<PAGE>
<PAGE>
As filed with the Securities and Exchange Commission on
September 29, 1997
Registration No.333-______
________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
_______________________________________
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
----------------------------------------
(Exact name of Registrant as Specified in Its Charter)
Indiana 31-1463057
------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3002 Harrison Avenue
Cincinnati, Ohio 45211-5789
513-661-5735
------------------------------
(Address of Principal Executive Offices)
Westwood Homestead Financial Corporation
1997 Stock Option Plan
Westwood Homestead Financial Corporation
Management Recognition Plan
----------------------------------------
(Full Title of the plans)
with copies to:
Michael P. Brennan, President Cynthia R. Cross, Esq.
Westwood Homestead Financial Daniel L. Hogans, Esq.
Corporation Housley Kantarian &
3002 Harrison Avenue Bronstein, P.C.
Cincinnati, Ohio 45211-5789 1220 19th Street N.W.,
- ------------------------------ Suite 700
(Name and Address of Agent Washington, D.C. 20036
For Service)
Washington, D.C. 20036
(202) 822-9611
----------------------
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================
<S> <C> <C> <C> <C>
Title of Proposed Maximum Proposed Maximum Amount of
Securities to Amount to be Offering Price Aggregate Offering Registration
be registered(1) registered(2) Per Share(3) Price(4) Fee
- ------------------------------------------------------------------------------------
Common Stock, $.01
par value per share 398,072 (3) $6,636,357.01 $2,011.02
====================================================================================
<FN>
(1) Maximum number of shares issuable under Westwood Homestead
Financial Corporation Management Recognition Plan (113,735
shares) and Westwood Homestead Financial Corporation 1997 Stock
Option Plan (284,337 shares), as such amounts may be increased in
accordance with said plans in the event of a merger,
consolidation, recapitalization or similar event involving the
Registrant.
(2) Under Rule 457(h) the registration fee may be calculated,
inter alia, based upon the price at which the options may be
exercised. 398,072 shares are being registered hereby, of which
190,410 are under option at a weighted average exercise price of
$17.0625 per share ($3,248,870.63 in the aggregate). The
remainder of such shares, which are not presently subject to
option (207,662 shares), are being registered based upon the
average of the high and low selling price of the common stock of
the Registrant as reported on the National Association of
Securities Dealers Automated Quotation, National Market ("NNM")
on September 25, 1997 of $16.3125 per share ($3,387,486.38 in the
aggregate). Therefore, the total amount of the offering being
registered herein is $6,636,357.01.<PAGE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION
10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION*
- ------- ----------------
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
- ------- INFORMATION*
*Documents containing the information required by Part I of
this Registration Statement will be sent or given to participants
in the Westwood Homestead Financial Corporation Management
Recognition Plan and Westwood Homestead Financial Corporation
1997 Stock Option Plan (together, the "Plans") in accordance with
Rule 428(b)(1). In accordance with Note to Part I of Form S-
8, such documents are not filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- -------
The following documents are incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 as filed with the Commission on
March 28, 1997 (Commission File No. 0-21385).
(b) The Company's quarterly report on Form 10-Q for the
quarter ended March 31, 1997, as filed with the Commission on May
13, 1997 (Commission File No. 0-21385).
(c) The Company's quarterly report on Form 10-Q for the
quarter ended June 30, 1997, as filed with the Commission on
August 1, 1997 (Commission File No. 0-21385).
(d) The description of the Company's securities as contained
in the Company's Form 8-A, as filed with the Commission on
September 17, 1996 (Commission File No. 0-21385).
ALL DOCUMENTS FILED BY THE COMPANY PURSUANT TO SECTIONS
13(A), 13(C), 14, AND 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 AFTER THE DATE HEREOF AND PRIOR TO THE FILING OF A
POST-EFFECTIVE AMENDMENT WHICH INDICATES THAT ALL SHARES OF
COMMON STOCK, PAR VALUE $.01 PER SHARE ("COMMON STOCK") OFFERED
HAVE BEEN SOLD OR WHICH DEREGISTERS ALL SHARES OF COMMON STOCK
THEN REMAINING UNSOLD SHALL BE DEEMED TO BE INCORPORATED BY
REFERENCE IN THIS REGISTRATION STATEMENT AND TO BE A PART HEREOF
FROM THE DATE OF FILING OF SUCH DOCUMENTS.
ITEM 4. DESCRIPTION OF SECURITIES
- -------
Not applicable, as the Common Stock is registered under
Section 12 of the Securities Exchange Act of 1934.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
- -------
Not Applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- -------
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY
The following is a summary of the general effect of the
indemnification provisions of the Company's Articles of
Incorporation and of the indemnification provided for under
Indiana law. All statements made herein, which are only
intended to summarize the above-referenced provisions, are
qualified in their entirety by reference to the Company's
Articles of Incorporation and the Indiana Business Corporation
Law.
<PAGE>
<PAGE>
ARTICLES OF INCORPORATION. Article XVIII of the Company's
Articles of Incorporation provides for indemnification of the
Company's directors and officers. In the case of a threatened,
pending or completed action or suit by or in the name of the
Company, the Company shall indemnify a director or officer
for amounts actually and reasonably incurred by him in connection
with the defense or settlement of the action or suit if the
director or officer: (i) is successful on the merits or
otherwise; or (ii) acted in good faith in the transaction which
is the subject of the suit or action, and in a manner he
reasonably believed to be in, or not opposed to, the best
interest of the Company. However, no indemnification shall be
made in respect of any claim, issue or matter as to which such
person has been adjudged liable to the Company, unless the court
in which the action is brought determines that indemnification
is proper.
In the case of a threatened, pending or completed action or
proceeding (whether criminal, administrative or investigative)
other than a suit by or in the right of the Company (a
"nonderivative suit"), against an officer or director, the
Company shall indemnify the director or officer for amounts
reasonably incurred by him in connection with the defense or
settlement of the nonderivative suit if the director or officer:
(i) is successful on the merits or otherwise; or (ii) acted in
good faith in the transaction which is the subject of the
nonderivative suit and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Company.
