<PAGE> 1
SCHEDULE 14A
(Rule 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule 240.14a-12
</TABLE>
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
February 28, 1997
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Westwood Homestead Financial Corporation to be held at the main office of The
Westwood Homestead Savings Bank, 3002 Harrison Avenue, Cincinnati, Ohio on
Tuesday, April 1, 1997 at 9:00 a.m., local time. Your Board of Directors and
Management look forward to personally greeting those stockholders able to
attend.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. During the meeting, we will
also report on the operations of the Company. Directors and officers of the
Company as well as representatives of KPMG Peat Marwick LLP, the Company's
independent auditors, will be present to respond to any questions the
stockholders may have.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS
POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING. Your vote is
important, regardless of the number of shares you own. This will not prevent you
from voting in person but will assure that your vote is counted if you are
unable to attend the meeting. On behalf of your Board of Directors, thank you
for your interest and support.
Sincerely,
/s/ Michael P. Brennan
Michael P. Brennan
President and Chief Executive Officer
<PAGE> 3
- --------------------------------------------------------------------------------
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
3002 HARRISON AVENUE
CINCINNATI, OHIO 45211-5789
(513) 661-5735
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 1, 1997
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Westwood Homestead Financial Corporation (the "Company"), will be
held at the main office of The Westwood Homestead Savings Bank, 3002 Harrison
Avenue, Cincinnati, Ohio at 9:00 a.m. on Tuesday, April 1, 1997.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon the
election of three directors of the Company, and the transaction of such other
matters as may properly come before the Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come
before the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Stockholders of
record at the close of business on February 21, 1997 are the stockholders
entitled to notice of and to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which
is solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mary Ann Jacobs
MARY ANN JACOBS
SECRETARY
Cincinnati, Ohio
February 28, 1997
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. PLEASE ACT PROMPTLY.
- --------------------------------------------------------------------------------
<PAGE> 4
- --------------------------------------------------------------------------------
PROXY STATEMENT
OF
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
3002 HARRISON AVENUE
CINCINNATI, OHIO 45211-5789
ANNUAL MEETING OF STOCKHOLDERS
APRIL 1, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GENERAL
- --------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Westwood Homestead Financial Corporation
(the "Company") to be used at the Annual Meeting of Stockholders of the Company
(the "Meeting") which will be held at the main office of The Westwood Homestead
Savings Bank, 3002 Harrison Avenue, Cincinnati, Ohio on Tuesday, April 1, 1997,
at 9:00 a.m., local time. The accompanying notice of meeting and this Proxy
Statement are being first mailed to stockholders on or about February 28, 1997.
- --------------------------------------------------------------------------------
VOTING AND REVOCABILITY OF PROXIES
- --------------------------------------------------------------------------------
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company, at the address shown above, by filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting or by attending the Meeting and voting in person. Proxies solicited by
the Board of Directors of the Company will be voted in accordance with the
directions given therein. WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE
VOTED FOR THE NOMINEES FOR DIRECTOR SET FORTH BELOW AND IN FAVOR OF EACH OF THE
OTHER PROPOSALS SET FORTH IN THIS PROXY STATEMENT TO BE CONSIDERED AT THE
MEETING. The proxy confers discretionary authority on the persons named therein
to vote with respect to the election of any person as a director where the
nominee is unable to serve or for good cause will not serve, and matters
incident to the conduct of the Meeting. Proxies marked as abstentions, and
shares held in street name which have been designated by brokers on proxies as
not voted, will not be counted as votes cast. Proxies marked as abstentions or
as broker non-votes will, however, be treated as shares present for purposes of
determining whether a quorum is present.
- --------------------------------------------------------------------------------
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
- --------------------------------------------------------------------------------
The securities entitled to notice of and to vote at the Meeting consist
of the Company's common stock, par value $.01 per share (the "Common Stock").
Stockholders of record as of the close of business on February 21, 1997 (the
"Record Date"), are entitled to one vote for each share of Common Stock then
held. As of the Record Date, there were 2,843,375 shares of Common Stock issued
and outstanding. The presence, in person or by proxy, of at least a majority of
the total number of shares of Common Stock outstanding and entitled to vote will
be necessary to constitute a quorum at the Meeting.
Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934 with the Company and the Securities and Exchange
Commission ("SEC"). Based on such reports, management knows of no persons other
than those set forth below who owned more than 5% of the outstanding shares of
Common Stock as of the Record Date. The following table sets forth, as of the
Record Date, certain information as to those persons who were the beneficial
owners of more than five percent (5%) of the Company's outstanding shares of
Common Stock, the shares beneficially owned by the Company's Chief Executive
Officer and the shares of Common Stock beneficially owned by all executive
officers and directors of the Company as a group.
<PAGE> 5
<TABLE>
<CAPTION>
Percent of Shares
Name and Address Amount and Nature of of Common Stock
of Beneficial Owner Beneficial Ownership(1) Outstanding
- ------------------- ------------------------ -----------------
<S> <C> <C>
Westwood Homestead Financial Corporation 227,470 (2) 8.00%
Employee Stock Ownership Plan ("ESOP")
3002 Harrison Avenue
Cincinnati, Ohio 45211-5789
Michael P. Brennan 12,835 (3)
President and Chief Executive Officer
The Westwood Homestead Savings Bank
3002 Harrison Avenue
Cincinnati, Ohio 45211-5785
Kennedy Capital Management, Inc. 140,000 5.00
10829 Olive Boulevard
St. Louis, Missouri 63141
All Executive Officers and Directors 90,709 3.19
as a Group (10 persons)
<FN>
- ----------------------
(1) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; and stock in which the individual either has or shares
voting and/or investment power. Each person or relative of such person
whose shares are included herein exercises sole (or shared with a
spouse or other relative) voting and dispositive power as to the shares
reported. Does not include shares with respect to which Directors
Bockhorst, Higley, Bennet, Heimerdinger and Jacobs have voting power by
virtue of their positions as trustees of the trust holding 227,470
shares of the ESOP.
(2) These shares are currently held in a suspense account for future
allocation and distribution among participants as the loan used to
purchase the shares is repaid. The ESOP trustees vote all allocated
shares in accordance with the instructions of the participating
employees. Unallocated shares and allocated shares for which no
instructions have been received are voted by the trustees in the same
proportion as participants vote allocated stock; provided that, in the
absence of any voting directions as to allocated stock, (i) the
Company's Board of Directors shall direct the trustees as to the voting
of all shares of unallocated stock, and (ii) in the absence of such
direction from the Company's Board of Directors, the ESOP trustees
shall have sole discretion as to the voting of such shares.
(3) Represents less than 1%.
</TABLE>
- --------------------------------------------------------------------------------
PROPOSAL I -- ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
The Company's Board of Directors is composed of eight members. The
Company's Articles of Incorporation require that directors be divided into three
classes, as nearly equal in number as possible, each class to serve for a three
year period, with approximately one-third of the directors elected each year.
The Board of Directors has nominated John B. Bennet, Sr., Mary Ann Jacobs and
James D. Kemp, each of whom is currently a member of the Board, to serve as
directors for a three-year period.
If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend or the size of the Board may be reduced to eliminate the
vacancy. At this time, the Board knows of no reason why any nominee might be
unavailable to serve.
2
<PAGE> 6
Under the Company's Bylaws, directors shall be elected by a plurality
of the votes of the shares present in person or by proxy at the Meeting. Votes
which are not cast at the Meeting, either because of abstentions or broker
non-votes, are not considered in determining the number of votes which have been
cast for or against the election of a nominee.
Unless otherwise specified on the proxy, it is intended that the
persons named in the proxies solicited by the Board will vote for the election
of the named nominees.
The following table sets forth the names of the Board's nominees for
election as directors of the Company and of those directors who will continue to
serve as such after the Meeting. Also set forth is certain other information
with respect to each person's age, the year he or she first became a director of
the Company's wholly owned subsidiary, The Westwood Homestead Savings Bank (the
"Bank"), the expiration of his or her term as a director, and the number of
shares of the Common Stock beneficially owned. None of the directors' share
ownership exceeded 1% of the Common Stock outstanding as of the Record Date. All
of the individuals were initially appointed as director of the Company in 1996
in connection with the Company's incorporation.
