<PAGE>
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 THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
GA Financial Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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 transaction 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:
Notes:
<PAGE>
GA FINANCIAL, INC.
4750 Clairton Boulevard
Pittsburgh, Pennsylvania 15236
(412) 882-9946
August 30, 1996
Fellow Shareholders:
You are cordially invited to attend the special meeting of shareholders
(the "Special Meeting") of GA Financial, Inc. (the "Company"), the holding
company for Great American Federal Savings and Loan Association (the
"Association"), Pittsburgh, Pennsylvania, which will be held on October 16,
1996, at 10:00 a.m., Pittsburgh Time, at The Bradley House, 5239 Brownsville
Road, Pittsburgh, Pennsylvania 15236.
The attached Notice of the Special Meeting and the Proxy Statement describe
the formal business to be transacted at the Special Meeting. Directors and
officers of GA Financial, Inc. will be present at the Special Meeting to respond
to any questions that our shareholders may have regarding the business to be
transacted.
The Board of Directors of GA Financial, Inc. 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.
Please sign and return the enclosed proxy card promptly. Your cooperation
is appreciated since a majority of the common stock must be represented, either
in person or by proxy, to constitute a quorum for the conduct of business.
On behalf of the Board of Directors and all of the employees of the Company
and the Association, I thank you for your continued interest and support.
Sincerely yours,
/s/ John M. Kish
John M. Kish
Chairman of the Board and Chief Executive Officer
<PAGE>
GA FINANCIAL, INC.
4750 Clairton Boulevard
Pittsburgh, Pennsylvania 15236
__________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on October 16, 1996
__________________________________
NOTICE IS HEREBY GIVEN that the special meeting of shareholders (the
"Special Meeting") of GA Financial, Inc. (the "Company") will be held on October
16, 1996, at 10:00 a.m., Pittsburgh Time, at The Bradley House, 5239 Brownsville
Road, Pittsburgh, Pennsylvania 15236.
The purpose of the Special Meeting is to consider and vote upon the
following matters:
1. The approval of the GA Financial, Inc. 1996 Stock-Based Incentive Plan;
and
2. Such other matters as may properly come before the meeting and at any
adjournments thereof, including whether or not to adjourn the meeting.
The Board of Directors has established August 23, 1996, as the record date
for the determination of shareholders entitled to receive notice of and to vote
at the Special Meeting and at any adjournments thereof. Only record holders of
the common stock of the Company as of the close of business on such record date
will be entitled to vote at the Special Meeting or any adjournments thereof. In
the event there are not sufficient votes for a quorum or to approve the
foregoing proposal at the time of the Special Meeting, the Special Meeting may
be adjourned in order to permit further solicitation of proxies by the Company.
A list of shareholders entitled to vote at the Special Meeting will be available
at GA Financial, Inc., 4750 Clairton Boulevard, Pittsburgh, Pennsylvania 15236,
for a period of ten days prior to the Special Meeting and will also be available
at the Special Meeting itself.
By Order of the Board of Directors
/s/ Lawrence A. Michael
Lawrence A. Michael
Corporate Secretary
Pittsburgh, Pennsylvania
August 30, 1996
<PAGE>
GA FINANCIAL, INC.
_______________________
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
October 16, 1996
_______________________
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to shareholders of GA Financial,
Inc. (the "Company") in connection with the solicitation by the Board of
Directors ("Board of Directors" or "Board") of proxies to be used at the special
meeting of shareholders, to be held on October 16, 1996 (the "Special Meeting"),
and at any adjournments thereof. This Proxy Statement is first being mailed to
record holders on or about August 30, 1996.
Regardless of the number of shares of common stock owned, it is important
that record holders of a majority of the shares be represented by proxy or in
person at the Special Meeting. Shareholders are requested to vote by completing
the enclosed proxy card and returning it signed and dated in the enclosed
postage-paid envelope. Shareholders are urged to indicate their vote in the
spaces provided on the proxy card. Proxies solicited by the Board of Directors
of the Company will be voted in accordance with the directions given therein.
Where no instructions are indicated, signed proxy cards will be voted FOR the
approval and ratification of the specific proposal presented in this proxy
statement.
Other than the matters listed on the attached Notice of Special Meeting of
Shareholders, the Board of Directors knows of no additional matters that will be
presented for consideration at the Special Meeting. Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Special Meeting and at any adjournments
thereof, including whether or not to adjourn the Special Meeting.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Corporate Secretary of the Company, by
delivering to the Company a duly executed proxy bearing a later date, or by
attending the Special Meeting and voting in person. However, if you are a
shareholder whose shares are not registered in your own name, you will need
appropriate documentation from your record holder to vote personally at the
Special Meeting.
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Kissel-
Blake, Inc., a proxy solicitation firm, will assist the Company in soliciting
proxies for the Special Meeting and will be paid a fee of $4,000, plus out-of-
pocket expenses. Proxies may also be solicited personally or by telephone by
directors, officers and other employees of the Company and its subsidiary,
<PAGE>
Great American Federal Savings and Loan Association (the "Association"), without
additional compensation therefor. The Company will also request persons, firms
and corporations holding shares in their names, or in the name of their
nominees, which are beneficially owned by others, to send proxy material to and
obtain proxies from such beneficial owners, and will reimburse such holders for
their reasonable expenses in doing so.
Voting Securities
The securities which may be voted at the Special Meeting consist of shares
of common stock of the Company ("Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Special Meeting, except
as described below.
The close of business on August 23, 1996, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
shareholders of record entitled to notice of and to vote at the Special Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 8,900,000 shares.
As provided in the Company's Certificate of Incorporation, record holders
of Common Stock who beneficially own in excess of 10% of the outstanding shares
of Common Stock (the "Limit") are not entitled to any vote in respect of the
shares held in excess of the Limit. A person or entity is deemed to
beneficially own shares owned by an affiliate of, as well as, by persons acting
in concert with, such person or entity. The Company's Certificate of
Incorporation authorizes the Board of Directors (i) to make all determinations
necessary to implement and apply the Limit, including determining whether
persons or entities are acting in concert, and (ii) to demand that any person
who is reasonably believed to beneficially own stock in excess of the Limit to
supply information to the Company to enable the Board of Directors to implement
and apply the Limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Special
Meeting. In the event that there are not sufficient votes for a quorum or to
approve or ratify any proposal at the time of the Special Meeting, the Special
Meeting may be adjourned in order to permit the further solicitation of proxies.
As to the matter being proposed for shareholder action set forth in
Proposal 1, the proxy card being provided by the Board of Directors enables a
shareholder to check the appropriate box on the proxy card to (i) vote "FOR" the
item, (ii) vote "AGAINST" the item, or (iii) "ABSTAIN" from voting on such item.
Under Delaware law, an affirmative vote of the holders of a majority of the
shares of Common Stock present at the Special Meeting, in person or by proxy,
and entitled to vote is required to constitute shareholder approval of Proposal
1. Shares as to which the "ABSTAIN" box has been selected on the proxy card
with respect to Proposal 1 will be counted as present and entitled to vote and
have the effect of a vote against the matter for which the "ABSTAIN" box has
been selected. In contrast, shares underlying broker non-votes or in
2
<PAGE>
excess of the Limit are not counted as present and entitled to vote and have no
effect on the vote on the matter presented. For further information on the vote
required to implement Proposal 1 during the first year following Conversion, see
the discussion under Proposal 1 herein.
Proxies solicited hereby will be returned to the Company's transfer agent,
Registrar and Transfer Company ("RTC"). The Board of Directors have designated
RTC to act as inspectors of election and tabulate the votes at the Special
Meeting. RTC is not otherwise employed by, or a director of, the Company or any
of its affiliates. After the final adjournment of the Special Meeting, the
proxies will be returned to the Company.
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date or as disclosed in certain reports
received to date regarding such ownership filed by such persons with the Company
and with the Securities and Exchange Commission ("SEC"), in accordance with
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended
("Exchange Act"). Other than those persons listed below, the Company is not
aware of any person, as such term is defined in the Exchange Act, that owns more
than 5% of the Company's Common Stock as of the Record Date.
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Beneficial Percent of
Title of Class of Beneficial Owner Ownership Class
- ---------------- -------------------------------------- -------------- ----------
<S> <C> <C> <C>
Common Stock Great American Federal Savings and 712,000(1) 8.0%
Loan Association Employee Stock
Ownership Plan ("ESOP")
4750 Clairton Boulevard
Pittsburgh, Pennsylvania 15236
Common Stock Friedman, Billings, Ramsey & Co., Inc. 590,200(2) 6.6%
1001 19th Street N.
18th Floor
Arlington, Virginia 22209
Common Stock John Hancock Advisers, Inc. 530,000(2) 6.0%
101 Huntington Avenue
Boston, Massachusetts 02199
</TABLE>
(1) Shares of Common Stock were acquired by the ESOP in the Association's
stock conversion. The ESOP Committee administers the ESOP. First
Bankers' Trust, N.A. has been appointed as the corporate trustee for
the ESOP ("ESOP Trustee"). The ESOP Trustee, subject to its fiduciary
duty, must vote all allocated shares held in the ESOP in accordance
with the instructions of the participants. At August 23, 1996, no
shares had been allocated under the ESOP and 712,000 shares remain
unallocated. Each participant, however, will be deemed to have one
share of Common Stock in the ESOP allocated to such participant's
account for the purpose of providing voting instructions to the ESOP
Trustee. Under the ESOP, unallocated shares will be voted by the ESOP
Trustee in a manner calculated to most accurately reflect the
instructions received from participants regarding the allocated stock
so long as such vote is in accordance with the provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
(2) Based on information disclosed in Form 13F filed with the SEC for the
quarter ended June 30, 1996.
3
<PAGE>
Security Ownership of Management
The following table sets forth information as of the Record Date as to
shares of Common Stock beneficially owned by directors and named executive
officers individually and by all executive officers and directors as a group.
Ownership information is based upon information furnished by the respective
individuals.
<TABLE>
<CAPTION>
Shares of
Common Stock Percent
Beneficially of
Name Title(1) Owned(2)(3) Class(4)
- -------------------------- -------------------------------------- --------------- --------
<S> <C> <C> <C>
Directors
John M. Kish Chairman of the Board and Chief 20,000 *
Executive Officer of the Company
and Chairman of the Board of the
Association
John G. Micenko Director and President of the 20,000 *
Company and Director, President
and Chief Executive Officer of the
Association
William G. Boyer Director 5,000 *
Thomas E. Bugel Director 20,000 *
Darrell J. Hess Director 20,000 *
Thomas M. Stanton Director 5,000 *
David R. Wasik Director 20,000 *
Named Executive Officers
Andrew R. Getsy Vice President and Treasurer of 10,650 *
the Association
All directors and
executive officers as a
group (15 persons) 154,143 1.73%
</TABLE>
- --------------------
* Does not exceed 1.0% of the Company's voting securities.
(1) Titles are for both the Company and the Association unless otherwise
indicated.
(2) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting and dispositive power as to shares reported.