INDIANA BUSINESS CORPORATION LAW. A corporation may, under
Indiana law, indemnify a director or officer made a party to a
proceeding because such person was a director or officer of the
corporation if: (i) the individual's conduct was in good faith;
and (ii) the individual reasonably believed (A) in the case
of conduct in the individual's official capacity with the
corporation, that the individual's conduct was in the
corporation's best interests, and (B) in all other cases, that
the individual's conduct was at least not opposed to the
corporation's best interests. An Indiana corporation may also
indemnify an officer or director in a criminal proceeding if the
individual: (i) had reasonable cause to believe that his conduct
was lawful; or (ii) had no reasonable cause to believe that his
conduct was unlawful.
An Indiana corporation must, unless limited by its articles
of incorporation, indemnify any director or officer who was
wholly successful, on the merits or otherwise, in the defense of
a proceeding to which the individual was a party because the
individual was a director or officer of the corporation, against
reasonable expenses incurred by the director or officer in
connection with the proceeding. Unless limited by the
corporation's articles of incorporation, an officer or director
may apply to the court conducting the proceeding or another court
of competent jurisdiction for indemnification. The court may
order indemnification if it determines: (i) the director or
officer is entitled to mandatory indemnification under Indiana
law; or (ii) the officer or director is fairly and reasonably
entitled to indemnification in view of all the relevant
circumstances, whether or not such director or officer met the
standard of conduct set forth for mandatory indemnification under
Indiana law. The Company's Articles of Incorporation do not
contain any limitations on the ability of the Company to
indemnify its directors and officers under Indiana law.
DIRECTOR AND OFFICER LIABILITY INSURANCE. The Company has
purchased director and officer liability insurance that insures
directors and officers against certain liabilities in connection
with the performance of their duties as directors and officers,
including liabilities under the Securities Act of 1933, as
amended, and provides for payment to the Company of costs
incurred by it in indemnifying its directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
- -------
Not Applicable.
ITEM 8. EXHIBITS
- -------
For a list of all exhibits filed or included as part of this
Registration Statement, see "Index to Exhibits" at the end of
this Registration Statement.
ITEM 9. UNDERTAKINGS
- -------
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement --
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which, individually or
<PAGE>
<PAGE>
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table
in the effective registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or
Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1934, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(d) If the registrant is a foreign private issuer, to
file a post-effective amendment to the registration statement to
include any financial statements required by Rule 3-19 of
Regulation S-X at the start of any delayed offering or throughout
a continuous offering.
2. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes to deliver
or cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements
of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person
to whom the prospectus is sent or given, the latest quarterly
report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
4. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of
such issue.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Cincinnati, State of Ohio, on
September 29, 1997.
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
By: /s/ Michael P. Brennan
----------------------------------
Michael P. Brennan
President and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned Directors of Westwood Homestead
Financial Corporation, hereby severally constitute and appoint
Michael P. Brennan, with full power of substitution, our true and
lawful attorney and agent, to do any and all things in our names
in the capacities indicated below which said Michael P. Brennan
may deem necessary or advisable to enable Westwood Homestead
Financial Corporation to comply with the Securities Act of 1933,
as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with the
registration of Westwood Homestead Financial Corporation's common
stock including specifically, but not limited to, power and
authority to sign for us in our names in the capacities indicated
below, the registration statement and any and all amendments
(including post-effective amendments) thereto; and we hereby
ratify and confirm all that said Michael P. Brennan shall do or
cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
</TABLE>
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- -----
<S> <C> <C>
/s/ Michael P. Brennan President, Chief September 29, 1997
- ---------------------- Executive Officer
Michael P. Brennan And Director
(Principal Executive
Officer)
/s/ John E. Essen Chief Financial September 29, 1997
- ----------------------- Officer and Treasurer
John E. Essen (Principal Financial
and Accounting Officer)
/s/ Carl H. Heimerdinger Chairman of the September 29, 1997
- ------------------------ Board
Carl H. Heimerdinger
/s/ John B. Bennet, Sr. Vice Chairman of September 29, 1997
- ------------------------ the Board
John B. Bennet, Sr.
/s/ Robert H. Bockhorst Director September 29, 1997
- ------------------------
Robert H. Bockhorst
/TABLE
<PAGE>
<PAGE>
SIGNATURES
Page 2
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
Director ______, 1997
- ------------------------
Raymond J. Brinkman
/s/ Roger M. Higley Director September 29, 1997
- -----------------------
Roger M. Higley
/s/ Mary Ann Jacobs Director September 29, 1997
- -----------------------
Mary Ann Jacobs
/s/ James D. Kemp Director September 29, 1997
- -----------------------
James D. Kemp
/TABLE
<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
5 Opinion of Housley Kantarian & Bronstein, P.C. as to
the validity of the Common Stock being registered
23.1 Consent of Housley Kantarian & Bronstein, P.C. (appears
in their opinion filed as Exhibit 5)
23.2 Consent of Independent Certified Public Accountants
24 Power of Attorney (contained in the signature page to
this registration statement)
99.1 Westwood Homestead Financial Corporation Management
Recognition Plan and associated trust agreement
99.2 Westwood Homestead Financial Corporation 1997 Stock
Option Plan
99.3 Form of Stock Option Agreement to be entered into with
Optionees with respect to Incentive Stock Options
granted under the Westwood Homestead Financial
Corporation 1997 Stock Option Plan
99.4 Form of Stock Option Agreement to be entered into with
Optionees with respect to Non-Incentive Stock Options
granted under the Westwood Homestead Financial
Corporation 1997 Stock Option Plan
99.5 Form of Agreement to be entered into with Optionees
with respect to Stock Appreciation Rights granted under
the Westwood Homestead Financial Corporation 1997 Stock
Option Plan
99.6 Notice of Management Recognition Plan Award
99.7 Memorandum concerning taxation of Management
Recognition Plan Awards, and associated election form
September 29, 1997
Board of Directors
Westwood Homestead Financial Corporation
3002 Harrison Avenue
Cincinnati, Ohio 45211-5789
Re: Registration Statement on Form S-8
Westwood Homestead Financial Corporation Management
Recognition Plan and Westwood Homestead Financial
Corporation 1997 Stock Option Plan
Dear Board Members:
We have acted as special counsel to Westwood Homestead
Financial Corporation, an Indiana Corporation (the "Company"), in
connection with the preparation of the Registration Statement on
Form S-8 filed with the Securities and Exchange Commission (the
"Registration Statement") under the Securities Act of 1933, as
amended, relating to 398,072 shares of common stock, par value
$.01 per share (the "Common Stock") of the Company which may be
issued pursuant to the Westwood Homestead Financial Corporation
Management Recognition Plan and Westwood Homestead Financial
Corporation 1997 Stock Option Plan (together, the "Plans"), all
as more fully described in the Registration Statement. You have
requested the opinion of this firm with respect to certain legal
aspects of the proposed offering.