<TABLE>
<CAPTION>
Shares of
Year First Common Stock
Elected as Beneficially
Age at Director Current Term Owned at the
Name December 31, 1996 of the Bank to Expire Record Date (1)
---- ----------------- ----------- --------- ---------------
<S> <C> <C> <C> <C>
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2000
John B. Bennet, Sr. 64 1982 1997 6,561 (2)
Mary Ann Jacobs 39 1987 1997 11,116 (2)
James D. Kemp 43 1989 1997 8,558
DIRECTORS CONTINUING IN OFFICE
Michael P. Brennan 54 1995 1998 12,835
Carl H. Heimerdinger 82 1947 1998 13,256 (2)
Roger M. Higley 58 1990 1998 10,031 (2)
Robert H. Bockhorst 58 1984 1999 9,538 (2)
Raymond J. Brinkman 72 1990 1999 9,936
<FN>
- --------------
(1) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; and stock in which the individual either has or shares
voting and/or investment power. Each person or relative of such person
whose shares are included herein exercises sole (or shared with a
spouse or other relative) voting and dispositive power as to the shares
reported.
(2) Does not include shares with respect to which the director has voting
power by virtue of his or her position as trustee of the trust holding
227,470 shares of the ESOP.
</TABLE>
3
<PAGE> 7
Presented below is certain information concerning the directors of the
Company and the Bank. Unless otherwise stated, all directors have held the
positions for at least the past five years.
JOHN B. BENNET, SR. is Vice-Chairman of the Board of Directors of the
Bank. Dr. Bennet was elected to the Board of Directors in 1982 and has served as
Vice-Chairman since February 1985. Dr. Bennet was a self-employed dentist from
1958 until his retirement in December 1995.
MARY ANN JACOBS has served as Secretary and a Director of the Bank
since 1987. Ms. Jacobs is a Partner of the law firm Ritter and Randolph. Her
current and past civic activities include serving as President and Board Member
of the Western Hamilton County Economic Council, Board Member of the Llanfair
Retirement Community, Board of Trustees Member for the Cincinnati Law Library,
Vice President and Trustee for the Alzheimer's Association (Cincinnati Chapter).
She is also an Elder of the Westminster Presbyterian Church and a member of the
Cheviot-Westwood Kiwanis.
JAMES D. KEMP has served as a Director of the Bank since 1989. He is
Vice President of sales with the investment firm of Hilliard Lyons. Mr. Kemp has
been a stockbroker with Hilliard Lyons since 1983. Mr. Kemp was employed by
Westwood Homestead from 1976 to 1983, and served in various capacities including
assistant manager, staff appraiser and Treasurer.
MICHAEL P. BRENNAN has been President, Chief Executive Officer, and a
member of the Board of Directors of Westwood Homestead since February, 1995.
Prior to joining the Bank, Mr. Brennan was President and Chief Executive Officer
and Director of Deer Park Federal Savings and Loan Association, Cincinnati,
Ohio. His current and past civic activities include serving on the Board of
Directors of the Exchange Club of Fairfield, as Community Advisor for Deer Park
Schools, as Chairman and member of the Tri-State League of Financial
Institutions, and as Director of the Greater Cincinnati Mortgage Counseling
Service. Mr. Brennan has also been active in the St. Aloysius and Sacred Heart
Parishes.
ROGER M. HIGLEY has served as a Director of the Bank since 1990. Dr.
Higley also serves as President of Gray's History of Wireless Museum Inc. at
WCET. Dr. Higley has been a self-employed dentist since 1969. He also serves on
the Board of Directors of the Greater Cincinnati Amateur Radio Society Inc.
ROBERT H. BOCKHORST has served as a Director of the Bank since 1984.
Mr. Bockhorst is an appraiser and a real estate investor. He is currently a
member of the Western Hills Exchange Club and the Cheviot-Westwood Kiwanis.
RAYMOND J. BRINKMAN, CPA retired from Deloitte & Touche LLP in 1989 as
Senior Manager. He is a member of the Saint Aloysius Orphan Society, the
American Association of Retired Persons and the Green Township Senior Citizens.
Mr. Brinkman is also active in St. Aloysius Gonzaga Parish.
