<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
----------
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only
/X/ Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
First Federal Financial Bancorp, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
First Federal Financial Bancorp, Inc.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): (previously paid by wire
transfer)
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2), or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------
(2) Aggregate number of securities to which transactions applies:
---------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------
(4) Proposed maximum aggregate value of transaction:
----------------------
(5) Total fee paid:
-------------------------------------------------------
Fee paid previously with preliminary materials.
- -------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
-----------------------------------------------
(2) Form, schedule or registration statement no.:
-------------------------
(3) Filing party:
---------------------------------------------------------
(4) Date filed:
-----------------------------------------------------------
<PAGE>
FIRST FEDERAL FINANCIAL
BANCORP, INC.
November 12, 1996
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of
First Federal Financial Bancorp, Inc. The meeting will be held at the
Ashland Plaza Hotel, located at 15th Street and Winchester Avenue, Ashland,
Kentucky, in the Kentucky Room, on Monday, December 16, 1996 at 1:30 p.m.,
Eastern Time. The matters to be considered by stockholders at the Special
Meeting are described in the accompanying materials.
The Board of Directors of First Federal Financial Bancorp, 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.
It is very important that your shares be voted at the Special Meeting
regardless of the number you own or whether you are able to attend the
meeting in person. We urge you to mark, sign, and date your proxy card today
and return it in the envelope provided, even if you plan to attend the
Special Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
On behalf of the Board of Directors and all of the employees of the
Company and the Savings Bank, I thank you for your continued interest and
support.
Sincerely,
/s/ I. Vincent Rice
I. Vincent Rice
President
<PAGE>
FIRST FEDERAL FINANCIAL BANCORP, INC.
415 CENTER STREET
IRONTON, OHIO 45638
(614) 532-6845
----------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 16, 1996
----------
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders ("Special
Meeting") of First Federal Financial Bancorp, Inc. (the "Company") will be held
at the Ashland Plaza Hotel, located at 15th Street and Winchester Avenue,
Ashland, Kentucky, in the Kentucky Room, on Monday, December 16, 1996 at 1:30
p.m., Eastern Time, for the following purposes, all of which are more
completely set forth in the accompanying Proxy Statement:
(1) To consider and approve the adoption of the Company's Stock Option
Plan;
(2) To consider and approve the adoption of the Company's Recognition and
Retention Plan and Trust;
(3) If necessary, to adjourn the Special Meeting to solicit additional
proxies; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof. Management is not aware of any other such
business.
The Board of Directors has fixed November 4, 1996 as the voting record date
for the determination of stockholders entitled to notice of and to vote at the
Special Meeting and at any adjournment thereof. Only those stockholders of
record as of the close of business on that date will be entitled to vote at the
Special Meeting or at any such adjournment.
By Order of the Board of Directors
/s/ Edith M. Daniels
Edith M. Daniels
Secretary
Ironton, Ohio
November 12, 1996
- -------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN
IF YOU PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU
ATTEND THE MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY
GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO
THE EXERCISE THEREOF.
- -------------------------------------------------------------------------------
<PAGE>
FIRST FEDERAL FINANCIAL BANCORP, INC.
----------
PROXY STATEMENT
----------
SPECIAL MEETING OF STOCKHOLDERS
DECEMBER 16, 1996
This Proxy Statement is furnished to holders of common stock, $.01 par
value per share ("Common Stock"), of First Federal Financial Bancorp, Inc. (the
"Company"). The Company acquired all of the stock of First Federal Savings Bank
of Ironton (the "Savings Bank") issued in connection with the Savings Bank's
conversion from a federally-chartered mutual savings and loan association to a
federally-chartered stock savings bank in June 1996 (the "Conversion"). Proxies
are being solicited on behalf of the Board of Directors of the Company to be
used at the Special Meeting of Stockholders ("Special Meeting") to be held at
the Ashland Plaza Hotel, located at 15th Street and Winchester Avenue, Ashland,
Kentucky, in the Kentucky Room, on Monday, December 16, 1996 at 1:30 p.m.,
Eastern Time, and at any adjournment thereof for the purposes set forth in the
Notice of Special Meeting of Stockholders. This Proxy Statement is first being
mailed to stockholders on or about November 12, 1996.
The proxy solicited hereby, if properly signed and returned to the Company
and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted FOR the matters described below and upon the
transaction of such other business as may properly come before the meeting in
accordance with the best judgment of the persons appointed as proxies. Any
stockholder giving a proxy has the power to revoke it at any time before it is
exercised by (i) filing with the Secretary of the Company written notice thereof
(Secretary, First Federal Financial Bancorp, Inc., 415 Center Street, Ironton,
Ohio 45638; (ii) submitting a duly-executed proxy bearing a later date; or
(iii) appearing at the Special Meeting and giving the Secretary notice of his
or her intention to vote in person. Proxies solicited hereby may be exercised
only at the Special Meeting and any adjournment thereof and will not be used for
any other meeting.
VOTING
Only stockholders of record of the Company at the close of business on
November 4, 1996 ("Voting Record Date") are entitled to notice of and to vote
at the Special Meeting and at any adjournment thereof. On the Voting Record
Date, there were 671,783 shares of Common Stock of the Company issued and
outstanding and the Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the
Special Meeting on all matters properly presented at the Special Meeting. The
<PAGE>
2
affirmative vote of the holders of a majority of the total votes eligible to
be cast in person or by proxy at the Special Meeting is required for approval
of the proposals to approve the Company's Stock Option Plan ("Stock Option
Plan") and the Company's Recognition and Retention Plan and Trust
("Recognition Plan"). A majority of the total votes present in person and by
proxy will be required to adjourn the Special Meeting, if such action is
required to be voted on. Because of the required votes, abstentions will
have the same effect as a vote against the proposals with respect to the
Stock Option Plan and the Recognition Plan. Under rules of the New York
Stock Exchange, the proposal for adjournment, if necessary, is considered a
"discretionary" item upon which brokerage firms may vote in their discretion
on behalf of their clients if such clients have not furnished voting
instructions and for which there will not be "broker non-votes." The
proposals to approve the Stock Option Plan and the Recognition Plan, however,
are considered "non-discretionary" and for which there may be broker
non-votes. A broker non-vote will have the same effect as a vote against the
proposals to approve the Stock Option Plan and the Recognition Plan.
<PAGE>
3
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) each person or
entity, including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), who or which was
known to the Company to be the beneficial owner of more than 5% of the issued
and outstanding Common Stock, (ii) the directors of the Company, and (iii) all
directors and executive officers of the Company and the Savings Bank as a group.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial of Beneficial
Owner or Number of Ownership as of Percent of
Persons in Group November 4, 1996(1) Common Stock
------------------ ------------------- ------------
<S> <C> <C>
First Federal Financial Bancorp, Inc. 53,743(2) 8.0%
Employee Stock Ownership Plan Trust
415 Center Street
Ironton, Ohio 45638
Directors:
Thomas D. Phillips 25,000(3) 3.7
I. Vincent Rice 3,500 *
James E. Waldo 40,000 6.0
Edith M. Daniels 10,000 1.5
Steven C. Milleson 10,001(4) 1.5
William P. Payne 10,000(5) 1.5
Edward R. Rambacher 13,000(6) 1.9
All directors and executive officers
of the Company and the Savings Bank
as a group (8 persons) 114,101(2) 17.0
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
<PAGE>
4
- ----------
* Represents less than 1% of the outstanding Common Stock.
(1) Based upon filings made pursuant to the Exchange Act and information
furnished by the respective individuals. Under regulations promulgated
pursuant to the Exchange Act, shares of Common Stock are deemed to be
beneficially owned by a person if he or she directly or indirectly has or
shares (i) voting power, which includes the power to vote or to direct the
voting of the shares, or (ii) investment power, which includes the power to
dispose or to direct the disposition of the shares. Unless otherwise
indicated, the named beneficial owner has sole voting and dispositive power
with respect to the shares.
(2) The First Federal Financial Bancorp, Inc. Employee Stock Ownership Plan
Trust ("Trust") was established pursuant to the First Federal Financial
Bancorp, Inc. Employee Stock Ownership Plan ("ESOP") by an agreement
between the Company and Messrs. Thomas D. Phillips, Edward R. Rambacher and
I. Vincent Rice who act as trustees of the plan ("Trustees"). As of the
Voting Record Date, no shares held in the Trust had been allocated to the
accounts of participating employees. Since no shares held in the Trust
were allocated as of the Voting Record Date under the terms of the ESOP,
unallocated shares held in the ESOP will be voted by the Trustees in
accordance with their fiduciary duties as Trustees. Under the terms of the
ESOP, the Trustees must vote the allocated shares held in the ESOP in
accordance with the instructions of the participating employees.
Unallocated shares held in the ESOP are required to be voted in the same
ratio on any matter as those allocated shares for which instructions are
given. Any allocated shares which either abstain on the proposal or are
not voted will be disregarded in determining the percentage of stock voted
for and against each proposal by the participants and beneficiaries. The
amount of Common Stock beneficially owned by directors who serve as
Trustees of the ESOP and by all directors and executive officers as a group
does not include the unallocated shares held by the Trust.
(3) Includes 10,000 shares held by the Phillips' Funeral Home Trust Pension
Fund and 5,000 shares held by Mr. Phillips' spouse.
(4) Includes 2,400 shares held by Mr. Milleson's spouse as custodian for
children and 716 shares held by Mr. Milleson's spouse in her Individual
Retirement Account ("IRA").
(5) Includes 10,000 shares held by Mr. Payne's spouse.
(6) Includes 5,000 shares held by Mr. Rambacher's spouse in her IRA, 1,000
shares held by Mr. Rambacher's spouse as custodian for her son and 1,000
shares held jointly by Mr. Rambacher's spouse and son.
<PAGE>
5
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who own more than 10% of the Company's Common Stock to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission and the National Association of Securities Dealers, Inc.
Officers, directors and greater than 10% stockholders are required by regulation
to furnish the Company with copies of all forms they file pursuant to Section
16(a) of the Exchange Act. The Company knows of no person who owns 10% or more
of the Company's Common Stock.
Based solely on review of the copies of such forms furnished to the
Company, or written representations from its officers and directors, the Company
believes that during, and with respect to, fiscal 1996, the Company's officers
and directors complied in all respects with the reporting requirements
promulgated under Section 16(a) of the 1934 Act.