We have examined such documents, records and matters of
law as we have deemed necessary for purposes of this opinion and
based thereon, we are of the opinion that the Common Stock when
issued pursuant to and in accordance with the terms of the Plans
will be legally issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement on Form S-8 and to
references to our firm included under the caption "Legal Opinion"
in the Prospectus which is part of the Registration Statement.
Very truly yours,
Housley Kantarian & Bronstein, P.C.
By /s/ Cynthia R. Cross
--------------------------------
Cynthia R. Cross, Esquire
Independent Auditor's Consent
-----------------------------
The Board of Directors
The Westwood Homestead Financial Corporation:
We consent to the use of our report incorporated herein by
reference and to the reference to our firm under the headings
"Experts" in the Prospectus dated September 29, 1997 for the
Westwood Homestead Financial Corporation Management Recognition
Plan and in the Prospectus dated September 29, 1997 for the
Westwood Homestead Financial Corporation 1997 Stock Option Plan.
/s/ KPMG Peat Marwick LLP
Cincinnati, Ohio
September 29, 1997
<PAGE>
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 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.<PAGE>
<PAGE>
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.
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.
- 2 -<PAGE>
<PAGE>
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.
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.
- 3 -<PAGE>
<PAGE>
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
(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.
- 4 -<PAGE>
<PAGE>
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.
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.
- 5 -<PAGE>
<PAGE>
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.
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
- 6 -<PAGE>
<PAGE>
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.
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.
- 7 -
<PAGE>
<PAGE>
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).
- 8 -
<PAGE>
<PAGE>
TRUST AGREEMENT
UNDER THE WESTWOOD HOMESTEAD FINANCIAL CORPORATION
MANAGEMENT RECOGNITION PLAN
This Agreement made this _____ day of _________, 1997 by
and between Westwood Homestead Financial Corporation (the
"Company") and Directors Bennet, Bockhorst, Heimerdinger, and
Jacobs (acting by majority, the "Trustee").
WHEREAS, the Company maintains the Westwood Homestead
Financial Corporation Management Recognition Plan (the "Plan");
and
WHEREAS, the Company has incurred or expects to incur
liability under the terms of the Plan with respect to the
individuals participating in the Plan ("Participants"); and
WHEREAS, the Company wishes to establish a trust (the
"Trust") and to contribute to the Trust assets that shall be
held therein, subject to the claims of the Company's general
creditors in the event of Insolvency, as defined in Section 3(a)
hereof, until paid to Participants and their beneficiaries in
such manner and at such times as specified in the Plan; and
WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect
the status of the Plan as an unfunded plan maintained for the
purpose of providing deferred compensation for a select group of
management or highly compensated employees for purposes of Title
I of the Employee Retirement Income Security Act of 1974; and
WHEREAS, it is the intention of the Company to make
contributions to the Trust to provide itself with a source of
funds to assist it in the meeting of its liabilities under the
Plan.
NOW, THEREFORE, the parties do hereby establish this Trust
and agree that the Trust shall be comprised, held and disposed
of as follows:
Section 1. Establishment of Trust
----------------------------------
(a) The Company hereby deposits, or will shortly hereafter
deposit, with the Trustee in trust (i) a number of shares of the
Company's common stock ("Common Stock") equal to four percent
(4%) of the number of shares of Common Stock issued in
connection with the conversion of Westwood Homestead Savings
Bank (the "Bank") from mutual to stock form, or (ii) an amount
expected to be sufficient to permit the Trust to purchase said
shares. Said shares or amount shall become the initial principal
of the Trust to be held, administered and disposed of by the
Trustee as provided in this Trust Agreement.
(b) The Trust shall become irrevocable upon the effective
date of the Plan.
(c) The Trust is intended to be a grantor trust, of which
the Company is the grantor, within the meaning of subpart E,
part I, subchapter J, chapter 1, subtitle A of the Internal
Revenue Code of 1986, as amended (the "Code"), and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon,
shall be held separate and apart from other funds of the Company
and shall be used exclusively for the uses and purposes of
Participants and general creditors as herein set forth.
Participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of
the Trust. Any rights created under the Plan and this Trust
Agreement shall be mere unsecured contractual rights of
Participants and their beneficiaries against the Company. Any
assets held by the Trust <PAGE>
<PAGE>
will be subject to the claims of the Company's general creditors
under federal and state law in the event of Insolvency, as
defined in Section 3(a) herein.
(e) The Company, in its sole discretion, may at any time,
or from time to time, make additional deposits of cash or other
property in trust with the Trustee to augment the principal to
be held, administered and disposed of by Trustee as provided in
this Trust Agreement. Neither the Trustee nor any Participant
or beneficiary shall have any right to compel such additional
deposits.
Section 2. Payments to Plan Participants and Their
Beneficiaries.
---------------------------------------------------
(a) The Company shall deliver to the Trustee a schedule
(the "Payment Schedule") that indicates the amounts payable in
respect of each Participant (and his or her beneficiaries), that
provides a formula or other instructions acceptable to the
Trustee for determining the amounts so payable, the form in
which such amount is to be paid (as provided for or available
under the Plan), and the time of commencement for payment of
such amounts. Except as otherwise provided herein, the Trustee
shall make payments to Participants and their beneficiaries in
accordance with such Payment Schedule. The Trustee shall make
provision for the reporting and withholding of any federal,
state or local taxes that may be required to be withheld with
respect to the payment of benefits pursuant to the terms of the
Plan and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported,
withheld and paid by the Company.
(b) The entitlement of a Participant or his or her
beneficiaries to benefits under the Plan shall be determined by
the Company or such party as it shall designate under the Plan,
and any claim for such benefits shall be considered and reviewed
under the procedures set out in the Plan.
(c) The Company may make payment of benefits directly to
Participants or their beneficiaries as they become due under the
terms of the Plan. The Company shall notify the Trustee of its
decision to make payment of benefits directly prior to the time
amounts are payable to Participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Plan, the Company shall make
the balance of each such payment as it falls due. The Trustee
shall notify the Company where principal and earnings are not
sufficient.
