<PAGE>
<PAGE>
[WESTWOOD HOMESTEAD FINANCIAL CORPORATION LETTERHEAD]
August 22, 1997
Dear Fellow Stockholder:
You are cordially invited to attend a Special Meeting of
Stockholders of Westwood Homestead Financial Corporation to be
held at the main office of The Westwood Homestead Savings Bank,
3002 Harrison Avenue, Cincinnati, Ohio on Monday, September 29,
1997 at 9:00 a.m., local time. The attached Notice of Special
Meeting and Proxy Statement describe the formal business to be
transacted at the meeting.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE
SPECIAL MEETING. Your vote is important, regardless of the
number of shares you own. This will not prevent you from voting
in person but will assure that your vote is counted if you are
unable to attend the meeting. On behalf of your Board of
Directors, thank you for your interest and support.
Sincerely,
Michael P. Brennan
President and Chief Executive Officer<PAGE>
<PAGE>
_________________________________________________________________
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
3002 Harrison Avenue
Cincinnati, Ohio 45211-5789
(513) 661-5735
_________________________________________________________________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on September 29, 1997
_________________________________________________________________
NOTICE IS HEREBY GIVEN that a Special Meeting of
Stockholders (the "Meeting") of Westwood Homestead Financial
Corporation (the "Company"), will be held at the Main office of
The Westwood Homestead Savings Bank, 3002 Harrison Avenue,
Cincinnati, Ohio at 9:00 a.m. on Monday, September 29, 1997.
A Proxy Card and a Proxy Statement for the Meeting are
enclosed.
The Meeting is for the purpose of considering and acting
upon:
1. Approval of the Westwood Homestead Financial
Corporation 1997 Stock Option Plan;
2. Approval of the Westwood Homestead Financial Corporation
Management Recognition Plan; and
3. The transaction of such other matters as may properly
come before the Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to
come before the Meeting.
Any action may be taken on any one of the foregoing pro-
posals at the Meeting on the date specified above or on any date
or dates to which, by original or later adjournment, the Meeting
may be adjourned. Stockholders of record at the close of busi-
ness on August 12, 1997, are the stockholders entitled to notice
of and to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of
proxy which is solicited by the Board of Directors and to mail it
promptly in the enclosed envelope. The proxy will not be used if
you attend and vote at the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mary Ann Jacobs
MARY ANN JACOBS
SECRETARY
Cincinnati, Ohio
August 22, 1997
_________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A
QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. PLEASE ACT PROMPTLY.
_________________________________________________________________
<PAGE>
<PAGE>
_________________________________________________________________
PROXY STATEMENT
OF
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
3002 Harrison Avenue
Cincinnati, Ohio 45211-5789
SPECIAL MEETING OF STOCKHOLDERS
September 29, 1997
_________________________________________________________________
GENERAL
_________________________________________________________________
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Westwood
Homestead Financial Corporation (the "Company") to be used at a
Special Meeting of Stockholders of the Company (the "Meeting")
which will be held at the main office of The Westwood Homestead
Savings Bank, 3002 Harrison Avenue, Cincinnati, Ohio on Monday,
September 29, 1997, at 9:00 a.m., local time. The accompanying
notice of meeting and this Proxy Statement are being first mailed
to stockholders on or about August 22, 1997.
_________________________________________________________________
Voting and Revocability of Proxies
_________________________________________________________________
Stockholders who execute proxies retain the right to revoke
them at any time. Unless so revoked, the shares represented by
such proxies will be voted at the Meeting and all adjournments
thereof. Proxies may be revoked by written notice to the Secre-
tary of the Company, at the address shown above, by filing of a
later dated proxy prior to a vote being taken on a particular
proposal at the Meeting or by attending the Meeting and voting in
person. Proxies solicited by the Board of Directors of the
Company will be voted in accordance with the directions given
therein. WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE
VOTED IN FAVOR OF EACH OF THE PROPOSALS SET FORTH IN THIS PROXY
STATEMENT TO BE CONSIDERED AT THE MEETING. The proxy confers
discretionary authority on the persons named therein to vote with
respect to the matters incident to the conduct of the Meeting.
Proxies marked as abstentions, and shares held in street name
which have been designated by brokers on proxies as not voted,
will not be counted as votes cast. An abstention will have the
same effect as a negative vote. Proxies marked as abstentions or
as broker non-votes will, however, be treated as shares present
for purposes of determining whether a quorum is present.
_________________________________________________________________
Voting Securities and Principal Holders Thereof
_________________________________________________________________
The securities entitled to notice of and to vote at the
Meeting consist of the Company's common stock, par value $.01 per
share (the "Common Stock"). Stockholders of record as of the
close of business on August 12, 1997 (the "Record Date"), are
entitled to one vote for each share of Common Stock then held.
As of the Record Date, there were 2,843,375 shares of Common
Stock issued and outstanding. The presence, in person or by
proxy, of at least one-third of the total number of shares of
Common Stock outstanding and entitled to vote will be necessary
to constitute a quorum at the Meeting.
Persons and groups owning in excess of 5% of the Common
Stock are required to file certain reports regarding such
ownership pursuant to the Securities Exchange Act of 1934 with
the Company and the Securities and Exchange Commission ("SEC").
Based on such reports (and certain other written information
received by the Company), management knows of no persons other
than those set forth below who owned more than 5% of the
outstanding shares of Common Stock as of the Record Date. The
following table sets forth, as of the Record Date, certain
information as to those persons who were the beneficial owners of
more than 5% of the Company's outstanding shares of Common Stock,
the shares beneficially owned by each director of the Company and
shares beneficially owned by all directors and executive officers
of the Company as a group.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Beneficial Percent
of Beneficial Owner Ownership (1) of Class
- ------------------- ------------- --------
<S> <C> <C>
Westwood Homestead Financial
Corporation 227,470 (2) 8.00%
Employee Stock Ownership Plan ("ESOP")
3002 Harrison Avenue
Cincinnati, Ohio 45211-5789
Michael P. Brennan 35,612 (3) 1.25
President and Chief Executive Officer
The Westwood Homestead Savings Bank
3002 Harrison Avenue
Cincinnati, Ohio 45211-5785
Kennedy Capital Management, Inc. 189,400 6.66
10829 Olive Boulevard
St. Louis, Missouri 63141
All Executive Officers and Directors 96,164 (4) 3.38
as a Group (10 persons)
<FN>
_____________
(1) Includes stock held in joint tenancy; stock owned as
tenants in common; stock owned or held by a spouse or other
member of the individual's household; and stock in which the
individual either has or shares voting and/or investment
power. Each person or relative of such person whose shares
are included herein exercises sole (or shared with a spouse
or other relative) voting and dispositive power as to the
shares reported.
(2) These shares are currently held in a suspense account for
future allocation and distribution among participants as the
loan used to purchase the shares is repaid. The ESOP
trustees vote all allocated shares in accordance with the
instructions of the participating employees. Unallocated
shares and allocated shares for which no instructions have
been received are voted by the trustees in the same
proportion as participants vote allocated stock; provided
that, in the absence of any voting directions as to
allocated stock, (i) the Company's Board of Directors shall
direct the trustees as to the voting of all shares of
unallocated stock, and (ii) in the absence of such direction
from the Company's Board of Directors, the ESOP trustees
shall have sole discretion as to the voting of such shares.
(3) Includes 21,777 shares which Mr. Brennan beneficially owns
in his capacity as trustee of the trust for the Company's
Directors' Retirement Plan. See "Directors" Compensation --
Directors' Retirement Plan."
(4) Includes 76,200 shares with respect to which Directors
Bennet, Bockhorst, Higley, Heimerdinger and Jacobs have
voting power by virtue of their positions as trustees of a
trust formed to hold assets of the Company's Management
Recognition Plan (see Proposal II -- Approval of the
Westwood Homestead Financial Corporation Management
Recognition Plan). Does not include shares with respect to
which Directors Bockhorst, Higley, Bennet, Heimerdinger and
Jacobs have voting power by virtue of their positions as
trustees of the trust holding 227,470 shares of the ESOP.
Also includes 21,777 shares which Mr. Brennan and two other
officers beneficially own in their capacity as trustees of
the trust for the Company's Directors' Retirement Plan. See
"Directors' Compensation -- Directors' Retirement Plan."
</FN>
/TABLE
<PAGE>
_________________________________________________________________
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
_________________________________________________________________
The Compensation Committee of the Board of Directors on
Executive Compensation (Committee) appointed on October 15, 1996,
(following the date of becoming a public company on September 27,
1996) consists entirely of outside, non-employee Directors. The
Committee will establish and regularly review executive
compensation levels and policies. Since officers of the Company
did not receive any compensation in 1996 for service to the
Company, this
2<PAGE>
<PAGE>
Report addresses only the compensation of executive officers of
The Westwood Homestead Savings Bank (the "Bank"), a wholly-owned
subsidiary of the Company.
The Committee's objective in determining executive
compensation is to attract, retain and motivate executive
officers for the long-term success of the Bank and the Company.
In furtherance of this objective, the Bank's executive
compensation program currently consists of salary and bonus
components and will in the future include stock-based award plans
including a stock option plan and a management recognition
(restricted stock) plan. The Bank also currently maintains the
ESOP, a broad-based employee benefit plan in which executive
officers are permitted to participate, which allows executives to
receive awards of Common Stock provided certain vesting
requirements are met.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Michael P. Brennan has been Chief Executive Officer (CEO)
and a member of the Board of Directors of the Bank since February
1995, at which time the Bank and Mr. Brennan entered into a
three-year employment agreement. See "Executive Compensation --
Employment Agreement." Prior to joining the Bank, Mr. Brennan
was President, Chief Executive Officer and Director of a savings
and loan association in Cincinnati, which service, together with
prior management duties in several other savings and loan
associations, covers a span of 30 years.
For the year ended December 31, 1996, the base salary of Mr.
Brennan was established by the terms of the 1995 employment
agreement between he and the Bank. The base salary under that
agreement was determined on the basis of a review and evaluation
of the compensation of chief executives of other financial
institutions of similar size in the surrounding community.
At the conclusion of 1996, the Committee evaluated the
performance of Mr. Brennan taking into account various factors,
including, among others, peer group comparisons, compensation
paid to executives performing similar duties in the Bank's market
area, quality of communication with the Board of Directors,
overall management of the Bank, as well as the Bank's financial
condition. The Committee reviewed executive compensation surveys
published by America's Community Bankers, Tri-State League of
Financial Institutions and SNL 1996 Thrift Executive Compensation
Review. During the course of this evaluation of the CEO's
performance, various areas of improvement were noted, namely:
a) improving the Bank's Community Reinvestment Act rating;
b) opening the Mount Adams branch office;
c) initiating and coordinating the development of a
business plan;
d) initiating the Bank's consumer lending activities;
e) promoting the sale of loans;
f) increasing loan marketing;
g) restructuring the organization of staff personnel;
h) improving staff training;
i) revision of job descriptions; and
j) especially his efforts in directing the successful
conversion of the Bank from mutual to stock ownership
form.
Based on its evaluation of Mr. Brennan's performance during
1996, after consideration of all factors, and noting especially
the areas of improvement described in the preceding sentence, the
Committee approved payment of a bonus for 1996 representing
approximately 23% of his 1996 base salary.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Carl H. Heimerdinger
John B. Bennet, Sr.
Raymond J. Brinkman
Roger M. Higley
James D. Kemp
3<PAGE>
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_________________________________________________________________
EXECUTIVE COMPENSATION
_________________________________________________________________
Summary Compensation Table. The following table sets forth
cash and noncash compensation for the fiscal year ended December
31, 1996 awarded to or earned by the Company's Chief Executive
Officer for services rendered in all capacities to the Bank and
its subsidiaries.
<TABLE>
<CAPTION>
Annual Compensation
------------------------
Name and Fiscal All Other
Principal Position Year Salary Bonus Compensation
- ------------------ ------ ------ ----- ------------
<S> <C> <C> <C> <C>
Michael P. Brennan 1996 $110,000 $ 25,000 $6,405(1)
President and Chief 1995 $ 93,491 $ 20,000 $2,917(2)
Executive Officer
<FN>
__________
(1) Consists of unused vacation and personal days.
(2) Consists of contributions made by the Bank for the account
of Mr. Brennan pursuant to the Bank's 401(k) Plan.