PROPOSAL TO ADOPT THE STOCK OPTION PLAN
GENERAL
The Board of Directors has adopted the Stock Option Plan which is designed
to attract and retain qualified personnel in key positions, provide officers and
key employees with a proprietary interest in the Company as an incentive to
contribute to the success of the Company and reward key employees for
outstanding performance. The Stock Option Plan is also designed to retain
qualified directors for the Company. The Stock Option Plan provides for the
grant of incentive stock options intended to comply with the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")
("incentive stock options"), non-qualified or compensatory stock options and
stock appreciation rights (collectively "Awards"). Awards will be available for
grant to directors and key employees of the Company and any subsidiaries, except
that directors will not be eligible to receive incentive stock options. If
stockholder approval is obtained, options to acquire shares of Common Stock will
be awarded to key employees of the Company and the Savings Bank and directors of
the Company with an exercise price equal to the fair market value of the Common
Stock on the date of such approval. The Stock Option Plan complies in all
material respects with Office of Thrift Supervision ("OTS") Regulations and the
OTS in no way endorses or approves the Stock Option Plan.
DESCRIPTION OF THE STOCK OPTION PLAN
The following description of the Stock Option Plan is a summary of its
terms and is qualified in its entirety by reference to the Stock Option Plan, a
copy of which is attached hereto as Appendix A.
ADMINISTRATION. The Stock Option Plan is administered and interpreted by a
committee of the Board of Directors ("Committee") that is composed solely of two
or more "Non-Employee Directors."
<PAGE>
6
STOCK OPTIONS. Under the Stock Option Plan, the Board of Directors or the
Committee determines which officers and key employees will be granted options,
whether such options will be incentive or compensatory options, the number of
shares subject to each option, whether such options may be exercised by
delivering other shares of Common Stock and when such options become
exercisable. The per share exercise price of a stock option shall be equal to
the fair market value of a share of Common Stock on the date the option is
granted.
All options granted to participants under the Stock Option Plan shall
become vested and exercisable at the rate of 20% per year on each annual
anniversary of the date the options were granted, and the right to exercise
shall be cumulative. Notwithstanding the foregoing, no vesting shall occur on
or after a participant's employment with the Company is terminated for any
reason other than his death or disability. Unless the Board or the Committee
shall specifically state otherwise at the time an option is granted, all options
granted to participants shall become vested and exercisable in full on the date
an optionee terminates his employment with or service to the Company or a
subsidiary company because of his death or disability. In addition, all stock
options will become vested and exercisable in full on the date an optionee
terminates his employment or service to the Company or a subsidiary company as
the result of a change in control of the Company, as defined in the Stock Option
Plan, if, as of the date of such change in control of the Company, such
treatment is either authorized or is not prohibited by applicable laws and
regulations.
Each stock option or portion thereof shall be exercisable at any time on or
after it vests and is exercisable until the earlier of ten years after its date
of grant or three months after the date on which the optionee's employment or
service as a non-employee director terminates, unless extended by the Committee
to a period not to exceed one year from such termination. However, failure to
exercise incentive stock options within three months after the date on which the
optionee's employment terminates may result in adverse tax consequences to the
optionee. If an optionee dies while serving as an employee or a non-employee
director or terminates his service as an employee or a non-employee director as
a result of disability without having fully exercised his options, the
optionee's executors, administrators, legatees or distributees of his estate
shall have the right to exercise such options during the twelve-month period
following the earlier of his death or termination due to disability, provided no
option will be exercisable more than ten years from the date it was granted.
Stock options are non-transferable except by will or the laws of descent and
distribution. Notwithstanding the foregoing, an optionee who holds
non-qualified options may transfer such options to his or her spouse, lineal
ascendants, lineal descendants, or to a duly established trust for the benefit
or one or more of these individuals. Options so transferred may thereafter be
transferred only to the optionee who originally received the grant or to an
individual or trust to whom the optionee could have initially transferred the
option. Options which are so transferred shall be exercisable by the transferee
according to the same terms and conditions as applied to the optionee.
<PAGE>
7
STOCK APPRECIATION RIGHTS. Under the Stock Option Plan, the Board of
Directors or the Committee is authorized to grant stock appreciation rights to
optionees under which an optionee may surrender any exercisable incentive stock
option or compensatory stock option or any portion thereof in return for payment
by the Company to the optionee of cash or Common Stock in an amount equal to the
excess of the fair market value of the shares of Common Stock subject to option,
or portion thereof, at the time over the exercise price of the option with
respect to such shares, or a combination of cash and Common Stock. A stock
appreciation right may be granted concurrently with the stock option to which it
relates or at any time thereafter which is prior to the exercise or expiration
of such option.
NUMBER OF SHARES COVERED BY THE STOCK OPTION PLAN. A total of 67,178
shares of Common Stock has been reserved for issuance pursuant to the Stock
Option Plan, which is 10% of the Common Stock issued in connection with the
Conversion. In the event of a stock split, reverse stock split or stock
dividend, the number of shares of Common Stock under the Stock Option Plan, the
number of shares to which any Award relates and the exercise price per share
under any option or stock appreciation right shall be adjusted to reflect such
increase or decrease in the total number of shares of the Common Stock
outstanding.
AMENDMENT AND TERMINATION OF THE STOCK OPTION PLAN. Unless sooner
terminated, the Stock Option Plan shall continue in effect for a period of ten
years from the effective date, which is October 21, 1996, the date the Stock
Option Plan was adopted by the Board and became effective by its terms.
Termination of the Stock Option Plan shall not affect any previously granted
Awards.
FEDERAL INCOME TAX CONSEQUENCES. Under current provisions of the Code, the
federal income tax treatment of incentive stock options and compensatory stock
options is different. As regards incentive stock options, an optionee who meets
certain holding period requirements will not recognize income at the time the
option is granted or at the time the option is exercised, and a federal income
tax deduction generally will not be available to the Company at any time as a
result of such grant or exercise. With respect to compensatory stock options,
the difference between the fair market value on the date of exercise and the
option exercise price generally will be treated as compensation income upon
exercise, and the Company will be entitled to a deduction in the amount of
income so recognized by the optionee. Upon the exercise of a stock appreciation
right, the holder will realize income for federal income tax purposes equal to
the amount received by him, whether in cash, shares of stock or both, and the
Company will be entitled to a deduction for federal income tax purposes in the
same amount.
The above description of tax consequences under federal law is necessarily
general in nature and does not purport to be complete. Moreover, statutory
provisions are subject to change, as are their interpretations, and their
application may vary in individual circumstances. Finally, the consequences
under applicable state and local income tax laws may not be the same as under
the federal income tax laws.
<PAGE>
8
ACCOUNTING TREATMENT. Stock appreciation rights will, in most cases,
require a charge against the earnings of the Company each year representing
appreciation in the value of such rights over periods in which they become
exercisable. Such charge is based on the difference between the exercise price
specified in the related option and the current market price of the Common
Stock. In the event of a decline in the market price of the Common Stock
subsequent to a charge against earnings related to the estimated costs of stock
appreciation rights, a reversal of prior charges is made in the amount of such
decline (but not to exceed aggregate prior charges).
Neither the grant nor the exercise of an incentive stock option or a
non-qualified stock option under the Stock Option Plan currently requires any
charge against earnings under generally accepted accounting principles. In
certain circumstances, shares issuable pursuant to outstanding options under the
Stock Option Plan might be considered outstanding for purposes of calculating
earnings per share.
STOCKHOLDER APPROVAL. No Awards will be granted under the Stock Option
Plan unless the Stock Option Plan is approved by stockholders. Stockholder
ratification of the Stock Option Plan will satisfy certain Nasdaq market listing
and tax requirements.
AWARDS TO BE GRANTED. The Board of Directors of the Company adopted the
Stock Option Plan and approved the grant of incentive options to executive
officers and employees of the Company and the Savings Bank and non-qualified
options to non-employee directors thereof. The options shall be effective upon
stockholder approval of the Stock Option Plan with a per share exercise price
equal to the fair market value of a share of Common Stock on the date of such
approval. The following table sets forth certain information with respect to
such grants.
<TABLE>
<CAPTION>
Number of Shares
Name of Individual or Subject to
Number of Persons in Group Title Stock Options
- -------------------------- ----- ----------------
<S> <C> <C>
I. Vincent Rice President 10,076
All executive officers as
a group (2 persons) -- 16,076
All non-employee directors
as a group (6 persons) -- 20,153
All employees, not including
executive officers, as a
group (13 persons) -- 1,300
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ADOPTION OF
THE STOCK OPTION PLAN.
<PAGE>
9
PROPOSAL TO ADOPT THE RECOGNITION
AND RETENTION PLAN AND TRUST
GENERAL
The Board of Directors of the Company has adopted the Recognition Plan, the
objective of which is to retain qualified personnel in key positions, provide
officers, key employees and directors with a proprietary interest in the Company
as an incentive to contribute to its success and reward key employees for
outstanding performance. Officers and key employees of the Company who are
selected by the Board of Directors of the Company or a committee thereof, as
well as non-employee directors of the Company, will be eligible to receive
benefits under the Recognition Plan. If stockholder approval is obtained,
shares will be granted to employees and to non-employee directors as described
below. The Recognition Plan complies in all material respects with OTS
Regulations and the OTS in no way endorses or approves the Recognition Plan.
DESCRIPTION OF THE RECOGNITION PLAN
The following description of the Recognition Plan is a summary of its terms
and is qualified in its entirety by reference to the Recognition Plan, a copy of
which is attached hereto as Appendix B.
ADMINISTRATION. The Recognition Plan is administered and interpreted by a
committee of the Board of Directors ("Committee") that is composed solely of two
or more "Non-Employee Directors."
Upon stockholder approval of the Recognition Plan, the Company will acquire
Common Stock on behalf of the Recognition Plan, in an amount necessary to
purchase the number of shares of Common Stock equal to 4% of the Common Stock
issued in the Conversion, or 26,871 shares. These shares will be acquired
through open market purchases.
GRANTS. Shares of Common Stock granted pursuant to the Recognition Plan
will be in the form of restricted stock payable over a five-year period at a
rate of 20% per year, beginning one year from the anniversary date of the
grant. A recipient will be entitled to all voting and other stockholder
rights with respect to shares which have been earned and allocated under the
Recognition Plan. However, until such shares have been earned and allocated,
they may not be sold, pledged or otherwise disposed of and are required to be
held in the Recognition Plan Trust. Under the terms of the Recognition Plan,
all shares which have not yet been earned and allocated are required to be
voted by the trustees in their sole discretion. In addition, any cash
dividends or stock dividends declared in respect of unvested share awards
will be held by the Recognition Plan Trust for the benefit of the recipients
and such dividends, including any interest thereon, will be paid out
proportionately by the Recognition Plan Trust to the recipients thereof as
soon as practicable after the share awards become earned. Any cash dividends
or stock dividends
<PAGE>
10
declared in respect of each vested share held by the Recognition Plan Trust
will be paid by the Recognition Plan Trust as soon as practicable after the
Recognition Plan Trust's receipt thereof to the recipient on whose behalf
such share is then held by the Recognition Plan Trust.