CARL H. HEIMERDINGER served as President of Westwood Homestead from
1981 to February 1995, and has served as Chairman of the Board of Westwood
Homestead since February 1995. He was Treasurer of the Cincinnati Public Schools
from 1964 until his retirement in 1980. His past professional activities
include: State President in 1972 and charter member of the Ohio Association of
School Business Officials; 1973-74 President of Ohio Council for Education; and
1980- 85 Treasurer of Cincinnati School Foundation. Mr. Heimerdinger's current
and past civic activities include serving as past president and member of the
Exchange Club of Cincinnati since 1972 and Treasurer of the Salem Presbyterian
Church where he has been a member since 1927.
4
<PAGE> 8
- --------------------------------------------------------------------------------
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
The Board of Directors of the Company meets periodically as needed.
During the year ended December 31, 1996, the Board held nine meetings. No
director attended fewer than 75% of the total number of Board meetings held
during the year ended December 31, 1996 and the total number of meetings held by
committees on which such director served during such fiscal year.
The Company does not have a Nominating Committee. Under the Company's
Bylaws, the board of directors acts as a nominating committee for selecting the
management nominees for election as directors. The full Board of Directors
served as a nominating committee for the nominees chosen for election as
directors at the Meeting. While the Board of Directors will consider nominees
recommended by stockholders, it has not actively solicited recommendations from
the Company's stockholders for nominees nor, subject to the procedural
requirements set forth in the Company's Articles of Incorporation and Bylaws,
established any procedures for this purpose.
The Company's Audit Committee consists of directors Brinkman
(Chairman), Heimerdinger and Kemp. The Audit Committee is responsible for
reviewing the Bank's auditing program, overseeing the quarterly regulatory
reporting process by annually reviewing the process with the chief financial
officer, overseeing the Bank's internal compliance audits as necessary,
receiving and reviewing the results of each external audit, reviewing
managements response to auditors' recommendations, and reviewing management's
reports on cases of financial misconduct by employees, officers or directors.
The Audit Committee met three times in fiscal 1996.
The Company's Compensation Committee consists of directors Bennet
(Chairman), Brinkman, Heimerdinger, Higley and Kemp. This committee monitors the
Company's compensation plans and practices and specifically designates
compensation levels for the Bank's executive officers. The Compensation
Committee met twice during fiscal 1996.
The Company's Mergers and Acquisitions Committee consists of directors
Brennan (Chairman), Heimerdinger, Jacobs and Kemp. This committee facilitates
the process of considering possible mergers and acquisitions of other financial
institutions. The Mergers and Acquisitions Committee met four times during
fiscal 1996.
- --------------------------------------------------------------------------------
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The Compensation Committee of the Board of Directors on Executive
Compensation (Committee) appointed on October 15, 1996, (following the date of
becoming a public company on September 30, 1996) consists entirely of outside,
non-employee Directors. The Committee will establish and regularly review
executive compensation levels and policies. Since officers of the Company did
not receive any compensation in 1996 for service to the Company, this Report
addresses only the compensation of executive officers of the Bank, a
wholly-owned subsidiary of the Company.
The Committee's objective in determining executive compensation is to
attract, retain and motivate executive officers for the long-term success of the
Bank and the Company. In furtherance of this objective, the Bank's executive
compensation program currently consists of salary and bonus components and will
in the future include stock-based award plans including a stock option plan and
a management recognition (restricted stock) plan. The Bank also currently
maintains the ESOP, a broad-based employee benefit plan in which executive
officers are permitted to participate, which allows executives to receive awards
of Common Stock provided certain vesting requirements are met.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Michael P. Brennan has been Chief Executive Officer (CEO) and a member
of the Board of Directors of the Bank since February 1995, at which time the
Bank and Mr. Brennan entered into a three-year employment agreement. See
"Executive Compensation -- Employment Agreement." Prior to joining the Bank, Mr.
Brennan was President, Chief
5
<PAGE> 9
Executive Officer and Director of a savings and loan association in Cincinnati,
which service, together with prior management duties in several other savings
and loan associations, covers a span of 30 years.
For the year ended December 31, 1996, the base salary of Mr. Brennan
was established by the terms of the 1995 employment agreement between he and the
Bank. The base salary under that agreement was determined on the basis of a
review and evaluation of the compensation of chief executives of other financial
institutions of similar size in the surrounding community.