(3) Does not include options and awards intended to be granted under the
Incentive Plan, which is subject to stockholder approval. For a discussion
of the options and awards that are intended to be granted under the
Incentive Plan, see Proposal 1.
(4) As of the Record Date, there were 8,900,000 shares of Common Stock
outstanding.
4
<PAGE>
Interest of Certain Persons in Matters to be Acted Upon
Upon obtaining stockholder approval, the Company and the Association intend
to grant to outside directors, and selected officers and employees of the
Association and the Company stock options and awards in the form of shares of
Common Stock under the GA Financial, Inc. 1996 Stock-Based Incentive Plan (the
"Incentive Plan"), being presented for approval in Proposal 1.
Directors' Compensation
Directors' Fees. Non-employee members of the Board of Directors of the
Company currently receive an annual retainer fee of $1,000 and a fee of $400 for
each Board meeting and a fee of $175 for each committee meeting attended.
However, Directors of the Company do not receive Company Board meeting fees on
dates when an Association Board of Directors meeting is held.
Non-employee directors of the Association are currently paid an annual
retainer of $16,800. Non-employee directors of the Association are also
currently paid a fee of $175 for Committee meetings attended and a fee of $400
for each special meeting of the Board of Directors attended. The Association
also maintains one Director Emeritus position that is currently filled by Joseph
E. Bugel, the former Chairman of the Board of Directors who served with the
Association from 1939 to 1988. Mr. Bugel is paid an annual retainer of $6,000
and a fee of $400 for each Board of Directors meeting which he attends.
Incentive Plan. The Company is presenting to shareholders for approval the
Incentive Plan, under which all directors of the Company and the Association are
eligible to receive awards. See Proposal 1 for a summary of the material terms
of the Incentive Plan.
5
<PAGE>
Executive Compensation. The following table shows, for the years ended
December 31, 1995 and 1994, the cash compensation paid by the Association, as
well as certain other compensation paid or accrued for those years, to the Chief
Executive Officers of the Company and the Association, the Vice President and
Treasurer of the Association, the highest paid executive officers of the Company
and the Association, who earned and/or received salary and bonus in excess of
$100,000 in fiscal year 1995 ("Named Executive Officers"). No other executive
officer of the Company or the Association earned and/or received salary and
bonus in excess of $100,000 in fiscal year 1995.
<TABLE>
<CAPTION>
Long-Term Compensation
-------------------------------------------
Annual Compensation(1) Awards Payouts
----------------------------------------------------------------------------------
Other Securities
Annual Restricted Underlying LTIP All Other
Name and Principal Compensation Stock Awards Options/SARs Payouts Compensation
Positions (2) Year Salary($) Bonus($) ($)(3) ($)(4) (#)(5) ($)(6) ($)(7)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John G. Micenko, 1995 $199,680 $41,600 $ - - - - $8,663
Director and President of 1994 192,000 32,000 - - - - 8,678
the Company and Director,
President and Chief
Executive Officer of the
Association
Andrew R. Getsy, 1995 118,231 19,705 - - - - 9,247
Vice President and 1994 113,684 14,211 - - - - 8,459
Treasurer of the
Association
John M. Kish, 1995 - - 20,625 - - - -
Chairman of the Board and
Chief Executive Officer
of the Company and
Chairman of the Board of
the Association
</TABLE>
____________________
(1) Under Annual Compensation, the column titled "Bonus" consists of board
approved discretionary bonus.
(2) As of January 1, 1996, Mr. Kish was appointed Chief Executive Officer of the
Company. Prior to his appointment as Chief Executive Officer, Mr. Kish
served as the Chairman of the Board of the Association since 1990 and as a
Director of the Association since 1983. For a discussion of Mr. Kish's base
salary, see "Employment Agreements."
(3) For 1995, there were no (a) perquisites over the lesser of $50,000 or 10% of
the individual's total salary and bonus for the year; (b) payments of above-
market preferential earnings on deferred compensation; (c) payments of
earnings with respect to long-term incentive plans prior to settlement or
maturation; (d) tax payment reimbursements; nor (e) preferential discounts
on stock. For 1995, the Association had no restricted stock or stock
related plans in existence. For Mr. Kish, such amounts represent Board of
Directors fees paid in 1995.
(4) No stock awards were granted or earned in 1994 and 1995. See Proposal 1.
(5) No stock options or SARs were earned or granted in 1994 and 1995. See
Proposal 1.
(6) For 1994 and 1995, there were no payouts or awards under any long-term
incentive plan.
(7) Other compensation includes a taxable fringe benefit group term life
insurance.
6
<PAGE>
Employment Agreements
The Association and the Company have entered into employment agreements
with Messrs. Kish and Micenko (individually, the "Executive"). These employment
agreements are intended to ensure that the Association and the Company will be
able to maintain a stable and competent management base. The continued success
of the Association and the Company depends to a significant degree on the skills
and competence of Messrs. Kish and Micenko.
The employment agreements provide for a three-year term for Messrs. Kish
and Micenko. The Association employment agreement provides that, commencing on
the first anniversary date and continuing each anniversary date thereafter, the
Board of the Association may extend the agreement for an additional year so that
the remaining term shall be three years, unless written notice of non-renewal is
given by the Board of the Association after conducting a performance evaluation
of the Executive. The terms of the Company employment agreements shall be
extended on a daily basis unless written notice of non-renewal is given by the
Board of the Company. The agreements provide that the Executive's base salary
will be reviewed annually. The base salary of Mr. Kish is a percentage of an
annual base salary of $180,000 based upon the amount of time expended by Mr.
Kish in his role as the Chairman of the Board and Chief Executive Officer of the
Company. It is currently expected that Mr. Kish's annual base salary for 1996
will be approximately $108,000. The current base salary for Mr. Micenko as
President of the Company and President and Chief Executive Officer of the
Association is $205,670. In addition to the base salary, the agreements provide
for, among other things, participation in stock benefits plans and other fringe
benefits applicable to executive personnel.
The agreements provide for termination by the Association or the Company
for cause as defined in the agreements at any time. In the event the
Association or the Company chooses to terminate the Executive's employment for
reasons other than for cause, or in the event of the Executive's resignation
from the Association and the Company upon: (i) failure to re-elect the
Executive to his current offices; (ii) a material change in the Executive's
functions, duties or responsibilities; (iii) a relocation of the Executive's
principal place of employment by more than 25 miles; (iv) liquidation or
dissolution of the Association or the Company; or (v) a breach of the agreement
by the Association or the Company, the Executive or, in the event of Executive's
subsequent death, his beneficiary, beneficiaries or estate, as the case may be,
would be entitled to receive an amount equal to the remaining base salary
payments due to the Executive and the contributions that would have been made on
the Executive's behalf to any employee benefit plans of the Association or the
Company during the remaining term of the agreement. The Association and the
Company would also continue and pay for the Executive's life, health and
disability coverage for the remaining term of the Agreement. Upon any
termination of the Executive, the Executive is subject to a one year non-
competition agreement.
Under the agreements, if voluntary or involuntary termination follows a
change in control of the Association or the Company (as defined in the
Employment Agreement), the Executive or, in the event of the Executive's death,
his beneficiary, would be entitled to a severance payment equal to the greater
of: (i) the payments due for the remaining terms of the agreement; or (ii)
three times the average of the five preceding taxable years' annual
compensation. The
7
<PAGE>
Association and the Company would also continue the Executive's life, health,
and disability coverage for thirty-six months. Notwithstanding that both
agreements provide for a severance payment in the event of a change in control,
the Executive would only be entitled to receive a severance payment under one
agreement. Based solely on the compensation reported in the summary
compensation table for 1995 in the case of Mr. Micenko and the projected base
salary of $108,000 for Mr. Kish and excluding any benefits under any employee
plan which may be payable, following a change in control and termination of
employment Messrs. Kish and Micenko would receive severance payments in the
amount of approximately $324,000 and $617,010, respectively.
Payments under the Employment Agreements in the event of a change in
control may constitute some portion of an excess parachute payment under Section
280G of the Internal Revenue Code (the "Code") for executive officers, resulting
in the imposition of an excise tax on the recipient and denial of the deduction
for such excess amounts to the Company and the Association.
Payments to the Executive under the Association's agreement will be
guaranteed by the Company in the event that payments or benefits are not paid by
the Association. Payment under the Company's agreement would be made by the
Company. All reasonable costs and legal fees paid or incurred by the Executive
pursuant to any dispute or question of interpretation relating to the
Agreements shall be paid by the Association or Company, respectively, if the
Executive is successful on the merits pursuant to a legal judgment, arbitration
or settlement. The employment agreements also provide that the Association and
Company shall indemnify the Executive to the fullest extent allowable under
federal and Delaware law, respectively.
Change in Control Agreements
For similar reasons as with the Employment Agreements, the Association and
the Company have entered into Change in Control Agreements with Mr. Getsy and
seven other executive officers (individually, the "Executive"). Each Change in
Control Agreement provides for a two year term. Commencing on the date of the
execution of the Company's Change in Control Agreement, the term shall be
extended for one day each day until such time as the Board of Directors of the
Company or the Executive elects by written notice not to extend the term, at
which time the Change in Control Agreement will end on the second anniversary of
the date of notice. The Company's Change in Control Agreement provides that at
any time following a change in control of the Association or the Company (as
defined in the agreement), if the Company terminates the Executive's employment
for any reason other than cause, or if the Executive terminates his or her
employment following demotion, loss of title, office or significant authority, a
reduction in compensation, or relocation of the principal place of employment of
more than 25 miles, the Executive, or in the event of Executive's subsequent
death, Executive's beneficiary or beneficiaries or estate, as the case may be,
would be entitled to a sum equal to two (2) times the Executive's annual
compensation, including bonuses, cash and stock compensation and other benefits
for the preceding twelve months. The Company would also continue the
Executive's life, medical and disability coverage for twenty-four (24) full
calendar months from the date of termination. The Association's Change in
Control Agreement is similar to that of the
8
<PAGE>
Company; however, any payments to the Executive under the Association's Change
in Control Agreement would be subtracted from any amount due simultaneously
under the Company's Change in Control Agreement. Payments to the Executive
under the Association's Change in Control Agreement will be guaranteed by the
Company in the event that payments or benefits are not paid by the Association.
Based solely on the Compensation reported in the summary compensation table for
1995 and excluding any benefits under any employee plan which may be payable,
following a change in control and termination of employment, the eight officers
covered by the Agreements would receive a severance payment in the amount of
approximately $1.36 million.
Payments under the Change in Control Agreements in the event of a change in
control may constitute some portion of an excess parachute payment under Section
280G of the Code for executive officers, resulting in the imposition of an
excise tax on the recipient and denial of the deduction for such excess amounts
to the Company and the Association.
Incentive Plan. The Company is presenting to stockholders for approval the
Incentive Plan under which all employees of the Company and the Association are
eligible to receive awards. See Proposal 1 for a summary of the material terms
of the Incentive Plan.