If a recipient terminates employment for reasons other than death or
disability, the recipient will forfeit all rights to the allocated shares under
restriction. All shares subject to an award held by a recipient whose
employment with or service to the Company or any subsidiary terminates due to
death or Disability, as defined in the Recognition Plan, shall be deemed earned
as of the recipient's last day of employment with or service to the Company or
any subsidiary and shall be distributed as soon as practicable thereafter;
provided, however, that awards shall be distributed in accordance with the
Recognition Plan. All shares subject to an award held by a recipient also shall
be deemed to be earned in the event of a change in control of the Company, as
defined in the Recognition Plan, provided that as of the date of such change in
control of the Company, such treatment is either authorized or is not prohibited
by applicable laws and regulations.
During the lifetime of the recipient, shares subject to an award may only
be earned by and paid to the recipient, provided that shares subject to an award
and rights to such shares shall be transferable by a recipient to his or her
spouse, lineal ascendants, lineal descendants, or to a duly established trust.
Shares subject to an award so transferred may not again be transferred other
than to the recipient who originally received the grant or to an individual or
trust to whom such recipient could have transferred shares subject to an award.
Shares subject to awards which are transferred shall be subject to the same
terms and conditions as would have applied to such shares subject to awards in
the hands of the recipient who originally received the grant.
FEDERAL INCOME TAX CONSEQUENCES. Pursuant to Section 83 of the Code,
recipients of Recognition Plan awards will recognize ordinary income in an
amount equal to the fair market value of the shares of Common Stock granted to
them at the time that the shares vest and become transferable. A recipient of a
Recognition Plan award may also elect, however, to accelerate the recognition of
income with respect to his or her grant to the time when shares of Common Stock
are first transferred to him or her, notwithstanding the vesting schedule of
such awards. The Company will be entitled to deduct as a compensation expense
for tax purposes the same amounts recognized as income by recipients of
Recognition Plan awards in the year in which such amounts are included in
income.
ACCOUNTING TREATMENT. For accounting purposes, the Company will also
recognize a compensation expense as shares of Common Stock granted pursuant to
the Recognition Plan vest. Unlike the treatment of Recognition Plan awards for
tax purposes, however, the compensation expense recognized for accounting
purposes is limited to the fair market value of the Common Stock at the date of
grant to recipients, rather than the fair market value of the Common Stock at
the time that a Recognition Plan grant vests.
<PAGE>
11
STOCKHOLDER APPROVAL. No shares will be granted under the Recognition Plan
unless the Recognition Plan is approved by stockholders. Stockholder
ratification of the Recognition Plan will satisfy certain Nasdaq market listing
and tax requirements.
SHARES TO BE GRANTED. The Board of Directors of the Company adopted the
Recognition Plan and approved the grant of shares to executive officers and
employees of the Company and the Savings Bank and non-employee directors
thereof. The awards shall be effective upon stockholder approval of the
Recognition Plan. The following table sets forth certain information with
respect to such grants.
<TABLE>
<CAPTION>
Name of Individual or Number of Shares
Number of Persons in Group Title Awarded
- -------------------------- ----- ----------------
<S> <C> <C>
I. Vincent Rice President 4,030
All executive officers as
a group (2 persons) -- 7,030
All non-employee directors
as a group (6 persons) -- 8,061
All employees, not
including executive
officers, as a group
(13 persons) -- 1,335
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ADOPTION OF
THE RECOGNITION AND RETENTION PLAN AND TRUST.
ADJOURNMENT OF SPECIAL MEETING
Each proxy solicited hereby requests authority to vote for an adjournment
of the Special Meeting, if an adjournment is deemed to be necessary. The
Company may seek an adjournment of the Special Meeting for not more than 30 days
in order to enable the Company to solicit additional votes in favor of the
proposals to adopt the Stock Option Plan and/or the Recognition Plan in the
event that either or both of such proposals have not received the requisite vote
of stockholders at the Special Meeting and either or both of such proposals have
not received the negative votes of the holders of a majority of the Company's
Common Stock. If the Company desires to adjourn the meeting with respect to
either or both of the foregoing proposals, it will request a motion that the
meeting be adjourned for up to 30 days with respect to such proposal or
proposals (and solely with respect to such proposal or proposals, provided that
a quorum is present at the Special Meeting), and no vote will be taken on such
proposal(s) at the originally scheduled Special Meeting. Each proxy solicited
hereby, if properly signed and returned to the Company and not revoked prior to
its use, will be voted on any motion for adjournment in accordance with the
<PAGE>
12
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted in favor of any motion to adjourn the meeting.
Unless revoked prior to its use, any proxy solicited for the Special Meeting
will continue to be valid for any adjournment of the Special Meeting, and will
be voted in accordance with instructions contained therein, and if no contrary
instructions are given, for the proposal(s) in question.
Any adjournment will permit the Company to solicit additional proxies and
will permit a greater expression of the stockholders' views with respect to such
proposal(s). Such an adjournment would be disadvantageous to stockholders who
are against the proposal(s), because an adjournment will give the Company
additional time to solicit favorable votes and thus increase the chances of
passing such proposal(s).
If a quorum is not present at the Special Meeting, no proposal will be
acted upon and the Board of Directors of the Company will adjourn the Special
Meeting to a later date in order to solicit additional proxies on each of the
proposal(s) being submitted to stockholders.
An adjournment for up to 30 days will not require either the setting of a
new record date or notice of the adjourned meeting as in the case of an original
meeting. The Company has no reason to believe that an adjournment of the
Special Meeting will be necessary at this time.
BECAUSE THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
PROPOSALS TO ADOPT THE STOCK OPTION PLAN AND RECOGNITION PLAN, AS DISCUSSED
ABOVE, THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE POSSIBLE
ADJOURNMENT OF THE SPECIAL MEETING. THE HOLDERS OF A MAJORITY OF THE COMPANY'S
COMMON STOCK PRESENT, IN PERSON OR BY PROXY, AT THE SPECIAL MEETING WILL BE
REQUIRED TO APPROVE A MOTION TO ADJOURN THE SPECIAL MEETING.
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of certain information concerning
the compensation paid by the Savings Bank for services rendered in all
capacities during the year ended September 30, 1996 and 1995 to the President of
the Savings Bank. No executive officers of the Savings Bank had total
compensation during the fiscal year which exceeded $100,000.
<PAGE>
13
<TABLE>
<CAPTION>
Annual Compensation
------------------------------------
Other All
Name and Annual Other
Principal Position Year Salary Bonus Compensation(1) Compensation
- ------------------ ---- ------ ----- --------------- ------------
<S> <C> <C> <C> <C> <C>
I. Vincent Rice 1996 $48,250 $1,500 $ -- $ --
President 1995 45,625 1,500 -- --
</TABLE>
- ----------
(1) Does not include amounts attributable to miscellaneous benefits received by
the named executive officer. In the opinion of management of the Savings
Bank, the costs to the Savings Bank of providing such benefits to the named
executive officer during the years ended September 30, 1996 and 1995 did
not exceed the lesser of $50,000 or 10% of the total of annual salary and
bonus reported for the individual.
DIRECTOR'S COMPENSATION
Directors of the Company do not receive fees for attendance at meetings.
Members of the Board of Directors of the Savings Bank receive fees of $550 per
month (except for Mr. Phillips who receives $800 per month for serving as
Chairman) regardless of attendance at meetings. Members of the Board of the
Savings Bank serving on committees do not receive any additional compensation
for serving on such committees.
EMPLOYMENT AGREEMENTS
The Company and the Savings Bank (the "Employers") have entered into
employment agreements with each of Messrs. I. Vincent Rice and Jeffery W. Clark,
the Company's and the Savings Bank's President and Comptroller, respectively
(the "Executives"). The Employers have agreed to employ Messrs. Rice and Clark
for a term of three years in their current respective positions at their current
salary levels of $47,500 and $30,600, respectively. The employment agreements
will be reviewed annually by the Boards of Directors of the Employers, and the
term of employment agreements shall be extended each year for a successive
additional one-year period upon approval of the Employers' Board of Directors,
unless either party elects, not less than 30 days prior to the annual
anniversary date, not to extend the employment term.
Each of the employment agreements shall be terminable with or without cause
by the Employers. The Executives shall have no right to compensation or other
benefits pursuant to the employment agreement for any period after voluntary
termination or termination by the Employers for cause. The agreements provide
for certain benefits in the event of an
<PAGE>
14
Executives' death, disability or retirement. In the event that (i) the
Executive terminates his employment (a) because of failure of the Employers
to comply with any material provision of the agreement or (b) as a result of
certain adverse actions which are taken with respect to the officer's
employment following a change in control of the Company, as defined, or (ii)
the employment agreement is terminated by the Employers other than for cause,
disability, retirement or death, the Executive will be entitled to a cash
severance amount equal to three times the officer's base salary. Based upon
current compensation levels, in the event of a termination of employment
following a Change in Control, Messrs. Rice and Clark would receive cash
severance of $151,500 and $96,300, respectively.
A change in control is generally defined in the employment agreement to
include any change in control of the Company required to be reported under the
federal securities laws, as well as (i) the acquisition by any person of 25% or
more of the Company's outstanding voting securities and (ii) a change in a
majority of the directors of the Company during any two-year period without the
approval of at least two-thirds of the persons who were directors of the Company
at the beginning of such period.
Each employment agreement provides that in the event that any of the
payments to be made thereunder or otherwise upon termination of employment are
deemed to constitute "excess parachute payments" within the meaning of Section
280G of the Code, then such payments and benefits received thereunder shall be
reduced, in the manner determined by the officer, by the amount, if any, which
is the minimum necessary to result in no portion of the payments and benefits
being non-deductible by the Employers for federal income tax purposes. Excess
parachute payments generally are payments in excess of three times the base
amount, which is defined to mean the recipient's average annual compensation
from the employer includable in the recipient's gross income during the most
recent five taxable years ending before the date on which a change in control of
the employer occurred. Recipients of excess parachute payments are subject to a
20% excise tax on the amount by which such payments exceed the base amount, in
addition to regular income taxes, and payments in excess of the base amount are
not deductible by the employer as compensation expense for federal income tax
purposes.
Although the above-described employment agreements could increase the cost
of any acquisition of control of the Company, management of the Company does not
believe that the terms thereof would have a significant anti-takeover effect.
BENEFITS
EMPLOYEE STOCK OWNERSHIP PLAN. The Company has established the ESOP for
employees of the Company and the Savings Bank. Full-time employees of the
Company and the Savings Bank who have been credited with at least 1,000 hours of
service during a twelve-month period and who have attained age 21 are eligible
to participate in the ESOP.