Section 3. Trustee Responsibility Regarding Payments to
Trust Beneficiary When Company Is Insolvent.
--------------------------------------------------------
(a) The Trustee shall cease payment of benefits to
Participants and their beneficiaries if the Company is
Insolvent. The Company shall be considered "Insolvent" for
purposes of this Trust Agreement if (i) the Company is unable to
pay its debts as they become due, or (ii) the Company becomes
subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as
provided in Section 1(d) hereof, the principal and income of the
Trust shall be subject to claims of general creditors of the
Company under federal and state law as set forth below.
(c) The Board of Directors and the Chief Executive Officer
of the Company shall have the duty to inform the Trustee in
writing of the Company's Insolvency. If a person claiming to be
a creditor of the Company alleges in writing to the Trustee that
the Company has become Insolvent, the Trustee shall determine
whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payment of benefits
to Participants or their beneficiaries.
(1) Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the Company or
a person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the
Company is Insolvent. The Trustee may in all events rely on
such evidence
- 2 -<PAGE>
<PAGE>
concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis
for making a determination concerning the Company's solvency.
(2) If at any time the Trustee has determined that
the Company is Insolvent, the Trustee shall discontinue payments
to Plan participants or their beneficiaries, shall liquidate the
Trust's investment in Common Stock, and shall hold the assets of
the Trust for the benefit of the Company's general creditors.
Nothing in this Trust Agreement shall in any way diminish any
rights of Participants or their beneficiaries as general
creditors of the Company with respect to benefits due under the
Plan or otherwise.
(3) The Trustee shall resume the payment of benefits
to Participants or their beneficiaries in accordance with
Section 2 of this Trust Agreement only after the Trustee has
determined that the Company is not Insolvent (or is no longer
Insolvent).
(d) Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust
pursuant to Section 3(b) hereof and subsequently resumes such
payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Participants
or their beneficiaries under the terms of the Plan for the
period of such discontinuance, less the aggregate amount of any
payments made to Participants or their beneficiaries by the
Company in lieu of the payments provided for hereunder during
any such period of discontinuance.
Section 4. Payments to the Company.
-----------------------------------
Except as provided in Section 3 hereof, after the Trust has
become irrevocable, the Company shall have no right or power to
direct the Trustee to return to the Company or to divert to
others any of the Trust assets before all payment of benefits
have been made to Plan Participants and their beneficiaries
pursuant to the terms of the Plan.
Section 5. Investment Authority.
--------------------------------
(a) The Trustee shall have sole discretion as to the
investment of Trust assets, except that to the extent reasonably
practicable, the Trustee shall invest all assets of the Trust in
Common Stock provided that the Trust shall not purchase an
aggregate number of shares of Common Stock exceeding 4% of the
shares of Common Stock issued in the Bank's mutual-to-stock
conversion.
(b) All rights associated with assets of the Trust shall
be exercised by the Trustee or the person designated by the
Trustee, and shall in no event be exercisable by or rest with
Participants, except that voting rights with respect to Common
Stock will be exercised in accordance with the terms of the
Plan.
(c) Subject to applicable federal and state securities
laws, if for any reason the Trustee will be selling shares of
Common Stock, the Trustee shall sell such shares by (i) giving
each Beneficiary 20 business days within which to purchase, at
fair market value, all or part of the shares of Common Stock
that the Trustee holds for the benefit of the Beneficiary, and
(ii) to the extent purchases by Beneficiaries are insufficient
to eliminate the Trusts' excess holdings of Common Stock, to
offer to sell, and to sell, all or any part of the excess shares
held by the Trust to the following purchasers, listed here by
order of priority: first, the Company; second, any benefit plan
maintained by the Company or the Bank; third, directors of the
Bank; fourth, officers of the Bank; fifth, members of the
general public.
Section 6. - Disposition of Income.
----------------------------------
During the term of this Trust, all income received by the
Trust, net of expenses and taxes, shall be accumulated and
reinvested.
- 3 -<PAGE>
<PAGE>
Section 7. Accounting by Trustee.
---------------------------------
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions
required to be made, including such specific records as shall be
agreed upon in writing between the Company and the Trustee.
Within 60 days following the close of each calendar year and
within 20 days after the removal or resignation of the Trustee,
the Trustee shall deliver to the Company a written account of
its administration of the Trust during such year or during the
period from the close of the last preceding year to the date of
such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it,
including a description of all securities and investments
purchased and sold with the cost or net proceeds of such
purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable being
shown separately), and showing all cash, securities and other
property held in the Trust at the end of such year or as of the
date of such removal or resignation, as the case may be.
Section 8. Responsibility of Trustee.
-------------------------------------
(a) The Trustee shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that Trustee
shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by the
Company which is contemplated by, and in conformity, the terms
of the Plan or this Trust and is given in writing by the
Company. In the event of a dispute between the Company and a
party, the Trustee may apply to a court of competent
jurisdiction to resolve the dispute.
(b) If the Trustee undertakes or defends any litigation
arising in connection with this Trust, the Company agrees to
indemnify the Trustee against Trustee's costs, expenses and
liabilities (including, without limitation, attorneys' fees and
expenses) relating thereto and to be primarily liable for such
payments, except in those cases where the Trustee shall have
been found by a court of competent jurisdiction to have acted
with gross negligence or willful misconduct. If the Company
does not pay such costs, expenses and liabilities in a
reasonably timely manner, the Trustee may obtain payment from
the Trust.
(c) The Trustee may consult with legal counsel with
respect to any of its duties or obligations hereunder.
(d) The Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or
obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law, unless expressly
provided otherwise herein, provided, however, that if an
insurance policy is held as an asset of the Trust, the Trustee
shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from
conversion of the policy to a different form) other than to a
successor trustee, or to loan to any person the proceeds of any
borrowing against such policy.
(f) Notwithstanding any powers granted to the Trustee
pursuant to this Trust Agreement or to applicable law, the
Trustee shall not have any power that could give this Trust the
objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the
Procedure and Administrative Regulations promulgated pursuant to
the Code.
Section 9. Compensation and Expenses of Trustee.
------------------------------------------------
The Company shall pay all administrative expenses and the
Trustee's fees and expenses relating to the Plan and this Trust.
If not so paid, the fees and expenses shall be paid from the
Trust.
- 4 -<PAGE>
<PAGE>
Section 10. Resignation and Removal of Trustee.
