997 to May 1998. Mr. Maxcy
was President of Maxcy, Gmys & Company, PC, Pittsburgh, Pennsylvania, a
certified public accounting firm, from 1992 to May 1997. Mr. Maxcy also was
employed by Resource Capital, Inc., Pittsburgh, Pennsylvania, an investment
management services and financial planning company, from 1988 to 1994. Mr. Maxcy
is a certified public accountant and a certified financial planner. Mr. Maxcy is
the son of Kenneth F. Maxcy, Jr.
Stephen Spolar. Mr. Spolar has been retired since 1992. Mr. Spolar was
President and Chief Executive Officer of the Savings Bank from 1986 to 1992. Mr.
Spolar has been a director of the Savings Bank since 1986 and served as an
officer of the Savings Bank from 1961 to 1986.
Charles A. Topnick. Mr. Topnick has been retired since 1992. Mr.
Topnick served as Senior Vice President of the Savings Bank from 1991 to 1992.
From 1983 to 1991, Mr. Topnick was President of Columbia Savings and Loan
Association, Pittsburgh, Pennsylvania.
James M. Droney, Jr. Mr. Droney has been the President and Chief
Executive Officer of Mt. Lebanon Office Equipment Co. Inc., Pittsburgh,
Pennsylvania, an office equipment retailer, since 1976.
- 4 -
<PAGE> 8
Kenneth R. Rieger. Mr. Rieger is Vice President and co-founder of G&R
Investment Consultants, Inc., Pittsburgh, Pennsylvania, an investment advisory
firm, since January 1980.
DIRECTOR EMERITUS
Effective December 1998, Messrs. Jess B. Mellor and Kenneth F. Maxcy,
Jr. became Director Emeriti of the Savings Bank. Mr. Mellor was Secretary of the
Savings Bank from 1955 to December 1998. Mr. Mellor served as Secretary of the
Company from its inception in September 1995 to June 1997. Mr. Mellor is retired
and was formerly Vice President of the Savings Bank from 1954 to 1986. Mr.
Mellor was with the Savings Bank from its inception in 1942 to 1998 and was a
director of the Savings Bank from 1954 to 1998. Mr. Maxcy has been retired since
1985. Mr. Maxcy was Assistant to the Chairman of Wheeling Pittsburgh Steel
Corporation, Pittsburgh, Pennsylvania from 1975 to 1985. Mr. Maxcy is the father
of Gregory G. Maxcy.
STOCKHOLDER NOMINATIONS
Article 7.F. of the Company's Amended and Restated Articles of
Incorporation ("Articles") governs nominations for election to the Board of
Directors and requires all such nominations, other than those made by or at the
direction of the Board, to be made at a meeting of stockholders called for the
election of directors, and only by a stockholder who has complied with the
notice provisions in that section. Stockholder nominations must be made pursuant
to timely notice 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 mailing of proxy materials by the Company in connection
with the immediately preceding annual meeting of stockholders of the Company. No
such proposals were received. Each written notice of a stockholder nomination is
required to set forth certain information specified in the Articles.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES OF THE COMPANY AND THE SAVINGS BANK
Regular meetings and special meetings of the Board of Directors of the
Company are held as necessary. During the fiscal year ended September 30, 1998,
the Board of Directors met nine times. No director attended fewer than 75% of
the total number of Board meetings or committee meetings on which he served that
were held during this period. The entire Board of Directors of the Company acts
as a Nominating Committee. The Board of Directors of the Company has established
the following committees:
Executive Committee. The Executive Committee of the Company has the
authority to act on general Company matters between Board meetings. The members
of the Executive Committee were Messrs. Spolar (Chairman), Dillen, Kenneth F.
Maxcy, Jr., Mellor and Topnick. The Executive Committee did not meet during
fiscal 1998.