<PAGE>
15
The ESOP borrowed funds from the Company to purchase 53,743 shares of
Common Stock in the Savings Bank's Conversion. The loan equalled 100% of the
aggregate purchase price of the Common Stock. The loan to the ESOP will be
repaid principally from the Company's and the Savings Bank's contributions to
the ESOP over a period of 12 years, and the collateral for the loan is the
Common Stock purchased by the ESOP. The Company may, in any plan year, make
additional discretionary contributions for the benefit of plan participants in
either cash or shares of Common Stock, which may be acquired through the
purchase of outstanding shares in the market or from individual stockholders,
upon the original issuance of additional shares by the Company or upon the sale
of treasury shares by the Company. Such purchases, if made, would be funded
through additional borrowing by the ESOP or additional contributions from the
Company. The timing, amount and manner of future contributions to the ESOP will
be affected by various factors, including prevailing regulatory policies, the
requirements of applicable laws and regulations and market conditions.
Shares purchased by the ESOP with the proceeds of the loan are held in a
suspense account and released on a pro rata basis as debt service payments are
made. Discretionary contributions to the ESOP and shares released from the
suspense account will be allocated among participants on the basis of
compensation. Forfeitures will be reallocated among remaining participating
employees and may reduce any amount the Company might otherwise have contributed
to the ESOP. Participants will vest in their right to receive their account
balances within the ESOP at the rate of 20 percent per year, starting with
completion of their third year of service. In the case of a "change in control,"
as defined, however, participants will become immediately fully vested in their
account balances, subject to certain tax considerations. Benefits may be
payable upon retirement, early retirement, disability or separation from
service. The Company's contributions to the ESOP are not fixed, so benefits
payable under the ESOP cannot be estimated.
The ESOP is subject to the requirements of ERISA and the regulations of the
IRS and the Department of Labor thereunder.
PENSION PLAN. The Savings Bank previously maintained a defined benefit
pension plan that covered all employees that had attained 21 years of age and
had completed six months of service. In general, the pension plan provided for
benefits payable monthly at retirement or normal retirement age with a reduced
level of benefits in the event of early retirement prior to having attained age
65 and/or prior to completing 25 years of service. Under the plan, an
employee's benefits were fully vested after seven years of service. A year of
service was any year in which an employee worked a minimum of 1,000 hours. The
retirement benefit was in an amount based upon the cash surrender value of
certain insurance contracts in force which were used to fund the pension plan
and a retirement benefit formula equal to 371/2% of a participant's average
monthly compensation, which was equal to the average of the monthly compensation
paid to him or her for the last five consecutive years of employment.
<PAGE>
16
The Savings Bank has terminated the pension plan in connection with the
Conversion and formation of the ESOP. Participant's accrued benefits under the
pension plan are available for distribution or rollover to another eligible
qualified plan such as an individual retirement account. Based on 11 years of
credited service under the pension plan, Mr. Rice will receive a benefit of
$84,800.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
All loans or extensions of credit to executive officers and directors must
be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with the
general public and must not involve more than the normal risk of repayment or
present other unfavorable features.
The Savings Bank's policy provides that all loans made by the Savings Bank
to its directors and officers are made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons. The
Savings Bank's policy provides that such loans may not involve more than the
normal risk of collectibility or present other unfavorable features. As of
September 30, 1996, loans to directors and executive officers, including
outstanding balances and commitments, amounted to $185,900, or 3.6% of the
Savings Bank's retained earnings, at September 30, 1996. As of such date, there
were no loans to any director or executive officer made at preferential rates or
terms which, in the aggregate, exceeded $60,000 during the three years ended
September 30, 1996. All such loans were made by the Savings Bank in accordance
with the aforementioned policy.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the first annual meeting of stockholders of
the Company, which is scheduled to be held in January 1997, was required to have
been received at the principal executive offices of the Company, 415 Center
Street, Ironton, Ohio 45638, Attention: Edith M. Daniels, Secretary, no later
than October 16, 1996. No such proposals were received.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may
be brought before an annual meeting pursuant to Section 2.14 of the Company's
Bylaws, which provides that business at an annual meeting of stockholders
must be (a) properly brought before the meeting by or at the direction of the
Board of Directors, or (b) otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before an annual meeting by
a stockholder, the stockholder must have given timely notice thereof in
writing to the Secretary of the Company. To be timely, a stockholder's
notice must be delivered to, or mailed and received at, the principal
executive offices of the Company not later than 90 days prior to the
anniversary date of the immediately preceding annual meeting of
<PAGE>
17
stockholders of the Company; provided, however, that with respect to the
first annual meeting of stockholders of the Company, which is expected to be
held on Wednesday, January 15, 1997, notice by the stockholder must be so
delivered or received no later than the close of business on Wednesday,
October 16, 1996, notwithstanding a determination by the Company to schedule
such annual meeting at a date later than the third Wednesday of January 1997.
No such proposals were received. Such stockholder's notice is required to
set forth as to each matter the stockholder proposes to bring before an
annual meeting (a) a brief description of the business desired to be brought
before the annual meeting, (b) the name and address, as they appear on the
Company's books, of the stockholder proposing such business, (c) the class
and number of shares of the Company which are beneficially owned by the
stockholder, and (d) any material interest of the stockholder in such
business.
OTHER MATTERS
Management is not aware of any business to come before the Special Meeting
other than the matters described above in this Proxy Statement. However, if any
other matters should properly come before the meeting, it is intended that the
proxies solicited hereby will be voted with respect to those other matters in
accordance with the judgment of the persons voting the proxies.
The cost of the solicitation of proxies will be borne by the Company. The
Company has retained Regan & Associates, Inc., a professional proxy solicitation
firm, to assist in the solicitation of proxies. Such firm will be paid a fee of
$2,500, which amount will be renegotiated in the event of a proxy contest, plus
reimbursement for out-of-pocket expenses. The Company will reimburse brokerage
firms and other custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending the proxy materials to the beneficial owners of the
Company's Common Stock. In addition to solicitations by mail, directors,
officers and employees of the Company may solicit proxies personally or by
telephone without additional compensation.
By Order of the Board of Directors
/s/ Edith M. Daniels
Edith M. Daniels
Secretary
November 12, 1996
<PAGE>
APPENDIX A
FIRST FEDERAL FINANCIAL BANCORP, INC.
STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
FIRST FEDERAL FINANCIAL BANCORP, INC. (THE "CORPORATION") HEREBY
ESTABLISHES THIS STOCK OPTION PLAN (THE "PLAN") UPON THE TERMS AND CONDITIONS
HEREINAFTER STATED.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of the
Corporation and its Subsidiary Companies by providing Employees and Non-Employee
Directors with a proprietary interest in the Corporation as an incentive to
contribute to the success of the Corporation and its Subsidiary Companies, and
rewarding those Employees for outstanding performance and the attainment of
targeted goals. All Incentive Stock Options issued under this Plan are intended
to comply with the requirements of Section 422 of the Code, and the regulations
thereunder, and all provisions hereunder shall be read, interpreted and applied
with that purpose in mind.
ARTICLE III
DEFINITIONS
3.01 "Award" means an Option or Stock Appreciation Right granted pursuant
to the terms of this Plan.
3.02 "Board" means the Board of Directors of the Corporation.
3.03 "Change in Control of the Corporation" shall be deemed to have
occurred if: (i) any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Corporation and any trustee or other
fiduciary holding securities under any employee benefit plan of the
Corporation), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities; (ii) during any period of two
consecutive years (not including any period prior to the adoption of the Plan),
individuals who at the beginning of such period constitute the Board of
Directors, and any new director whose election by the Board of Directors or
nomination for election by the Corporation's stockholders was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board
<PAGE>
of Directors; (iii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than a
merger or consolidation that would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity) more than 50% of the combined voting power of the
voting securities of the Corporation outstanding immediately after such
merger or consolidation; or (iv) the stockholders of the Corporation approve
a plan of complete liquidation of the Corporation or an agreement for the
sale or disposition by the Corporation of all or substantially all of the
Corporation's assets. If any of the events enumerated in clauses (i) through
(iv) occur, the Board shall determine the effective date of the Change in
Control resulting therefrom for purposes of the Plan.
3.04 "Code" means the Internal Revenue Code of 1986, as amended.
3.05 "Committee" means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof, each of whom shall be a Non-Employee
Director.
3.06 "Common Stock" means shares of the common stock, $.01 par value per
share, of the Corporation.
3.07 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Corporation or a Subsidiary Company, or, if no such plan
applies, which would qualify such Employee for disability benefits under the
Federal Social Security System.
3.08 "Effective Date" means the day upon which the Board approves this
Plan.
3.09 "Employee" means any person who is employed by the Corporation or a
Subsidiary Company, or is an Officer of the Corporation or a Subsidiary Company,
but not including directors who are not also Officers of or otherwise employed
by the Corporation or a Subsidiary Company.
3.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
3.11 "Fair Market Value" shall be equal to the fair market value per
share of the Corporation's Common Stock on the date an Award is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of the markets, if more than one) or national quotation system in which such
shares are then traded, or if no such closing prices are reported, the mean
between the high bid and low asked prices that day on the principal market or
national quotation system then in use, or if no such quotations are available,
the price furnished by a professional securities dealer making a market in such
shares selected by the Committee.
A-2
<PAGE>
3.12 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.
3.13 "Non-Employee Director" means a member of the Board who is not an
Officer or Employee of the Corporation or any Subsidiary Company and shall
include any individual who, at any time after the date of adoption of the Plan,
services the Board in an advisory or emeritus capacity.
3.14 "Non-Qualified Option" means any Option granted under this Plan which
is not an Incentive Stock Option.
3.15 "Offering" means the offering of Common Stock to the public pursuant
to a Plan of Conversion adopted by the Savings Bank.
3.16 "Officer" means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.
3.17 "OTS" means the Office of Thrift Supervision.
3.18 "Option" means a right granted under this Plan to purchase Common
Stock.
3.19 "Optionee" means an Employee or Non-Employee Director or former
Employee or Non-Employee Director to whom an Option is granted under the Plan.
3.20 "Retirement" means a termination of employment upon or after
attainment of age sixty-five (65) or such earlier age as may be specified in any
applicable plans or policies maintained by the Corporation or a Subsidiary
Company.
3.21 "Savings Bank" means First Federal Savings Bank of Ironton, the
wholly-owned subsidiary of the Corporation.
3.22 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Corporation in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.11.
3.23 "Subsidiary Companies" means those subsidiaries of the Corporation,
including the Savings Bank, which meet the definition of "subsidiary
corporations" set forth in Section 425(f) of the Code, at the time of granting
of the Option in question.