-----------------------------------------------
The Trustee (or any individual serving as one of the
trustees who act by majority as the Trustee) may resign
at any time by written notice to the Company, which resignation
shall be effective 30 days after the Company receives such
notice (unless the Company and the Trustee agree otherwise).
The Trustee (or any individual serving as one of the trustees
who act by majority as the Trustee) may be removed by the
Company on 30 days notice or upon shorter notice accepted by the
Trustee.
If the Trustee (or any individual serving as one of the
trustees who act by majority as the Trustee) resigns or is
removed, a successor shall be appointed, in accordance with
Section 11 hereof, by the effective date or resignation or
removal under this section. If no such appointment has been
made, the Trustee may apply to a court of competent jurisdiction
for appointment of a successor or for instructions. All
expenses of the Trustee in connection with the proceeding shall
be allowed as administrative expenses of the Trust. Upon
resignation or removal of the Trustee and appointment of a
successor trustee, all assets shall subsequently be transferred
to the successor trustee. The transfer shall be completed
within 60 days after receipt of notice of resignation, removal
or transfer, unless the Company extends the time limit.
Section 11. Appointment of Successor.
-------------------------------------
If the Trustee resigns or is removed in accordance with
Section 10 hereof, the Company may appoint any other party as a
successor to replace the Trustee upon resignation or removal.
The appointment shall be effective when accepted in writing by
the new trustee, who shall have all of the rights and powers of
the former trustee, including ownership rights in the Trust
assets. The former trustee shall execute any instrument
necessary or reasonably requested by the Company or the
successor trustee to evidence the transfer.
A successor trustee need not examine the records and acts
of any prior trustee and may retain or dispose of existing Trust
assets, subject to Sections 7 and 8 hereof. The successor
trustee shall not be responsible for, and the Company shall
indemnify and defend the successor trustee from, any claim or
liability resulting from any action or inaction of any prior
trustee or from any other past event, or any condition existing
at the time it becomes successor trustee.
Section 12. Amendment or Termination.
-------------------------------------
(a) This Trust Agreement may be amended by a written
instrument executed by the Trustee and the Company, provided
that no such amendment shall make the Trust revocable.
(b) The Trust shall not terminate until the date on which
Participants and their beneficiaries are no longer entitled to
benefits pursuant to the terms hereof. Upon termination of the
Trust, the Trustee shall return any assets remaining in the
Trust to the Company.
(c) Upon written approval of all Participants (or their
beneficiaries if they are then entitled to payment of benefits),
the Company may terminate this Trust prior to the time all
benefit payments under the Plan have been made. All assets in
the Trust at termination shall be returned to the Company.
<PAGE>
Section 13. Miscellaneous.
--------------------------
(a) Any provision of this Trust Agreement prohibited by
law shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.
- 5 -<PAGE>
<PAGE>
(b) Benefits payable to Participants and their
beneficiaries under this Trust Agreement may not be anticipated,
assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process, except pursuant
to the terms of the Plan.
(c) This Trust Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, to
the extent not preempted by federal law.
(d) The Trustee agrees to be bound by the terms of the
Plan, as in effect from time to time.
(e) The Trustee shall act by vote or written consent of a
majority of its duly-appointed members.
IN WITNESS WHEREOF, the Company, by its duly authorized
officer, has caused this Agreement to be executed, and its
corporate seal affixed, and the Trustees have executed this
Agreement, this _____ day of ____________________, 1997.
ATTEST: WESTWOOD HOMESTEAD FINANCIAL
CORPORATION
- ------------------------ -----------------------------
Its President
ATTEST:
- ------------------------ -----------------------------
John B. Bennet, Sr.
- ------------------------ -----------------------------
Robert H. Bockhorst
- ------------------------ -----------------------------
Carl H. Heimerdinger
- ------------------------ -----------------------------
Mary Ann Jacobs
- 6 -
<PAGE>
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.
<PAGE>
(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
(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
<PAGE>
<PAGE>
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>
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
- 3 -<PAGE>
<PAGE>
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.
- 4 -<PAGE>
<PAGE>
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
- 5 -<PAGE>
<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;
- 6 -<PAGE>
<PAGE>
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.
(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
- 7 -
<PAGE>
<PAGE>
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.
- 8 -
<PAGE>
<PAGE>
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.
<PAGE>
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,
- 9 -
<PAGE>
<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.
- 10 -
<PAGE>
STOCK OPTION AGREEMENT
FOR INCENTIVE STOCK OPTIONS UNDER SECTION 422
OF THE INTERNAL REVENUE CODE
PURSUANT TO THE
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
STOCK OPTION for a total of _____ shares of Common Stock,
par value $.01 per share, of Westwood Homestead Financial
Corporation (the "Company"), which Option is intended to qualify
as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), is hereby granted
to ________ (the "Optionee") at the price set forth herein, and
in all respects subject to the terms, definitions and provisions
of the Westwood Homestead Financial Corporation 1997 Stock
Option Plan (the "Plan") which was adopted by the Company and
which is incorporated by reference herein, receipt of which is
hereby acknowledged.
1. Option Price. The option price is $_____ for each
share, being 100%* of the fair market value, as determined by
the Committee, of the Common Stock on the date of grant of this
Option.
2. Exercises of Option. This Option shall be exercisable
in accordance with provisions of the Plan as follows:
(i) Schedule of rights to exercise.
------------------------------
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
- ------------------------------ ---------------------------
Upon Grant 20%
1 year but less than 2 years 40%
2 years but less than 3 years 60%
3 years but less than 4 years 80%
4 years or more 100%
- -----------------
* 110% in the case of an Optionee who owns shares
representing more than 10% of the outstanding common
stock of the Company on the date of grant of this Option.<PAGE>
<PAGE>
ISO Agreement
Page 2
(ii) Method of Exercise. This Option shall be exercisable
by a written notice by the Optionee which shall:
(a) state the election to exercise the Option, the number
of shares with respect to which it is being exercised, the
person in whose name the stock certificate or certificates for
such shares of Common Stock is to be registered, his address and
Social Security Number (or if more than one, the names,
addresses and Social Security Numbers of such persons);
(b) contain such representations and agreements as to the
holder's investment intent with respect to such shares of Common
Stock as may be satisfactory to the Company's counsel;
(c) be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any
person or persons other than the Optionee, be accompanied by
proof, satisfactory to counsel for the Company, of the right of
such person or persons to exercise the Option; and
(d) be in writing and delivered in person or by certified
mail to the Treasurer of the Company.