- 5 -
<PAGE> 9
Audit Committee. The Audit Committee of the Company recommends
independent auditors to the Board annually and reviews the Company's financial
statements and the scope and results of the audit performed by the Company's
independent auditors and the Company's system of internal control with
management and such independent auditors and reviews regulatory examination
reports. The Audit Committee, which was comprised of Messrs. Lerach (Chairman),
Droney, Kenneth F. Maxcy, Jr., Spolar and Topnick, met twice during fiscal 1998.
The Compensation Committee of the Savings Bank's Board of Directors
reviews the compensation for the Savings Bank's officers, along with employee
benefits, and recommends to the Board adjustments in such compensation. See
"Management Compensation - Compensation Committee Interlocks and Insider
Participation." The members of the Compensation Committee were Messrs. Kenneth
F. Maxcy, Jr. (Chairman), Mellor, Spolar and Topnick. Messrs. Mellor, Spolar and
Topnick formerly served as officers of the Savings Bank. The Compensation
Committee met once during fiscal 1998.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Set forth below is information concerning the executive officers of the
Company and the Savings Bank who do not serve on the Board of Directors of the
Company. All executive officers are elected by the Board of Directors and serve
until their successors are elected and qualified. No executive officer is
related to any director or other executive officer of the Company by blood,
marriage or adoption, and there are no arrangements or understandings between a
director of the Company and any other person pursuant to which such person was
elected an executive officer.
Michael J. Kirk. Mr. Kirk has been Executive Vice President since
January 1998 and Chief Financial Officer of the Company and the Savings Bank
since January 1996. Mr. Kirk served as Senior Vice President of the Company and
the Savings Bank from January 1996 to January 1998. Mr. Kirk became Vice
President and Chief Financial Officer of the Savings Bank in 1992 and was Vice
President and Chief Financial Officer of the Company from its inception in
September 1995 through January 1996. Mr. Kirk served as an Analyst and
Controller of Community Savings Association, Monroeville, Pennsylvania from 1988
to 1992 and as an auditor with Ernst & Whitney, the predecessor to Ernst &
Young, LLP, from 1985 to 1988. Mr. Kirk is a certified public accountant.
Joseph E. Archer. Mr. Archer has been Senior Vice President of Lending
of the Savings Bank since 1988. Mr. Archer served as Vice President of the
Savings Bank from 1986 to 1988 and Assistant Vice President from 1970 to 1986.
Mr. Archer joined the Savings Bank in 1962.
Albert L. Winters. Mr. Winters has been Senior Vice President of
Operations of the Savings Bank since 1994. Mr. Winters served as Vice President
of the Savings Bank from 1991 to 1993 and Assistant Vice President of the
Savings Bank from 1989 to 1990. Mr. Winters joined the Savings Bank in 1970.
- 6 -
<PAGE> 10
Patricia J. Nesbit. Ms. Nesbit has been Senior Vice President of Retail
Banking of the Savings Bank since January 1998. Ms. Nesbit served as Vice
President of Retail Banking of the Savings Bank from January 1996 to January
1998. Ms. Nesbit served as a Branch Manager of the Savings Bank from 1994 to
1995. Prior to 1994, Ms. Nesbit was employed by Integra Bank, Pittsburgh,
Pennsylvania and certain predecessor institutions from 1969 to 1994 as a Branch
Manager and in other related capacities.
- 7 -
<PAGE> 11
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table on the following page 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 and nominees of the
Company, (iii) those executive officers of the Company whose salary and bonus
exceeded $100,000 in fiscal 1998, and (iv) all directors and executive officers
of the Company and the Savings Bank as a group.
- 8 -
<PAGE> 12
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial of Beneficial
Owner or Number of Ownership as of Percent of
Persons in Group December 18, 1998(1) Common Stock
------------------ -------------------- ------------
<S> <C> <C>
Pittsburgh Home Financial Corp. 194,293(2) 10.2%
Employee Stock Ownership Plan Trust
438 Wood Street
Pittsburgh, Pennsylvania 15222
John Hancock Mutual Life Insurance 190,000(3) 10.0
Company
John Hancock Subsidiaries, Inc.