A-3
<PAGE>
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 DUTIES OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority (subject to
compliance with applicable OTS regulations) to adopt, amend and rescind such
rules, regulations and procedures as, in its opinion, may be advisable in the
administration of the Plan, including, without limitation, rules, regulations
and procedures which (i) deal with satisfaction of an Optionee's tax withholding
obligation pursuant to Section 12.02 hereof, (ii) include arrangements to
facilitate the Optionee's ability to borrow funds for payment of the exercise or
purchase price of an Award, if applicable, from securities brokers and dealers,
and (iii) include arrangements which provide for the payment of some or all of
such exercise or purchase price by delivery of previously-owned shares of Common
Stock or other property and/or by withholding some of the shares of Common Stock
which are being acquired. The interpretation and construction by the Committee
of any provisions of the Plan, any rule, regulation or procedure adopted by it
pursuant thereto or of any Award shall be final and binding in the absence of
action by the Board of Directors.
4.02 APPOINTMENT AND OPERATION OF THE COMMITTEE. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, each of whom shall be a Non-Employee Director. The
Committee shall act by vote or written consent of a majority of its members.
Subject to the express provisions and limitations of the Plan, the Committee may
adopt such rules, regulations and procedures as it deems appropriate for the
conduct of its affairs. It may appoint one of its members to be chairman and
any person, whether or not a member, to be its secretary or agent. The
Committee shall report its actions and decisions to the Board at appropriate
times but in no event less than one time per calendar year.
4.03 REVOCATION FOR MISCONDUCT. The Board of Directors or the Committee
may by resolution immediately revoke, rescind and terminate any Option, or
portion thereof, to the extent not yet vested, or any Stock Appreciation Right,
to the extent not yet exercised, previously granted or awarded under this Plan
to an Employee who is discharged from the employ of the Corporation or a
Subsidiary Company for cause, which, for purposes hereof, shall mean termination
because of the Employee's personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order.
Options granted to a Non-Employee Director who is removed for cause pursuant to
the Corporation's Certificate of Incorporation shall, to the extent not yet
vested, terminate as of the effective date of such removal.
A-4
<PAGE>
4.04 LIMITATION ON LIABILITY. Neither the members of the Board of
Directors nor any member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan, any rule, regulation
or procedure adopted pursuant thereto or for any Awards granted hereunder. If
any members of the Board of Directors or a member of the Committee is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of anything done or not done by him in such capacity under or with
respect to the Plan, the Corporation shall, subject to the requirements of
applicable laws and regulations, indemnify such member against all liabilities
and expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and its
Subsidiary Companies and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.
4.05 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as
may be required. The Corporation shall not be required to issue or deliver
any certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any federal or state law or any rule or
regulation of any government body, which the Corporation shall, in its sole
discretion, determine to be necessary or advisable. Moreover, no Option or
Stock Appreciation Right may be exercised if such exercise would be contrary
to applicable laws and regulations.
4.06 RESTRICTIONS ON TRANSFER. The Corporation may place a legend upon any
certificate representing shares acquired pursuant to an Award granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.
ARTICLE V
ELIGIBILITY
Awards may be granted to such Employees or Non-Employee Directors of the
Corporation and its Subsidiary Companies as may be designated from time to time
by the Board of Directors or the Committee. Awards may not be granted to
individuals who are not Employees or Non-Employee Directors of either the
Corporation or its Subsidiary Companies. Non-Employee Directors shall be
eligible to receive only Non-Qualified Options.
A-5
<PAGE>
ARTICLE VI
COMMON STOCK COVERED BY THE PLAN
6.01 OPTION SHARES. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 67,178 shares, which is equal to 10.0% of the shares of
Common Stock issued in the Offering. None of such shares shall be the subject
of more than one Award at any time, but if an Option as to any shares is
surrendered before exercise, or expires or terminates for any reason without
having been exercised in full, or for any other reason ceases to be exercisable,
the number of shares covered thereby shall again become available for grant
under the Plan as if no Awards had been previously granted with respect to such
shares. Notwithstanding the foregoing, if an Option is surrendered in
connection with the exercise of a Stock Appreciation Right, the number of shares
covered thereby shall not be available for grant under the Plan. During the
time this Plan remains in effect, grants to each Employee and each Non-Employee
Director shall not exceed 25% and 5% of the shares of Common Stock available
under the Plan, respectively, provided, however, that grants in the aggregate to
Non-Employee Directors shall not exceed 30% of the shares of Common Stock
available under the Plan.
6.02 SOURCE OF SHARES. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares, shares purchased by the
Corporation on the open market or from private sources for use under the Plan
or, if applicable, shares held in a grantor trust created by the Corporation.
ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
The Board of Directors or the Committee shall, in its discretion, determine
from time to time which Employees and Non-Employee Directors will be granted
Awards under the Plan, the number of shares of Common Stock subject to each
Award, whether each Option will be an Incentive Stock Option or a Non-Qualified
Stock Option and the exercise price of an Option. In making determinations with
respect to Employees there shall be taken into account the duties,
responsibilities and performance of each respective Employee, his present and
potential contributions to the growth and success of the Corporation, his salary
and such other factors as the Board of Directors or the Committee shall deem
relevant to accomplishing the purposes of the Plan.
ARTICLE VIII
OPTIONS AND STOCK APPRECIATION RIGHTS
Each Option granted hereunder shall be on the following terms and
conditions:
A-6
<PAGE>
8.01 STOCK OPTION AGREEMENT. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which shall
set forth the total number of shares of Common Stock to which it pertains, the
exercise price, whether it is a Non-Qualified Option or an Incentive Stock
Option, and such other terms, conditions, restrictions and privileges as the
Board of Directors or the Committee in each instance shall deem appropriate,
provided they are not inconsistent with the terms, conditions and provisions of
this Plan. Each Optionee shall receive a copy of his executed Stock Option
Agreement.
8.02 AWARDS TO EMPLOYEES AND NON-EMPLOYEE DIRECTORS. Specific Awards to
Employees and Non-Employee Directors shall be made to such persons and in such
amounts as are determined by the Board of Directors or the Committee. However,
Awards equal to 20,153 shares (or 30% of the number of shares available under
this Plan) shall be made to Non-Employee Directors in the aggregate and no
individual Non-Employee Director may receive Awards in excess of 3,358 shares
(or 5% of the number of shares available under this Plan).
8.03 OPTION EXERCISE PRICE.
(a) INCENTIVE STOCK OPTIONS. The per share price at which the
subject Common Stock may be purchased upon exercise of an Incentive Stock Option
shall be no less than one hundred percent (100%) of the Fair Market Value of a
share of Common Stock at the time such Incentive Stock Option is granted, except
as provided in Section 8.10(b), and subject to any applicable adjustment
pursuant to Article IX hereof.
(b) NON-QUALIFIED OPTIONS. The per share price at which the subject
Common Stock may be purchased upon exercise of a Non-Qualified Option shall be
no less than one hundred percent (100%) of the Fair Market Value of a share of
Common Stock at the time such Non-Qualified Option is granted, and subject to
any applicable adjustment pursuant to Article IX hereof.
8.04 VESTING AND EXERCISE OF OPTIONS.
(a) GENERAL RULES. Incentive Stock Options and Non-Qualified Options
granted hereunder shall become vested and exercisable at the rate of 20% per
year on each annual anniversary of the date the Option was granted, and the
right to exercise shall be cumulative. Notwithstanding the foregoing, no
vesting shall occur on or after an Employee's employment with the Corporation
and all Subsidiary Companies is terminated for any reason other than his death
or Disability. In determining the number of shares of Common Stock with respect
to which Options are vested and/or exercisable, fractional shares will be
rounded up to the nearest whole number if the fraction is 0.5 or higher, and
down if it is less.
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(b) ACCELERATED VESTING. Unless the Committee shall specifically
state otherwise at the time an Option is granted, all Options granted hereunder
shall become vested and exercisable in full on the date an Optionee terminates
his employment with or service to the Corporation or a Subsidiary Company
because of his death or Disability. All options hereunder shall become
immediately vested and exercisable in full on the date an Optionee terminates
his employment or service to the Corporation or a Subsidiary Company as the
result of a Change in Control of the Corporation if, as of the date of such
Change in Control of the Corporation, such treatment is either authorized or is
not prohibited by applicable laws and regulations.
8.05 DURATION OF OPTIONS.
(a) GENERAL RULE. Except as provided in Sections 8.05(b) and 8.10,
each Option or portion thereof granted to Employees and Non-Employee Directors
shall be exercisable at any time on or after it vests and becomes exercisable
until the earlier of (i) ten (10) years after its date of grant or (ii) three
(3) months after the date on which the Optionee ceases to be employed (or in the
service of the Board of Directors in the case of Non-Employee Directors) by the
Corporation and all Subsidiary Companies, unless the Board of Directors or the
Committee in its discretion decides at the time of grant or thereafter to extend
such period of exercise upon termination of employment or service from three (3)
months to a period not exceeding one (1) year.
(b) EXCEPTIONS. If an Employee dies while in the employ of the
Corporation or a Subsidiary Company or terminates employment with the
Corporation or a Subsidiary Company as a result of Disability without having
fully exercised his Options, the Optionee or the executors, administrators,
legatees or distributees of his estate shall have the right, during the
twelve-month period following the earlier of his death or termination due to
Disability, to exercise such Options. If a Non-Employee Director dies while
serving as a Non-Employee Director or terminates his service to the Corporation
or a Subsidiary Company as a result of Disability without having fully exercised
his Options, the Non-Employee Director or the executors, administrators,
legatees or distributees of his estate shall have the right, during the
twelve-month period following the earlier of his death or termination due to
Disability, to exercise such Options. In no event, however, shall any Option be
exercisable more than ten (10) years from the date it was granted. In the event
of Retirement, an Employee or Non-Employee Director shall be entitled to the
same time period set forth above in this Section 8.05(b) to exercise an Option
if, as of the date of such Retirement, such treatment is either authorized or is
not prohibited by applicable laws and regulations.
8.06 NONASSIGNABILITY. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative. Notwithstanding the foregoing, or any other provision
of this Plan, an Optionee who holds Non-Qualified Options may transfer such
Options to his or her spouse, lineal ascendants, lineal descendants, or to a
duly established trust for the benefit of one or more of these individuals.
Options so transferred may thereafter be transferred only to the Optionee who
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originally received the grant or to an individual or trust to whom the Optionee
could have initially transferred the Option pursuant to this Section 8.06.
Options which are transferred pursuant to this Section 8.06 shall be exercisable
by the transferee according to the same terms and conditions as applied to the
Optionee.
8.07 MANNER OF EXERCISE. Options may be exercised in part or in whole and
at one time or from time to time. The procedures for exercise shall be set
forth in the written Stock Option Agreement provided pursuant to Section 8.01.