At the conclusion of 1996, the Committee evaluated the performance of
Mr. Brennan taking into account various factors, including, among others, peer
group comparisons, compensation paid to executives performing similar duties in
the Bank's market area, quality of communication with the Board of Directors,
overall management of the Bank, as well as the Bank's financial condition. The
Committee reviewed executive compensation surveys published by America's
Community Bankers, Tri-State League of Financial Institutions and SNL 1996
Thrift Executive Compensation Review. During the course of this evaluation of
the CEO's performance, various areas of improvement were noted, namely:
a) improving the Bank's Community Reinvestment Act rating;
b) opening the Mount Adams branch office;
c) initiating and coordinating the development of a business
plan;
d) initiating the Bank's consumer lending activities;
e) promoting the sale of loans;
f) increasing loan marketing;
g) restructuring the organization of staff personnel;
h) improving staff training;
i) revision of job descriptions; and
j) especially his efforts in directing the successful conversion
of the Bank from mutual to stock ownership form.
Based on its evaluation of Mr. Brennan's performance during 1996, after
consideration of all factors, and noting especially the areas of improvement
described in the preceding sentence, the Committee approved payment of a bonus
for 1996 representing approximately 23% of his 1996 base salary.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Carl H. Heimerdinger
John B. Bennet, Sr.
Raymond J. Brinkman
Roger M. Higley
James D. Kemp
6
<PAGE> 10
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE. The following table sets forth the cash and
noncash compensation for the last fiscal year awarded to or earned by the Chief
Executive Officer. No other executive officer of the Bank earned salary and
bonus in fiscal 1996 exceeding $100,000 for services rendered in all capacities
to the Bank.
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Name and Fiscal All Other
Principal Position Year Salary Bonus Compensation
- ------------------ ----- ------ ----- ------------
<S> <C> <C> <C> <C>
Michael P. Brennan 1996 $110,000 $ 25,000 $ 6,405 (1)
President and Chief 1995 $ 93,491 $ 20,000 $ 2,917 (2)
Executive Officer
<FN>
- --------------
(1) Consists of unused vacation and personal days.
(2) Consists of contributions made by the Bank for the account of Mr.
Brennan pursuant to the Bank's 401(k) Plan.
</TABLE>
EMPLOYMENT AGREEMENT. In February 1995, the Bank entered into an
employment agreement (the "Employment Agreement") with Mr. Michael P. Brennan,
who serves as its Chief Executive Officer and President (the "Executive"). The
Employment Agreement was amended in connection with the Bank's conversion from
mutual to stock form to add the Company as a party jointly and severally liable
for the Bank's obligations, and to update its definition of a change in control
to take into account the Company's formation. The Executive is responsible for
overseeing all operations of the Bank and for implementing the policies adopted
by the Bank's Board of Directors. The Board of Directors believes that the
Employment Agreement assures fair treatment of the Executive in relation to his
position with the Bank by assuring him of some financial security.
The Employment Agreement became effective on February 23, 1995 for a
term of three years, with an annual base salary of $110,000. On each anniversary
from the date of commencement of the Employment Agreement, the term of the
Executive's employment will be extended for an additional one-year period beyond
the then effective expiration date, upon a determination by the Board that the
performance of the Executive has met the required performance standards and that
such Employment Agreement should be extended. The Employment Agreement provides
the Executive with a salary review by the Board not less often than annually, as
well as with inclusion in any discretionary bonus plans, retirement and medical
plans, customary fringe benefits, vacation and personal leave. The Employment
Agreement is terminable by the Bank for "cause" as defined therein, in which
event no severance benefits are available. If the Bank terminates the Executive
for any reason other than cause, retirement, death, disability, or expiration of
the Agreement, the Executive will be entitled to a continuation of his salary
from the last day of the month following the date of the event of termination
through the remaining term of the Employment Agreement. If the Employment
Agreement is terminated due to the Executive's disability, the Executive will be
entitled to a continuation of his salary for up to 30 days. If the Executive is
disabled for a continuous period exceeding 30 days, the Bank may terminate the
Employment Agreement, in which event the Executive shall be entitled to receive
secondary disability benefits under any group or individual disability benefit
program maintained by the Bank. In the event of the Executive's death during the
term of the Employment Agreement, his estate will be entitled to receive his
salary through the remaining term of the Employment Agreement.