John Hancock Asset Management
John Hancock Place
P.O. Box 111
Boston, Massachusetts 02117
The Berkeley Financial Group
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
J. Ardie Dillen 51,652(4)(5) 2.7
James M. Droney, Jr. 1,120 *
Michael J. Kirk 25,111(6) 1.3
Joseph G. Lang 6,087(7) *
Richard F. Lerach 40,763(8) 2.1
Gregory G. Maxcy 23,516(10) 1.2
Kenneth R. Rieger 6,037 *
Stephen Spolar 13,129(5)(8) *
Charles A. Topnick 11,063(5)(8) *
All directors and executive officers
of the Company and the Savings Bank
as a group (12 persons) 225,889(9) 11.9%
</TABLE>
- ----------
* Represents less than 1% of the outstanding Common Stock.
(Footnotes continued on following page)
- 9 -
<PAGE> 13
- ----------
(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. Shares which are subject to stock options and
which may be exercised within 60 days of December 18, 1998 are deemed to be
outstanding for the purpose of computing the percentage of Common Stock
beneficially owned by such person.
(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"). Messrs. J. Ardie Dillen, Stephen
Spolar and Charles A. Topnick act as trustees of the plan ("Trustees"). As
of the Voting Record Date, 37,480 shares held in the Trust had been
allocated to the accounts of participating employees. Under the terms of
the ESOP, the Trustees will generally vote the allocated shares held in the
ESOP in accordance with the instructions of the participating employees.
Unallocated shares held in the ESOP will generally be voted in the same
ratio on any matter as those allocated shares for which instructions are
given, subject in each case to the fiduciary duties of the ESOP trustees
and applicable law. Any allocated shares which either abstain on a 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.
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) Based on a Schedule 13G joint filing on January 31, 1997 made on behalf of
John Hancock Mutual Life Insurance Company ("JHMLICO"), JHMLICO's direct,
wholly-owned subsidiary, John Hancock Subsidiaries, Inc. ("JHSI"), JHSI's
direct, wholly-owned subsidiary, John Hancock Asset Management ("JHAM"),
JHAM's wholly-owned subsidiary, The Berkeley Financial Group ("TBFG") and
TBFG's wholly-owned subsidiary, John Hancock Advisers, Inc. ("JHA").
Pursuant to an advisory agreement with the John Hancock Bank and Thrift
Opportunity Fund dated July 21, 1994, JHA has sole voting and dispositive
power as to 100,000 shares of Common Stock. Pursuant to an advisory
agreement with the John Hancock Regional Bank Fund dated July 1, 1996, JHA
has sole voting and dispositive power as to 90,000 shares of Common Stock.
Through their parent-subsidiary relationship to JHA, JHMLICO, JHSI, JHAM
and TBFG have indirect, beneficial ownership of these same shares.
(Footnotes continued on following page)
- 10 -
<PAGE> 14
- ----------
(4) Includes 1,500 shares held by Mr. Dillen's spouse in her Individual
Retirement Account, 600 shares held by Mr. Dillen as custodian for his
children, 3,303 shares which are held by the ESOP which have been allocated
to the account of Mr. Dillen, and 14,965 shares which may be acquired by
Mr. Dillen upon the exercise of stock options.
(5) Excludes the shares held by the ESOP, of which the named director is one of
three trustees.
(6) Includes 1,937 shares which are held by the ESOP which have been allocated
to the account of Mr. Kirk, and 7,682 shares which may be acquired by Mr.
Kirk upon the exercise of stock options.
(7) Includes 200 shares held by Mr. Lang's son and 2,473 shares which may be
acquired by Mr. Lang upon the exercise of stock options.
(8) Includes 3,273 shares which may be acquired by the named director upon the
exercise of stock options.