</FN>
</TABLE>
Employment Agreement. In February 1995, the Bank entered
into an employment agreement (the "Employment Agreement") with
Mr. Michael P. Brennan, who serves as its Chief Executive Officer
and President (the "Executive"). The Employment Agreement was
amended in connection with the Bank's conversion from mutual to
stock form to add the Company as a party jointly and severally
liable for the Bank's obligations, and to update its definition
of a change in control to take into account the Company's
formation. The Executive is responsible for overseeing all
operations of the Bank and for implementing the policies adopted
by the Bank's Board of Directors. The Board of Directors
believes that the Employment Agreement assures fair treatment of
the Executive in relation to his position with the Bank by
assuring him of some financial security.
The Employment Agreement became effective on February 23,
1995 for a term of three years, with an annual base salary of
$110,000. On each anniversary from the date of commencement of
the Employment Agreement, the term of the Executive's employment
will be extended for an additional one-year period beyond the
then effective expiration date, upon a determination by the Board
that the performance of the Executive has met the required
performance standards and that such Employment Agreement should
be extended. The Employment Agreement provides the Executive
with a salary review by the Board not less often than annually,
as well as with inclusion in any discretionary bonus plans,
retirement and medical plans, customary fringe benefits, vacation
and personal leave. The Employment Agreement is terminable by
the Bank for "cause" as defined therein, in which event no
severance benefits are available. If the Bank terminates the
Executive for any reason other than cause, retirement, death,
disability, or expiration of the Agreement, the Executive will be
entitled to a continuation of his salary from the last day of the
month following the date of the event of termination through the
remaining term of the Employment Agreement. If the Employment
Agreement is terminated due to the Executive's disability, the
Executive will be entitled to a continuation of his salary for up
to 30 days. If the Executive is disabled for a continuous period
exceeding 30 days, the Bank may terminate the Employment
Agreement, in which event the Executive shall be entitled to
receive secondary disability benefits under any group or
individual disability benefit program maintained by the Bank. In
the event of the Executive's death during the term of the
Employment Agreement, his estate will be entitled to receive his
salary through the remaining term of the Employment Agreement.
The Employment Agreement contains provisions stating that if
the Executive terminates employment after a change in control of
the Bank or the Company, for any reason other than cause,
retirement, disability, death, expiration of the Agreement, or
otherwise a change in the present capacity or circumstances in
which the Executive is employed, or a reduction in compensation
or other benefits provided under this Agreement without the
Executive's written consent, the Executive will be paid, in
addition to the continuation of the Executive's compensation and
benefits through the expiration of the Agreement, an amount equal
to 2.99 times the Executive's average annual compensation for the
most recent five taxable years before the change in control,
provided such payments do not constitute an "excess parachute
payment" under Section 280G of the Internal Revenue Code of 1986,
as amended. In the event such payments would constitute an
excess parachute payment, they would be reduced accordingly.
"Control" generally refers to the
4<PAGE>
<PAGE>
acquisition, by any person or entity, of the ownership or power
to vote more than 25% of the Bank's or the Company's voting
stock, the control of the election of a majority of the Bank's or
the Company's directors, or the exercise of a controlling
influence over the management or policies of the Bank or the
Company. In addition, under the Employment Agreement, a change
in Control occurs when, during any consecutive two-year period,
directors of the Company or the Bank at the beginning of such
period cease to constitute at least a majority of the Board of
the Company or the Bank, unless the election of the replacement
directors was approved by at least a majority of the initial
directors then in office.
_________________________________________________________________
Directors' Compensation
_________________________________________________________________
The Company's non-employee directors received fees of
$15,300 in 1996 in compensation for service provided to the Bank.
Employee directors do not receive board fees. Chairman of the
Board and Former Chief Executive Officer of the Bank, Carl
Heimerdinger received an additional $20,000 in 1996 pursuant to a
consulting agreement with the Bank that expires in 1998, and an
additional $5,000 for his service as Chairman of the Board.
Director Brinkman received an additional $5,000 per year for his
position as internal auditor and compliance auditor during 1996.
The Company's directors will be eligible to receive awards
under the Company's 1997 Stock Option and Incentive Plan and
Management Recognition Plan, if approved by the Company's
shareholders. See "Proposal I -- Approval of the Westwood
Homestead Financial Corporation 1997 Stock Option Plan" and
"Proposal II -- Approval of the Westwood Homestead Financial
Corporation Management Recognition Plan".
DIRECTORS' RETIREMENT PLAN. The Bank maintains a Directors'
Retirement Plan, the terms of which were approved by the
Company's shareholders at a special meeting held on December 23,
1996. Under this plan, a bookkeeping account in each
participant's name is credited, on a quarterly basis, with an
amount equal to the sum of (i) the quarterly accrual attributable
to the participant, (ii) any appreciation or depreciation on the
balance of the participant's account during the calendar quarter,
with the investment return measured by the director's choice
between the rate of return on certificates of deposit and the
Company's Common Stock, and (iii) a retirement adjustment which
will arise if the director terminates service on the Board prior
to the crediting of all quarterly accruals scheduled to be made
to his or her account. In general, each quarterly accrual is
designed to provide participating directors with a retirement
annuity having a term equal to the lesser of ten years or the
director's remaining life expectancy, and with the amount of each
annual payment being equal to the product his or her Benefit
Percentage, Vested Percentage, and 65% of average fees (100% of
average fees for directors who have served 40 or more years on
the Board). For Director Fritz, "quarterly accrual" means the
quarterly financial expense to fund a liability, upon Mr. Fritz's
termination of service, to provide Mr. Fritz with a 50% joint and
survivor retirement annuity with a 15 year term with each annual
payment equal to 100% of his average fees. A director's "Benefit
Percentage" is based on his or her overall years of service on
the Board of Directors of the Bank (whether before or after the
plan's effective date and whether or not as an employee), and
increases in increments of 5% from 25% for five years of service,
to 100% for 20 or more years of service. A director's "Vested
Percentage" is based on his or her full years of service as a
director after January 1, 1995 (whether or not as an employee),
and increases in increments of 25% per year, from 25% for one
year of service after January 1, 1995, up to 100% for three or
more full years of service after January 1, 1995. A director's
Benefit Percentage will accelerate to 100% upon retirement, death
or disability, or a change in control of the Bank assuming the
director has completed specified levels of service on the Board.
Benefits payable under the plan are paid solely from the Bank's
general assets.
5<PAGE>
<PAGE>
_________________________________________________________________
Stock Performance Graph
_________________________________________________________________
The graph which follows shows the cumulative total return on
the Common Stock since the commencement of trading of the Common
Stock on September 27, 1996 compared with the cumulative total
return of (i) SNL Midwest Thrifts Index; and (ii) the Standard &
Poors 500 Index. Cumulative total return on the stock or the
index equals the total increase in value since September 27,
1996, assuming reinvestment of all dividends paid on the stock or
the index, respectively. The graph was prepared assuming that
$100 was invested at the closing price on September 27, 1996 in
the Common Stock and in each of the indices. The shareholder
returns shown on the performance graph are not necessarily
indicative of the future performance of the Common Stock or of
any particular index.
Line graph appears here depicting the cumulative total
return of $100 invested in the Common Stock as compared to $100
invested in the SNL Midwest Thrifts Index and the Standards &
Poors 500 Index and plots the cumulative total return at
September 30, 1996 through June 30, 1997. The plot points are
provided below.
<TABLE>
<CAPTION>
Westwood Homestead SNL Thrift
Date Financial Corporation Index S&P 500
- ----- --------------------- ---------- -------
<S> <C> <C> <C>
09/30/96 100.00 101.00 102.00
10/31/96 98.84 106.37 102.76
11/29/96 110.47 113.51 110.51
12/31/96 112.79 113.17 108.32
01/31/97 120.93 120.90 115.05
02/28/97 135.53 131.45 115.95
03/31/97 127.40 123.41 111.23
04/30/97 119.26 125.79 117.80
05/30/97 126.88 135.63 124.90
06/30/97 136.19 146.71 130.42
</TABLE>
6<PAGE>
<PAGE>
_________________________________________________________________
Proposal I -- Approval of the Westwood Homestead Financial
Corporation 1997 Stock Option Plan
_________________________________________________________________
GENERAL
The Board of Directors of the Company has adopted the Westwood Homestead
Financial Corporation 1997 Stock Option Plan (the "Option Plan"), subject to
its approval by the Company's stockholders. The initial grant of stock
options under the Option Plan will occur upon the Option Plan's receipt of
stockholder approval (the "Effective Date"). The Option Plan is attached
hereto as Exhibit A and should be consulted for additional information. All
statements made herein regarding the Option Plan, which are only intended to
summarize the Option Plan, are qualified in their entirety by reference to the
Option Plan.
PURPOSE OF THE OPTION PLAN
The purpose of the Option Plan is to advance the interests of the Company
by providing directors and selected employees of the Company and its
affiliates, including the Bank, with the opportunity to acquire shares of
Common Stock. By encouraging such stock ownership, the Company seeks to
attract, retain, and motivate the best available personnel for positions of
substantial responsibility and to provide additional incentive to directors
and employees of the Company and its affiliates to promote the success of the
business of the Company.
DESCRIPTION OF THE OPTION PLAN
Effective Date. The Option Plan will become effective on the date of its
approval by the Company's stockholders at the Meeting (the Effective Date),
and prior thereto no awards may be made.
Administration. The Option Plan is administered by a committee (the
"Committee"), appointed by the Board of Directors, consisting of at least two
directors of the Company who are "Non-employee Directors" within the meaning
of the federal securities laws. The Committee has discretionary authority to
select participants and grant awards, to determine the form and content of any
awards made under the Option Plan, to interpret the Option Plan, and to make
other decisions necessary or advisable in connection with administering the
Option Plan. All decisions, determinations, and interpretations of the
Committee are final and conclusive on all persons affected thereby. Members
of the Committee will be indemnified to the full extent permissible under the
Company's governing instruments in connection with any claims or other actions
relating to any action taken under the Option Plan. It is expected that the
Committee will initially consist of Directors Bennet, Bockhorst, Higley,
Heimerdinger and Jacobs.
Eligible Persons; Types of Awards. Under the Option Plan, the Committee
may grant stock options ("Options") and stock appreciation rights ("SARs")
(collectively, "Awards") to such employees and directors as the Committee
shall designate. A director who is not an employee will receive the automatic
grant described below (see "Automatic Grants"). As of the Record Date, the
Company and its subsidiaries had approximately 15 full-time and seven part-
time employees and seven non-employee directors who were eligible to
participate in the Option Plan.
Shares Available for Grants. The Option Plan reserves 284,337 shares of
Common Stock for issuance upon the exercise of Options or SARs. Such shares
may be (i) authorized but unissued shares, (ii) shares held in treasury, or
(iii) shares held in a grantor trust. In the event of any merger,
consolidation, recapitalization, reorganization, reclassification, stock
dividend, split-up, combination of shares, or similar event in which the
number or kind of shares is changed without receipt or payment of
consideration by the Company, the Committee will adjust the number and kind of
shares reserved for issuance under the Option Plan, and the number and kind of
shares subject to outstanding Awards, and the exercise prices of such Awards.
Generally, the number of shares as to which SARs are granted are charged
against the aggregate number of shares available for grant under the Option
Plan, provided that, in the case of an SAR granted in conjunction with an
Option, under circumstances in which the exercise of the SAR results in
termination of
7<PAGE>
<PAGE>
the Option and vice versa, only the number of shares of Common Stock subject
to the Option shall be charged against the aggregate number of shares of
Common Stock remaining available under the Option Plan. If Awards should
expire, become unexercisable or be forfeited for any reason without having
been exercised, the shares of Common Stock subject to such Awards shall,
unless the Option Plan shall have been terminated, be available for the grant
of additional Awards under the Option Plan.
Options. Options may be either incentive stock options ("ISOs") as
defined in Section 422 of the Code, or options that are not ISOs ("Non-ISOs").
The exercise price as to any Option may not be less than the fair market value
(determined under the Option Plan) of the optioned shares on the date of
grant. In the case of a participant who owns more than 10% of the outstanding
Common Stock on the date of grant, such exercise price may not be less than
110% of fair market value of the shares. As required by federal tax laws, to
the extent that the aggregate fair market value (determined when an ISO is
granted) of the Common Stock with respect to which ISOs are exercisable by an
optionee for the first time during any calendar year (under all plans of the
Company and of any subsidiary) exceeds $100,000, the Options granted in excess
of $100,000 will be treated as Non-ISOs, and not as ISOs.