Pension Plan. The Association participates in the Financial Institutions
Retirement Plan, administered by the Pentegra Group, which is a defined benefit
pension plan, for its employees (the "Pension Plan"). As discussed below, the
Pension Plan was modified as of July 1, 1996. The following table indicates the
annual retirement benefit that would be payable under the current terms of the
Pension Plan upon retirement at age 65 to a participant electing to receive his
retirement benefit in the standard form of benefit, assuming various specified
levels of plan compensation and various specified years of credited service. A
fully vested participant may elect early retirement as of age 45. However, for
each full year prior to age 65, the benefit payable is reduced by 3% to 6%,
depending on age of the employee at the time of retirement. The benefits listed
in the retirement benefit table are based upon salary only and are not subject
to any social security adjustment. The following table includes benefits under
the current terms of the Pension Plan together with any additional amounts
received under the Association's non-qualified Supplemental Retirement Plan.
9
<PAGE>
<TABLE>
<CAPTION>
High-5 10 Years 15 Years 20 Years 25 Years 30 Years
Average Benefit Benefit Benefit Benefit Benefit
Compensation Service Service Service Service Service
- ------------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 20,000 $ 2,400 $ 3,600 $ 4,800 $ 6,000 $ 6,000
30,000 3,600 5,400 7,200 9,000 9,000
50,000 6,000 9,000 12,000 15,000 15,000
75,000 9,000 13,500 18,000 22,500 22,500
100,000 12,000 18,000 24,000 30,000 30,000
150,000 28,000 27,000 36,000 45,000 45,000
200,000 24,000 36,000 48,000 60,000 60,000
250,000 30,000 45,000 60,000 75,000 75,000
</TABLE>
---------
(1) The maximum allowable salary for 1995 is $150,000.
Effective July 1, 1996, in conjunction with the Association's adoption of a
savings plan qualified under Section 401K the Code (the "401K Plan") and the
employee stock ownership plan (the "ESOP"), the Association modified the Pension
Plan from a self-administered defined benefit plan with a 60 percent, High-3
formula and a 25 year target service minimum to a defined benefit plan with a 30
percent, High-5 formula and a 25 year target service minimum. All participants
in the Pension Plan as of such date of modification will effectively receive a
benefit based upon the terms of the plan prior to the modifications. The
following table indicates the annual retirement benefit that would be payable
under the Pension Plan upon retirement at age 65 to participants in the Plan as
of July 1, 1996, who elect to receive their retirement benefit in the standard
form of benefit, assuming various specified levels of plan compensation and
various specified years of credited service. The benefits listed in the
retirement tables are based upon salary only and are not subject to any Social
Security adjustment.
10
<PAGE>
Table I below sets forth estimated annual pension benefits for individuals
at age 65 as of the June 30, 1996 accrued benefit date.
<TABLE>
<CAPTION>
High-3 10 Years 15 Years 20 Years 25 Years 30 Years
Average Benefit Benefit Benefit Benefit Benefit
Compensation Service Service Service Service Service
- ------------ --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 25,000 $ 9,000 $12,000 $15,000 $15,000 $15,000
50,000 18,000 24,000 30,000 30,000 30,000
75,000 27,000 36,000 45,000 45,000 45,000
100,000 36,000 48,000 60,000 60,000 60,000
125,000 45,000 60,000 75,000 75,000 75,000
150,000 54,000 72,000 90,000 90,000 90,000
175,000 54,000 72,000 90,000 90,000 90,000
200,000 54,000 72,000 90,000 90,000 90,000
250,000 54,000 72,000 90,000 90,000 90,000
</TABLE>
---------
(1) The maximum amount of annual compensation which can be considered in
computing benefits under Section 401(a)(17) of the Internal Revenue
Code is $150,000.
The following table sets forth the years of credited service (i.e., benefit
service) as of December 31, 1995 for each Named Executive Officer.
<TABLE>
<CAPTION>
Credited
Service
--------------
Years Months
------ ------
<S> <C> <C>
John M. Kish..... *
John G. Micenko.. 39 6
Andrew R. Getsy.. 29 10
</TABLE>
- ---------
* Mr. Kish's participation in the pension plan will commence in 1997.
11
<PAGE>
Supplemental Executive Retirement Plan. The Association has implemented a
non-qualified Supplemental Retirement Plan ("SERP") to provide certain officers
and highly compensated employees with additional retirement benefits. The
benefits provided under the SERP will make up the benefits lost to the SERP
participants due to application of limitations on compensation and maximum
benefits applicable to the Association's tax qualified 401(k) Plan, ESOP and the
Pension Plan. Additionally, this SERP may provide benefits which mitigate the
effect of early retirement under the Pension Plan to the extent that the Pension
Plan is not amended to eliminate such reduction. Benefits will be provided
under the SERP at the same time and in the same form as the related benefits
will be provided under the 401(k) Plan, ESOP and the Pension Plan.
Employee Stock Ownership Plan and Trust. The Association established an
ESOP and related trust for eligible employees effective March 26, 1996.
Employees employed with the Association as of January 1, 1996 and employees of
the Company or the Association employed after such date, who have been credited
with at least 1,000 hours during a twelve month period and who have attained the
age of 21 become participants. The ESOP purchased 8% or 712,000 shares of the
Common Stock issued in the Conversion. In order to fund the ESOP's purchase of
the Common Stock, the ESOP borrowed funds from the Company equal to 100% of the
aggregate purchase price of the Common Stock. The loan will be paid repaid
principally from the Company's or the Association's contribution's to the ESOP
over a period of fourteen years and the collateral for the loan will be the
Common Stock purchased by the ESOP.
Transactions With Certain Related Persons
The Association's current policy provides that all loans made by the
Association to its directors and executive officers 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.
Prior to the Financial Institutions Recovery, Reform and Enforcement Act of 1989
("FIRREA"), the Association made loans to executive officers with discounted
interest rates.
Set forth below is certain information as of December 31, 1995, with
respect to loans made by the Association on preferential terms, as explained
above, to executive officers of the Company and their affiliates which in the
aggregate exceeded $60,000 at any time since January 1, 1995 plus any additional
indebtedness of such persons to the Association.
12
<PAGE>
<TABLE>
<CAPTION>
Largest
Amount Balance Interest
Maturity Outstanding as of Rate as of
Date Date Since December December Type of
Name and Position of Loan of Loan January 1, 1995 31, 1995 31, 1995 Loan
- ----------------------------------------------------------- -------- -------- ---------------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Lawrence A. Michael 7/6/87 8/1/17 $ 64,152 $ 62,770 6.25% Mortgage
Secretary of the Company and Secretary and Vice
President of the Association
Raymond G. Suchta 1/9/87 6/1/17 121,040 115,863 6.50 Mortgage
Chief Financial Officer and Treasurer of the Company and
Vice President of the Association
Wayne A. Callen 11/18/86 6/1/17 114,348 112,127 7.00 Mortgage
Vice President of the Association
Eugene G. Hreha 8/27/80 9/1/10 71,442 69,080 8.50 Mortgage
Vice President of the Association
</TABLE>
PROPOSAL 1. APPROVAL OF THE
GA FINANCIAL, INC.
1996 STOCK-BASED INCENTIVE PLAN
The Board of Directors of the Company is presenting for stockholder approval
the GA Financial, Inc. 1996 Stock-Based Incentive Plan ("Incentive Plan"), in
the form attached hereto as Appendix A. The purpose of the Incentive Plan is to
attract and retain qualified personnel in key positions, provide officers,
employees and non-employee directors ("Outside Directors") with a proprietary
interest in the Company as an incentive to contribute to the success of the
Company and reward employees for outstanding performance. The following is a
summary of the material terms of the Incentive Plan which is qualified in its
entirety by the complete provisions of the Incentive Plan document attached as
Appendix A.
General
The Incentive Plan authorizes the granting of options to purchase Common
Stock, option-related awards and awards of Common Stock (collectively,
"Awards"). Subject to certain adjustments to prevent dilution of Awards to
participants, the maximum number of shares reserved for Awards under the
Incentive Plan is 1,246,000 shares, provided such number is not in excess of 14%
of the outstanding shares of the Common Stock as of the effective date of the
13
<PAGE>
Incentive Plan. The maximum number of shares reserved for purchase pursuant to
the exercise of options and option-related Awards granted under the Incentive
Plan is 890,000 shares, provided such number is not in excess of 10% of the
outstanding shares of Common Stock as of the effective date of the Incentive
Plan. The maximum number of the shares reserved for award of Common Stock
("Stock Awards") is 356,000 shares, provided such number is not in excess of 4%
of the outstanding shares of Common Stock as of the effective date of the
Incentive Plan. All officers, other employees and Outside Directors of the
Company and its affiliates are eligible to receive Awards under the Incentive
Plan. The Incentive Plan will be administered by a committee (the "Committee").
Subject to the regulations of the Office of Thrift Supervision, authorized but
unissued shares or shares previously issued and reacquired by the Company may be
used to satisfy Awards under the Incentive Plan, resulting in an increase in the
number of shares outstanding, and may have a dilutive effect on the holdings of
existing stockholders.
Awards to Employees
Types of Awards. The Incentive Plan authorizes the grant of Awards to
employees in the form of: (i) options to purchase the Company's Common Stock
intended to qualify as incentive stock options under Section 422 of the Code
(options which afford tax benefits to the recipients upon compliance with
certain conditions and which do not result in tax deductions to the Company),
referred to as "Incentive Stock Options"; (ii) options that do not so qualify
(options which do not afford income tax benefits to recipients, but which may
provide tax deductions to the Company), referred to as "Non-statutory Stock
Options"; (iii) limited rights which are exercisable only upon a change in
control of the Company (as defined in the Incentive Plan) that is not accounted
for as a "pooling of interests" ("Limited Rights"); (iv) stock awards, that
provide a grant of Common Stock which vests over time (such vesting may be
contingent upon the attainment of stated performance goals); (v) dividend
equivalent rights which provide option holders with a cash benefit in the event
of the payment by the Company of an extraordinary dividend (as defined below) to
shareholders ("Dividend Equivalent Rights"); and (vi) equitable adjustment
rights which provide option holders upon the payment of an extraordinary
dividend an equitable adjustment of the number of shares and/or exercise price
at the discretion of the Committee ("Equitable Adjustment Rights").
Options. Under the Incentive Plan on the date of the Special Meeting,
assuming the requisite stockholder approval is obtained, the Board of Directors
intends to grant options to employees (including executive officers) for 526,500
shares (with Limited Rights and Dividend Equivalent Rights or Equitable
Adjustment Rights) and options to directors for 100,000 shares (with Limited
Rights and Dividend Equivalent Rights or Equitable Adjustment Rights). Options
for 263,500 shares will be reserved and available under the Incentive Plan for
future grants to directors and/or employees. All options granted to employees
will be qualified as Incentive Stock Options to the extent permitted under
Section 422 of the Code. Incentive Stock Options, at the discretion of the
Committee with the concurrence of the holder, may be converted into Non-
Statutory Stock Options. Pursuant to the Incentive Plan, the Committee has the
authority to determine the date or dates on which each stock option shall become
exercisable; provided, however, under the terms of the Incentive Plan any stock
option granted prior to March 26, 1997 may not vest in annual installments of
greater than 20% of the number of shares underlying the
14
<PAGE>
options awarded commencing at least one year from the date of grant, and the
vesting of such options may not be accelerated except in the case of death or
disability. The Board of Directors intends to amend this feature in the future,
see "New Plan Benefits" below. The Committee may also decide to make the
vesting of future option awards contingent upon the Company's, Association's or
grantee's attainment of performance goals set by the Committee. The exercise
price of all Incentive Stock Options must be 100% of the fair market value of
the underlying Common Stock at the time of grant, except as provided below. The
exercise price may be paid in cash or in Common Stock at the discretion of the
Committee. See "Payout Alternatives" and "Alternative Option Payments."