(9) Includes 63,540 shares which may be acquired by all directors and executive
officers of the Company and the Savings Bank as a group upon the exercise
of stock options. Also includes 10,719 shares which are held by the
Company's ESOP which have been allocated to the accounts of executive
officers.
(10) Includes 825 shares which are held by the ESOP which have been allocated to
the account of Mr. Gregory G. Maxcy, and 4,191 shares which may be acquired
by Mr. Gregory G. Maxcy upon the exercise of stock options.
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 ("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
more than 10% of the Company's Common Stock.
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 1998, the Company's officers
and directors complied in all respects with the reporting requirements
promulgated under Section 16(a) of the Exchange Act, except that Mr. Winters was
late once in reporting one transaction.
- 11 -
<PAGE> 15
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The Company does not pay separate compensation to its officers. The
following table includes individual compensation information with respect to the
executive officers whose total compensation paid by the Savings Bank exceeded
$100,000 for services rendered in all capacities during the fiscal year ended
September 30, 1998.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
--------------------------- --------------------------------
Restricted Number of All Other
Name and Principal Position Fiscal Year Salary (1) Bonus(2) Stock Awards Options Compensation
- ---------------------------------- ------------ -------------- --------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
J. Ardie Dillen 1998 $128,750 $35,000 $ 27,750(3) 5,000(4) $20,481(5)
Chairman, President and 1997 106,875 20,000 182,640(6) 34,913(7) 29,063(5)
Chief Executive Officer 1996 97,500 11,212 -- -- 11,475(5)
Michael J. Kirk 1998 $ 76,500 $25,000 $ 55,500(3) 3,500(4) $12,163(8)
Executive Vice President and 1997 63,500 12,000 91,314(6) 17,456(7) 17,262(8)
Chief Financial Officer 1996 54,500 5,750 -- -- 6,416(8)
</TABLE>
- ----------
(1) Does not include amounts attributable to miscellaneous benefits received by
the named executive officers. In the opinion of management of the Savings
Bank, the costs to the Savings Bank of providing such benefits to the named
executive officers during the indicated period did not exceed the lesser of
$50,000 or 10% of the total of annual salary and bonus reported.
(2) Incentive bonuses were paid in January for goals achieved in the prior
fiscal year.
(3) Represents the grant of 1,500 shares and 3,000 shares of restricted Common
Stock to Messrs. Dillen and Kirk, respectively, pursuant to the Company's
Recognition and Retention Plan and Trust ("Recognition Plan"), which were
deemed to have had the indicated value at the date of grant. The restricted
Common Stock awarded to Messrs. Dillen and Kirk had a fair market value of
$20,250 and $40,500 at September 30, 1998, respectively, based on the
$13.50 per share closing market price on September 30, 1998. The awards
vest 20% each year beginning December 18, 1998, and dividends are paid on
restricted shares.
(4) Consists of stock options granted pursuant to the Company's Stock Option
Plan ("Stock Option Plan") which are exercisable at the rate of 20% each
year beginning December 18, 1998.
(Footnotes continued on following page)
- 12 -
<PAGE> 16
- ----------
(5) Represents $16,618, $25,857 and $8,550, the allocation on behalf of Mr.
Dillen under the Company's ESOP, and $3,863, $3,206 and $2,925 in
contributions pursuant to the Savings Bank's Thrift Plan, in each case in
fiscal 1998, 1997 and 1996, respectively. See "Benefits - Thrift Plan."
(6) Represents the grant of 15,711 shares and 7,855 shares of restricted Common
Stock to Messrs. Dillen and Kirk, respectively, pursuant to the Company's
Recognition Plan, which were deemed to have had the indicated value at the
date of grant. The restricted Common Stock awarded to Messrs. Dillen and
Kirk had a fair market value of $212,099 and $106,043 at September 30,
1998, respectively, based on the $13.50 per share closing market price on
September 30, 1998. The awards vest 20% each year beginning October 15,
1997, and dividends are paid on restricted shares.