The Employment Agreement contains provisions stating that if the
Executive terminates employment after a change in control of the Bank or the
Company, for any reason other than cause, retirement, disability, death,
expiration of the Agreement, or otherwise a change in the present capacity or
circumstances in which the Executive is employed, or a reduction in compensation
or other benefits provided under this Agreement without the Executive's written
consent, the Executive will be paid, in addition to the continuation of the
Executive's compensation and benefits through the expiration of the Agreement,
an amount equal to 2.99 times the Executive's average annual compensation for
the most recent five taxable years before the change in control, provided such
payments do not constitute an "excess parachute payment" under
7
<PAGE> 11
Section 280G of the Internal Revenue Code of 1986, as amended. In the event such
payments would constitute an excess parachute payment, they would be reduced
accordingly. "Control" generally refers to the acquisition, by any person or
entity, of the ownership or power to vote more than 25% of the Bank's or the
Company's voting stock, the control of the election of a majority of the Bank's
or the Company's directors, or the exercise of a controlling influence over the
management or policies of the Bank or the Company. In addition, under the
Employment Agreement, a change in Control occurs when, during any consecutive
two-year period, directors of the Company or the Bank at the beginning of such
period cease to constitute at least a majority of the Board of the Company or
the Bank, unless the election of the replacement directors was approved by at
least a majority of the initial directors then in office.
- --------------------------------------------------------------------------------
DIRECTORS' COMPENSATION
- --------------------------------------------------------------------------------
The Company's non-employee directors received fees of $15,300 in 1996
in compensation for service provided to the Bank. Employee directors do not
receive board fees. Chairman of the Board and Former Chief Executive Officer of
the Bank, Carl Heimerdinger, received an additional $20,000, pursuant to an
agreement with the Bank that expires in 1998. Director Brinkman received an
additional $5,000 per year for his position as internal auditor and compliance
auditor during 1996.
DIRECTORS' RETIREMENT PLAN. The Bank maintains a Directors' Retirement
Plan, the terms of which were approved by the Company's shareholders at a
special meeting held on December 23, 1996. Under this plan, a bookkeeping
account in each participant's name is credited, on a quarterly basis, with an
amount equal to the sum of (i) the quarterly accrual attributable to the
participant, (ii) any appreciation or depreciation on the balance of the
participant's account during the calendar quarter, with the investment return
measured by the director's choice between the rate of return on certificates of
deposit and the Company's Common Stock, and (iii) a retirement adjustment which
will arise if the director terminates service on the Board prior to the
crediting of all quarterly accruals scheduled to be made to his or her account.
In general, each quarterly accrual is designed to provide participating
directors with a retirement annuity having a term equal to the lesser of ten
years or the director's remaining life expectancy, and with the amount of each
annual payment being equal to the product his or her Benefit Percentage, Vested
Percentage, and 65% of average fees (100% of average fees for directors who have
served 40 or more years on the Board). For Director Fritz, "quarterly accrual"
means the quarterly financial expense to fund a liability, upon Mr. Fritz's
termination of service, to provide Mr. Fritz with a 50% joint and survivor
retirement annuity with a 15 year term with each annual payment equal to 100% of
his average fees. A director's "Benefit Percentage" is based on his or her
overall years of service on the Board of Directors of the Bank (whether before
or after the plan's effective date and whether or not as an employee), and
increases in increments of 5% from 25% for five years of service, to 100% for 20
or more years of service. A director's "Vested Percentage" is based on his or
her full years of service as a director after January 1, 1995 (whether or not as
an employee), and increases in increments of 25% per year, from 25% for one year
of service after January 1, 1995, up to 100% for three or more full years of
service after January 1, 1995. A director's Benefit Percentage will accelerate
to 100% upon retirement, death or disability, or a change in control of the Bank
assuming the director has completed specified levels of service on the Board.
Benefits payable under the plan are paid solely from the Bank's general assets.
8
<PAGE> 12
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STOCK PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The graph and table which follow show the cumulative total return on
the Common Stock since the commencement of trading of the Common Stock on
September 27, 1996 compared with the cumulative total return of (i) SNL Midwest
Thrifts Index; and (ii) the Standard & Poors 500 Index. Cumulative total return
on the stock or the index equals the total increase in value since September 27,
1996, assuming reinvestment of all dividends paid on the stock or the index,
respectively. The graph and table were prepared assuming that $100 was invested
at the closing price on September 27, 1996 in the Common Stock and in each of
the indices. The shareholder returns shown on the performance graph are not
necessarily indicative of the future performance of the Common Stock or of any
particular index.