Incentive Stock Options may only be granted to employees. In order to qualify
as Incentive Stock options under Section 422 of the Code, the exercise price
must not be less than 100% of the fair market value on the date of grant.
Incentive Stock Options granted to any person who is the beneficial owner of
more than 10% of the outstanding voting stock may be exercised only for a period
of five years from the date of grant and the exercise price must be at least
equal to 110% of the fair market value of the underlying Common Stock on the
date of grant.
Termination of Employment. Unless otherwise determined by the Committee, upon
termination of an employee's services for any reason other than death,
disability or termination for cause, the Incentive Stock Options shall be
exercisable for a period of three months following termination. The Committee
in its discretion may redesignate Incentive Stock Options as Non-statutory Stock
Options, and extend this period. Notwithstanding the foregoing, in the event of
death or disability, options will become fully vested and shall be exercisable
for up to one year thereafter.
Limited Rights. Limited Rights are related to specific options granted and
become exercisable in the event of a change in control of the Association or the
Company. Upon exercise, the optionee will be entitled to receive in lieu of
purchasing the stock underlying the option, a lump sum cash payment equal to the
difference between the exercise price of the related option and the fair market
value of the shares of Common Stock subject to the option on the date of
exercise of the right less any applicable tax withholding.
Dividend Equivalent Rights. Simultaneously with the grant of any option to
any employee, the Committee may grant a Dividend Equivalent Right with respect
to all or some of the shares covered by such option. The Dividend Equivalent
Right provides the employee with a separate cash benefit equal to 100% of the
amount of any extraordinary dividend declared by the Company on shares of Common
Stock subject to an option. Under the terms of the Incentive Plan, an
extraordinary dividend is any dividend paid on shares of Common Stock where the
rate of the dividend exceeds the Association's weighted average cost of funds on
interest bearing liabilities for the current and preceding three quarters. Upon
the payment of an extraordinary dividend, the holder of a Dividend Equivalent
Right will receive, at the time of vesting of the related option, an amount of
cash or some other payment as determined under the Incentive Plan, equal to 100%
of the extraordinary dividend paid on shares of Common Stock, multiplied by the
number of shares subject to the underlying option plus any earnings thereon
minus any tax
15
<PAGE>
withholding amounts. Payments shall be decreased by the amount of any
applicable tax withholding prior to distribution in accordance with the
Incentive Plan. The Dividend Equivalent Right is transferable only when the
underlying option is transferable and under the same conditions.
Equitable Adjustment Right. Simultaneously with the grant of any option, in
the alternative to a Dividend Equivalent Right, the Committee may grant an
Equitable Adjustment Right. Upon the payment of an extraordinary dividend as
described above, the Committee may adjust the number of shares and/or the
exercise price of the options underlying the Equitable Adjustment Right, as the
Committee deems appropriate.
Option Grants. It is currently intended that the options proposed to be
granted will include Limited Rights and Equitable Adjustment Rights and will
vest and become exercisable on a cumulative basis in equal installments over
five (5) years commencing one year from the date of grant; provided, however,
that all options will be immediately exercisable in the event the optionee's
employment is terminated due to death or disability. The exercise price of all
such options will be 100% of the fair market value of the underlying Common
Stock at the time of grant, which is intended to be the date of the Special
Meeting. See "New Plan Benefits Table" below for information concerning options
intended to be granted under the Incentive Plan assuming stockholder approval.
As of August 22, 1996, the closing price per share of Common Stock, as
reported on the American Stock Exchange was $11.625.
Stock Awards. The Incentive Plan authorizes the granting of Stock Awards to
employees. The Committee has the authority to determine the dates on which
Stock Awards granted to an employee will vest; provided, however, that any Stock
Award granted prior to March 26, 1997 may not vest at a rate greater than 20%
per year commencing at least one year from the date of grant and the vesting of
any Stock Award may not be accelerated except in the case of death or
disability. The Board of Directors intends to amend this feature in the future,
see "New Plan Benefits" below. All Stock Award grants will immediately vest
upon termination of employment due to death or disability. Under the Incentive
Plan, the vesting of Stock Awards may also be contingent upon the attainment of
certain performance goals by the Company, Association or grantee which such
performance goals would, if any, be established by the Committee. An agreement
setting forth the terms of the Stock Award ("Stock Award Agreement") shall set
forth the vesting period and performance goals, if any, which must be attained.
The performance goals may be set by the Committee on an individual basis, for
all Stock Awards made during a given period of time, or for all Stock Awards for
indefinite periods. A Stock Award may only be granted from the shares reserved
and available for grant under the Incentive Plan. No Stock Award that is
subject to a performance goal is to be distributed to the employee until the
Committee confirms that the underlying performance goal has been achieved.
Stock Awards are generally nontransferable and nonassignable as provided in
the Incentive Plan. The Committee has the power, under the Incentive Plan, to
permit transfers. When plan shares are distributed in accordance with the
Incentive Plan, the recipients will also receive
16
<PAGE>
amounts equal to accumulated cash and stock dividends (if any) with respect
thereto plus earnings thereon minus any required tax withholding amounts. Prior
to vesting, recipients of Stock Awards may direct the voting of shares of Common
Stock granted to them and held in the trust. Shares of Common Stock held by the
Incentive Plan trust which have not been allocated or for which voting has not
been directed are voted by the trustee in the same proportion as the awarded
shares are voted in accordance with the directions given by all recipients of
Stock Awards.
Awards to Outside Directors
Each member of the Board of Directors of the Company who is not an officer or
employee of the Company or the Association will receive Non-statutory Stock
Options to purchase 20,000 shares of Common Stock with Dividend Equivalent
Rights attached, and Stock Awards for 10,000 shares of Common Stock
(collectively "Directors' Awards"). Each Director Emeritus will receive stock
awards for 5,000 shares of Common Stock.
The Directors' Awards initially granted under the Incentive Plan will vest
over a five-year period, at a rate of 20% each year commencing with the first
anniversary of the date of the grant. All Directors Awards will continue to
vest provided the Director is elected as a Director Emeritus or serves as a
consultant to the Association or Company. All Directors' Awards will
immediately vest upon termination of employment due to death or disability. See
"New Plan Benefit" below.
The exercise price of each option shall equal the fair market value of the
Common Stock on the date the option is granted, which is intended to be the date
of the Special Meeting. All unexercised options granted under the Incentive
Plan expire 10 years following the date of grant.
When Stock Awards are distributed in accordance with the Incentive Plan, the
recipients will also receive amounts equal to accumulated cash and stock
dividends (if any) with respect thereto plus earnings minus any required tax
withholding amounts. Prior to vesting, recipients of Stock Awards may direct
the voting of shares of Common Stock granted to them and held in the trust.
Shares of Common Stock held by the Incentive Plan trust will be voted as
provided for under "Awards to Employees - Stock Awards."
Tax Treatment
Stock Options. An optionee will generally not be deemed to have recognized
taxable income upon grant or exercise of any Incentive Stock Option, provided
that shares transferred in connection with the exercise are not disposed of by
the optionee for at least one year after the date the shares are transferred in
connection with the exercise of the option and two years after the date of grant
of the option. If the holding periods are satisfied, upon disposal of the
shares, the aggregate difference between the per share option exercise price and
the fair market value of the Common Stock is recognized as income taxable at
long term capital gains rates. No compensation deduction may be taken by the
Company as a result of the grant or exercise of Incentive Stock Options,
assuming these holding periods are met.
17
<PAGE>
In the case of the exercise of a Non-statutory Stock Option, an optionee will
be deemed to have received ordinary income upon exercise of the stock option in
an amount equal to the aggregate amount by which the per share exercise price is
exceeded by the fair market value of the Common Stock. In the event that a Non-
statutory Stock Option is exercised during a period that under former rules
would have subjected the optionee to liability under Section 16(b) of the
Exchange Act (i.e., within six months of the date of grant), the optionee will
not be deemed to have recognized income until such period of liability has
expired, unless the optionee makes a Section 83(b) election under the Code. In
the event shares received through the exercise of an Incentive Stock Option are
disposed of prior to the satisfaction of the holding periods (a "disqualifying
disposition"), the exercise of the option will be treated as the exercise of a
Non-statutory Stock Option, except that the optionee will recognize the ordinary
income for the year in which the disqualifying disposition occurs. The amount
of any ordinary income deemed to have been received by an optionee upon the
exercise of a Non-statutory Stock Option or due to a disqualifying disposition
will be a deductible expense of the Company for tax purposes.
In the case of Limited Rights, the option holder would have to include the
amount paid to him upon exercise in his gross income for federal income tax
purposes in the year in which the payment is made and the Company would be
entitled to a deduction for federal income tax purposes of the amount paid.
Equitable Adjustment Rights have the same tax treatment as other Non-statutory
Stock Options. The employee will recognize taxable income for the amount of
cash received under the Dividend Equivalent Right for the year such amounts are
paid. The Company may take a compensation deduction for such amount.
Stock Awards. When shares of Common Stock, as Stock Awards, are distributed,
the recipient is deemed to receive ordinary income equal to the fair market
value of such shares at the date of distribution plus any dividends and earnings
on such shares (provided such date is more than six months after the date of
grant) and the Company is permitted a commensurate compensation expense
deduction for income tax purposes.
Payout Alternatives
The Committee has the sole discretion to determine what form of payment it
shall use in distributing payments for all Awards. If the Committee requests
any or all participants to make an election as to form of payment, it shall not
be considered bound by the election. Any shares of Common Stock tendered in
payment of an obligation arising under the Incentive Plan or applied to tax
withholding amounts shall be valued at the fair market value of the Common
Stock. The Committee may use treasury stock, authorized but unissued stock or
may direct the market purchase of such Common Stock to satisfy its obligations
under the Incentive Plan.
Alternate Option Payments
The Committee also has the sole discretion to determine the form of payment
for the exercise of an option. The Committee may indicate acceptable forms in
the Award Agreement covering such options or may reserve its decision to the
time of exercise. No option is to be considered exercised until payment in full
is accepted by the Committee. The Committee may
18
<PAGE>
permit the following forms of payment for options: (a) in cash or by certified
check; (b) through borrowed funds, to the extent permitted by law; or (c) by
tendering previously acquired shares of Common Stock. Any shares of Common
Stock tendered in payment of the exercise price of an option shall be valued at
the Fair Market Value of the Common Stock on the date prior to the date of
exercise.