Automatic Grants. On the Effective Date, certain employees and each
director of the Company or the Bank will receive a one-time grant of an Option
to purchase shares of Common Stock at an exercise price per share equal to its
fair market value on the Effective Date (see "Proposed Stock Option Grants"
and "New Plan Benefits" below). These options will have a term of ten years.
SARs. A SAR may be granted in tandem with all or part of any Option
granted under the Option Plan, or without any relationship to any Option. A
SAR granted in tandem with an ISO must expire no later than the ISO, must have
the same exercise price as the ISO and may be exercised only when the ISO is
exercisable and when the fair market value of the shares subject to the ISO
exceeds the exercise price of the ISO. A SAR granted in tandem with an Option
may be an alternative right where the exercise of the SAR cancels the
participant's right to exercise the Option, and vice versa. Regardless of
whether a SAR is granted in tandem with an Option, exercise of the SAR will
entitle the optionee to receive, as the Committee prescribes in the grant, all
or a percentage of the difference between (i) the fair market value of the
shares of Common Stock subject to the SAR at the time of its exercise, and
(ii) the fair market value of such shares at the time the SAR was granted (or,
in the case of SARs granted in tandem with Options, the exercise price). The
exercise price as to any particular SAR may not be less than the fair market
value of the optioned shares on the date of grant.
Exercise of Options and SARs. Unless otherwise provided by the Committee
in the underlying agreement, each Option will become exercisable with respect
to 20% of the underlying shares upon the date such Option is granted, and with
respect to 20% of the underlying shares upon the participant's completion of
each of four years of service after the date of grant. Such vesting shall
accelerate to 100% upon a change in control or upon an optionee's termination
of service as an employee or director due to retirement, death, or disability
(as defined in the Option Plan). In the absence of Committee action to the
contrary, an otherwise unexpired Option shall cease to be exercisable upon (i)
an optionee's termination of employment for "just cause" (as defined in the
Option Plan), (ii) the date one year after an optionee terminates service due
to disability or for a reason other than just cause or death, (iii) the date
two years after an optionee terminates service due to death. Upon an
optionee's exercise of an Option, the Company may, if provided by the
Committee in the underlying Agreement, pay the optionee an amount in cash up
to the amount of any dividends declared on the shares underlying the Option,
between the date of grant and the date of exercise of the Option.
An optionee may exercise Options or SARs, subject to provisions relative
to their termination and limitations on their exercise, only by (i) written
notice of intent to exercise the Option or SAR with respect to a specified
number of shares of Common Stock, and (ii) in the case of Options, payment to
the Company (contemporaneously with delivery of such notice) in cash, in
Common Stock, or a combination of cash and Common Stock, of the amount of the
exercise price for the number of shares with respect to which the Option is
then being exercised. Common Stock utilized in full or partial payment of the
exercise price for Options shall be valued at its market value at the date of
exercise, and may consist of shares subject to the Option being exercised.
8<PAGE>
<PAGE>
Conditions on Issuance of Shares. The Committee will have the
discretionary authority to impose, in agreements, such restrictions on shares
of Common Stock issued pursuant to the Option Plan as it may deem appropriate
or desirable, including but not limited to the authority to impose a right of
first refusal or to establish repurchase rights or both of these restrictions.
In addition, the Committee may not issue shares unless the issuance complies
with applicable securities laws, and to that end may require that a
participant make certain representations or warranties.
Change of Control. Notwithstanding the provisions of any Award which
provide for its exercise or vesting in installments, all options and SARs will
become immediately exercisable and fully vested on the date of a change in
control and the participant will, at the discretion of the Committee, be
entitled to receive cash in an amount equal to the excess of the market value
of the Common Stock subject to such Option over the exercise price of such
shares, in exchange for the cancellation of such Options or SARs by the
participant.
For the purposes of the Option Plan,"change in control" means any one of
the following events: (1) the acquisition of ownership, holding or power to
vote more than 25% of the voting stock of the Bank or the Company, (2) the
acquisition of the ability to control the election of a majority of the Bank's
or the Company's directors, (3) the acquisition of a controlling influence
over the management or policies of the Bank or of the Company by any person or
by persons acting as a group within the meaning of Section 13(d) of the
Securities Exchange Act of 1934 (except in the case of the foregoing, the
Company's ownership of the Bank shall not of itself constitute a "change in
control"), or (4) during any period of two consecutive years, individuals (the
"Continuing Directors") who at the beginning of such period constitute the
Board of Directors of the Bank or of the Company (the "Existing Board") cease
for any reason to constitute at least two-thirds thereof, provided that any
individual whose election or nomination for election as a member of the
Existing Board was approved by a vote of at least two-thirds of the Continuing
Directors then in office shall be considered a Continuing Director. For
purposes of defining "change in control", the term "person" refers to an
individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed.
Nontransferability. Optionees may transfer their Awards to family
members or trusts under specified circumstances. Awards may otherwise not be
sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by the laws of descent and distribution. In no
event may shares of Common Stock purchased pursuant to an Option or SAR be
sold within six months of the grant of such Option or SAR, except in the event
of the optionee's death, disability, retirement, or upon a change in control.
Effect of Dissolution and Related Transactions. In the event of (i) the
liquidation or dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or (iii) the sale or
disposition of all or substantially all of the Company's assets (any of the
foregoing to be referred to herein as a "Transaction"), all outstanding
Awards, together with the exercise prices thereof, will be equitably adjusted
for any change or exchange of shares for a different number or kind of shares
which results from the Transaction. However, any such adjustment will be made
in such a manner as to not constitute a modification, within the meaning of
Section 424(h) of the Code, of outstanding ISOs. The exercise price of shares
subject to outstanding Awards will 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.
Duration of the Option Plan and Grants. The Option Plan has a term of 10
years from the Effective Date, after which date no Awards may be granted. The
maximum term for an Award is 10 years from the date of grant, except that the
maximum term of an ISO (and a SAR granted in tandem with an ISO) may not
exceed five years if the optionee owns more than 10% of the Common Stock on
the date of grant. The expiration of the Option Plan, or its termination by
the Committee, will not affect any Award then outstanding.
Amendment and Termination of the Option Plan. The Board of Directors of
the Company may from time to time amend the terms of the Option Plan and, with
respect to any shares at the time not subject to Awards, suspend or terminate
the Option Plan. No amendment, suspension, or termination of the Option Plan
will, without the consent of
9<PAGE>
<PAGE>
any affected optionee, alter or impair any rights or obligations under any
Award previously granted. Stockholder approval might not be required for plan
amendments that would not materially increase the benefits accruing to plan
participants, materially increase the number of securities which may be issued
under the plan or materially modify eligibility requirements for plan
participation.
Financial Effects of Awards. The Company will receive no monetary
consideration for the granting of Awards under the Option Plan. It will
receive no monetary consideration other than the exercise price for shares of
Common Stock issued to optionees upon the exercise of their Options, and will
receive no monetary consideration upon the exercise of SARs. Under the
Company's accounting policies, recognition of compensation expense is not
required when Options are granted at an exercise price equal to or exceeding
the fair market value of the Common Stock on the date the Option is granted.
The granting of SARs will require charges to the income of the Company
based on the amount of the appreciation, if any, in the market price of the
Common Stock to which the SARs relate over the exercise price of those shares.
If the market price of the Common Stock declines subsequent to a charge
against earnings due to estimated appreciation in the Common Stock subject to
SARs, the amount of the decline will reverse such prior charges against
earnings (but not by more than the aggregate of such prior charges).
FEDERAL INCOME TAX CONSEQUENCES
ISOs. An optionee recognizes no taxable income upon the grant of ISOs.
If the optionee holds the shares purchased upon exercise of an ISO for at
least two years from the date the ISO is granted, and for at least one year
from the date the ISO is exercised, any gain realized on the sale of the
shares received upon exercise of the ISO is taxed as long-term capital gain.
However, the difference between the fair market value of the Common Stock on
the date of exercise and the exercise price of the ISO will be treated by the
optionee as an item of tax preference in the year of exercise for purposes of
the alternative minimum tax. If an optionee disposes of the shares before the
expiration of either of the two special holding periods noted above, the
disposition is a "disqualifying disposition." In this event, the optionee
will be required, at the time of the disposition of the Common Stock, to treat
the lesser of the gain realized or the difference between the exercise price
and the fair market value of the Common Stock at the date of exercise as
ordinary income and the excess, if any, as capital gain.
The Company will not be entitled to any deduction for federal income tax
purposes as the result of the grant or exercise of an ISO, regardless of
whether or not the exercise of the ISO results in liability to the optionee
for alternative minimum tax. However, if an optionee has ordinary income
taxable as compensation as a result of a disqualifying disposition, the
Company will be entitled to deduct an equivalent amount.
Non-ISOs. In the case of a Non-ISO, an optionee will recognize ordinary
income upon the exercise of the Non-ISO in an amount equal to the difference
between the fair market value of the shares on the date of exercise and the
option price (or, if the optionee is subject to certain restrictions imposed
by the federal securities laws, upon the lapse of those restrictions unless
the optionee makes a special tax election within 30 days after the date of
exercise to have the general rule apply). Upon a subsequent disposition of
such shares, any amount received by the optionee in excess of the fair market
value of the shares as of the exercise will be taxed as capital gain. The
Company will be entitled to a deduction for federal income tax purposes at the
same time and in the same amount as the ordinary income recognized by the
optionee in connection with the exercise of a Non-ISO.
SARs. The grant of an SAR has no tax effect on the optionee or the
Company. Upon exercise of the SARs, however, any cash or Common Stock
received by the optionee in connection with the surrender of his or her SAR
will be treated as compensation income to the optionee, and the Company will
be entitled to a business expense deduction for the amounts treated as
compensation income.
10<PAGE>
<PAGE>
PROPOSED STOCK OPTION GRANTS
Set forth below is certain information, as of the Record Date, relating
to all Options to be granted to the specified individuals and groups of
individuals on the Effective Date of the Option Plan. All such Options will
be subject to the terms and conditions described above and are contingent on,
and not exercisable until, the Option Plan receives stockholder approval. The
exercise price for these Options will equal the fair market value of the
Common Stock on the date of grant. The closing sale price of the Common Stock
on August 1, 1997, as reported on the Nasdaq National Market was $15.50 per
share.
<TABLE>
<CAPTION>
Number
of Shares
Subject
Participant (or Group) to Options
- ---------------------- ----------
<S> <C>
Michael P. Brennan, President and
Chief Executive Officer 71,084
John E. Essen, Chief Financial Officer 11,018
Gerald T. Mueller, Vice President 12,084
John B. Bennet, Sr., Director 12,185
Robert H. Bockhorst, Director 12,185
Raymond J. Brinkman, Director 12,185
Roger M. Higley, Director 12,185
Carl H. Heimerdinger, Director 12,185
Mary Ann Jacobs, Director 12,185
James D. Kemp, Director 12,185
All executive officers
as a group (3 persons) 94,186
All directors who are not
executive officers as a
group 7 persons) 85,295
All employees, including all current
officers who are not executive
officers, as a group (19 persons) 10,929
</TABLE<
For additional information relating to grants made under the Option Plan,
see "New Plan Benefits" below.
11<PAGE>
<PAGE>
RECOMMENDATION AND VOTE REQUIRED
The Board of Directors has determined that the Option Plan is desirable,
cost effective, and produces incentives which will benefit the Company and its
stockholders. The Board of Directors is seeking stockholder approval of the
Option Plan pursuant to the Nasdaq Stock Market corporate governance rules and
in order to satisfy the requirements of the Code for favorable tax treatment
of ISOs.
Stockholder approval of the Option Plan requires the affirmative vote of
the holders of a majority of the votes present at the Meeting. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE OPTION PLAN.
_________________________________________________________________
PROPOSAL II -- APPROVAL OF THE WESTWOOD HOMESTEAD FINANCIAL
CORPORATION MANAGEMENT RECOGNITION PLAN
_________________________________________________________________
GENERAL
The Board of Directors of the Company has adopted the Westwood Homestead
Financial Corporation Management Recognition Plan (the "MRP"), subject to its
approval by the Company's stockholders. The initial grant of MRP awards will
occur upon the MRP's receipt of stockholder approval at the Meeting. A copy
of the MRP is attached hereto as Exhibit B, and should be consulted for
additional information. All statements made herein regarding the MRP, which
are only intended to summarize the MRP, are qualified in their entirety by
reference to the MRP.