(7) Consists of stock options granted pursuant to the Company's Stock Option
Plan which are exercisable at the rate of 20% each year beginning October
15, 1997.
(8) Represents $9,868, $15,357 and $4,781, the allocation on behalf of Mr. Kirk
under the Company's ESOP, and $2,295, $1,905 and $1,635 in contributions
pursuant to the Savings Bank's Thrift Plan, in each case in fiscal 1998,
1997 and 1996, respectively. See "Benefits - Thrift Plan."
The following table discloses the total options granted to the
executive officers named in the Summary Compensation Table during the year ended
September 30, 1998:
<TABLE>
<CAPTION>
Number % of Total Options
of Options Granted To Exercise Grant Date
Name Granted Employees(1) Price(2) Expiration Date Present Value(3)
- ----------------- ---------- ------------------- --------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
J. Ardie Dillen 5,000 26.3% $18.50 December 18, 2007 $29,400
Michael J. Kirk 3,500 18.4 18.50 December 18, 2007 20,580
</TABLE>
- ----------
(1) Percentage of options granted to all employees during fiscal 1998.
(2) The exercise price was based on the closing market price of a share of the
Company's Common Stock on the date of grant.
(3) Present Value of the grant at the date of grant under the Black-Scholes
option pricing model.
- 13 -
<PAGE> 17
The following table sets forth, with respect to the executive officers
named in the Summary Compensation Table, information with respect to the
aggregate amount of options exercised during the last fiscal year, any value
realized thereon, the number of unexercised options at the end of the fiscal
year (exercisable and unexercisable) and the value with respect thereto under
specified assumptions.
<TABLE>
<CAPTION>
Shares Value of Unexercised
Acquired on Value Number of Unexercised in the Money Options at
Name Exercise Realized Options at Fiscal Year End September 30, 1998
- ----------------- ----------- -------- ---------------------------------- ----------------------------------
Exercisable(1) Unexercisable(2) Exercisable(1) Unexercisable(2)
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
J. Ardie Dillen -- -- 6,983 32,930 $21,822 $87,281
Michael J. Kirk -- -- 3,491 17,465 10,909 43,641
</TABLE>
- ----------
(1) Shares are exercisable at the rate of 20% per year on each annual
anniversary of the date the options were granted.
(2) Based on a per share market price of $13.50 at September 30, 1998.
COMPENSATION OF DIRECTORS
The Company pays non-employee directors a quarterly retainer of $500.
The monthly Savings Bank Board retainer and the fee per meeting attended are
each $500. Members of committees of the Board of the Company (excluding the
President) and the Savings Bank (excluding inside directors) are paid $250 ($350
for committee chairmen) for each committee meeting attended. Mr. Dillen and Mr.
Gregory G. Maxcy receive no additional compensation as Chairman of the Board of
the Company and the Savings Bank and Secretary of the Company, respectively.
EMPLOYMENT AGREEMENTS
The Company and the Savings Bank (collectively, the "Employers") have
entered into employment agreements with each of Messrs. Dillen, Kirk, and
Gregory G. Maxcy, and the Savings Bank has entered into employment agreements
with Messrs. Archer and Winters (the "Executives"). Messrs. Dillen and Kirk are
the Chairman, President and Chief Executive Officer, and the Executive Vice
President and Chief Financial Officer of the Company and the Savings Bank,
respectively. Mr. Maxcy is the Executive Vice President and Secretary of the
Company and Executive Vice President of the Savings Bank. Messrs. Archer and
Winters are Senior Vice Presidents of the Savings Bank. The Employers have
agreed to employ Messrs. Dillen, Kirk and Gregory G. Maxcy 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
- 14 -
<PAGE> 18
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 agreements 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 Messrs. Dillen, Kirk and Gregory G.