Payment of the purchase price of any shares with respect to
which the Option is being exercised shall be by cash, Common
Stock, or such combination of cash and Common Stock as the
Optionee elects. The certificate or certificates for shares of
Common Stock as to which the Option shall be exercised shall be
registered in the name of the person or persons exercising the
Option.
(iii) Restrictions on exercise. This Option may not be
exercised if the issuance of the shares upon such
exercise would constitute a violation of any applicable federal
or state securities or other law or valid regulation.
As a condition to the Optionee's exercise of this Option, the
Company may require the person exercising this Option
to make any representation and warranty to the Company as may be
required by any applicable law or regulation.
3. Withholding. The Optionee hereby agrees that the
exercise of the Option or any installment thereof will not be
effective, and no shares will become transferable to the
Optionee, until the Optionee makes appropriate arrangements with
the Company for such tax withholding as may be required of the
Company under federal, state, or local law on account of such
exercise.
4. Non-transferability of Option. This Option may not be
transferred in any manner otherwise than by will or the laws of
descent or distribution. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors
and assigns of the Optionee. Notwithstanding any other terms of
this agreement, this Option may be transferred to the Optionee's
spouse, lineal ascendants, lineal descendants, or to a duly
established trust, provided <PAGE>
<PAGE>
ISO Agreement
Page 3
that such transferee shall be permitted to exercise this Option
subject to the same terms and conditions applicable to the
Optionee.
5. Term of Option. This Option may not be exercisable
for more than ten years** from the date of grant of this Option,
as stated below, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
1997 STOCK OPTION PLAN COMMITTEE
By _______________________________________
__________________
Date of Grant Attest: ____________________________(Seal)
________________
** Five years in the case of an Optionee who owns shares
representing more than 10% of the outstanding common
stock of the Company on the date of grant of this Option. <PAGE>
<PAGE>
INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
_______________
Date
Treasurer
Westwood Homestead Financial Corporation
3002 Harrison Avenue
Cincinnati, Ohio 45211-5789
Re: Westwood Homestead Financial Corporation
----------------------------------------
1997 Stock Option Plan
Dear Sir:
The undersigned elects to exercise the Incentive Stock
Option to purchase ____________ shares, par value $.01, of
Common Stock of Westwood Homestead Financial Corporation under
and pursuant to a Stock Option Agreement dated ___________,
199_.
Delivered herewith is a certified or bank cashier's or
teller's check and/or shares of Common Stock, valued at the fair
market value of the stock on the date of exercise, as set forth
below.
$_______ of cash or check
_______ _____ shares of Common Stock, valued at
$_____ per share
$_______
------- Total
The name or names to be on the stock certificate or
certificates and the address and Social Security Number of such
person(s) is as follows:
Name____________________________________________________________
Address_________________________________________________________
Social Security Number__________________________________________
Very truly yours,
_____________________
<PAGE>
STOCK OPTION AGREEMENT
FOR NON-INCENTIVE STOCK OPTIONS PURSUANT TO THE
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
STOCK OPTION for a total of __________ shares of Common
Stock, par value $.01 per share, of Westwood Homestead Financial
Corporation (the "Company") is hereby granted to _______________
(the "Optionee") at the price set forth herein, and in all
respects subject to the terms, definitions and provisions of the
Westwood Homestead Financial Corporation 1997 Stock Option Plan
(the "Plan") which has been adopted by the Company and which is
incorporated by reference herein, receipt of which is hereby
acknowledged. Such Stock Options do not comply with Options
granted under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
1. Option Price. The option price is $_________ for each
share, being 100% of the fair market value, as determined by the
Committee, of the Common Stock on the date of grant of this
Option.
2. Exercise of Option. This Option shall be exercisable
in accordance with provisions of the Plan as follows:
(i) Schedule of rights to exercise.
------------------------------
Percentage of Total Shares
Years of Continuous Employment Subject to Option Which May
After Date of Grant of Option Be Exercised
------------------------------ ---------------------------
Upon Grant 20%
1 year but less than 2 years 40%
2 years but less than 3 years 60%
3 years but less than 4 years 80%
4 years or more 100%
(ii) Method of Exercise. This Option shall be exercisable
by a written notice which shall:
(a) state the election to exercise the Option, the number
of shares with respect to which it is being exercised,
the person in whose name the stock certificate or
certificates for such shares of Common Stock is to be
registered, his address and Social Security Number (or
if more than one, the names, addresses and Social
Security Numbers of such persons);
(b) contain such representations and agreements as to the
holders' investment intent with respect to such shares
of Common Stock as may be satisfactory to the
Company's counsel;
(c) be signed by the person or persons entitled to
exercise the Option and, if the Option is being
exercised by any person or persons other than the
Optionee, be accompanied by proof, satisfactory to
counsel for the Company, of the right of such person
or persons to exercise the Option; and
<PAGE>
<PAGE>
Non-ISO Agreement
Page 2
(d) be in writing and delivered in person or by certified
mail to the Treasurer of the Company.
Payment of the purchase price of any shares with respect to
which the Option is being exercised shall be by cash, Common
Stock, or such combination of cash and Common Stock as the
Optionee elects. The certificate or certificates for shares of
Common Stock as to which the Option shall be exercised shall be
registered in the name of the person or persons exercising the
Option.
(iii) Restrictions on exercise. The Option may not be
exercised if the issuance of the shares upon such exercise would
constitute a violation of any applicable federal or state
securities or other law or valid regulation. As a condition to
his exercise of this Option, the Company may require the person
exercising this Option to make any representation and warranty
to the Company as may be required by any applicable law or
regulation.
3. Withholding. The Optionee hereby agrees that the
exercise of the Option or any installment thereof will not be
effective, and no shares will become transferable to the
Optionee, until the Optionee makes appropriate arrangements with
the Company for such tax withholding as may be required of the
Company under federal, state, or local law on account of such
exercise.
4. Non-transferability of Option. This Option may not be
transferred in any manner otherwise than by will or the laws of
descent or distribution. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors
and assigns of the Optionee. Notwithstanding any other terms of
this agreement, this Option may be transferred to the Optionee's
spouse, lineal ascendants, lineal descendants, or to a duly
established trust, provided that such transferee shall be
permitted to exercise this Option subject to the same terms and
conditions applicable to the Optionee.