8.08 PAYMENT FOR SHARES. Payment in full of the purchase price for shares
of Common Stock purchased pursuant to the exercise of any Option shall be made
to the Corporation upon exercise of such Option. All shares sold under the Plan
shall be fully paid and nonassessable. Payment for shares may be made by the
Optionee in cash or, at the discretion of the Board of Directors or the
Committee, by delivering shares of Common Stock (including shares acquired
pursuant to the exercise of an Option) or other property equal in Fair Market
Value to the purchase price of the shares to be acquired pursuant to the Option,
by withholding some of the shares of Common Stock which are being purchased upon
exercise of an Option, or any combination of the foregoing.
8.09 VOTING AND DIVIDEND RIGHTS. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of such Option.
8.10 ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 8.01 to 8.09 above, to those contained in this
Section 8.10.
(a) Notwithstanding any contrary provisions contained elsewhere in
this Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted, of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year, under this Plan and
stock options that satisfy the requirements of Section 422 of the Code under any
other stock option plan or plans maintained by the Corporation (or any parent or
Subsidiary Company), shall not exceed $100,000.
(b) LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at which
shares of Common Stock may be purchased upon exercise of an Incentive Stock
Option granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the total
combined voting power of all classes of stock issued to stockholders of the
Corporation or any Subsidiary Company, shall be no less than one hundred and ten
percent (110%) of the Fair Market Value of a share of the Common Stock of the
Corporation at the time of grant, and such Incentive Stock Option
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shall by its terms not be exercisable after the earlier of the date
determined under Section 8.04 or the expiration of five (5) years from the
date such Incentive Stock Option is granted.
(c) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. An Optionee shall
immediately notify the Corporation in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Corporation shall be entitled to withhold from any
compensation or other payments then or thereafter due to the Optionee such
amounts as may be necessary to satisfy any withholding requirements of federal
or state law or regulation and, further, to collect from the Optionee any
additional amounts which may be required for such purpose. The Committee may,
in its discretion, require shares of Common Stock acquired by an Optionee upon
exercise of an Incentive Stock Option to be held in an escrow arrangement for
the purpose of enabling compliance with the provisions of this Section 8.10(c).
8.11 STOCK APPRECIATION RIGHTS.
(a) GENERAL TERMS AND CONDITIONS. The Board of Directors or the
Committee may, but shall not be obligated to, authorize the Corporation, on such
terms and conditions as it deems appropriate in each case, to grant rights to
Optionees to surrender an exercisable Option, or any portion thereof, in
consideration for the payment by the Corporation of an amount equal to the
excess of the Fair Market Value of the shares of Common Stock subject to the
Option, or portion thereof, surrendered over the exercise price of the Option
with respect to such shares (any such authorized surrender and payment being
hereinafter referred to as a "Stock Appreciation Right"). Such payment, at the
discretion of the Board of Directors or the Committee, may be made in shares of
Common Stock valued at the then Fair Market Value thereof, or in cash, or partly
in cash and partly in shares of Common Stock.
The terms and conditions set with respect to a Stock Appreciation Right may
include (without limitation), subject to other provisions of this Section 8.11
and the Plan, the period during which, date by which or event upon which the
Stock Appreciation Right may be exercised (which shall be on the same terms as
the Option to which it relates pursuant to Section 8.04 hereunder); the method
for valuing shares of Common Stock for purposes of this Section 8.11; a ceiling
on the amount of consideration which the Corporation may pay in connection with
exercise and cancellation of the Stock Appreciation Right; and arrangements for
income tax withholding. The Board of Directors or the Committee shall have
complete discretion to determine whether, when and to whom Stock Appreciation
Rights may be granted. Notwithstanding the foregoing, the Corporation may not
permit the exercise of a Stock Appreciation Right issued pursuant to this Plan
until the Corporation has been subject to the reporting requirements of Section
13 of the Exchange Act for a
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period of at least one year prior to the exercise of any such Stock
Appreciation Right and until a Stock Appreciation Right issued pursuant to
this Plan has been outstanding for at least six months from the date of grant.
(b) TIME LIMITATIONS. If a holder of a Stock Appreciation Right
terminates service with the Corporation, the Stock Appreciation Right may be
exercised only within the period, if any, within which the Option to which it
relates may be exercised. Notwithstanding the foregoing, any election by an
Optionee to exercise the Stock Appreciation Rights provided in this Plan shall
be made during the period beginning on the third business day following the
release for publication of quarterly or annual financial information required to
be prepared and disseminated by the Corporation pursuant to the requirements of
the Exchange Act and ending on the twelfth business day following such date.
The required release of information shall be deemed to have been satisfied when
the specified financial data appears on or in a wire service, financial news
service or newspaper of general circulation or is otherwise first made publicly
available.
(c) EFFECTS OF EXERCISE OF STOCK APPRECIATION RIGHTS OR OPTIONS.
Upon the exercise of a Stock Appreciation Right, the number of shares of Common
Stock available under the Option to which it relates shall decrease by a number
equal to the number of shares for which the Stock Appreciation Right was
exercised. Upon the exercise of an Option, any related Stock Appreciation Right
shall terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.
(d) TIME OF GRANT. A Stock Appreciation Right may be granted
concurrently with the Option to which it relates or at any time thereafter prior
to the exercise or expiration of such Option.
(e) NON-TRANSFERABLE. The holder of a Stock Appreciation Right may
not transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.
ARTICLE IX
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance under
this Plan, the number of shares to which any Award relates and the exercise
price per share of Common Stock under any Option shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the effective date of this Plan resulting
from a split, subdivision or consolidation of shares or any other capital
adjustment, the payment of a stock dividend, or other increase or decrease in
such shares effected without receipt or payment of consideration by the
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Corporation. If, upon a merger, consolidation, reorganization, liquidation,
recapitalization or the like of the Corporation, the shares of the Corporation's
Common Stock shall be exchanged for other securities of the Corporation or of
another corporation, each recipient of an Award shall be entitled, subject to
the conditions herein stated, to purchase or acquire such number of shares of
Common Stock or amount of other securities of the Corporation or such other
corporation as were exchangeable for the number of shares of Common Stock of the
Corporation which such optionees would have been entitled to purchase or acquire
except for such action, and appropriate adjustments shall be made to the per
share exercise price of outstanding Options. Notwithstanding any provision to
the contrary, the exercise price of shares subject to outstanding Awards may be
proportionately adjusted upon the payment of a special large and nonrecurring
dividend that has the effect of a return of capital to the stockholders.
ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate or amend the Plan with
respect to any shares of Common Stock as to which Awards have not been granted,
subject to regulations of the OTS and any required stockholder approval or any
stockholder approval which the Board may deem to be advisable for any reason,
such as for the purpose of obtaining or retaining any statutory or regulatory
benefits under tax, securities or other laws or satisfying any applicable stock
exchange listing requirements. The Board may not, without the consent of the
holder of an Award, alter or impair any Award previously granted or awarded
under this Plan as specifically authorized herein.
ARTICLE XI
EMPLOYMENT RIGHTS
Neither the Plan nor the grant of any Awards hereunder nor any action taken
by the Committee or the Board in connection with the Plan shall create any right
on the part of any Employee or Non-Employee Director of the Corporation or a
Subsidiary Company to continue in such capacity.
ARTICLE XII
WITHHOLDING
12.01 TAX WITHHOLDING. The Corporation may withhold from any cash payment
made under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of such cash payment is insufficient, the
Corporation may require the Optionee to pay to the Corporation the amount
required to be withheld as a condition to delivering the shares acquired
pursuant to an Award. The Corporation also may withhold
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or collect amounts with respect to a disqualifying disposition of shares of
Common Stock acquired pursuant to the exercise of an Incentive Stock Option,
as provided in Section 8.10(c).
12.02 METHODS OF TAX WITHHOLDING. The Board of Directors or the Committee
is authorized to adopt rules, regulations or procedures which provide for the
satisfaction of an Optionee's tax withholding obligation by the retention of
shares of Common Stock to which the Employee would otherwise be entitled
pursuant to an Award and/or by the Optionee's delivery of previously-owned
shares of Common Stock or other property.
ARTICLE XIII
EFFECTIVE DATE OF THE PLAN; TERM
13.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on
the Effective Date, and Awards may be granted hereunder as of or after the
Effective Date and prior to the termination of the Plan, provided that no
Incentive Stock Option issued pursuant to this Plan shall qualify as such unless
this Plan is approved by the requisite vote of the holders of the outstanding
voting shares of the Corporation at a meeting of stockholders of the Corporation
held within twelve (12) months of the Effective Date. Notwithstanding the
foregoing or anything to the contrary in this Plan, the implementation of this
Plan and any Awards granted pursuant hereto shall be subject to the
non-objection of the OTS in the first year after the completion of the Offering
and to the approval of the Corporation's stockholders.
13.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain
in effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.
ARTICLE XIV
MISCELLANEOUS
14.01 GOVERNING LAW. To the extent not governed by federal law, this
Plan shall be construed under the laws of the State of Ohio.
14.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.
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APPENDIX B
FIRST FEDERAL FINANCIAL BANCORP, INC.
RECOGNITION AND RETENTION PLAN AND TRUST AGREEMENT
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 First Federal Financial Bancorp, Inc. (the "Corporation") hereby
establishes a Recognition and Retention Plan (the "Plan") and Trust (the
"Trust") upon the terms and conditions hereinafter stated in this Management
Recognition Plan and Trust Agreement (the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to retain personnel of experience and
ability in key positions by providing Employees and Non-Employee Directors of
the Corporation and of First Federal Savings Bank of Ironton (the "Savings
Bank") with a proprietary interest in the Corporation as compensation for their
contributions to the Corporation, the Savings Bank, and any other Subsidiaries
and as an incentive to make such contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Agreement with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meanings set forth below. Wherever appropriate, the masculine pronouns shall
include the feminine pronouns and the singular shall include the plural.
3.01 "Beneficiary" means the person or persons designated by a Recipient to
receive any benefits payable under the Plan in the event of such Recipient's
death. Such person or persons shall be designated in writing on forms provided
for this purpose by the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, his estate.
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3.02 "Board" means the Board of Directors of the Corporation.
3.03 "Change in Control of the Corporation" shall be deemed to have
occurred if: (i) any "person" as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Corporation and any trustee or other
fiduciary holding securities under any employee benefit plan of the
Corporation), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities; (ii) during any period of two
consecutive years (not including any period prior to the adoption of the Plan),
individuals who at the beginning of such period constitute the Board of
Directors, and any new director whose election by the Board of Directors or
nomination for election by the Corporation's stockholders was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors; (iii) the stockholders
of the Corporation approve a merger or consolidation of the Corporation with any
other corporation, other than a merger or consolidation that would result in the
voting securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Corporation outstanding immediately
after such merger or consolidation; or (iv) the stockholders of the Corporation
approve a plan of complete liquidation of the Corporation or an agreement for
the sale or disposition by the Corporation of all or substantially all of the
Corporation's assets. If any of the events enumerated in clauses (i) through
(iv) occur, the Board shall determine the effective date of the Change in
Control resulting therefrom for purposes of the Plan.