Maxcy, and two times base salary for the other Executives payable in
installments over three years (in the case of Messrs. Dillen, Kirk and Gregory
G. Maxcy) or two years (in the case of the other Executives). Based upon
compensation levels at September 30, 1998, in the event of a termination of
employment following a Change in Control, Messrs. Dillen and Kirk would receive
$405,000 and $240,000 respectively, in cash severance and each of the other
three Executives would receive between $120,000 and $270,000. 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.
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 Internal Revenue Code of 1986, as amended (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,
- 15 -
<PAGE> 19
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 from mutual to stock form. The
Company utilized the funds received from its return of capital distribution in
December 1997 with respect to the unallocated ESOP shares to purchase an
additional 20,848 shares. 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 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.
- 16 -
<PAGE> 20
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.
Stock Option Plan. The Company's stockholders approved the Stock Option
Plan at a special meeting held on October 15, 1996. The Stock Option Plan 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 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. A total of 218,212 shares of Common Stock has
been reserved for issuance pursuant to the Stock Option Plan. 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."
Unless sooner terminated, the Stock Option Plan shall continue in effect for a
period of ten years from the adoption by the Board of Directors.
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. Subject to certain
exceptions, 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 options were granted, and the right to exercise
shall be cumulative.
At September 30, 1998, the Company had outstanding stock options to
directors and officers of the Company and the Savings Bank to purchase an
aggregate of 192,711 shares of Common Stock at exercise prices ranging from
$10.375 per share to $18.50 per share.
Recognition and Retention Plan. The Company's stockholders also
approved the Recognition Plan at the special meeting held on October 15, 1996.
The objective of the Recognition Plan 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. The Recognition Plan Trust acquired
87,285 shares of Common Stock on behalf of the Recognition Plan. These shares
were acquired through open market purchases. The Recognition Plan is
administered
- 17 -
<PAGE> 21
and interpreted by a committee of the Board of Directors that is composed solely
of two or more "Non-Employee Directors."
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 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.
At September 30, 1998, the Company had granted an aggregate of 86,190 shares to
directors and executive officers of the Company and the Savings Bank, including
17,211 shares and 10,855 shares to Messrs. Dillen and Kirk, respectively.
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 provides a death
benefit payment, in the event of death prior to retirement.
For the years ended September 30, 1998, 1997 and 1996 pension expense
amounted to $15,000, $60,000 and $60,000, 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
- 18 -
<PAGE> 22
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 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 directors
must be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with the
general public, unless the loans are made pursuant to a benefit or compensation
program that (i) is widely available to employees of the institution and (ii)
does not give preference to any director, executive officer or principal
stockholder, or certain affiliated interests of either, over other employees of
the savings institution, 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 directors 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, 1998, mortgage and
consumer loans to executive officers and directors aggregated $24,000 or 0.1% 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Savings Bank's Board of Directors
reviews the compensation for the Savings Bank's officers, along with employee
benefits, and recommends to the Board adjustments in such compensation.
The report of the Compensation Committee with respect to compensation
for the Chairman, President and Chief Executive Officer and all other executive
officers for the fiscal year ended September 30, 1998 is set forth below:
- 19 -
<PAGE> 23
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The purpose of the Committee is to provide oversight of the personnel
related policies of the Company and the Savings Bank, including the
establishment of an executive compensation philosophy for the organization and
the monitoring of compensation plans and strategies to determine conformity with
the overall philosophy. The Committee also is responsible for ensuring that the
financial costs of current or proposed compensation and benefit programs are
reasonable and consistent with industry standards, management performance and
stockholders' interest. A competitive comprehensive benefit program is essential
to achieving the goal of retaining and attracting highly qualified employees.
The Committee considers the following criteria when establishing its
recommendation to the Board of Directors regarding the compensation level of the
Chief Executive Officer and other executive officers of the Company and the
Savings Bank:
1. The overall competitive performance of the Company and the
Savings Bank during the fiscal year under consideration including
the level of, and/or increases in earnings per share, return on
equity and consideration of the individual, as well as combined
measures of progress of the Company and the Savings Bank in
different areas, including the overall growth of the Savings
Bank, the improvement in market share, the quality of the loan
portfolio, the level of non-performing assets, efficiency ratio
levels as compared to peer groups and other objectives as may be
established by the Board of Directors.