PURPOSE OF THE MRP
The purpose of the MRP is to reward and retain personnel of experience
and ability in key positions of responsibility by providing such persons with
a proprietary interest in the Company, with compensation for their past
contributions to the Company and its subsidiaries, and with an incentive to
make such contributions in the future.
DESCRIPTION OF THE MRP
Effective Date. The MRP will become effective immediately upon its
approval by the Company's stockholders (the "MRP Effective Date"), and prior
thereto no awards may be made.
Administration. The MRP will be administered by an MRP Committee
consisting of not less than two members of the Board who are "Non-employee
Directors" within the meaning of the federal securities laws. Except as
limited by the express provisions of the MRP or by resolutions adopted by the
Board, the MRP Committee has sole and complete authority and discretion (1) to
select and grant MRP awards to employees, (2) to determine the form and
content of MRP awards to be issued under the MRP, (3) to interpret the MRP,
(4) to prescribe, amend, and rescind rules and regulations relating to the
MRP, and (5) to make other determinations necessary or advisable for the
administration of the MRP. The MRP provides that members of the MRP Committee
shall be indemnified and held harmless for actions taken under the MRP in good
faith and in the best interests of the Company and its subsidiaries. The MRP
Committee consists of Directors Bennet, Bockhorst, Higley, Heimerdinger and
Jacobs.
MRP Trust; Purchase Limitations. The assets of the MRP will be held in a
trust (the "MRP Trust"), as to which Directors Bennet, Bockhorst, Higley,
Heimerdinger and Jacobs will act as trustees ("MRP Trustees") and thereby have
the responsibility to invest all funds contributed to the MRP Trust by the
Company or the Bank. With funds contributed by the Company, the MRP Trust has
purchased, in the open market, 76,200 shares of the Company's Common Stock.
The maximum number of shares that the MRP Trust may purchase, in the
aggregate, pursuant to the MRP is 113,735. The remaining Common Stock that
may be purchased by the MRP Trust may be acquired on the open market or in the
form of shares newly issued by the Company. In the event an MRP award is
forfeited for any reason or additional shares
12
<PAGE>
are purchased by the MRP Trust associated with an MRP, the MRP Committee may
make awards with respect to such shares.
Types of Awards; Eligible Persons. The MRP Committee has the discretion
to select employees and directors of the Company and/or of the Bank who will
receive discretionary MRP awards. In selecting those employees and directors
to whom MRP awards will be granted and the number of shares covered by such
awards, the MRP Committee will consider the position, duties and
responsibilities of the eligible individuals, the value of their services to
the Company and its affiliates (including the Bank), and any other factors the
MRP Committee may deem relevant. In addition, the MRP specifically provides
for certain automatic awards to certain employees and all non-employee
directors (see "New Plan Benefits" below).
Vesting. Pursuant to the MRP, freely transferable shares of Common
Stock will be transferred to participants as they become vested in their MRP
awards. Unless otherwise provided by the Committee in a notice of plan share
award, MRP awards will become 20% vested upon the date such award is granted,
and with respect to 20% upon the participant's completion of each of four
years of service after the date of grant, provided that the participant is an
employee or a director of the Company or a subsidiary on such vesting date.
All shares of Common Stock subject to outstanding awards will be immediately
100% earned and nonforfeitable upon a participant's death, disability (as
defined in the MRP), retirement, or upon a change in control. If a
participant terminates employment for reasons other than death, disability,
retirement, or change in control, the participant forfeits all rights to the
shares then under restriction.
Distributions of Shares; Voting; Dividends. All unvested shares of
Common Stock (including all shares not subject to an MRP award) held by the
MRP Trust shall be voted by the MRP Trustees in the same proportion as the
trustees of the ESOP Trust vote Common Stock held therein. The MRP Trustees
shall distribute all shares, together with any shares representing stock
dividends, in the form of Common Stock. Payments representing cash dividends
(including special large and nonrecurring dividends, including one that has
the effect of a return of capital to the Company's stockholders) will be made
in cash.
No Plan Shares may be distributed from the MRP Trust prior to the date
which is five years from the date of the Bank's conversion from mutual to
stock form to the extent the recipient would after receipt of such shares own
in excess of ten percent of the issued and outstanding shares of Common Stock,
unless such action is approved in advance by a majority vote of the non-
employee directors of the Company's Board of Directors. Any shares remaining
undistributed solely by reason of the operation of this rule shall be
distributed to the recipient on the date which is five years from the date of
the Bank's conversion to stock form.
Nontransferability. Participants may transfer their MRP awards to family
members or trusts under specified circumstances. MRP awards and rights to
shares held in the MRP Trust are not otherwise transferable by participants in
the MRP, and during the lifetime of a participant, shares held in the MRP
Trust may only be earned by and paid to the participant. In no event may MRP
shares be sold during the six-month prior following the date of the underlying
awards, except in the event of the participant's death or disability or such
other event as the Board may specifically deem appropriate.
Taxation. Participants will recognize compensation income when their
interest vests, or at an earlier date pursuant to a participant's election to
accelerate recognition pursuant to Section 83(b) of the Internal Revenue Code.
Financial Effects of Awards. Neither the Company nor the Bank will
receive any monetary consideration for the granting of awards under the MRP.
Under the Company's accounting policies, when MRP awards are granted, the
Company must recognize compensation expense based on the fair market value of
the Common Stock on the date the awards are granted, with such amount being
amortized over the expected vesting period for the award.
Adjustments for Capital Changes. In the event of any merger,
consolidation, recapitalization, reorganization, reclassification, stock
dividend, split-up, combination of shares, or similar event in which the
number or kind of shares
13<PAGE>
<PAGE>
is changed without receipt or payment of consideration by the Company, the MRP
Committee will adjust both the number and kind of shares of stock as to which
awards may be granted under the MRP, and the number and kind of shares of
stock subject to outstanding MRP awards. In the event of (i) the liquidation
or dissolution of the Company, (ii) a merger or consolidation in which the
Company is not the surviving entity, or (iii) the sale or disposition of all
or substantially all of the Company's assets, all outstanding MRP awards shall
be equitably adjusted for any change or exchange of shares of Common Stock for
a different number or kind of shares or other securities, which results from
the transaction.
Amendment and Termination of the MRP. The Company's Board of Directors
may, by resolution, at any time amend or terminate the MRP, provided that no
amendment or termination of the MRP will, without the written consent of any
affected holders of an MRP award, impair any rights or obligations under any
MRP award previously granted.
The power to amend or terminate includes the power to direct the MRP
Trustees to return to the Company all or any part of the assets of the MRP
Trust, including shares of Common Stock held in the plan share reserve of the
MRP. However, the termination of the MRP Trust may not affect a participant's
right to earn outstanding MRP awards and to receive Common Stock relating
thereto, including earnings thereon, in accordance with the terms of the MRP
and the particular MRP award made to the participant. Stockholder approval
might not be required for plan amendments that would not materially increase
the benefits accruing to plan participants, materially increase the number of
securities which may be issued under the plan or materially modify eligibility
requirements for plan participation.
Duration of the MRP. The MRP and MRP Trust will remain in effect until
the earlier of (i) termination by the Company's Board of Directors, or (2) the
distribution of all assets of the MRP Trust. Termination of the MRP will not
affect any MRP awards previously granted, and such MRP awards will remain
valid and in effect until they have been earned and distributed from the MRP
Trust, or by their terms expire or are forfeited.
Proposed MRP Awards. For information relating to proposed MRP awards,
see "New Plan Benefits" below.
RECOMMENDATION AND VOTE REQUIRED
The Board of Directors has determined that the MRP is desirable, cost
effective, and produces incentives which will benefit the Company and its
stockholders. The Board of Directors is seeking stockholder approval of the
MRP pursuant to the Nasdaq Stock Market corporate governance rules.
Approval of the MRP requires the affirmative vote of the holders of a
majority of the votes present at the Meeting. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" APPROVAL OF THE MRP.
14<PAGE>
<PAGE>
NEW PLAN BENEFITS
The following table sets forth certain information regarding the benefits
to be received under the Option Plan and the MRP.
</TABLE>
<TABLE>
<CAPTION>
Option Plan MRP (1)
-------------------------- ---------------------
Dollar Number Dollar Number
Value ($)(2) of Units(3) Value($)(4) of Units
------------------------------------------------
<S> <C> <C> <C> <C>
Michael P. Brennan, President $ -- 71,084 $440,712 28,433
and Chief Executive Officer
John E. Essen, Chief Financial -- 11,018 68,309 4,407
Officer
Gerald T. Mueller, Vice
President -- 12,084 74,912 4,833
All executive officers as a -- 94,186 583,932 37,673
group (3 persons)
All directors who are not -- 85,295 528,829 34,118
executive officers as a
group (7 persons)
All employees who are not -- 10,929 67,751 4,371
executive officers as a
group (19 persons)
<FN>
____________
(1) For information regarding the awarding and vesting of shares awarded
pursuant to the MRP, see "Proposal II -- Approval of Management
Recognition Plan."
(2) Based on the fair market value of the Common Stock on the date of grant
less the exercise price. All Options will be granted at an exercise
price equal to the fair market value of the underlying shares of Common
Stock on the date of the grant, which will occur upon receipt of
stockholder approval at the Meeting.
(3) All Options listed herein will be granted upon receipt of approval of
the Option Plan by stockholders at the Meeting. See "Proposal I --
Approval of the Westwood Homestead Financial Corporation 1997 Stock
Option Plan."
(4) Based on the closing price of the underlying Common Stock of $15.50 per
share as quoted on the NASDAQ National Market on August 1, 1997.
</FN>
</TABLE>
15<PAGE>
<PAGE>
_________________________________________________________________
OTHER MATTERS
_________________________________________________________________
The Board of Directors is not aware of any business to come
before the Meeting other than those matters described above in
this Proxy Statement. However, if any other matters should pro-
perly come before the Meeting, it is intended that proxies in the
accompanying form will be voted in respect thereof in accordance
with the determination of the Board of Directors.
_________________________________________________________________
MISCELLANEOUS
_________________________________________________________________
The cost of soliciting proxies will be borne by the Company.
The Company will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them
in sending proxy materials to the beneficial owners of Common
Stock. In addition to solicitations by mail, directors, officers
and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional
compensation.
_________________________________________________________________
STOCKHOLDER PROPOSALS
_________________________________________________________________
In order to be eligible to be considered for inclusion in
the Company's proxy materials for the next Annual Meeting of
Stockholders, any stockholder proposal to take action at such
meeting must be received at the Company's executive offices at
3002 Harrison Avenue, Cincinnati, Ohio 45211-5789, no later than
October 31, 1997. Any such proposal shall be subject to the re-
quirements of the proxy rules adopted under the Securities
Exchange Act of 1934.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mary Ann Jacobs
MARY ANN JACOBS
SECRETARY
Cincinnati, Ohio
August 22, 1997
<PAGE>
<PAGE>
EXHIBIT A
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Plan is to advance the interests of
the Company through providing select key Employees and
Directors of the Bank, the Company, and their Affiliates with
the opportunity to acquire Shares. By encouraging such stock
ownership, the Company seeks to attract, retain and motivate
the best available personnel for positions of substantial
responsibility and to provide additional incentives to
Directors and key Employees of the Company or any Affiliate to
promote the success of the business.
2. DEFINITIONS.
As used herein, the following definitions shall apply.
(a) "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Code.
(b) "Agreement" shall mean a written agreement entered
into in accordance with Paragraph 5(c).
(c) "Awards" shall mean, collectively, Options and SARs,
unless the context clearly indicates a different meaning.
(d) "Bank" shall mean The Westwood Homestead Savings
Bank.
(e) "Board" shall mean the Board of Directors of the
Company.