Amendment
The Board of Directors may amend the Incentive Plan in any respect, at any
time, provided that no amendment may affect the rights of an Awardholder without
his or her permission. The Board of Directors intends to amend the Plan in the
future, see "New Plan Benefits" below.
Adjustments
In the event of any change in the outstanding shares of Common Stock of the
Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Company, the Committee may
make such adjustments to previously granted Awards, to prevent dilution or
enlargement of the rights of the Participant or Outside Director.
No such adjustments may, however, materially change the value of benefits
available to a Participant or Outside Director under a previously granted Award.
All Awards under this Incentive Plan shall be binding upon any successors or
assigns of the Company.
Nontransferability
Unless determined otherwise by the Committee, no award under the Incentive
Plan shall be transferable by the recipient other than by will or the laws of
intestate succession or pursuant to a qualified domestic relations order. With
the consent of the Committee, an employee or Outside Director may designate a
person or his or her estate as beneficiary of any award to which the recipient
would then be entitled, in the event of the death of the employee.
Stockholder Approval
Pursuant to OTS regulations, the Incentive Plan may not be implemented during
the first year after the Association's stock conversion unless the affirmative
vote of the holders of a majority of the total votes eligible to be cast at this
meeting is received. Broker non-votes will not be counted as votes eligible to
be cast at the Special Meeting for the purposes of satisfaction of OTS
regulations regarding stockholder approval of the Incentive Plan. If such
approval is not obtained, but the Incentive Plan receives the affirmative vote
of a majority of the shares present at the meeting and eligible to be cast, the
Incentive Plan will not become effective at this time, but will become effective
following a period of one year after the conversion without further stockholder
approval. The Board of Directors also may determine that the Incentive Plan
become
19
<PAGE>
effective one year after the Conversion if the Incentive Plan does not receive
the requisite affirmative vote of stockholders at this meeting. In the absence
of stockholder approval, the option awards under the Incentive Plan would not
qualify as incentive stock options under the Code.
Unless marked to the contrary, the shares represented by the enclosed proxy
card, if executed and returned, will be voted "FOR" the approval of the GA
Financial, Inc. 1996 Stock-Based Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE GA
FINANCIAL, INC. 1996 STOCK-BASED INCENTIVE PLAN.
New Plan Benefits
The following table provides certain information with respect to all Awards
which will be granted immediately, assuming stockholder approval is obtained,
under the Incentive Plan, specifying the amounts to be granted immediately to
the named executive officers individually, all current executive officers as a
group, all current directors who are not executive officers as a group, and all
employees, including all current officers who are not executive officers, as a
group.
All awards granted to the officers and directors of the Company and the
Association reflected in the table below become vested and exercisable in equal
annual installments of 20% each year commencing one year from the date of grant.
All such awards will immediately vest and become exercisable upon termination of
employment due to death or disability. Additionally, on or after March 26,
1997, the Board of Directors intends to amend the awards reflected below to
provide for acceleration of the vesting of such awards upon a change in control
of the Company or the Association (as defined in the Incentive Plan). The
Incentive Plan generally defines that a change in control will be deemed to
occur when a person or group of persons acting in concert acquires beneficial
ownership of 20% or more of any class of equity security, such as the Common
Stock of the Company or the Association, or in the event of a tender offer or
exchange offer, merger or other form of business combination, sale of assets or
contested election of directors which results in a change in control of a
majority of the incumbent Board of Directors of the Company or the Association.
20
<PAGE>
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
Stock Option Awards Stock Awards
-------------------------- -----------------------------
Dollar Number Dollar Number
Name and Position Value (1) of Units (2) Value (3) of Units (2)
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
John M. Kish, Chairman of the Board and Chief Executive Officer of the - 75,000 $ 348,750 30,000
Company and Chairman of the Board of the Association
John G. Micenko, Director and President of the Company and Director, - 95,000 $ 639,375 55,000
President and Chief Executive Officer of the Association
All other current executive officers as a group - 245,000 $1,453,125 125,000
(8 persons)
All current directors of the Company and Association (who are not - 100,000 $ 639,375 55,000
executive officers) as a group (6 persons, including one Director
Emeritus)
Other employees (76 persons) 111,500 $ 507,431 43,650
</TABLE>
- ----------------------------------
(1) The "dollar value" for options to be granted pursuant to the Incentive Plan
on the date of grant will be zero, as the exercise price for such options
will be the fair market value on the date of grant which is intended to be
the date stockholder approval is obtained.
(2) 263,500 Stock Option Awards and 47,350 Stock Awards remain unallocated under
the Incentive Plan.
(3) Based upon $11.625, the closing price of the Common Stock, as reported on
the American Stock Exchange on August 22, 1996.
21
<PAGE>
ADDITIONAL INFORMATION
Shareholder Proposals
To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 1997 Annual Meeting of Shareholders, which has been
scheduled to be held on April 30, 1997, a shareholder proposal must be received
by the Secretary of the Company at the address set forth on the first page of
this Proxy Statement not later than November 30, 1996 except that if such annual
meeting is held on a date more than 30 calendar days from April 30, 1997, a
stockholder proposal must be received by a reasonable time before the proxy
solicitation for such annual meeting is made. Any such proposal will be subject
to 17 C.F.R. (S) 240.14a-8 of the Rules and Regulations under the Securities
Exchange Act of 1934, as amended.
Notice of Business to be Conducted at a Special or Annual Meeting
The Bylaws of the Company set forth the procedures by which a shareholder may
properly bring business before a meeting of shareholders. Pursuant to the
Bylaws, only business brought by or at the direction of the Board of Directors
may be conducted at a special meeting. The Bylaws of the Company provide an
advance notice procedure for a shareholder to properly bring business before an
annual meeting. The shareholder must give written advance notice to the
Secretary of the Company not less than ninety (90) days before the date
originally fixed for such meeting; provided, however, that in the event that
less than one hundred (100) days notice or prior public disclosure of the date
of the meeting is given or made to shareholders, notice by the shareholder to be
timely must be received not later than the close of business on the tenth day
following the date on which the Company's notice to shareholders of the annual
meeting date was mailed or such public disclosure was made. The advance notice
by shareholders must include the shareholder's name and address, as they appear
on the Company's record of shareholders, a brief description of the proposed
business, the reason for conducting such business at the annual meeting, the
class and number of shares of the Company's capital stock that are beneficially
owned by such shareholder and any material interest of such shareholder in the
proposed business. In the case of nominations to the Board of Directors,
certain information regarding the nominee must be provided. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
statement or the proxy relating to any annual meeting any shareholder proposal
which does not meet all of the requirements for inclusion established by the SEC
in effect at the time such proposal is received.
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Special
Meeting of Shareholders. If, however, other matters are properly brought before
the Special Meeting, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
22
<PAGE>
Whether or not you intend to be present at the Special Meeting, you are urged
to return your proxy card promptly. If you are then present at the Special
Meeting and wish to vote your shares in person, your original proxy may be
revoked by voting at the Special Meeting.
By Order of the Board of Directors
/s/ Lawrence A. Michael
Lawrence A. Michael
Corporate Secretary
Pittsburgh, Pennsylvania
August 30, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO SIGN, DATE AND PROMPTLY RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
23
<PAGE>
Appendix A
GA FINANCIAL, INC.
1996 STOCK-BASED INCENTIVE PLAN
1. DEFINITIONS.
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(a) "Affiliate" means (i) a member of a controlled group of corporations of
which the Holding Company is a member or (ii) an unincorporated trade or
business which is under common control with the Holding Company as determined in
accordance with Section 414(c) of the Code and the regulations issued
thereunder. For purposes hereof, a "controlled group of corporations" shall mean
a controlled group of corporations as defined in Section 1563(a) of the Code
determined without regard to Section 1563(a)(4) and (e)(3)(C).
(b) "Alternate Option Payment Mechanism" refers to one of several methods
available to a Participant to fund the exercise of a stock option set out in
Section 13 hereof. These mechanisms include: broker assisted cashless exercise
and stock for stock exchange.
(c) "Award" means a grant of one or some combination of one or more Non-
statutory Stock Options, Incentive Stock Options and Stock Awards under the
provisions of this Plan.
(d) "Association" means Great American Federal Savings and Loan
Association.
(e) "Board of Directors" or "Board" means the board of directors of the
Holding Company.
(f) "Change in Control" means a change in control of the Association or
Holding Company of a nature that; (i) would be required to be reported in
response to Item 1 of the current report on Form 8-K, as in effect on the date
hereof, pursuant to Section 13 or 15(d) of the Exchange Act; or (ii) results in
a Change in Control within the meaning of the Home Owners' Loan Act of 1933, as
amended ("HOLA") and the Rules and Regulations promulgated by the Office of
Thrift Supervision ("OTS") (or its predecessor agency), as in effect on the date
hereof (provided, that in applying the definition of change in control as set
forth under such rules and regulations the Board shall substitute its judgment
for that of the OTS); or (iii) without limitation such a Change in Control shall
be deemed to have occurred at such time as (A) any "person" (as the term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Association or the Holding Company representing
20% or more of the Association's or the Holding Company's outstanding securities
except for any securities of the Association purchased by the Holding Company
and any securities purchased by any tax qualified employee benefit plan of the
Association; or (B) individuals who constitute the Board on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for election by
the Holding Company's stockholders was approved by the same
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Nominating Committee serving under an Incumbent Board, shall be, for purposes of
this clause (B), considered as though he were a member of the Incumbent Board;
or (C) a plan of reorganization, merger, consolidation, sale of all or
substantially all the assets of the Association or the Holding Company or
similar transaction occurs in which the Association or Holding Company is not
the resulting entity; or (D) a solicitation of shareholders of the Holding
Company, by someone other than the current management of the Holding Company,
seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Holding Company or Association or similar transaction with
one or more corporations, as a result of which the outstanding shares of the
class of securities then subject to the plan are exchanged for or converted into
cash or property or securities not issued by the Association or the Holding
Company; or (E) a tender offer is made for 20% or more of the voting securities
of the Association or the Holding Company.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means a committee consisting of the entire Board of
Directors or consisting solely of two or more members of the Board of Directors
who are defined as Non-Employee Directors as such term is defined under Rule
16b-3(b)(3)(i) under the Exchange Act as promulgated by the Securities and
Exchange Commission.
(i) "Common Stock" means the Common Stock of the Holding Company, par
value, $.01 per share or any stock exchanged for shares of Common Stock pursuant
to Section 17 hereof.
(j) "Date of Grant" means the effective date of an Award.
(l) "Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of a Participant to perform the work
customarily assigned to him or , in the case of a Director, to serve on the
Board. Additionally, a medical doctor selected or approved by the Board of
Directors must advise the Committee that it is either not possible to determine
when such Disability will terminate or that it appears probable that such
Disability will be permanent during the remainder of said Participant's
lifetime.
(m) "Dividend Equivalent Rights" means the right to receive an amount of
cash based upon the terms set forth in Section 10 hereof.
(n) "Effective Date" means ________________, the effective date of the
Plan.
(o) "Employee" means any person who is currently employed by the Holding
Company or an Affiliate, including officers, but such term shall not include
Outside Directors.