2. The Company's and the Savings Bank's regulatory ratings.
3. The compensation and benefit levels of comparable management
positions to peer group institutions of similar asset size and
operating characteristics, with a concentration on those
institutions operating within the Mid-Atlantic region and
specifically Pennsylvania.
4. The individual effectiveness of the Chief Executive Officer
relative to overall management efficiency and leadership and his
commitment to professional involvement, civic activities and the
maintenance of corporate stature enhancing the image of the
Company and the Savings Bank in its market place.
The compensation arrangements and recommendations of the Committee
include a base salary and a bonus component if the Executive's performance is
judged to warrant such a bonus. The officers of the Company are not specifically
compensated for their service in such capacity and are paid only for their
services as officers of the Savings Bank.
The base compensation of J. Ardie Dillen, Chairman, President and Chief
Executive Officer of the Company and the Bank, was established at $135,000 as of
January 1, 1998. This level of
- 20 -
<PAGE> 24
compensation represented a 22.7% increase over the previous year's base
compensation which had been established as of January 1, 1997. Mr. Dillen was
awarded a bonus of $35,000 for his service during fiscal 1997 based on his
overall performance. Mr. Dillen's compensation level, determined with the
aforementioned criteria, was based on an examination of the peer group companies
relative to salary and bonus compensation for Chief Executive Officers.
Additionally, the Committee recognized that Mr. Dillen was named Chairman of the
Company and the Bank during 1997.
Following extensive review by the Committee, all issues pertaining to
executive compensation are submitted to the full Board of Directors for their
approval.
Kenneth F. Maxcy, Jr., Chairman
Jess B. Mellor
Stephen Spolar
Charles A. Topnick
- 21 -
<PAGE> 25
PERFORMANCE GRAPH
The following graph compares the cumulative total returns for the
Common Stock of the Company, the SNL All Thrift Index and the Nasdaq Total
Return Index since the Company's initial public offering in April 1996. All of
these cumulative returns are computed assuming the reinvestment of dividends at
the frequency with which dividends were paid during the period.
<TABLE>
<CAPTION>
PITTSBURGH HOME FINANCIAL CORP.
PERIOD ENDING
---------------------------------------------------------
INDEX 4/1/96 9/30/96 3/31/97 9/30/97 3/31/98 9/30/98
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Pittsburgh Home Financial Corp. 100.00 108.48 137.08 177.67 197.37 144.05
NASDAQ - Total U.S. 100.00 111.46 110.60 153.01 167.98 156.33
SNL Thrift Index 100.00 112.76 139.16 195.93 232.81 175.66
</TABLE>
The above graph represents $100 invested in the Company's initial
public offering of Common Stock on April 1, 1996 at $10.00 per share. The Common
Stock commenced trading on the Nasdaq Stock Market on April 1, 1996.
- 22 -
<PAGE> 26
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Ernst & Young LLP,
independent certified public accountants, to perform the audit of the Company's
financial statements for the year ending September 30, 1999, and further
directed that the selection of auditors be submitted for ratification by the
stockholders at the Annual Meeting.
The Company has been advised by Ernst & Young LLP that neither that
firm nor any of its associates has any relationship with the Company or its
subsidiaries other than the usual relationship that exists between independent
certified public accountants and clients. Ernst & Young LLP will have one or
more representatives at the Annual Meeting who will have an opportunity to make
a statement, if they so desire, and who will be available to respond to
appropriate questions.