(f) "Change in Control" shall mean any one of the
following events: (i) the acquisition of ownership, holding or
power to vote more than 25% of the voting stock of the Bank or
the Company, (ii) the acquisition of the ability to control the
election of a majority of the Bank's or the Company's
directors, (iii) the acquisition of a controlling influence
over the management or policies of the Bank or of the Company
by any person or by persons acting as a "group" (within the
meaning of Section 13(d) of the Securities Exchange Act of
1934), or (iv) during any period of two consecutive years,
individuals (the "Continuing Directors") who at the beginning
of such period constitute the Board of Directors of the Bank or
of the Company (the "Existing Board") cease for any reason to
constitute at least two-thirds thereof, provided that any
individual whose election or nomination for election as a
member of the Existing Board was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. Notwithstanding the
foregoing, the Company's ownership of the Bank shall
not of itself constitute a Change in Control for purposes of
the Agreement. For purposes of this paragraph only, the term
"person" refers to an individual or a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form
of entity not specifically listed herein.
(g) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(h) "Committee" shall mean both the Stock Option
Committee appointed by the Board in accordance with Paragraph
5(a) hereof, and the Board.
(i) "Common Stock" shall mean the common stock of the
Company.
(j) "Company" shall mean Westwood Homestead Financial
Corporation
<PAGE>
<PAGE>
(k) "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee or
Director of the Company or an Affiliate. Continuous Service
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Company, in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate or a
successor, or in the case of a Director's performance of
services in an emeritus or advisory capacity.
(l) "Director" shall mean any member of the Board, and
any member of the board of directors of any Affiliate that the
Board has by resolution designated as being eligible for
participation in this Plan.
(m) "Disability" shall mean a physical or mental
condition, which in the sole and absolute discretion of the
Committee, is reasonably expected to be of indefinite duration
and to substantially prevent a Participant from fulfilling his
or her duties or responsibilities to the Company or an
Affiliate.
(n) "Effective Date" shall mean the date specified in
Paragraph 14 hereof.
(o) "Employee" shall mean any person employed by the
Company, the Bank, or an Affiliate.
(p) "Exercise Price" shall mean the price per Optioned
Share at which an Option or SAR may be exercised.
(q) "ISO" shall mean an option to purchase Common Stock
which meets the requirements set forth in the Plan, and which
is intended to be and is identified as an "incentive stock
option" within the meaning of Section 422 of the Code.
(r) "Market Value" shall mean the fair market value of
the Common Stock, as determined under Paragraph 7(b) hereof.
(s) "Non-Employee Director" shall have the meaning
provided in Rule 16b-3.
(t) "Non-ISO" means an option to purchase Common Stock
which meets the requirements set forth in the Plan but which is
not intended to be and is not identified as an ISO.
(u) "Option" means an ISO and/or a Non-ISO.
(v) "Optioned Shares" shall mean Shares subject to an
Award granted pursuant to this Plan.
(w) "Participant" shall mean any person who receives an
Award pursuant to the Plan.
(x) "Plan" shall mean this Westwood Homestead Financial
Corporation 1997 Stock Option Plan.
(y) "Rule 16b-3" shall mean Rule 16b-3 of the General
Rules and Regulations under the Securities Exchange Act of
1934, as amended.
(z) "Share" shall mean one share of Common Stock.
(aa) "SAR" (or "Stock Appreciation Right") means a right
to receive the appreciation in value, or a portion of the
appreciation in value, of a specified number of shares of
Common Stock.
(bb) "Year of Service" shall mean a full twelve-month
period, measured from the date of an Award and each annual
anniversary of that date, during which a Participant has not
terminated Continuous Service for any reason.
-2-<PAGE>
<PAGE>
3. TERM OF THE PLAN AND AWARDS.
(a) Term of the Plan. The Plan shall continue in effect
for a term of ten years from the Effective Date, unless sooner
terminated pursuant to Paragraph 16 hereof. No Award shall be
granted under the Plan after ten years from the Effective Date.
(b) Term of Awards. The term of each Award granted under
the Plan shall be established by the Committee, but shall not
exceed 10 years; provided, however, that in the case of an
Employee who owns Shares representing more than 10% of the
outstanding Common Stock at the time an ISO is granted, the
term of such ISO shall not exceed five years.
4. SHARES SUBJECT TO THE PLAN.
(a) General Rule. Except as otherwise required under
Paragraph 11, the aggregate number of Shares deliverable
pursuant to Awards shall not exceed 10% of the Shares issued by
the Company in connection with the Bank's conversion from
mutual to stock form. Such Shares may either be authorized but
unissued Shares, Shares held in treasury, or Shares held in a
grantor trust created by the Company. If any Awards should
expire, become unexercisable, or be forfeited for any reason
without having been exercised, the Optioned Shares shall,
unless the Plan shall have been terminated, be available for
the grant of additional Awards under the Plan.
(b) Special Rule for SARs. The number of Shares with
respect to which an SAR is granted, but not the
number of Shares which the Company delivers or could deliver to
an Employee or individual upon exercise of an
SAR, shall be charged against the aggregate number of Shares
remaining available under the Plan; provided, however,
that in the case of an SAR granted in conjunction with an
Option, under circumstances in which the exercise of the
SAR results in termination of the Option and vice versa, only
the number of Shares subject to the Option shall be
charged against the aggregate number of Shares remaining
available under the Plan. The Shares involved in an Option
as to which option rights have terminated by reason of the
exercise of a related SAR, as provided in Paragraph 10
hereof, shall not be available for the grant of further Options
under the Plan.
5. ADMINISTRATION OF THE PLAN.
(a) Composition of the Committee. The Plan shall be
administered by the Committee, which shall consist of not less
than two (2) members of the Board who are Non-Employee
Directors. Members of the Committee shall serve at the
pleasure of the Board. In the absence at any time of a duly
appointed Committee, the Plan shall be administered by the
Board.
(b) Powers of the Committee. Except as limited by the
express provisions of the Plan or by resolutions adopted by the
Board, the Committee shall have sole and complete authority and
discretion (i) to select Participants and grant Awards, (ii) to
determine the form and content of Awards to be issued in the
form of Agreements under the Plan, (iii) to interpret the Plan,
(iv) to prescribe, amend and rescind rules and regulations
relating to the Plan, and (v) to make other determinations
necessary or advisable for the administration of the Plan. The
Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to
time. A majority of the entire Committee shall constitute a
quorum and the action of a majority of the members present at
any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee without a meeting,
shall be deemed the action of the Committee.
(c) Agreement. Each Award shall be evidenced by a
written agreement containing such provisions as may be approved
by the Committee. Each such Agreement shall constitute a
binding contract between the Company and the Participant, and
every Participant, upon acceptance of such Agreement, shall be
bound by the terms and restrictions of the Plan and of such
Agreement. The terms of each such Agreement shall be in
accordance with the Plan, but each Agreement may include such
additional provisions and restrictions determined by the
Committee, in
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its discretion, provided that such additional provisions and
restrictions are not inconsistent with the terms of the Plan.
In particular, the Committee shall set forth in each Agreement
(i) the Exercise Price of an Option or SAR, (ii) the number of
Shares subject to the Award, and its expiration date, (iii) the
manner, time, and rate (cumulative or otherwise) of exercise or
vesting of such Award, and (iv) the restrictions, if any, to be
placed upon such Award, or upon Shares which may be issued upon
exercise of such Award. The Chairman of the Committee and such
other Directors and officers as shall be designated by the
Committee are hereby authorized to execute Agreements on behalf
of the Company and to cause them to be delivered to the
recipients of Awards.
(d) Effect of the Committee's Decisions. All decisions,
determinations and interpretations of the Committee shall be
final and conclusive on all persons affected thereby.
(e) Indemnification. In addition to such other rights of
indemnification as they may have, the members of the Committee
shall be indemnified by the Company in connection with any
claim, action, suit or proceeding relating to any action taken
or failure to act under or in connection with the Plan or any
Award, granted hereunder to the full extent provided for under
the Company's governing instruments with respect to the
indemnification of Directors.
6. GRANT OF OPTIONS.
(a) General Rule. Employees and Directors shall be
eligible to receive Awards. In selecting those individuals to
whom Awards will be granted and the number of shares covered by
such Awards, the Committee shall consider the position, duties
and responsibilities of the eligible individuals, the value of
their services to the Company and its Affiliates, and any other
factors the Committee may deem relevant. Notwithstanding the
foregoing, the Committee shall automatically make the Awards
specified in Sections 6(b) and 9 hereof.
(b) Automatic Grants to Employees. On the Effective Date,
each of the following Employees shall receive an Option (in the
form of an ISO, to the extent permissible under the Code) to
purchase the number of Shares listed below, at an Exercise
Price per Share equal to the Market Value of a Share on the
Effective Date; provided that such grant shall not be made to
an Employee whose Continuous Service terminates on or before
the Effective Date:
Percentage of Shares
Participant Reserved under Paragraph 4(a)
___________ _____________________________
Michael P. Brennan 25.0%
John E. Essen 3.875%
Gerald T. Mueller 4.25%
With respect to each of the above-named Participants, the
Option granted to the Participant hereunder (i) shall vest in
accordance with the general rule set forth in Paragraph 8(a) of
the Plan, (ii) shall have a term of ten years from the
Effective Date, and (iii) shall be subject to the general rule
set forth in Paragraph 8(c) with respect to the effect of a
Participant's termination of Continuous Service on the
Participant's right to exercise his Options.
(c) Special Rules for ISOs. The aggregate Market Value,
as of the date the Option is granted, of the Shares with
respect to which ISOs are exercisable for the first time by an
Employee during any calendar year (under all incentive stock
option plans, as defined in Section 422 of the Code, of the
Company or any present or future Affiliate of the Company)
shall not exceed $100,000. Notwithstanding the foregoing, the
Committee may grant Options in excess of the foregoing
limitations, in which case Options granted in excess of such
limitation shall be Non-ISOs.
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7. EXERCISE PRICE FOR OPTIONS.
(a) Limits on Committee Discretion. The Exercise Price
as to any particular Option shall not be less than 100% of the
Market Value of the Optioned Shares on the date of grant. In
the case of an Employee who owns Shares representing more than
10% of the Company's outstanding Shares of Common Stock at the
time an ISO is granted, the Exercise Price shall not be less
than 110% of the Market Value of the Optioned Shares at the
time the ISO is granted.
(b) Standards for Determining Exercise Price. If the
Common Stock is listed on a national securities exchange
(including the NASDAQ National Market System) on the date in
question, then the Market Value per Share shall be the average
of the highest and lowest selling price on such exchange on
such date, or if there were no sales on such date, then the
Exercise Price shall be the mean between the bid and asked
price on such date. If the Common Stock is traded otherwise
than on a national securities exchange on the date in question,
then the Market Value per Share shall be the mean between the
bid and asked price on such date, or, if there is no bid and
asked price on such date, then on the next prior business day
on which there was a bid and asked price. If no such bid and
asked price is available, then the Market Value per Share shall
be its fair market value as determined by the Committee, in its
sole and absolute discretion.
8. EXERCISE OF OPTIONS.
(a) Generally. Unless otherwise provided by the
Committee in the underlying Agreement, each Option shall become
exercisable with respect to twenty percent (20%) of the
Optioned Shares upon the date such Option is granted,
and with respect to twenty percent (20%) of the Optioned Shares
upon the Participant's completion of each of four Years of
Service after the date of grant. Notwithstanding the
foregoing, an Option shall become fully (100%) exercisable
immediately upon a Change in Control or upon termination of the
Participant's Continuous Service due to the Participant's
Disability, death, or retirement. An Option may not be
exercised for a fractional Share.
(b) Procedure for Exercise. A Participant may exercise
Options, subject to provisions relative to its termination and
limitations on its exercise, only by (1) written notice of
intent to exercise the Option with respect to a specified
number of Shares, and (2) payment to the Company
(contemporaneously with delivery of such notice) in cash, in
Common Stock, or a combination of cash and Common Stock, of the
amount of the Exercise Price for the number of Shares with
respect to which the Option is then being exercised. Each such
notice (and payment where required) shall be delivered, or
mailed by prepaid registered or certified mail, addressed to
the Treasurer of the Company at its executive offices. Common
Stock utilized in full or partial payment of the Exercise Price
for Options shall be valued at its Market Value at the date of
exercise, and may consist of Shares subject to the Option being
exercised. Upon a Participant's exercise of an Option, the
Company may, if provided by the Committee in the underlying
Agreement, pay to the Participant a cash amount up to but not
exceeding the amount of dividends, if any, declared on the
underlying Shares between the date of grant and the date of
exercise of the Option.