(p) "Employee Participant" means an Employee who holds an outstanding Award
under the terms of the Plan.
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(q) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(r) "Exercise Price" means the purchase price per share of Common Stock
deliverable upon the exercise of each Option in order for the option to be
exchanged for shares of Common Stock.
(s) "Fair Market Value" means, when used in connection with the Common
Stock on a certain date, the average of the high and low bid prices of the
Common Stock as reported by the American Stock Exchange ("AMEX") or the New York
Stock Exchange ("NYSE") or the average of the high and low sale prices of the
Common Stock as reported by Nasdaq Stock Market ("NASDAQ") each as published in
the Wall Street Journal, if published, on such date or, if the Common Stock was
not traded on such date, on the next preceding day on which the Common Stock was
traded thereon or the last previous date on which a sale is reported. If the
Common Stock is not reported on the AMEX, NASDAQ or the NYSE, the Fair Market
Value of the Common Stock is the value so determined by the Board in good faith.
(t) "Holding Company" means GA Financial, Inc.
(u) "Incentive Stock Option" means an Option granted by the Committee to a
Participant, which Option is designated by the Committee as an Incentive Stock
Option pursuant to Section 7 hereof and is intended to be such under Section 422
of the Code.
(v) "Limited Right" means the right to receive an amount of cash based upon
the terms set forth in Section 8 hereof.
(w) "Non-statutory Stock Option" means an Option to a Participant pursuant
to Section 6 hereof, which is not designated by the Committee as an Incentive
Stock Option or which is redesignated by the Committee as a Non-statutory Stock
Option or which is designated an Incentive Stock Option under Section 7 hereof,
but does not meet the requirements of such under Section 422 of the Code.
(x) "Option" means the right to buy a fixed amount of Common Stock at the
Exercise Price within a limited period of time designated as the term of the
option as granted under Section 6 or 7 hereof.
(y) "Outside Director" means a member of the Board of Directors of the
Holding Company or its Affiliates, who is not also an Employee.
(z) "Outside Director Participant" means an Outside Director who holds an
outstanding Award under the terms of the Plan.
(aa) "Participant(s)" means collectively an Employee Participant and/or an
Outside Director Participant who hold(s) outstanding Awards under the terms of
the Plan.
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(bb) "Retirement" with respect to an Employee Participant means termination
of employment which constitutes retirement under any tax qualified plan
maintained by the Association. However, "Retirement" will not be deemed to have
occurred for purposes of this Plan if a Participant continues to serve as a
consultant to or on the Board of Directors of the Holding Company or its
Affiliates even if such Participant is receiving retirement benefits under any
retirement plan of the Holding Company or its Affiliates. With respect to an
Outside Director, "Retirement" means the termination of service from the Board
of Directors of the Holding Company or its Affiliates following written notice
to the Board as a whole of such Outside Director's intention to retire, except
that an Outside Director shall not be deemed to have "retired" for purposes of
the Plan in the event he continues to serve as a consultant to the Board or as
an advisory director.
(cc) "Stock Awards" are Awards of Common Stock which may vest immediately
or over a period of time. Vesting of Stock Awards under Section 9 hereof may be
contingent upon the occurrence of specified events or the attainment of
specified performance goals as determined by the Committee.
(dd) "Termination for Cause" shall mean, in the case of a Director, removal
from the Board of Directors, or, in the case of an employee, termination of
employment, in both such cases as determined by the Board of Directors, because
of a material loss to the Holding Company or one of its Affiliates caused by the
Participant's intentional failure to perform stated duties, personal dishonesty,
willful violation of any law, rule, regulation, (other than traffic violations
or similar offenses) or final cease and desist order. No act, or the failure to
act, on Participant's part shall be "willful" unless done, or omitted to be
done, not in good faith and without reasonable belief that the action or
omission was in the best interest of the Holding Company or its Affiliates.
(ee) "Trust" means a trust established by the Board in connection with this
Plan to hold Plan assets for the purposes set forth herein.
(ff) "Trustee" means that person or persons and entity or entities approved
by the Board to hold legal title to any of the Trust assets for the purposes set
forth herein.
2. ADMINISTRATION.
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(a) The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to grant awards to Employees
and establish such rules and regulations as it deems necessary for the proper
administration of the Plan and to make whatever determinations and
interpretations in connection with the Plan it deems necessary or advisable.
All determinations and interpretations made by the Committee shall be binding
and conclusive on all Employee Participants and Outside Director Participants in
the Plan and on their legal representatives and beneficiaries.
(b) Awards to Outside Directors of the Holding Company or its Affiliates
shall be granted by the Board of Directors or the Committee, pursuant to the
terms of this Plan.
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(c) Actual transference of the Award requires no, nor allows any,
discretion by the Trustee.
3. TYPES OF AWARDS AND RELATED RIGHTS.
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The following Awards and related rights as described below in Paragraphs 6
through 14 hereof may be granted under the Plan:
(a) Non-statutory Stock Options
(b) Incentive Stock Options
(c) Limited Right
(d) Stock Awards
(e) Dividend Equivalent Right
(f) Equitable Adjustment Right
4. STOCK SUBJECT TO THE PLAN.
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Subject to adjustment as provided in Section 17 hereof, the maximum number
of shares reserved for Awards under the Plan is 1,246,000 which number may not
be excess of 14% of the outstanding shares of the Common Stock determined
immediately as of the Effective Date. Subject to adjustment as provided in
Section 17 hereof, the maximum number of shares reserved hereby for purchase
pursuant to the exercise of Options and Option-related Awards granted under the
Plan is 890,000, which number is not in excess of the 10% of the outstanding
shares of Common Stock as of the Effective Date. The maximum number of the
shares reserved for award as Stock Awards shall not exceed 4% of the outstanding
shares of Common Stock as of the Effective Date. These shares of Common Stock
may be either authorized but unissued shares or authorized shares previously
issued and reacquired by the Holding Company. To the extent that Options and
Stock Awards are granted under the Plan, the shares underlying such Awards will
be unavailable for any other use including future grants under the Plan except
that, to the extent that Stock Awards or Options terminate, expire, or are
forfeited without having been exercised (in the case of Limited Rights,
exercised for cash), new Awards may be made with respect to these shares.
5. ELIGIBILITY.
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Subject to the terms herein, all Employees and Outside Directors shall be
eligible to receive Awards under the Plan.
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6. NON-STATUTORY STOCK OPTIONS.
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The Committee or the Board of Directors may, subject to the limitations
of the Plan and the availability of shares reserved but unawarded in the Plan,
from time to time, grant Non-statutory Stock Options to Employees and Outside
Directors, upon such terms and conditions as the Committee may determine in
exchange for and upon surrender of previously granted Awards under this Plan.
Non-statutory Stock Options granted under this Plan are subject to the following
terms and conditions:
(a) Exercise Price. The Exercise Price of each Non-statutory Stock Option
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shall be determined by the Committee on the date the option is granted. Such
Exercise Price shall not be less than 100% of the Fair Market Value of the
Holding Company's Common Stock on the Date of Grant. Shares of Common Stock
underlying a Non-statutory Stock Option may be purchased only upon full payment
of the Exercise Price or upon operation of an Alternate Option Payment Mechanism
set out in Section 13 hereof.
(b) Terms of Non-statutory Stock Options. The term during which each Non-
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statutory Stock Option may be exercised shall be determined by the Committee,
but in no event shall a Non-statutory Stock Option be exercisable in whole or in
part more than 10 years from the Date of Grant. The Committee shall determine
the date on which each Non-statutory Stock Option shall become exercisable. The
shares of Common Stock underlying each Non-statutory Stock Option installment
may be purchased in whole or in part by the Participant at any time during the
term of such Non-statutory Stock Option after such installment becomes
exercisable. The Committee may, in its sole discretion, accelerate the time at
which any Non-statutory Stock Option may be exercised in whole or in part. The
acceleration of any Non-statutory Stock Option under the authority of this
paragraph shall create no right, expectation or reliance on the part of any
other Participant or that certain Participant regarding any other unaccelerated
Non-statutory Stock Options. Unless determined otherwise by the Committee and
except in the event of the Participant's death or pursuant to a domestic
relations order, a Non-statutory Stock Option is not transferable and may be
exercisable in his lifetime only by the Participant to whom it is granted. Upon
the death of a Participant, a Non-statutory Stock Option is transferable by will
or the laws of descent and distribution.
(c) NSO Agreement. The terms and conditions of any Non-statutory Stock
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Option granted shall be evidenced by an agreement (the "NSO Agreement") which
shall be subject to the terms and conditions of the Plan.
(d) Termination of Employment or Service. Unless otherwise determined by
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the Committee, upon the termination of a Participant's employment or service for
any reason other than Disability, death or Termination for Cause, the
Participant's Non-statutory Stock Options shall be exercisable only as to those
shares that were immediately exercisable by the Participant at the date of
termination and only for a period of three months following termination.
Notwithstanding any provisions set forth herein or contained in any NSO
Agreement relating to an award of a Non-statutory Stock Option, in the event of
termination of the Participant's employment or service for Disability or death,
all Non-statutory Stock Options held by such
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Participant shall immediately vest and be exercisable for one year after such
termination of service, and, in the event of a Termination for Cause, all rights
under the Participant's Non-statutory Stock Options shall expire immediately
upon such Termination for Cause.
7. INCENTIVE STOCK OPTIONS.
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The Committee may, subject to the limitations of the Plan and the
availability of shares reserved but unawarded in the Plan, from time to time,
grant Incentive Stock Options to Employees. Incentive Stock Options granted
pursuant to the Plan shall be subject to the following terms and conditions:
(a) Exercise Price. The Exercise Price of each Incentive Stock Option
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shall be not less than 100% of the Fair Market Value of the Common Stock on the
Date of Grant. However, if at the time an Incentive Stock Option is granted to
an Employee Participant, the Employee Participant owns Common Stock representing
more than 10% of the total combined voting securities of the Holding Company
(or, under Section 424(d) of the Code, is deemed to own Common Stock
representing more than 10% of the total combined voting power of all classes of
stock of the Holding Company, by reason of the ownership of such classes of
stock, directly or indirectly, by or for any brother, sister, spouse, ancestor
or lineal descendent of such Employee Participant, or by or for any corporation,
partnership, estate or trust of which such Employee Participant is a
shareholder, partner or beneficiary), ("10% Owner"), the Exercise Price per
share of Common Stock deliverable upon the exercise of each Incentive Stock
Option shall not be less than 110% of the Fair Market Value of the Common Stock
on the Date of Grant. Shares may be purchased only upon payment of the full
Exercise Price or upon operation of an Alternate Option Payment Mechanism set
out in Section 13 hereof.
(b) Amounts of Incentive Stock Options. Incentive Stock Options may be
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granted to any Employee in such amounts as determined by the Committee; provided
that the amount granted is consistent with the terms of Section 422 of the Code.