5. Term of Option. This Option may not be exercisable for
more than ten years from the date of grant of this Option, as
set forth below, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
1997 STOCK OPTION PLAN COMMITTEE
___________________ By____________________________________
Date of Grant
Attest_________________________ (Seal)
<PAGE>
<PAGE>
NON-INCENTIVE STOCK OPTION EXERCISE FORM
PURSUANT TO THE
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
____________
Date
Treasurer
Westwood Homestead Financial Corporation
3002 Harrison Avenue
Cincinnati, Ohio 45211-5789
Re: Westwood Homestead Financial Corporation
----------------------------------------
1997 Stock Option Plan
Dear Sir:
The undersigned elects to exercise his Non-Incentive Stock
Option to purchase _______ shares, par value $.01, of Common
Stock of Westwood Homestead Financial Corporation under and
pursuant to a Stock Option Agreement dated _____________, 199_.
Delivered herewith is a certified or bank cashier's or
tellers check and/or shares of Common Stock, valued at the fair
market value of the stock on the date of exercise, as set forth
below.
$________ of cash or check
________ __________ shares of Common Stock,
valued at $______ per share
$________
-------- Total
The name or names to be on the stock certificate or
certificates and the address and Social Security Number of such
person is as follows:
Name____________________________________________________________
Address_________________________________________________________
Social Security Number__________________________________________
Very truly yours,
_____________________
<PAGE>
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
Stock Appreciation Rights Agreement
Not In Tandem with Stock Option
On the date of grant specified below, the Stock Option
Committee of Westwood Homestead Financial Corporation (the
"Company") hereby grants to _____________ (the "Optionee") a
total of _______ Stock Appreciation Rights (SARs), subject to
the terms and conditions set forth in the Westwood Homestead
Financial Corporation 1997 Stock Option Plan (the "Plan") (a
copy of which is available to the Optionee upon request). The
terms and conditions of the Plan are incorporated herein by
reference.
(a) The exercise price is $________ for each share, such
price being 100% of the fair market value, as determined by the
Committee, of the Common Stock on the date of grant of this
option.
(b) The SAR shall be exercisable to the extent permitted
in the Plan.
(c) The SAR shall be accepted for surrender by the
Optionee in consideration for the payment by the Company of an
amount equal to the excess of the fair market value on the date
of exercise of the Shares of Common Stock subject to such SAR
over the exercise price specified in Paragraph (a) hereof.
(d) Payment hereunder shall be made in shares of Common
Stock or in cash as provided in the Plan.
(e) The SAR is nontransferable, except in accordance with
Section 13 of the Plan.
(f) The SAR may be exercised only in accordance with
Sections 8 and 10 of the Plan, and only when there is a positive
spread, i.e., when the market price of the Common Stock subject
to the SAR exceeds the exercise price of the SAR.
(g) In the event of any inconsistency or conflict between
this Agreement and the Plan, the Plan shall be controlling and
supercede any conflicting or inconsistent provision of the
Agreement.
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
1997 STOCK OPTION PLAN COMMITTEE
By:___________________________________
Date of Grant: ATTEST:
______________ ______________________________________
<PAGE>
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
MANAGEMENT RECOGNITION PLAN COMMITTEE
NOTICE OF AWARD
---------------
WHEREAS, the Board of Directors of Westwood Homestead
Financial Corporation (the "Company") has previously adopted the
Westwood Homestead Financial Corporation Management Recognition
Plan (the "Plan"); and
WHEREAS, the Board of Directors of the Company has
previously appointed Directors Bennet, Bockhorst, Higley,
Heimerdinger, and Jacobs as members of the Management
Recognition Plan Committee (the "Committee") pursuant to the
terms of the Plan; and
WHEREAS, the Plan became effective on ________________,
1997, upon its receipt of stockholder approval, and Sections
6.04 and 6.05 of the Plan provide for automatic awards on the
Plan effective date, including the award referenced below.
PLEASE TAKE NOTICE, that the following individual be
granted an award under the Plan ("Plan Share Award"), effective
__________________________:
Number of Shares Subject to
Recipient Plan Share Award
--------- ---------------------------
____________________ ___________
AND BE IT FURTHER RESOLVED, that the Plan Share Award
specified herein shall be subject to the restrictions and other
provisions of Section 7.01 of the Plan.
Date of Notice:
_____________, 199__
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
MANAGEMENT RECOGNITION PLAN COMMITTEE
By:______________________________________
Its Chairman
<PAGE>
M E M O R A N D U M
TO: Participants in the Westwood Homestead Financial
Corporation (the "Company") Management Recognition
Plan
DATE: ___________ __, 1997
FROM: Westwood Homestead Financial Corporation
RE: Taxation of MRP Awards
* * * * * * * * * * * * * * * * * * * * * * * * *
THIS DOCUMENT CONSTITUTES PART OF
A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
* * * * * * * * * * * * * * * * * * * * * * * * *
This memorandum concerns the taxation of the awards that
automatically occurred under the Company's Management
Recognition Plan (the "MRP") upon its receipt of stockholder
approval. To facilitate your review, the discussion below is
divided as follows:
Part I: General Tax Principles and Application to the MRP
Part II: Accelerated Taxation under Section 83(b)
Please understand that this memorandum is merely designed
to summarize the tax rules generally applicable to MRP awards.
We could provide individual tax advice to the recipients of MRP
awards ("Participants"), should anyone desire assistance.
The deadline for making a Section 83(b) election is 30 days
after the award date with respect to awards occurring on the
MRP's receipt of stockholder approval.
<PAGE>
<PAGE>
Taxation of MRP Awards
Page 2
PART I:
GENERAL TAX PRINCIPLES
Section 83 -- Generally. Section 83 of the Internal
Revenue Code (the "Code") controls the federal income taxation
of property that is transferred in connection with the
performance of services. In the absence of the Section 83(b)
election described in Part II, the recipient of restricted
property (such as an MRP award) recognizes income not on the
date of the award but on the date that his or her interest
vests. The amount of the recipient's taxable income will equal
the fair market value of the restricted property when vesting
occurs. Subsequent gain or loss is treated as capital gain,
with the amount that is included in the recipient's ordinary
income determining his or her basis in the property.