(c) Period of Exercisability. Except to the extent
otherwise provided in the terms of an Agreement, an Option may
be exercised by a Participant only while he is an Employee and
has maintained Continuous Service from the date of the grant of
the Option, or within one year after termination of such
Continuous Service (but not later than the date on which the
Option would otherwise expire), except if the Employee's
Continuous Service terminates by reason of --
(1) "Just Cause" which for purposes hereof shall
have the meaning set forth in any unexpired employment or
severance agreement between the Participant and the Bank
and/or the Company (and, in the absence of any such
agreement, 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
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<PAGE>
offenses) or final cease-and-desist order), then the
Participant's rights to exercise such Option shall expire
on the date of such termination;
(2) death, then to the extent that the Participant
would have been entitled to exercise the Option
immediately prior to his death, such Option of the
deceased Participant may be exercised within two years
from the date of his death (but not later than the date on
which the Option would otherwise expire) by the personal
representatives of his estate or person or persons to whom
his rights under such Option shall have passed by will or
by laws of descent and distribution;
(3) Disability, then to the extent that the
Participant would have been entitled to exercise the
Option immediately prior to his or her Disability, such
Option may be exercised within one year from the date of
termination of employment due to Disability, but not later
than the date on which the Option would otherwise expire.
(d) Effect of the Committee's Decisions. The Committee's
determination whether a Participant's Continuous Service has
ceased, and the effective date thereof, shall be final and
conclusive on all persons affected thereby.
(e) Mandatory Six-Month Holding Period. Notwithstanding
any other provision of this Plan to the contrary, common stock
of the Company that is purchased upon exercise of an Option or
SAR may not be sold within the six-month period following the
grant of that Option or SAR, except in the event of the
Participant's death, Disability, or retirement, or upon a
Change in Control.
9. GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS
(a) Automatic Grants. Notwithstanding any other
provisions of this Plan, each Director who is not an Employee
but is a Director on the Effective Date shall receive, on said
date, Non-ISOs to purchase a number of Shares equal to the
lesser of five percent (5%) of the number of Shares reserved
under Paragraph 4(a) hereof, and the quotient obtained by
dividing --
(i) 30 percent (30%) of the number of Shares reserved
under Paragraph 4(a) hereof, by
(ii) the number of Directors entitled to receive an Option
on the Effective Date, pursuant to this Paragraph
9(a).
Such Non-ISOs shall have an Exercise Price per Share equal
to the Market Value of a Share on the date of grant.
(b) Terms of Exercise. Options received by a Director
pursuant to this Plan (i) shall become exercisable in
accordance with paragraph 8(a) of the Plan, and (ii) may be
exercised from time to time by written notice of intent to
exercise the Option with respect to all or a specified number
of the Optioned Shares, and payment to the Company
(contemporaneously with the delivery of such notice), in cash,
in Common Stock, or a combination of cash and Common Stock, of
the amount of the Exercise Price for the number of the Optioned
Shares with respect to which the Option is then being
exercised. Each such notice and payment shall be delivered, or
mailed by prepaid registered or certified mail, addressed to
the Treasurer of the Company at the Company's executive
offices. Upon a Director's exercise of an Option, the Company
may, if provided by the Committee in the underlying Agreement
and the exercise of discretion by the Committee in that regard
is consistent with the Plan's conformity with Rule 16b-3, pay
to the Director a cash amount up to but not exceeding the
amount of dividends, if any, declared on the underlying Shares
between the date of grant and the date of exercise of the
Option. A Director who exercises Options pursuant to this
Paragraph may satisfy all applicable federal, state and local
income and employment tax withholding obligations, in whole or
in part, by irrevocably electing to have the Company withhold
shares of Common Stock, or to deliver to the Company shares of
Common Stock that he already owns, having a value equal to the
amount required to be withheld;
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provided that to the extent not inconsistent herewith, such
election otherwise complies with those requirements of
Paragraphs 8 and 20 hereof.
Options granted to a Director shall have a term of ten
years; provided that such Options shall expire one year after
the date on which a Director terminates Continuous Service on
the Board for a reason other than death, but in no event later
than the date on which such Options would otherwise expire. In
the event of such Director's death during the term of his
directorship, his Options shall become immediately exercisable,
and may be exercised within two years from the date of his
death by the personal representatives of his estate or person
or persons to whom his rights under such Option shall have
passed by will or by laws of descent and distribution, but in
no event later than the date on which such Options would
otherwise expire. In the event of such Director's Disability
during his or her directorship, the Director's Option shall
become immediately exercisable, and such Option may be
exercised within one year of the termination of directorship
due to Disability, but not later than the date that the Option
would otherwise expire. Unless otherwise inapplicable or
inconsistent with the provisions of this Paragraph, the Options
to be granted to Directors shall be subject to all other
provisions of this Plan.
(c) Effect of the Committee's Decisions. The Committee's
determination whether a Participant's Continuous Service has
ceased, and the effective date thereof, shall be final and
conclusive on all persons affected thereby.
10. SARS (STOCK APPRECIATION RIGHTS)
(a) Granting of SARs. In its sole discretion, the
Committee may from time to time grant SARs to Participants
either in conjunction with, or independently of, any Options
granted under the Plan. An SAR granted in conjunction with an
Option may be an alternative right wherein the exercise of the
Option terminates the SAR to the extent of the number of shares
purchased upon exercise of the Option and, correspondingly, the
exercise of the SAR terminates the Option to the extent of the
number of Shares with respect to which the SAR is exercised.
Alternatively, an SAR granted in conjunction with an Option may
be an additional right wherein both the SAR and the Option may
be exercised. An SAR may not be granted in conjunction with an
ISO under circumstances in which the exercise of the SAR
affects the right to exercise the ISO or vice versa, unless the
SAR, by its terms, meets all of the following requirements:
(1) The SAR will expire no later than the ISO;
(2) The SAR may be for no more than the difference
between the Exercise Price of the ISO and the Market
Value of the Shares subject to the ISO at the time the SAR
is exercised;
(3) The SAR is transferable only when the ISO is
transferable, and under the same conditions;
(4) The SAR may be exercised only when the ISO may be
exercised; and
(5) The SAR may be exercised only when the Market Value
of the Shares subject to the ISO exceeds
the Exercise Price of the ISO.
(b) Exercise Price. The Exercise Price as to any
particular SAR shall not be less than the Market Value of the
Optioned Shares on the date of grant.
(c) Timing of Exercise. The provisions of Paragraph 8(c)
regarding the period of exercisability of Options are
incorporated by reference herein, and shall determine the
period of exercisability of SARs.
<PAGE>
(d) Exercise of SARs. An SAR granted hereunder shall be
exercisable at such times and under such conditions as shall be
permissible under the terms of the Plan and of the Agreement
granted to a Participant, provided
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that an SAR may not be exercised for a fractional Share. Upon
exercise of an SAR, the Participant shall be entitled to
receive, without payment to the Company except for applicable
withholding taxes, an amount equal to the excess of (or, in the
discretion of the Committee if provided in the Agreement, a
portion of) the then aggregate Market Value of the number of
Optioned Shares with respect to which the Participant exercises
the SAR, over the aggregate Exercise Price of such number of
Optioned Shares. This amount shall be payable by the Company,
in the discretion of the Committee, in cash or in Shares valued
at the then Market Value thereof, or any combination thereof.
(e) Procedure for Exercising SARs. To the extent not
inconsistent herewith, the provisions of Paragraph 8(b) as to
the procedure for exercising Options are incorporated by
reference, and shall determine the procedure for exercising
SARs.
11. EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE
PLAN.
(a) Recapitalizations; Stock Splits, Etc. The number and
kind of shares reserved for issuance under the Plan, and the
number and kind of shares subject to outstanding Awards, and
the Exercise Price thereof, shall be proportionately adjusted
for any increase, decrease, change or exchange of Shares for a
different number or kind of shares or other securities of the
Company which results from a merger, consolidation,
recapitalization, reorganization, reclassification, stock
dividend, split-up, combination of shares, or similar event in
which the number or kind of shares is changed without the
receipt or payment of consideration by the Company.
(b) Transactions in which the Company is Not the
Surviving Entity. In the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or (iii) the
sale or disposition of all or substantially all of the
Company's assets (any of the foregoing to be referred to herein
as a "Transaction"), all outstanding Awards, together with the
Exercise Prices thereof, shall be equitably adjusted for any
change or exchange of Shares for a different number or kind of
shares or other securities which results from the Transaction.
(c) Special Rule for ISOs. Any adjustment made pursuant
to subparagraphs (a) or (b)(1) hereof shall be made in such a
manner as not to constitute a modification, within the meaning
of Section 424(h) of the Code, of outstanding ISOs.
(d) Conditions and Restrictions on New, Additional, or
Different Shares or Securities. If, by reason of any
adjustment made pursuant to this Paragraph, a Participant
becomes entitled to new, additional, or different shares of
stock or securities, such new, additional, or different shares
of stock or securities shall thereupon be subject to all of the
conditions and restrictions which were applicable to the Shares
pursuant to the Award before the adjustment was made.
(e) Other Issuances. Except as expressly provided in
this Paragraph, the issuance by the Company or an Affiliate of
shares of stock of any class, or of securities convertible into
Shares or stock of another class, for cash or property or for
labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect,
and no adjustment shall be made with respect to, the number,
class, or Exercise Price of Shares then subject to Awards or
reserved for issuance under the Plan.
(f) Certain Special Dividends. The Exercise Price of
shares subject to outstanding Awards shall 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, except that this subparagraph (f) shall not apply
to any dividend which is paid to the Participant pursuant to
Paragraph 8(b) or 9(b) hereof.
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12. CHANGE OF CONTROL.
The terms of any Award which provide for its exercise or
vesting in installments shall immediately and permanently lapse
on the date of a Change in Control. Consequently, all Options
and SARs shall become immediately exercisable and fully vested
on the date of the Change in Control. At the time of a Change
in Control, the Participant shall, at the discretion of the
Committee, be entitled to receive cash in an amount equal to
the excess of the Market Value of the Common Stock subject to
such Option over the Exercise Price of such Shares, in exchange
for the cancellation of such Options or SARs by the
Participant.
13. NON-TRANSFERABILITY OF AWARDS.
Awards may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or
by the laws of descent and distribution. Notwithstanding the
foregoing, or any other provision of this Plan, a Participant
who holds Awards may transfer such Awards 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.
Awards so transferred may thereafter be transferred only to the
Participant who originally received the grant or to an
individual or trust to whom the Participant could have
initially transferred the Awards pursuant to this Paragraph 13.
Awards which are transferred pursuant to this Paragraph 13
shall be exercisable by the transferee according to the same
terms and conditions as applied to the Participant.
14. TIME OF GRANTING AWARDS.
The date of grant of an Award shall, for all purposes, be
the later of the date on which the Committee makes the
determination of granting such Award, and the Effective Date.
Notice of the determination shall be given to each Participant
to whom an Award is so granted within a reasonable time after
the date of such grant.
15. EFFECTIVE DATE.
The Plan shall become effective immediately upon its
approval by at least a majority of the total votes cast at a
duly called meeting of the Company's stockholders held in
accordance with applicable laws. No Awards may be made prior
to approval of the Plan by the stockholders of the Company.
16. MODIFICATION OF AWARDS.
At any time, and from time to time, the Board may
authorize the Committee to direct execution of an instrument
providing for the modification of any outstanding Award,
provided no such modification shall confer on the holder of
said Award any right or benefit which could not be conferred on
him by the grant of a new Award at such time, or impair the
Award without the consent of the holder of the Award.
17. AMENDMENT AND TERMINATION OF THE PLAN.
The Board may from time to time amend the terms of the
Plan and, with respect to any Shares at the time not subject to
Awards, suspend or terminate the Plan. No amendment,
suspension or termination of the Plan shall, without the
consent of any affected holders of an Award, alter or impair
any rights or obligations under any Award theretofore granted.
18. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Compliance with Securities Laws. Shares of Common
Stock shall not be issued with respect to any Award unless the
issuance and delivery of such Shares shall comply with all
relevant provisions of law, including,
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<PAGE>
without limitation, the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, any applicable
state securities law, and the requirements of any stock
exchange upon which the Shares may then be listed.