The Board of Directors recommends that you vote FOR the ratification of
the appointment of Ernst & Young LLP as independent auditors for the fiscal year
ending September 30, 1999.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders of
the Company, which currently is scheduled to be held in January 2000, must be
received at the principal executive offices of the Company, 438 Wood Street,
Pittsburgh, Pennsylvania 15222, Attention: Gregory G. Maxcy, Secretary, no later
than August 23, 1999.
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
Articles, 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, or not later than
October 30, 1999 in connection with the 2000 Annual Meeting of Stockholders of
the Company. Such stockholder's notice is required to set forth certain
information specified in the Articles. No such proposals were received in
connection with the Annual Meeting.
- 23 -
<PAGE> 27
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year
ended September 30, 1998 accompanies this Proxy Statement. Such annual report is
not part of the proxy solicitation materials.
Upon receipt of a written request, the Company will furnish to any
stockholder without charge a copy of the Company's Annual Report on Form 10-K
for fiscal 1998 required to be filed under the 1934 Act. Such written requests
should be directed to Michael J. Kirk, Executive Vice President and Chief
Financial Officer, Pittsburgh Home Financial Corp., 438 Wood Street, Pittsburgh,
Pennsylvania 15222. The Form 10-K is not part of the proxy solicitation
materials.
OTHER MATTERS
Each proxy solicited hereby also confers discretionary authority on the
Board of Directors of the Company to vote the proxy with respect to the approval
of the minutes of the last meeting of stockholders, the election of any person
as a director if the nominee is unable to serve or for good cause will not
serve, matters incident to the conduct of the meeting, and upon such other
matters as may properly come before the Annual Meeting. Management is not aware
of any business that may properly come before the Annual 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.
The cost of the solicitation of proxies will be borne by the Company.
The Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending 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/ GREGORY G. MAXCY
--------------------
Gregory G. Maxcy
Secretary
December 29, 1998
- 24 -
<PAGE> 28
<TABLE>
<CAPTION>
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE [X]
<S> <C> <C>
1. ELECTION OF DIRECTORS Nominees for a 2. PROPOSAL to ratify the appointment by the 3. In their discretion, the proxies
three-year term: Stephen Spolar, Board of Directors of Ernst & Young LLP as are authorized to vote upon such
Charles A. Topnick and Joseph G. Lang the Company's independent auditors for the other business as may properly
fiscal year ending September 30, 1999. come before the meeting.
WITHHOLD
FOR AUTHORITY FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] SHARES OF THE COMPANY'S COMMON STOCK
WILL BE VOTED AS SPECIFIED. IF
NOTE: To withhold authority to vote for an RETURNED BUT NOT OTHERWISE
individual nominee, strike a line SPECIFIED, THIS PROXY WILL BE VOTED
through that nominee's name. Unless FOR THE ELECTION OF THE BOARD OF
authority to vote for all of the DIRECTORS' NOMINEES TO THE BOARD OF
foregoing nominees is withheld, this DIRECTORS, FOR RATIFICATION OF THE
Proxy will be deemed to confer COMPANY'S INDEPENDENT AUDITORS AND
authority to vote for each nominee OTHERWISE AT THE DISCRETION OF THE
whose name is not struck. PROXIES. YOU MAY REVOKE THIS PROXY
AT ANY TIME PRIOR TO THE TIME IT IS
VOTED AT THE ANNUAL MEETING.
Dated: _____________________________
____________________________________
Signature of Stockholder
____________________________________
Signature of Stockholder
NOTE: Please sign this exactly as
your name(s) appear(s) on this
proxy. When signing in a
representative capacity, please give
full 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.
- -----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
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 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 28, 1999 AND AT ANY ADJOURNMENT THEREOF.
The undersigned, being a stockholder of the Company as of December 18,
1998, 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 Annual Meeting of Stockholders of the Company to be held at
The Library Center, GRW Theatre, Second Level, 414 Wood Street, Pittsburgh,
Pennsylvania, on Thursday, January 28, 1999 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:
(Continued and to be signed on other side)
FOLD AND DETACH HERE