3.04 "Code" means the Internal Revenue Code of 1986, as amended.
3.05 "Committee" means the committee appointed by the Board pursuant to
Article IV hereof.
3.06 "Common Stock" means shares of the common stock, $.01 par value per
share, of the Corporation.
3.07 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Corporation or any Subsidiary or, if no such plan
applies, which would qualify such Employee for disability benefits under the
Federal Social Security System.
3.08 "Effective Date" means the day upon which the Board approves this
Plan.
3.09 "Employee" means any person who is employed by the Corporation, the
Savings Bank, or any Subsidiary, or is an officer of the Corporation, the
Savings Bank, or
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any Subsidiary, including officers or other employees who may be directors of
the Corporation.
3.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
3.11 "Non-Employee Director" means a member of the Board who is not an
Employee, and shall include any individual who, at any time after the date of
adoption of the Plan, serves the Board in an advisory or emeritus capacity.
3.12 "OTS" means the Office of Thrift Supervision.
3.13 "Plan Shares" or "Shares" means shares of Common Stock held in the
Trust which may be distributed to a Recipient pursuant to the Plan.
3.14 "Plan Share Award" or "Award" means a right granted under this Plan to
receive a distribution of Plan Shares upon completion of the service
requirements described in Article VII.
3.15 "Recipient" means an Employee or Non-Employee Director who receives a
Plan Share Award under the Plan.
3.16 "Savings Bank" means First Federal Savings Bank of Ironton, the
wholly-owned subsidiary of the Corporation.
3.17. "Subsidiary" means First Federal Bank of Ironton and any other
subsidiaries of the Corporation or the Savings Bank which, with the consent of
the Board, agree to participate in this Plan.
3.18. "Trustee" means such firm, entity or persons approved by the
Board of Directors to hold legal title to the Plan for the purposes set forth
herein.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE OF THE COMMITTEE. The Plan shall be administered and interpreted
by the Committee, which shall consist of two or more members of the Board, each
of whom shall be a Non-Employee Director. The Committee shall have all of the
powers allocated to it in this and other Sections of the Plan. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Plan Share Award granted hereunder shall be final and binding in the
absence of action by the Board of Directors. The Committee shall act by vote or
written consent of a majority of its members. Subject to the express provisions
and limitations of the Plan (subject to compliance with applicable OTS
regulations), the Committee may adopt such rules, regulations and procedures as
it deems appropriate for the conduct of its affairs. The Committee shall report
its actions and
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decisions with respect to the Plan to the Board at appropriate times, but in
no event less than one time per calendar year.
4.02 ROLE OF THE BOARD. The members of the Committee and the Trustee shall
be appointed or approved by, and will serve at the pleasure of, the Board. The
Board may in its discretion from time to time remove members from, or add
members to, the Committee, and may remove or replace the Trustee, provided that
any directors who are selected as members of the Committee shall be Non-Employee
Directors.
4.03 LIMITATION ON LIABILITY. No member of the Board or the Committee
shall be liable for any determination made in good faith with respect to the
Plan or any Plan Shares or Plan Share Awards granted under it. If a member of
the Board or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Corporation
shall, subject to the requirements of applicable laws and regulations, indemnify
such member against all liabilities and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in the best interests of the
Corporation and any Subsidiaries and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
4.04 COMPLIANCE WITH LAWS AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and OTS
regulations and to such approvals by any government or regulatory agency as may
be required.
ARTICLE V
CONTRIBUTIONS
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall determine the
amount (or the method of computing the amount) and timing of any contributions
by the Corporation and any Subsidiaries to the Trust established under this
Plan. Such amounts may be paid in cash or in shares of Common Stock and shall
be paid to the Trust at the designated time of contribution. No contributions
by Employees or Directors shall be permitted.
5.02 INVESTMENT OF TRUST ASSETS; NUMBER OF PLAN SHARES. Subject to Section
8.02 hereof, the Trustee shall invest all of the Trust's assets primarily in
Common Stock. The aggregate number of Plan Shares available for distribution
pursuant to this Plan shall be 26,871 shares of Common Stock, which shares shall
be purchased from the Corporation and/or from stockholders thereof by the Trust
with funds contributed by the Corporation. During the time this Plan remains in
effect, Awards to each Employee and each Non-
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Employee Director shall not exceed 25% and 5% of the shares of Common Stock
available under the Plan, respectively, provided, however, that Awards in the
aggregate to all Non-Employee Directors shall not exceed 30% of the shares of
Common Stock available under the Plan.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 AWARDS TO NON-EMPLOYEE DIRECTORS. Plan Share Awards to Non-Employee
Directors shall be made to such persons and in such amounts as determined by the
Board of Directors or the Committee. However, Plan Share Awards equal to 8,061
shares (or 30% of the number of shares available under this Plan) shall be made
to Non-Employee Directors in the aggregate and no individual Non-Employee
Director may receive Plan Share Awards in excess of 1,343 shares (or 5% of the
number of shares available under this Plan). In the event of a forfeiture of
the right to any Shares subject to an Award, such forfeited Shares shall be
reallocated on the first day of the month following such forfeiture to the
remaining Non-Employee Directors who are eligible to receive such re-allocation
by dividing the number of forfeited shares of Common Stock by such remaining
number of Non-Employee Directors at such time.
6.02 AWARDS TO EMPLOYEES. Plan Share Awards may be made to such Employees
as may be selected by the Board of Directors or the Committee, subject to the
maximum number of shares as determined under Section 5.02 hereof. In selecting
those Employees to whom Plan Share Awards may be granted and the number of
Shares covered by such Awards, the Board of Directors or the Committee shall
consider the duties, responsibilities and performance of each respective
Employee, his present and potential contributions to the growth and success of
the Corporation, his salary and such other factors as shall be deemed relevant
to accomplishing the purposes of the Plan. The Board of Directors or the
Committee may but shall not be required to request the written recommendation of
the Chief Executive Officer of the Corporation other than with respect to Plan
Share Awards to be granted to him.
6.03 FORM OF ALLOCATION. As promptly as practicable after a determination
is made pursuant to Sections 6.01 or 6.02 that a Plan Share Award is to be
issued (subject to the maximum number of shares as determined under Section 5.02
hereof) the Board of Directors or the Committee shall notify the Recipient in
writing of the grant of the Award, the number of Plan Shares covered by the
Award, and the terms upon which the Plan Shares subject to the Award shall be
distributed to the Recipient. The date on which the Board of Directors or the
Committee makes the determination with respect to Plan Share Awards shall be
considered the date of grant of the Plan Share Award. The Board of Directors or
the Committee shall maintain records as to all grants of Plan Share Awards under
the Plan.
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6.04 ALLOCATIONS NOT REQUIRED TO ANY SPECIFIC EMPLOYEE. Notwithstanding
anything to the contrary in Section 6.02 hereof, no Employee shall have any
right or entitlement to receive a Plan Share Award hereunder, such Awards being
at the total discretion of the Board of Directors or the Committee.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) GENERAL RULES. Subject to the terms hereof, Plan Share Awards
shall be earned by a Recipient at the rate of twenty percent (20%) of the
aggregate number of Shares covered by the Award as of each annual anniversary of
the date of grant of the Award. If the employment of an Employee or service as
a Non-Employee Director is terminated prior to the fifth (5th) annual
anniversary of the date of grant of a Plan Share Award for any reason (except as
specifically provided in subsections (b) and (c) below), the Recipient shall
forfeit the right to any Shares subject to the Award which have not theretofore
been earned. In the event of a forfeiture of the right to any Shares subject to
an Award by an Employee, such forfeited Shares shall become available for
allocation pursuant to Section 6.02 hereof as if no Award had been previously
granted with respect to such Shares. No fractional shares shall be distributed
pursuant to this Plan.
(b) EXCEPTION FOR TERMINATIONS DUE TO DEATH OR DISABILITY.
Notwithstanding the general rule contained in Section 7.01(a), all Plan Shares
subject to a Plan Share Award held by a Recipient whose employment with or
service to the Corporation or any Subsidiary terminates due to death or
Disability shall be deemed earned as of the Recipient's last day of employment
with or service to the Corporation or any Subsidiary and shall be distributed as
soon as practicable thereafter; provided, however, that Awards shall be
distributed in accordance with Section 7.03(a).
(c) EXCEPTION FOR TERMINATIONS AFTER A CHANGE IN CONTROL OF THE
CORPORATION. Notwithstanding the general rule contained in Section 7.01(a), all
Plan Shares subject to a Plan Share Award held by a Recipient shall be deemed to
be earned in the event of a Change in Control of the Corporation if, as of the
date of such Change in Control of the Corporation, such treatment is either
authorized or is not prohibited by applicable laws and regulations.
(d) REVOCATION FOR MISCONDUCT. Notwithstanding anything hereinafter
to the contrary, the Board may by resolution immediately revoke, rescind and
terminate any Plan Share Award, or portion thereof, previously awarded under
this Plan, to the extent Plan Shares have not been distributed hereunder,
whether or not yet earned, in the case of an Employee who is discharged from the
employ of the Corporation or any Subsidiary for cause (as hereinafter defined).
Termination for cause shall mean termination because of the
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Employee's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses) or final cease-and-desist order.
Plan Share Awards granted to a Non-Employee Director who is removed for cause
pursuant to the Corporation's Certificate of Incorporation shall terminate as
of the effective date of such removal.
7.02 DISTRIBUTION OF DIVIDENDS. Any cash dividends (including special
large and non-recurring dividends including one that has the effect of a return
of capital to the Corporation's stockholders) or stock dividends declared in
respect of each unvested Plan Share Award will be held by the Trust for the
benefit of the Recipient on whose behalf such Plan Share Award is then held by
the Trust and such dividends, including any interest thereon, will be paid out
proportionately by the Trust to the Recipient thereof as soon as practicable
after the Plan Share Awards become earned. Any cash dividends or stock
dividends declared in respect of each vested Plan Share held by the Trust will
be paid by the Trust, as soon as practicable after the Trust's receipt thereof,
to the Recipient on whose behalf such Plan Share is then held by the Trust.
7.03 DISTRIBUTION OF PLAN SHARES.
(a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Plan Shares shall be
distributed to the Recipient or his Beneficiary, as the case may be, as soon as
practicable after they have been earned.
(b) FORM OF DISTRIBUTIONS. All Plan Shares, together with any Shares
representing stock dividends, shall be distributed in the form of Common Stock.