Operation of the MRP. The Company's MRP will generally
work as follows for Recipients who do not make Section 83(b)
elections:
Date Event
---- -----
Stockholder The MRP should provide a "Notice of
Approval the MRP of Award" to each
Recipient. The notice will specify
the number of shares subject to the
award.
Recipients will not receive shares
of the Company's common stock, or
be subject to federal income
taxation as the result of receiving
an award.
Date of MRP Award The MRP trusts will transfer to
and First Four each Recipient a number of
Anniversary unrestricted shares equal to
Dates of the MRP's one-fifth of the number of shares
Receipt of Approval subject to the award, plus any
dividends attributable to those
shares (provided that the
Recipient has not previously
terminated service).
As you may recall, vesting would accelerate to 100% upon a
Recipient's termination of service due to death or disability,
and that special rules apply if a transfer of Common Stock would
cause the Recipient to own in excess of 10% of the Common Stock.
Tax Withholding. In the case of Recipients who are
non-employee directors, federal income tax withholding is not
required when their MRP awards give rise to taxable income. On
the other hand, Recipients who are employees must satisfy
federal income tax withholding not only at the time their MRP
awards generate taxable income, but also before they may receive
shares of Common Stock from the MRP trust.
- --------------
1 This contrasts with the financial accounting treatment for
MRP awards (i.e., expense recognition is determined by the fair
market on the date of the award).<PAGE>
<PAGE>
Taxation of MRP Awards
Page 3
IRS Reporting. We understand that in the case of an
employee, the ordinary income arising from the vesting of MRP
awards and from the payment of tax bonuses is reportable on Form
W-2, in Box 11, and that in the case of a non-employee director,
such income is reportable on Form 1099-MISC, in Box 7.
PART II:
ACCELERATED TAXATION UNDER SECTION 83(B)
Section 83(b) Generally. Within 30 days after receiving an
MRP Award, a Recipient may make a special, irrevocable election
under Code Section 83(b), and thereby accelerate ordinary income
taxation to the date that the property transfer occurred. The
amount of the Recipient's ordinary income would equal the fair
market value of the Common Stock subject to the MRP award as of
the date on which the award occurred. Subsequent gain (or loss,
if the award is forfeited or depreciates) would be long- or
short-term capital gain, not ordinary income.
Procedural Requirements. Section 83(b) elections must
include the information set forth in the form of Section 83(b)
election that we have attached hereto. Further, Section 83(b)
elections must be filed with the IRS Service Center where the
Recipient files his or her return (both within 30 days after the
transfer occurs, and as an attachment to his or her tax return
for the year to which the Section 83(b) election relates). A
copy of the Section 83(b) election must also be filed with the
Company.
Tax Caveat. In several recent private letter rulings
(which, while not binding precedent, are indicative of
current IRS policy), the Internal Revenue Service has taken the
position that, for purposes of Section 83 of the Code,
no "transfer" of property occurs when an individual receives an
interest in an employer's grantor trust. Because the
trust associated with the MRP is a grantor trust (by design, in
order to secure deferred taxation of awards), these
rulings suggest that the IRS could question whether Section
83(b) elections may be made with respect to MRP awards.
While we do not believe that this theoretical possibility
involves a substantial tax risk for Recipients, each Recipient
should contact his or her personal tax counsel for independent
advice about this issue.
Tax Reporting and Withholding. The rules described in Part
I would apply, as though vesting occurred on the date of the
Recipient's Section 83(b) election.
CONCLUSION
Whether or not a Recipient should make a Section 83(b)
election depends on a variety of factors, including the
Recipient's expectations as to (i) the short-term and long-term
future value of the Common Stock, (ii) the length of time the
Recipient is likely to hold the Common Stock, (iii) future tax
rates -- as to both income and capital gain, (iv) the risk of
forfeiture, and (v) the Recipient's ability to pay the taxes
associated with the MRP award.
<PAGE>
<PAGE>
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
MANAGEMENT RECOGNITION PLAN
-----------------------------------------------------
Election to Include Value of Restricted Stock in Gross Income
in Year of Transfer Under Code Section 83(b)
-----------------------------------------------------
* * * * * * * * * * * * * * * * * * * * * * * * * *
THIS DOCUMENT CONSTITUTES PART OF
A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
* * * * * * * * * * * * * * * * * * * * * * * * * *
The undersigned hereby makes the election permitted under
Section 83(b) of the Internal Revenue Code of 1986, as amended,
with respect to the property described below, and supplies the
following information in accordance with the regulations
promulgated thereunder:
1. The name, address, and taxpayer identification or social
security number of the undersigned are:
Name: ________________________________
Address: ________________________________
________________________________
I.D. No. ________________________________
2. Description of the property with respect to which the
election is being made:
____________________ ( ) shares of common stock,
par value $0.01 per share, of Westwood Homestead
Financial Corporation (hereinafter, the "Common
Stock").
3. The date on which the Common Stock was transferred is
______________ ___, 199_. The taxable year to which this
election relates is calendar year 199_.
4. The nature of the restrictions to which the Common Stock is
subject is as follows:
The Common Stock is forfeitable until it is earned in
accordance with Article VII of the Westwood
Homestead Financial Corporation Management Recognition
Plan (the "Plan"). Generally, the Common Stock
becomes earned and nonforfeitable by the undersigned
with respect to 20% of the Plan Share Award
<PAGE>
<PAGE>
Section 83(b) Election
Page 2 of 2
upon the date such Plan Share Award is granted, and
with respect to 20% of the Plan Share Award upon the
undersigned's completion of each of four years of
Service after the date of grant. For special rules
regarding the vesting of the undersigned's interest in
the Common Stock, see Section 7.01 of the Plan.
The Common Stock is non-transferable until the
undersigned's interest therein becomes vested and
nonforfeitable, except as provided pursuant to Section
8.03 of the Plan.
5. Fair market value:
The fair market value at the time of transfer
(determined without regard to any restrictions other
then restrictions which by their terms will never
lapse) of the stock with respect to which this
election is being made is $_____ per share.
6. Amount paid for Common Stock:
The amount paid by taxpayer for said Common Stock is
$0.00 per share.
7. Furnishing statement to employer:
A copy of this statement has been furnished to
Westwood Homestead Financial Corporation.
8. Notice:
Nothing contained herein shall be held to alter, vary
or affect any of the terms, provisions or conditions
of the Plan, or the award made thereunder to the
undersigned.
Dated: ____________ ___, 199__.
______________________________
Taxpayer/Plan Participant