In the case of an Option intended to qualify as an Incentive Stock Option, the
aggregate Fair Market Value (determined as of the time the Option is granted)
of the Common Stock with respect to which Incentive Stock Options granted are
exercisable for the first time by the Employee Participant during any calendar
year (under all plans of the Employee Participant's employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000. The provisions
of this Section 7(b) shall be construed and applied in accordance with Section
422(d) of the Code and the regulations, if any, promulgated thereunder. To the
extent an Award of an Incentive Stock Option under this Section 7 exceeds this
$100,000 limit, the portion of the Award in excess of such limit shall be
deemed a Non-statutory Stock Option. The Committee shall have discretion to
redesignate Options granted as Incentive Stock Options as Non-Statutory Stock
Options. Such Non-statutory Stock Options shall be subject to Section 6 hereof.
(c) Terms of Incentive Stock Options. The term during which each Incentive
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Stock Option may be exercised shall be determined by the Committee, but in no
event shall an Incentive Stock Option be exercisable in whole or in part more
than 10 years from the Date of Grant. If at the time an Incentive Stock Option
is granted to an Employee Participant who is a
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10% Owner, the Incentive Stock Option granted to such Employee Participant shall
not be exercisable after the expiration of five years from the Date of Grant.
No Incentive Stock Option is transferable except by will or the laws of descent
and distribution and is exercisable in his lifetime only by the Employee
Participant to whom it is granted. The designation of a beneficiary does not
constitute a transfer.
The Committee shall determine the date on which each Incentive Stock Option
shall become exercisable. The Committee may also determine as of the Date of
Grant any other specific conditions or specific performance goals which must be
satisfied prior to the Incentive Stock Option becoming exercisable. The shares
comprising each installment may be purchased in whole or in part at any time
during the term of such Incentive Stock Option after such installment becomes
exercisable. The Committee may, in its sole discretion, accelerate the time at
which any Incentive Stock Option may be exercised in whole or in part. The
acceleration of any Incentive Stock Option under the authority of this paragraph
shall not create a right, expectation or reliance on the part of any other
Participant or that certain Participant regarding any other unaccelerated
Incentive Stock Options.
(d) ISO Agreement. The terms and conditions of any Incentive Stock Option
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granted shall be evidenced by an agreement (the "ISO Agreement") which shall be
subject to the terms and conditions of the Plan.
(e) Termination of Employment. Unless otherwise determined by the
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Committee, upon the termination of an Employee Participant's employment for any
reason other than Disability, death or Termination for Cause, the Employee
Participant's Incentive Stock Options shall be exercisable only as to those
shares that were immediately exercisable by the Participant at the date of
termination and only for a period of three months following termination.
Notwithstanding any provisions set forth herein or contained in any ISO
Agreement relating to an award of an Incentive Stock Option, in the event of
termination of the Employee Participant's employment for Disability or death,
all Incentive Stock Options held by such Employee Participant shall immediately
vest and be exercisable for one year after such termination, and, in the event
of Termination for Cause, all rights under the Employee Participant's Incentive
Stock Options shall expire immediately upon termination.
(f) Compliance with Code. The Incentive Stock Options granted under this
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Section 7 are intended to qualify as "incentive stock options" within the
meaning of Section 422 of the Code, but the Holding Company makes no warranty as
to the qualification of any Option as an incentive stock option within the
meaning of Section 422 of the Code. All Options that do not so quality shall be
treated as Non-statutory Stock Options.
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8. LIMITED RIGHT.
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Simultaneously with the grant of any Option to an Employee, the Committee
may grant a Limited Right with respect to all or some of the shares covered by
such Option. Limited Rights granted under this Plan are subject to the
following terms and conditions:
(a) Terms of Rights. In no event shall a Limited Right be exercisable in
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whole or in part before the expiration of six months from the Date of Grant of
the Limited Right.
The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, and only when the Fair Market Value of the underlying
shares on the day of exercise is greater than the Exercise Price of the
underlying Option.
Upon exercise of a Limited Right, the underlying Option shall cease to
be exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the purchase price and the Fair Market Value of the Common
Stock subject to the underlying option. The Limited Right is transferable only
when the underlying option is transferable and under the same conditions.
(b) Payment. Upon exercise of a Limited Right, the holder shall promptly
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receive from the Holding Company an amount of cash equal to the difference
between the Exercise Price of the underlying option and the Fair Market Value of
the Common Stock subject to the underlying Option on the date the Limited Right
is exercised, multiplied by the number of shares with respect to which such
Limited Right is being exercised. Payments shall be less any applicable tax
withholding as set forth in Section 18 hereof.
9. STOCK AWARD.
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The Committee (or in the case of an Outside Director Participant, the Board
of Directors) may, subject to the limitations of the Plan, from time to time,
make an Award of some number of shares of Common Stock to Employees and Outside
Directors. The Awards shall be made subject to the following terms and
conditions:
(a) Payment of the Stock Award. The Stock Award may only be made in whole
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shares of Common Stock. Stock Awards may only be granted from shares reserved
under the Plan but unawarded at the time the new Stock Award is made.
(b) Terms of the Stock Awards. The Committee shall determine the dates on
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which Stock Awards granted to a Participant shall vest and any specific
conditions or performance goals which must be satisfied prior to the vesting of
any installment or portion of the Stock Award. Notwithstanding other paragraphs
in this Section 9, the Committee may, in its sole discretion, accelerate the
vesting of any Stock Award. The acceleration of any Stock Award under the
authority of this paragraph shall create no right, expectation or reliance on
the part of any other Participant or that certain Participant regarding any
other unaccelerated Stock Awards.
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(c) Stock Award Agreement. The terms and conditions of any Stock Award
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shall be evidenced by an agreement (the "Stock Award Agreement") which such
Stock Award Agreement will be subject to the terms and conditions of the Plan.
Each Stock Award Agreement shall set forth:
(i) the period over which the Stock Award will vest;
(ii) the performance goals, if any, which must be satisfied prior to
the vesting of any installment or portion of the Stock Award. The
performance goals may be set by the Committee on an individual level,
for all Participants, for all Awards made during a given period of
time, or for all Awards for indefinite periods;
(d) Certification of Attainment of the Performance Goal. No Stock Award or
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portion thereof that is subject to a performance goal is to be distributed to
the Participant until the Committee certifies that the underlying performance
goal has been achieved.
(e) Termination of Employment or Service. Unless otherwise determined by
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the Committee, upon the termination of a Participant's employment or service for
any reason other than Disability, death or Termination for Cause, the
Participant's unvested Stock Awards as of the date of termination shall be
forfeited and any rights the Participant had to such unvested Stock Awards shall
become null and void. Notwithstanding any provisions set forth herein or
contained in any Stock Award Agreement relating to a Stock Award, in the event
of termination of the Participant's service due to Disability or death, all
unvested Stock Awards held by such Participant shall immediately vest and, in
the event of the Participant's Termination for Cause, the Participant's unvested
Stock Awards as of the date of such termination shall be forfeited and any
rights the Participant had to such unvested Stock Awards shall become null and
void.
(f) Non-Transferability. Except to the extent permitted by the Code, the
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rules promulgated under Section 16(b) of the Exchange Act or any successor
statutes or rules:
(i) The recipient of a Stock Award shall not sell, transfer, assign,
pledge, or otherwise encumber shares subject to the Stock Award until full
vesting of such shares has occurred. For purposes of this section, the
separation of beneficial ownership and legal title through the use of any "swap"
transaction is deemed to be a prohibited encumbrance.
(ii) Unless determined otherwise by the Committee and except in the
event of the Participant's death or pursuant to a domestic relations order, a
Stock Award is not transferable and may be earned in his lifetime only by the
Participant to whom it is granted. Upon the death of a Participant, a Stock
Award is transferable by will or the laws of descent and distribution. The
designation of a beneficiary does not constitute a transfer.
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(iii) If a recipient of a Stock Award is subject to the provisions
of Section 16 of the Exchange Act, shares of Common Stock subject to such Stock
Award may not, without the written consent of the Committee (which consent may
be given in the Stock Award Agreement), be sold or otherwise disposed of within
six months following the date of grant of the Stock Award.
(g) Accrual of Dividends. Whenever shares of Common Stock underlying a
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Stock Award are distributed to a Participant or beneficiary thereof under the
Plan, such Participant or beneficiary shall also be entitled to receive, with
respect to each such share distributed, a payment equal to any cash dividends
and the number of shares of Common Stock equal to any stock dividends, declared
and paid with respect to a share of the Common Stock if the record date for
determining shareholders entitled to receive such dividends falls between the
date the relevant Stock Award was granted and the date the relevant Stock Award
or installment thereof is issued. There shall also be distributed an
appropriate amount of net earnings, if any, of the Trust with respect to any
dividends paid out.
(h) Voting of Stock Awards. After a Stock Award has been granted but for
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which the shares covered by such Stock Award have not yet been earned and
distributed to the Participant pursuant to the Plan, the Participant shall be
entitled to direct the Trustee as to the voting of such shares of Common Stock
which the Stock Award covers subject to the rules and procedures adopted by the
Committee for this purpose. All shares of Common Stock held by the Trust as to
which Participants are not entitled to direct, or have not directed, the voting,
shall be voted by the Trustee in the same proportion as the Common Stock
covered by Stock Awards which have been awarded is voted.
10. DIVIDEND EQUIVALENT RIGHT.
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Simultaneously with the grant of any Option to a Participant, the Committee
(or Board of Directors, if grant is to an Outside Director Participant) may
grant a Dividend Equivalent Right with respect to all or some of the shares
covered by such Option. Dividend Equivalent Rights granted under this Plan are
subject to the following terms and conditions:
(a) Terms of Rights. The Dividend Equivalent Right provides the Employee
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with a cash benefit per share for each share underlying the unexercised portion
of the related Option equal to the amount of any extraordinary dividend (as
defined in this Section 10 (c)) per share of Common Stock declared by the
Holding Company. The Dividend Equivalent Right is transferable only when the
related Option is transferable and under the same conditions.
(b) Payment. Upon the payment of an extraordinary dividend, the
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Participant holding a Dividend Equivalent Right with respect to Options or
portions thereof which have vested shall promptly receive from the Holding
Company the amount of cash equal to the amount of the extraordinary dividend per
share of Common Stock, multiplied by the number of shares of Common Stock
underlying the unexercised portion of the related Option. With respect to
Options or portions thereof which have not vested, the amount that would have
been received pursuant to the Dividend Equivalent Right with respect to the
shares underlying such unvested Option or
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portion thereof shall be paid to the Participant holding such Dividend
Equivalent Right together with earnings thereon, on such date as the Option or
portion thereof becomes vested. Payments shall be decreased by the amount of
any applicable tax withholding prior to distribution to the Participant as set
forth in Section 18.
(c) Extraordinary Dividend. For purposes of this Section 10, an
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extraordinary dividend is any dividend paid on shares of Common Stock where the
rate of the dividend exceeds the Association's weighted average cost of funds on
interest-bearing liabilities for the current and preceding three quarters.
(d) The terms and conditions of any Dividend Equivalent Right shall be
evidenced in the agreement for the Option (NSO Agreement or ISO Agreement) and
shall be subject to the terms and conditions of the Plan. The Dividend
Equivalent Right shall be transferable to the extent that the related Option is
transferable.