One share of Common Stock shall be given for each Plan Share earned and
distributable. Payments representing cash dividends shall be made in cash.
(c) WITHHOLDING. The Trustee may withhold from any cash payment or
Common Stock distribution made under this Plan sufficient amounts to cover any
applicable withholding and employment taxes, and if the amount of a cash payment
is insufficient, the Trustee may require the Recipient or Beneficiary to pay to
the Trustee the amount required to be withheld as a condition of delivering the
Plan Shares. The Trustee shall pay over to the Corporation or any Subsidiary
which employs or employed such Recipient any such amount withheld from or paid
by the Recipient or Beneficiary.
(d) RESTRICTIONS ON SELLING OF PLAN SHARES. Plan Share Awards may
not be sold, assigned, pledged or otherwise disposed of prior to the time that
they are earned and distributed pursuant to the terms of this Plan. Following
distribution, the Board of Directors or the Committee may require the Recipient
or his Beneficiary, as the case may be, to agree not to sell or otherwise
dispose of his distributed Plan Shares except in accordance with all then
applicable federal and state securities laws, and the Board of Directors or the
Committee may cause a legend to be placed on the stock certificate(s)
representing the
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distributed Plan Shares in order to restrict the transfer of the distributed
Plan Shares for such period of time or under such circumstances as the Board
of Directors or the Committee, upon the advice of counsel, may deem
appropriate.
7.04 VOTING OF PLAN SHARES. All Plan Shares which have not yet been earned
and allocated shall be voted by the Trustee in its sole discretion.
ARTICLE VIII
TRUST
8.01 TRUST. The Trustee shall receive, hold, administer, invest and make
distributions and disbursements from the Trust in accordance with the provisions
of the Plan and Trust and the applicable directions, rules, regulations,
procedures and policies established by the Board of Directors or the Committee
pursuant to the Plan.
8.02 MANAGEMENT OF TRUST. It is the intent of this Plan and Trust that the
Trustee shall have complete authority and discretion with respect to the
arrangement, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust in Common Stock to the fullest extent
practicable, except to the extent that the Trustee determine that the holding of
monies in cash or cash equivalents is necessary to meet the obligations of the
Trust. In performing their duties, the Trustee shall have the power to do all
things and execute such instruments as may be deemed necessary or proper,
including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust assets in
Common Stock without regard to any law now or hereafter in force limiting
investments for trustees or other fiduciaries. The investment authorized herein
may constitute the only investment of the Trust, and in making such investment,
the Trustee is authorized to purchase Common Stock from the Corporation or from
any other source, and such Common Stock so purchased may be outstanding, newly
issued, or treasury shares.
(b) To invest any Trust assets not otherwise invested in accordance
with (a) above, in such deposit accounts, and certificates of deposit,
obligations of the United States Government or its agencies or such other
investments as shall be considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at any
time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be registered in
the name of a nominee, without the addition of words indicating that such
security is an asset of the Trust (but accurate records shall be maintained
showing that such security is an asset of the Trust).
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(e) To hold cash without interest in such amounts as may in the
opinion of the Trustee be reasonable for the proper operation of the Plan and
Trust.
(f) To employ brokers, agents, custodians, consultants and
accountants.
(g) To hire counsel to render advice with respect to their rights,
duties and obligations hereunder, and such other legal services or
representation as the Trustee deems desirable.
(h) To hold funds and securities representing the amounts to be
distributed to a Recipient or his Beneficiary as a consequence of a dispute as
to the disposition thereof, whether in a segregated account or held in common
with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the Trustee
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of court for the exercise of any power
herein contained, or give bond.
8.03 RECORDS AND ACCOUNTS. The Trustee shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Board of Directors or the Committee.
8.04 EXPENSES. All costs and expenses incurred in the operation and
administration of this Plan shall be borne by the Corporation.
8.05 INDEMNIFICATION. Subject to the requirements of applicable laws and
regulations, the Corporation shall indemnify, defend and hold the Trustee
harmless against all claims, expenses and liabilities arising out of or related
to the exercise of the Trustee's powers and the discharge of its duties
hereunder, unless the same shall be due to the Trustee's gross negligence or
willful misconduct.
ARTICLE IX
MISCELLANEOUS
9.01 ADJUSTMENTS FOR CAPITAL CHANGES. The aggregate number of Plan Shares
available for distribution pursuant to the Plan Share Awards and the number of
Shares to which any Plan Share Award relates shall be proportionately adjusted
for any increase or decrease in the total number of outstanding shares of Common
Stock issued subsequent to the effective date of the Plan resulting from any
split, subdivision or consolidation of shares or other capital adjustment, or
other increase or decrease in such shares effected without receipt or payment of
consideration by the Corporation.
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9.02 AMENDMENT AND TERMINATION OF PLAN. The Board may, by resolution, at
any time amend or terminate the Plan and the Trust (including amendments which
may result in the merger of the Plan or the Trust with and into other plans or
trusts of the Corporation or successor thereto), subject to regulations of the
OTS and any required stockholder approval or any stockholder approval which the
Board may deem to be advisable for any reason, such as for the purpose of
obtaining or retaining any statutory or regulatory benefits under tax,
securities or other laws or satisfying any applicable stock exchange listing
requirements. The Board may not, without the consent of the Recipient, alter or
impair his Plan Share Award except as specifically authorized herein. Upon
termination of the Plan, the Recipient's Plan Share Awards shall be distributed
to the Recipient in accordance with the terms of Article VII hereof.
9.03 NONTRANSFERABLE. During the lifetime of the Recipient, Plan Shares
may only be earned by and paid to the Recipient who was notified in writing of
the Award pursuant to Section 6.03, provided that Plan Share Awards and rights
to Plan Shares shall be transferable by a Recipient to his or her spouse, lineal
ascendants, lineal descendants, or to a duly established trust. Plan Share
Awards so transferred may not again be transferred other than to the Recipient
who originally received the grant of Plan Share Awards or to an individual or
trust to whom such Recipient could have transferred Plan Share Awards pursuant
to this Section 9.03. Plan Share Awards which are transferred pursuant to this
Section 9.03 shall be subject to the same terms and conditions as would have
applied to such Plan Share Awards in the hands of the Recipient who originally
received the grant of such Plan Share Award. No Recipient or Beneficiary shall
have any right in or claim to any assets of the Plan or Trust, nor shall the
Corporation or any Subsidiary be subject to any claim for benefits hereunder.
9.04 EMPLOYMENT OR SERVICE RIGHTS. Neither the Plan nor any grant of a
Plan Share Award or Plan Shares hereunder nor any action taken by the Trustee,
the Committee or the Board in connection with the Plan shall create any right on
the part of any Employee or Non-Employee Director to continue in such capacity.
9.05 VOTING AND DIVIDEND RIGHTS. No Recipient shall have any voting or
dividend rights or other rights of a stockholder in respect of any Plan Shares
covered by a Plan Share Award, except as expressly provided in Sections 7.02 and
7.04 above, prior to the time said Plan Shares are actually earned and
distributed to him.
9.06 GOVERNING LAW. To the extent not governed by federal law, the Plan
and Trust shall be governed by the laws of the State of Ohio.
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9.07 EFFECTIVE DATE. This Plan shall be effective as of the Effective
Date, and Awards may be granted hereunder as of or after the Effective Date and
as long as the Plan remains in effect. Notwithstanding the foregoing or
anything to the contrary in this Plan, the implementation of this Plan and any
Awards granted pursuant hereto are subject to the non-objection of the OTS and
approval of the Corporation's stockholders.
9.08 TERM OF PLAN. This Plan shall remain in effect until the earlier of
(1) ten (10) years from the Effective Date, (2) termination by the Board, or (3)
the distribution to Recipients and Beneficiaries of all assets of the Trust.
9.09 TAX STATUS OF TRUST. It is intended that the trust established hereby
be treated as a Grantor Trust of the Corporation under the provisions of Section
671 et seq. of the Code, as the same may be amended from time to time.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and the corporate seal to be affixed
and duly attested, and the initial Trustee established pursuant hereto have duly
and validly executed this Agreement, all on this 21st day of October 1996.
FIRST FEDERAL FINANCIAL
BANCORP, INC.
By: /s/ I. Vincent Rice
------------------------------------
I. Vincent Rice
President
ATTEST:
By: /s/ Edith M. Daniels
-----------------------------------
Edith M. Daniels
Corporate Secretary
TRUSTEE
By: /s/ Thomas D. Phillips
------------------------------------
Thomas D. Phillips
Trustee
By: /s/ James E. Waldo
------------------------------------
James E. Waldo
Trustee
By: /s/ Edward R. Rambacher
------------------------------------
Edward R. Rambacher
Trustee
By: /s/ Steven C. Milleson
------------------------------------
Steven C. Milleson
Trustee
By: /s/ William P. Payne
------------------------------------
William P. Payne
Trustee
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REVOCABLE PROXY
FIRST FEDERAL FINANCIAL BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST
FEDERAL FINANCIAL BANCORP, INC. ("COMPANY") FOR USE AT THE SPECIAL MEETING OF
STOCKHOLDERS TO BE HELD ON DECEMBER 16, 1996 AND AT ANY ADJOURNMENT THEREOF.
The undersigned, being a stockholder of the Company as of November 4, 1996,
hereby authorizes the Board of Directors of the Company or any successors
thereto as proxies with full powers of substitution, to represent the
undersigned at the Special Meeting of Stockholders of the Company to be held at
the Ashland Plaza Hotel located at 15th and Winchester Avenue, Ashland,
Kentucky, in the Kentucky Room, on Monday, December 16, 1996 at 1:30 p.m.,
Eastern Time, and at any adjournment of said meeting, and thereat to act with
respect to all votes that the undersigned would be entitled to cast, if then
personally present, as follows:
1. PROPOSAL to adopt the Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
2. PROPOSAL to adopt the Recognition and Retention Plan and Trust.
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL to adjourn the Special Meeting, if necessary, to solicit
additional proxies.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued and to be signed on other side)
<PAGE>
SHARES OF THE COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF
RETURNED BUT NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1,
2 AND, IF NECESSARY, 3 AND OTHERWISE AT THE DISCRETION OF THE PROXIES. YOU MAY
REVOKE THIS PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED AT THE SPECIAL
MEETING.
Dated: , 1996
----------------------------
----------------------------------------
Signature(s)
PLEASE SIGN THIS EXACTLY AS YOUR
NAME(S) APPEAR(S) ON THIS PROXY.
WHEN SIGNING IN A REPRESENTATIVE
CAPACITY, PLEASE GIVE TITLE. WHEN
SHARES ARE HELD JOINTLY, ONLY ONE
HOLDER NEED SIGN.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