(b) Special Circumstances. The inability of the Company
to obtain approval from any regulatory body or authority deemed
by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder shall relieve the Company of
any liability in respect of the non-issuance or sale of such
Shares. As a condition to the exercise of an Option or SAR,
the Company may require the person exercising the Option or SAR
to make such representations and warranties as may be necessary
to assure the availability of an exemption from the
registration requirements of federal or state securities law.
(c) Committee Discretion. The Committee shall have the
discretionary authority to impose in Agreements such
restrictions on Shares as it may deem appropriate or desirable,
including but not limited to the authority to impose a right of
first refusal or to establish repurchase rights or both of
these restrictions.
19. RESERVATION OF SHARES.
The Company, during the term of the Plan, will reserve and
keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
20. WITHHOLDING TAX.
The Company's obligation to deliver Shares upon exercise
of Options and/or SARs shall be subject to the Participant's
satisfaction of all applicable federal, state and local income
and employment tax withholding obligations. The Committee, in
its discretion, may permit the Participant to satisfy the
obligation, in whole or in part, by irrevocably electing to
have the Company withhold Shares, or to deliver to the Company
Shares that he already owns, having a value equal to the amount
required to be withheld. The value of the Shares to be
withheld, or delivered to the Company, shall be based on the
Market Value of the Shares on the date the amount of tax to be
withheld is to be determined. As an alternative, the Company
may retain, or sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld.
21. NO EMPLOYMENT OR OTHER RIGHTS.
In no event shall an Employee's or Director's eligibility
to participate or participation in the Plan create or be deemed
to create any legal or equitable right of the Employee,
Director, or any other party to continue service with the
Company, the Bank, or any Affiliate of such corporations.
Except to the extent provided in Paragraphs 6(b) and 9(a), no
Employee or Director shall have a right to be granted an Award
or, having received an Award, the right to again be granted an
Award. However, an Employee or Director who has been granted
an Award may, if otherwise eligible, be granted an additional
Award or Awards.
22. GOVERNING LAW.
The Plan shall be governed by and construed in accordance
with the laws of the State of Ohio, except to the extent that
federal law shall be deemed to apply.
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EXHIBIT B
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
MANAGEMENT RECOGNITION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.01 The Company hereby establishes this Plan upon the
terms and conditions hereinafter stated.
1.02 Through acceptance of their appointment to the
Committee, each member of the Committee hereby accepts his or
her appointment hereunder upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and retain
personnel of experience and ability in key positions of
responsibility by providing Employees and Directors of the
Company, the Bank, and their Affiliates with a proprietary
interest in the Company, and as compensation for their past
contributions to the Bank, and as an incentive to make such
contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Plan
with an initial capital letter, shall have the meanings set
forth below unless the context clearly indicates otherwise.
Wherever appropriate, the masculine pronoun shall include the
feminine pronoun and the singular shall include the plural.
3.01 "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the
Internal Revenue Code of 1986, as amended.
3.02 "Bank" means The Westwood Homestead Savings Bank.
3.03 "Beneficiary" means the person or persons designated
by a Participant to receive any benefits payable under the Plan
in the event of such Participant'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
Participant's surviving spouse, if any or if none, his estate.
3.04 "Board" means the Board of Directors of the Company.
3.05 "Change in Control" shall mean any one of the
following events: (i) the acquisition of ownership, holding or
power to vote more than 25% of the voting stock of the Bank or
the Company, (ii) the acquisition of the ability to control the
election of a majority of the Bank's or the Company's
directors, (iii) the acquisition of a controlling influence
over the management or policies of the Bank or of the Company
by any person or by persons acting as a "group" (within the
meaning of Section 13(d) of the Securities Exchange Act of
1934), or (iv) during any period of two consecutive years,
individuals (the "Continuing Directors") who at the beginning
of such period constitute the Board of Directors of the Bank or
of the Company (the "Existing Board") cease for any reason to
constitute at least two-thirds thereof, provided that any
individual whose election or nomination for election as a
member of the Existing Board was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. Notwithstanding the
foregoing, the Company's ownership of the Bank shall not of
itself constitute a Change in Control for purposes of the
Agreement. For purposes of this paragraph only, the
<PAGE>
term "person" refers to an individual or a corporation,
partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization or
any other form of entity not specifically listed herein.
3.06 "Committee" means the Management Recognition Plan
Committee appointed by the Board pursuant to Article IV hereof.
3.07 "Common Stock" means shares of the common stock of
the Company.
3.08 "Company" means Westwood Homestead Financial
Corporation.
3.09 "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee or
Director of the Company or an Affiliate. Continuous Service
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Company in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate or a
successor, or in the case of a Director's performance of
services in an emeritus or advisory capacity.
3.10 "Date of Conversion" means the date of the conversion
of the Bank from mutual to stock form.
3.11 "Director" means a member of the Board.
3.12 "Disability" shall mean a physical or mental
condition, which in the sole and absolute discretion of the
Committee, is reasonably expected to be of indefinite duration
and to substantially prevent a Participant from fulfilling his
or her duties or responsibilities to the Company or an
Affiliate.
3.13 "Effective Date" means the date on which the Plan
first becomes effective, as determined under Section 8.07
hereof.
3.14 "Employee" means any person who is employed by the
Company or an Affiliate.
3.15 "Non-Employee Director" shall have the meaning
provided in Rule 16b-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.
3.16 "Participant" means an Employee or Director who
holds a Plan Share Award.
3.17 "Plan" means this Westwood Homestead Financial
Corporation Management Recognition Plan.
3.18 "Plan Shares" means shares of Common Stock held in
the Trust which are awarded or issuable to a Participant
pursuant to the Plan.
3.19 "Plan Share Award" means a right granted under this
Plan to receive Plan Shares.
3.20 "Plan Share Reserve" means the shares of Common
Stock held by the Trustee pursuant to Sections 5.02 and 5.03.
3.21 "Trust" and "Trust Agreement" mean that agreement
entered into pursuant to the terms hereof between the Company
and the Trustee, and "Trust" means the trust created
thereunder.
3.22 "Trustee" means that person(s) or entity appointed
by the Board pursuant to the Trust Agreement to hold legal
title to the Plan assets for the purposes set forth herein.
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<PAGE>
3.23 "Year of Service" shall mean a full twelve-month
period, measured from the date of a Plan Share Award and each
annual anniversary of that date, during which a Participant's
Continuous Service has not terminated for any reason.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE AND POWERS OF THE COMMITTEE. The Plan shall
be administered and interpreted by the Committee, which shall
consist of not less than two members of the Board who are
Non-Employee Directors. In the absence at any time of a duly
appointed Committee, the Plan shall be administered by the
Board.
The Committee shall have all of the powers allocated to it
in this and other Sections of the Plan. Except as limited by
the express provisions of the Plan or by resolutions adopted by
the Board, the Committee shall have sole and complete authority
and discretion (i) to make Plan Share Awards to such Employees
or Directors as the Committee may select, (ii) to determine the
form and content of Plan Share Awards to be issued under the
Plan, (iii)to interpret the Plan, (iv) to prescribe, amend and
rescind rules and regulations relating to the Plan, and (v) to
make other determinations necessary or advisable for the
administration of the Plan. The Committee shall have and may
exercise such other power and authority as may be delegated to
it by the Board from time to time. Subject to Section 4.02,
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. The Committee shall act
by vote or written consent of a majority of its members, and
shall report its actions and decisions with respect to the Plan
to the Board at appropriate times, but in no event less than
one time per calendar year. The Committee may recommend to the
Board one or more persons or entity to act as Trustee(s) in
accordance with the provisions of this Plan and the Trust.
4.02 ROLE OF THE BOARD. The members of the Committee
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. The Board shall have all of the powers allocated to
it in this and other Sections of the Plan, may take any action
under or with respect to the Plan which the Committee is
authorized to take, and may reverse or override any action
taken or decision made by the Committee under or with respect
to the Plan, provided, however, that the Board may not revoke
any Plan Share Award already made or impair a participant's
vested rights under a Plan Share Award. Members of the Board
who are eligible for or who have been granted Plan Share Awards
(other than pursuant to Section 6.04) may not vote on any
matters affecting the administration of the Plan or the grant
of Plan Shares or Plan Share Awards (although such members may
be counted in determining the existence of a quorum at any
meeting of the Board during which actions with regard thereto
are taken). Further, with respect to all actions taken by the
Board in regard to the Plan, such action shall be taken by a
majority of the Board where such a majority of the directors
acting in the matter are Non-Employee Directors.
4.03 LIMITATION ON LIABILITY. No member of the Board or
the Committee or the Trustee(s) 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 or any Trustee 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 Company shall indemnify such member,
against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred
by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he
or she reasonably believed to be in the best interests of the
Company and its Affiliates and, with respect to any criminal
action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
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<PAGE>
ARTICLE V
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall
determine the amounts (or the method of computing the amounts)
to be contributed by the Company to the Trust, provided that
the Bank may also make contributions to the Trust. Such
amounts shall be paid to the Trustee at the time of
contribution. No contributions to the Trust by Employees shall
be permitted.
5.02 INVESTMENT OF TRUST ASSETS; MAXIMUM PLAN SHARE
AWARDS. The Trustee shall invest Trust assets only in
accordance with the Trust Agreement; provided that the Trust
shall not purchase, and Plan Share Awards shall not be made
with respect to, more than four percent (4%) of the number of
Shares issued on the Date of Conversion.
5.03 EFFECT OF ALLOCATIONS, RETURNS AND FORFEITURES UPON
PLAN SHARE RESERVES. Upon the allocation of Plan Share Awards
under Section 6.02, the Plan Share Reserve shall be reduced by
the number of Shares subject to the Awards so allocated. Any
Shares subject or attributable to an Award which may not be
earned because of a forfeiture by the Participant pursuant to
Section 7.01 shall be added to the Plan Share Reserve.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 ELIGIBILITY. The Committee may make Plan Share
Awards to Employees and Directors. In selecting those
individuals to whom Plan Share Awards will be granted and the
number of shares covered by such Awards, the Committee shall
consider the position, duties and responsibilities of the
eligible individuals, the value of their services to the
Company and its Affiliates, and any other factors the Committee
may deem relevant. Notwithstanding the foregoing, (i) the
Committee shall automatically make the Plan Share Awards
specified in Sections 6.04 and 6.05 hereof.
6.02 ALLOCATIONS. The Committee will determine which
Employees and Directors will be granted discretionary Plan
Share Awards, and the number of Shares covered by each Plan
Share Award, provided that in no event shall any Awards be made
which will violate the governing instruments of the Bank or its
Affiliates or any applicable federal or state law or
regulation. In the event Plan Shares are forfeited for any
reason or additional shares of Common Stock are purchased by
the Trustee, the Committee may, from time to time, determine
which of the Employees referenced in Section 6.01 above will be
granted additional Plan Share Awards to be awarded from the
forfeited or acquired Plan Shares.
6.03 FORM OF ALLOCATION. As promptly as practicable
after a determination is made pursuant to Section 6.02
that a Plan Share Award is to be made, the Committee shall
notify the Participant 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 may be earned.
The date on which the Committee so notifies the Participant
shall be considered the date of grant of the Plan Share Awards.
The Committee shall maintain records as to all grants of Plan
Share Awards under the Plan.
6.04 AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS.
Notwithstanding any other provisions of this Plan, each
Director who is not an Employee but is a Director on the
Effective Date shall receive, on said date, a Plan Share
Award for a number of Shares equal to the lesser of five (5%)
of the number of Plan Shares which the Trust is authorized to
purchase pursuant to Section 5.02 of the Plan and the quotient
obtained by dividing --
(i) thirty percent (30%) of the number of Plan Shares
which the Trust is authorized to purchase pursuant to
Section 5.02 of the Plan, by
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<PAGE>
(ii) the number of Directors entitled to receive Plan
Share Awards on the Effective Date, pursuant to
this Section 6.04.
Plan Share Awards received under the provisions of this Section
shall become vested and nonforfeitable according to the general
rules set forth in subsections (a), and (b) of Section 7.01,
and the Committee shall have no discretion to alter or
accelerate said vesting requirements. Unless otherwise
inapplicable or inconsistent with the provisions of this
Section, the Plan Share Awards to be granted hereunder shall be
subject to all other provisions of this Plan.