<TABLE>
<CAPTION>
WESTWOOD HOMESTEAD FINANCIAL
Total Return Performance
[Chart]
Period Ending
------------------------------------------------
9/30/96 10/31/96 11/29/96 12/31/96
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Westwood Homestead Financial 100.00 106.25 118.75 121.25
S&P 500 100.00 102.75 110.44 108.26
Thrifts (Midwest) 100.00 105.36 111.85 113.03
</TABLE>
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RELATIONSHIP WITH INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
KPMG Peat Marwick LLP was the Company's independent certified public
accountant for the 1996 fiscal year. The Board of Directors presently intends to
renew the Company's arrangement with KPMG Peat Marwick LLP to be its independent
certified public accountant for the fiscal year ending December 31, 1997. A
representative of KPMG Peat Marwick LLP is expected to be present at the Meeting
to respond to appropriate questions and to make a statement, if so desired.
9
<PAGE> 13
- --------------------------------------------------------------------------------
BENEFICIAL OWNERSHIP REPORTS
- --------------------------------------------------------------------------------
Pursuant to regulations promulgated under the Exchange Act, the
Company's officers, directors and persons who own more than ten percent of the
outstanding Common Stock are required to file reports detailing their ownership
and changes of ownership in such Common Stock, and to furnish the Company with
copies of all such reports. Because the Company was not subject to the Exchange
Act during the 1996 fiscal year, no reports of beneficial ownership were
required to be filed during that year.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the determination of the Board of Directors.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
The Company's Annual Report to Stockholders, including financial
statements, is being mailed to all stockholders of record as of the Record Date.
Any stockholder who has not received a copy of such Annual Report may obtain a
copy by writing to the Secretary of the Company. Such Annual Report is not to be
treated as a part of the proxy solicitation material or as having been
incorporated herein by reference.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be eligible to be considered for inclusion in the Company's
proxy materials for the next Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the Company's
executive office at 3002 Harrison Avenue, Cincinnati, Ohio 45211-5789, no later
than October 31, 1997. Any such proposal shall be subject to the requirements of
the proxy rules adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mary Ann Jacobs
MARY ANN JACOBS
SECRETARY
Cincinnati, Ohio
February 28, 1997
- --------------------------------------------------------------------------------
FORM 10-K
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
1996 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED
WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE
SECRETARY, WESTWOOD HOMESTEAD FINANCIAL CORPORATION, 3002 HARRISON AVENUE,
CINCINNATI, OHIO 45211-5789.
- --------------------------------------------------------------------------------
10
<PAGE> 14
REVOCABLE PROXY
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
CINCINNATI, OHIO
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 1, 1997
- --------------------------------------------------------------------------------
The undersigned hereby appoints Robert H. Bockhorst, Raymond J. Brinkman
and Roger M. Higley, with full powers of substitution, to act as proxies for the
undersigned, to vote all shares of common stock of Westwood Homestead Financial
Corporation (the "Company") which the undersigned is entitled to vote at the
Annual Meeting of Stockholders (the "Meeting"), to be held at the main office of
The Westwood Homestead Savings Bank, 3002 Harrison Avenue, Cincinnati, Ohio, on
Tuesday, April 1, 1997 at 9:00 a.m., local time, and at any and all adjournments
thereof, as follows:
VOTE
FOR WITHHELD
--- --------
The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ]
John B. Bennet, Sr.
Mary Ann Jacobs
James D. Kemp
INSTRUCTION: TO WITHHOLD YOUR VOTE
FOR ANY INDIVIDUAL NOMINEE, INSERT THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED ABOVE. IF
ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN ACCORDANCE WITH THE DETERMINATION OF THE BOARD OF
DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY ON THE HOLDERS THEREOF TO VOTE WITH RESPECT TO THE ELECTION OF ANY
PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL
NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the Meeting of the stockholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated and of no rather
force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a proxy
statement dated February 28, 1997 and an annual report.
Dated:
--------------
- -------------------------------- --------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- -------------------------------- --------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope in which this card was
mailed. When signing as attorney, executor, administrator, trustee or guardian,
please give your full title. If shares are held jointly, each holder should
sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------