11. EQUITABLE ADJUSTMENT RIGHT.
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Simultaneously with the grant of any Option under this Plan, in the
alternative to a Dividend Equivalent Right, the Committee (or Board of
Directors, if grant is to an Outside Director Participant) may grant an
Equitable Adjustment Right with respect to all or some of the shares covered by
such Option
Upon the payment of an extraordinary dividend (as such term is defined in
Section 10(c)), the Committee may adjust the number of shares and/or the
Exercise Price of the related Option, as the Committee deems appropriate as
provided in Section 17 hereof.
The terms and conditions of any Equitable Adjustment Right shall be
evidenced in the agreement for the Option (NSO Agreement or ISO Agreement) and
shall be subject to the terms and conditions of the Plan. The Equitable
Adjustment Right shall be transferable to the extent that the related Option is
transferable.
12. PAYOUT ALTERNATIVES.
-------------------
Payments due to a Participant upon the exercise or redemption of an Award,
may be made subject to the following terms and conditions:
(a) Discretion of the Committee. The Committee has the sole discretion to
---------------------------
determine what form of payment (whether monetary, Common Stock, a combination of
payout alternatives or otherwise) it shall use in making distributions of
payments for all Awards. If the Committee requests any or all Participants to
make an election as to form of distribution or payment, it shall not be
considered bound by the election.
12
<PAGE>
(b) Payment in the form of Common Stock. Any shares of Common Stock
-----------------------------------
tendered in satisfaction of an obligation arising under this Plan shall be
valued at the Fair Market Value of the Common Stock on the day preceding the
date of the issuance of such stock to the Participant.
13. ALTERNATE OPTION PAYMENT MECHANISM.
----------------------------------
The Committee has sole discretion to determine what form of payment it will
accept for the exercise of an Option. The Committee may indicate acceptable
forms in the ISO or NSO Agreement covering such Options or may reserve its
decision to the time of exercise. No Option is to be considered exercised until
payment in full is accepted by the Committee or its agent.
(a) Cash Payment. The exercise price may be paid in cash or by certified
------------
check.
(b) Borrowed Funds. To the extent permitted by law, the Committee may
--------------
permit all or a portion of the exercise price of an Option to be paid through
borrowed funds.
(c) Exchange of Common Stock.
------------------------
(i) The Committee may permit payment by the tendering of previously
acquired shares of Common Stock. This includes the use of "pyramiding
transactions" whereby some number of Options are exercised; then the shares
gained through the exercise are tendered back to the Holding Company as payment
for a greater number of Options. This transaction may be repeated as needed to
exercise all of the Options available.
(ii) Any shares of Common Stock tendered in payment of the exercise
price of an Option shall be valued at the Fair Market Value of the Common
Stock on the date prior to the date of exercise.
14. RIGHTS OF A SHAREHOLDER: NONTRANSFERABILITY.
-------------------------------------------
No Participant or Outside Director shall have any rights as a shareholder
with respect to any shares of Common Stock covered by an Option until the date
of issuance of a stock certificate for such shares. Nothing in this Plan or in
any Award granted confers on any person any right to continue in the employ or
service of the Holding Company or its Affiliates or interferes in any way with
the right of the Holding Company or its Affiliates to terminate a Participant's
services as an officer or other employee at any time.
Except as permitted under the Code (with respect to Incentive Stock
Options) and the rules promulgated pursuant to Section 16(b) of the Exchange Act
or any successor statutes or rules, no Award under the Plan shall be
transferable by the Participant or Outside Director other than by will or the
laws of intestate succession or pursuant to a domestic relations order or
unless determined otherwise by the Committee.
13
<PAGE>
15. AGREEMENT WITH GRANTEES.
-----------------------
Each Award will be evidenced by a written agreement(s) (whether
constituting an NSO Agreement, ISO Agreement, Stock Award Agreement or any
combination thereof), executed by the Participant and the Holding Company or its
Affiliates that describes the conditions for receiving the Awards including the
date of Award, the Exercise Price if any, the terms or other applicable periods,
and other terms and conditions as may be required or imposed by the Plan, the
Committee, the Board of Directors, tax law considerations or applicable
securities law considerations.
16. DESIGNATION OF BENEFICIARY.
--------------------------
A Participant may, with the consent of the Committee, designate a person
or persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by
and delivered to the Holding Company and may be revoked in writing. If a
Participant fails effectively to designate a beneficiary, then the Participant's
estate will be deemed to be the beneficiary.
17. DILUTION AND OTHER ADJUSTMENTS.
------------------------------
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Holding Company, the Committee will make
such adjustments to previously granted Awards, to prevent dilution or
enlargement of the rights of the Participant, including any or all of the
following:
(a) adjustments in the aggregate number or kind of shares of Common Stock
or other securities that may underlie future Awards under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common Stock
or other securities underlying Awards already made under the Plan;
(c) adjustments in the purchase price of outstanding Incentive and/or Non-
statutory Stock Options, or any Limited Rights attached to such
Options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award. All awards under
this Plan shall be binding upon any successors or assigns of the Holding
Company.
18. TAX WITHHOLDING.
---------------
Awards under this Plan shall be subject to tax withholding to the extent
required by any governmental authority. Any withholding shall comply with Rule
16b-3 or any amendment or
14
<PAGE>
successive rule. Shares of Common Stock withheld to pay for tax withholding
amounts shall be valued at their Fair Market Value on the date the Award is
deemed taxable to the Participant.
19. AMENDMENT OF THE PLAN.
---------------------
The Board of Directors may at any time, and from time to time, modify or
amend the Plan in any respect, prospectively or retroactively; provided however,
that provisions governing grants of Incentive Stock Options, unless permitted by
the rules and regulations or staff pronouncements promulgated under the Code
shall be submitted for shareholder approval to the extent required by such law,
regulation or interpretation.
Failure to ratify or approve amendments or modifications by shareholders
shall be effective only as to the specific amendment or modification requiring
such ratification. Other provisions, sections, and subsections of this Plan
will remain in full force and effect.
No such termination, modification or amendment may adversely affect the
rights of a Participant under an outstanding Award without the written
permission of such Participant.
20. EFFECTIVE DATE OF PLAN.
----------------------
The Plan shall become effective upon being presented to shareholders for
ratification for purposes of: (i) obtaining favorable treatment under Section
16(b) of the Securities Exchange Act; and (ii) obtaining preferential tax
treatment for Incentive Stock Options. The failure to obtain shareholder
ratification for such purposes will not effect the validity of the Plan and the
Options thereunder, provided, however, that if the Plan is not ratified, the
Plan shall remain in full force and effect, and any Incentive Stock Options
granted under the Plan shall be deemed to be Non-statutory Stock Options.
21. TERMINATION OF THE PLAN.
-----------------------
The right to grant Awards under the Plan will terminate upon the earlier
of: (i) ten (10) years after the Effective Date; (ii) the issuance of a number
of shares of Common Stock pursuant to the exercise of Options or the
distribution of Stock Awards which together with the exercise of Limited
Rights is equivalent to the maximum number of shares reserved under the Plan as
set forth in Section 4. The Board of Directors has the right to suspend or
terminate the Plan at any time, provided that no such action will, without the
consent of a Participant, adversely affect a Participant's vested rights under a
previously granted Award.
22. APPLICABLE LAW.
--------------
The Plan will be administered in accordance with the laws of the State of
Delaware and applicable federal law.
15
<PAGE>
23. COMPLIANCE WITH OTS CONVERSION REGULATIONS.
------------------------------------------
Notwithstanding any other provision contained in this Plan:
(a) unless the Plan is approved by a majority vote of the outstanding
shares of the Holding Company eligible to be cast at a meeting of
stockholders to consider the Plan, as determined by Delaware law, the
Plan shall not become effective or implemented prior to March 26, 1997;
(b) no Award granted prior to March 26, 1997 shall become vested or
exercisable at a rate in excess of 20% of the total number Stock Awards
or Options (whichever may be the case) granted to such Participant,
provided, that Awards shall become fully vested or immediately
exercisable in the event of a Participant's termination of service due
to death or Disability and, provided further, that the Committee may
determine to modify the terms of any Award after March 26, 1997 to
provide for acceleration of the vesting or exercisability of such
Award, including a modification or amendment to provide that such Award
shall become fully vested or immediately exercisable in the event of a
Change in Control;
(c) no Award granted to any individual employee prior to March 26, 1997 may
exceed 25% of the total amount of Awards which may be granted under the
Plan;
(d) no Award granted to any individual Outside Director prior to March 26,
1997 may exceed 5% of the total amount of Awards which may be granted
under the Plan; and
(e) the aggregate amount of Awards granted to all Outside Director prior
to March 26, 1997 may not exceed 30% of the total amount of Awards
which may be granted under the Plan.
24. DELEGATION OF AUTHORITY.
-----------------------
The Committee may delegate all authority for: the determination of forms of
payment to be made by or received by the Plan; the execution of Award
agreements; the determination of Fair Market Value; the determination of all
other aspects of administration of the plan to the executive officer(s) of the
Holding Company or the Association. The Committee may rely on the descriptions,
representations, reports and estimate provided to it by the management of the
Holding Company or the Association for determinations to be made pursuant to the
Plan, including the attainment of performance goals. However, only the
Committee or a portion of the Committee may certify the attainment of a
performance goal.
[remainder of this page intentionally left blank]
16
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
REVOCABLE PROXY
GA FINANCIAL, INC.
SPECIAL MEETING OF STOCKHOLDERS
October 16, 1996
10:00 a.m., Pittsburgh Time
This Proxy is Solicited on Behalf of The Board of Directors for
the Special Meeting of Stockholders on October 16, 1996
The undersigned hereby appoints John M. Kish, Chairman of the Board of
Directors and Chief Executive Officer or John G. Micenko, President, of GA
Financial, Inc., jointly or individually, to act as proxies for the undersigned,
and to vote all shares of Common Stock of GA Financial, Inc. which the
undersigned is entitled to vote only at the Special Meeting of Stockholders, to
be held on October 16, 1996 at 10:00 a.m., Pittsburgh Time, at The Bradley
House, 5239 Brownsville Road, Pittsburgh, Pennsylvania 15236 and at any and all
adjournments thereof as indicated.
1. The ratification of the GA For Against Abstain
Financial, Inc. 1996 Stock-Based [_] [_] [_]
Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE ABOVE LISTED PROPOSAL
This proxy is revocable and will be voted as directed, but if no instructions
are specified, this proxy will be voted FOR the proposal listed above. If any
other business is presented at the Special Meeting, this proxy will be voted by
those named in this proxy as directed by the Board of Directors. At the present
time, the Board of Directors knows of no other business to be presented at the
Special Meeting.
IMPORTANT: The undersigned acknowledges receipt from the Company prior to
the execution of this proxy of a notice of Special Meeting of Stockholders and
of a Proxy Statement dated August 30, 1996.
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign, but only one signature
is required.
Please be sure to sign and date Date
this Proxy in the box below.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
GA FINANCIAL, INC.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