6.05 AUTOMATIC GRANTS TO EMPLOYEES. On the Effective
Date, each of the following individuals shall receive a Plan
Share Award as to the number of Plan Shares listed below,
provided that such award shall not be made to an individual who
is not an Employee on the Effective Date:
Employee Shares Subject to Plan Share Award
________ __________________________________
Michael P. Brennan 25.0%
John E. Essen 3.875%
Gerald T. Mueller 4.25%
Plan Share Awards received under the provisions of this
Section shall become vested and nonforfeitable according to the
general rules set forth in subsections (a) and (b) of Section
7.01, and the Committee shall have no discretion to alter said
vesting requirements. Unless otherwise inapplicable or
inconsistent with the provisions of this Section, the Plan
Share Awards to be granted hereunder shall be subject to all
other provisions of this Plan.
6.06 ALLOCATIONS NOT REQUIRED. Notwithstanding anything
to the contrary in Sections 6.01 and 6.02, but subject to
Sections 6.04 and 6.05, no Employee or Director shall have any
right or entitlement to receive a Plan Share Award hereunder,
such Awards being at the total discretion of the Committee, nor
shall any Employees or Directors as a group have such a right.
The Committee may, with the approval of the Board (or, if so
directed by the Board) return all Common Stock in the Plan
Share Reserve to the Company at any time, and cease issuing
Plan Share Awards.
ARTICLE VII
EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) GENERAL RULES. Unless otherwise provided by the
Committee in a notice of Plan Share Award, Plan
Shares subject to a Plan Share Award shall be earned and become
non-forfeitable with respect to twenty percent (20%)
of the Plan Share Award upon the date such Plan Share Award is
granted, and with respect to twenty percent (20%)
of the Plan Share Award upon the Participant's completion of
each of four Years of Service after the date of grant.
(b) EXCEPTION FOR TERMINATIONS DUE TO DEATH, DISABILITY,
RETIREMENT, OR CHANGE IN CONTROL. Notwithstanding the general
rule contained in Section 7.01(a) above, all Plan Shares
subject to a Plan Share Award held by a Participant upon a
Change in Control or whose service with the Company or an
Affiliate terminates due to the Participant's death,
Disability, or retirement, shall be deemed earned as of the
Participant's last day of service with the Company or an
Affiliate and shall be distributed as soon as practicable
thereafter.
(c) SIX-MONTH HOLDING PERIOD. In no event may Plan
Shares be sold within the six-month period following the date
of the underlying Plan Share Award, except in the event of the
Participant's death or disability, or such other event as the
Board may specifically deem appropriate.
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<PAGE>
7.02 ACCRUAL OF DIVIDENDS. Whenever Plan Shares are paid
to a Participant or Beneficiary under Section 7.03, such
Participant or Beneficiary shall also be entitled to receive,
with respect to each Plan Share paid, an amount equal to any
cash dividends (including special large and nonrecurring
dividends, including one that has the effect of a return of
capital to the Company's stockholders) and a number of shares
of Common Stock equal to any stock dividends, declared and paid
with respect to a share of Common Stock between the date the
relevant Plan Share Award was initially granted to such
Participant and the date the Plan Shares are being distributed.
There shall also be distributed an appropriate amount of net
earnings, if any, of the Trust with respect to any cash
dividends so paid out.
7.03 DISTRIBUTION OF PLAN SHARES.
(a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Except as
provided in Subsections (c), and (d) below, the Trustee shall
distribute Plan Shares and accumulated cash from dividends and
interest to the Participant or his Beneficiary, as the case may
be, as soon as practicable after they have been earned. No
fractional shares shall be distributed.
(b) FORM OF DISTRIBUTION. The Trustee shall distribute
all Plan Shares, together with any shares representing stock
dividends, in the form of Common Stock. One share of Common
Stock shall be given for each Plan Share earned. Payments
representing cash dividends (and earnings thereon) shall be
made in cash.
(c) Withholding. The Trustee shall 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 not sufficient, the Trustee
shall require the Participant 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
Company or Affiliate which employs or employed such Participant
any such amount withheld from or paid by the Participant or
Beneficiary.
(d) TIMING: EXCEPTION FOR 10% SHAREHOLDERS.
Notwithstanding Subsections (a) and (b) above, no Plan Shares
may be distributed prior to the date which is five (5) years
from the Date of Conversion to the extent the Participant or
Beneficiary, as the case may be, would after receipt of such
Shares own in excess of ten percent (10%) of the issued and
outstanding shares of Common Stock unless such action is
approved in advance by a majority vote of Non-employee
Directors of the Board. To the extent this limitation would
delay the date on which a Participant receives Plan Shares, the
Participant may elect to receive from the Trust, in lieu of
such Plan Shares, the cash equivalent thereof. Any Plan Shares
remaining undistributed solely by reason of the operation of
this Subsection (d) shall be distributed to the Participant or
his Beneficiary on the date which is five years from the Date
of Conversion.
(e) REGULATORY EXCEPTIONS. No Plan Shares shall be
distributed unless and until all of the requirements of
all applicable law and regulation shall have been fully
complied with, including the receipt of approval of the Plan
by the stockholders of the Company by such vote, if any, as may
be required by applicable law and regulations.
7.04 VOTING OF PLAN SHARES. All shares of Common Stock
held by the Trust (whether or not subject to a Plan Share
Award) shall be voted by the Trustee in the same proportion as
the trustee of the Company's Employee Stock Ownership Plan
votes Common Stock held in the trust associated therewith, and
in the absence of any such voting, shall be voted in the manner
directed by the Board.
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<PAGE>
ARTICLE VIII
MISCELLANEOUS
8.01 ADJUSTMENTS FOR CAPITAL CHANGES.
(a) RECAPITALIZATIONS; STOCK SPLITS, ETC. The number and
kind of shares which may be purchased under the Plan, and the
number and kind of shares subject to outstanding Plan Share
Awards, shall be proportionately adjusted for any increase,
decrease, change or exchange of shares of Common Stock for a
different number or kind of shares or other securities of the
Company which results from a merger, consolidation,
recapitalization, reorganization, reclassification, stock
dividend, split-up, combination of shares, or similar event in
which the number or kind of shares is changed without the
receipt or payment of consideration by the Company.
(b) TRANSACTIONS IN WHICH THE COMPANY IS NOT THE
SURVIVING ENTITY. In the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or (iii) the
sale or disposition of all or substantially all of the
Company's assets (any of the foregoing to be referred to
herein as a "Transaction"), all outstanding Plan Share Awards
shall be adjusted for any change or exchange of shares
of Common Stock for a different number or kind of shares or
other securities which results from the Transaction.
(c) CONDITIONS AND RESTRICTIONS ON NEW, ADDITIONAL, OR
DIFFERENT SHARES OR SECURITIES. If, by reason of any
adjustment made pursuant to this Section, a Participant becomes
entitled to new, additional, or different shares of stock or
securities, such new, additional, or different shares of stock
or securities shall thereupon be subject to all of the
conditions and restrictions which were applicable to the shares
pursuant to the Plan Share Award before the adjustment was
made. In addition, the Committee shall have the discretionary
authority to impose on the Shares subject to Plan Share Awards
to Employees such restrictions as the Committee may deem
appropriate or desirable, including but not limited to a right
of first refusal, or repurchase option, or both of these
restrictions.
(d) OTHER ISSUANCES. Except as expressly provided in
this Section, the issuance by the Company or an Affiliate of
shares of stock of any class, or of securities convertible into
shares of Common Stock or stock of another class, for cash or
property or for labor or services either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor,
shall not affect, and no adjustment shall be made with respect
to, the number or class of shares of Common Stock then subject
to Plan Share Awards or reserved for issuance under the Plan.
8.02 AMENDMENT AND TERMINATION OF PLAN. The Board may,
by resolution, at any time amend or terminate the Plan;
provided that no amendment or termination of the Plan shall,
without the written consent of a Participant, impair any rights
or obligations under a Plan Share Award theretofore granted to
the Participant.
The power to amend or terminate the Plan in accordance
with this Section 8.02 shall include the power to direct the
Trustee to return to the Company all or any part of the assets
of the Trust, including shares of Common Stock held in the Plan
Share Reserve. However, the termination of the Trust shall not
affect a Participant's right to earn Plan Share Awards and to
receive a distribution of Common Stock relating thereto,
including earnings thereon, in accordance with the terms of
this Plan and the grant by the Committee or the Board.
8.03 NONTRANSFERABILITY. Plan Share Awards may not be
sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent
and distribution. Notwithstanding the foregoing, or any other
provision of this Plan, a Participant who holds Plan Share
Awards may transfer such Awards 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. Plan
Share Awards so transferred may thereafter be transferred only
to the Participant who originally received the grant or to an
individual or trust to whom the Participant could have
initially transferred the Awards pursuant to this Section 8.03.
Plan Share Awards which are transferred pursuant to this
Section 8.03 shall be exercisable by the transferee according
to the same terms and conditions as applied to the Participant.
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<PAGE>
8.04 NO EMPLOYMENT OR OTHER 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, either express
or implied, on the part of any Employee or Director to continue
in the service of the Company, the Bank, or an Affiliate
thereof.
8.05 VOTING AND DIVIDEND RIGHTS. No Participant 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 prior to the time said Plan Shares are actually
distributed to him.
8.06 GOVERNING LAW. The Plan and Trust shall be governed
and construed under the laws of the State of Ohio to the extent
not preempted by federal law.
8.07 EFFECTIVE DATE. The Plan shall become effective
immediately upon its approval by at least a majority of the
total votes cast at a duly called meeting of the Company's
stockholders held in accordance with applicable laws.
In no event shall Plan Share Awards be made prior to the
Effective Date.
8.08 TERM OF PLAN. This Plan shall remain in effect
until the earlier of (i) termination by the Board, or (ii)
the distribution of all assets of the Trust. Termination of
the Plan shall not affect any Plan Share Awards previously
granted, and such Awards shall remain valid and in effect until
they have been earned and paid, or by their terms expire or are
forfeited.
8.09 TAX STATUS OF TRUST. It is intended that (i) the
Trust associated with the Plan be treated as a grantor trust of
the Company under the provisions of Section 671 et seq. of the
Code, as the same may be amended from time to time, and (ii)
that in accordance with Revenue Procedure 92-65 (as the same
may be amended from time to time), Participants have the status
of general unsecured creditors of the Company, the Plan
constitutes a mere unfunded promise to make benefit payments in
the future, the Plan is unfunded for tax purposes and for
purposes of Title I of the Employee Retirement Income Security
Act of 1974, as amended, and the Trust has been and will
continue to be maintained in conformity with Revenue Procedure
92-64 (as the same may be amended from time to time).
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<PAGE>
REVOCABLE PROXY
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
SPECIAL MEETING OF STOCKHOLDERS
September 29, 1997
The undersigned hereby appoints Robert H. Bockhorst, Raymond
J. Brinkman and Roger M. Higley with full powers of substitution,
to act as proxies for the undersigned, to vote all shares of
common stock of Westwood Homestead Financial Corporation (the
"Company") which the undersigned is entitled to vote at the
Special Meeting of Stockholders (the "Meeting"), to be held at
the main office of the Westwood Homestead Savings Bank, located
at 3002 Harrison Avenue, Cincinnati, Ohio, on Monday, September
29, 1997 at 9:00 a.m., local time, and at any and all
adjournments thereof, as follows:
PLEASE PRINT CHANGE OF ADDRESS HERE
Street/PO Box
City State Zip Code
Continued on reverse side
<PAGE>
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
1. Approval of the Westwood Homestead
Financial Corporation 1997 Stock Option
Plan. [ ] [ ] [ ]
2. Approval of the Westwood Homestead
Financial Corporation Management
Recognition Plan. [ ] [ ] [ ]
</TABLE>
The Board of Directors recommends a vote "FOR" the listed
propositions.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS
LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING,
THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN
ACCORDANCE WITH THE DETERMINATION OF THE BOARD OF DIRECTORS. AT
THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO VOTE WITH
RESPECT TO MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
Should the undersigned be present and elect to vote at the
Meeting or at any adjournment thereof and after notification to
the Secretary of the Company at the Meeting of the stockholder's
decision to terminate this proxy, then the power of said
attorneys and proxies shall be deemed terminated and of no
further force and effect.
Please sign exactly as your name appears on the other side. When
shares are held by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee or guardian, please
give your full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If
a partnership, please sign in partnership name by authorized
person.
____________________________ __________________________
NAME DATE NAME: DATE
