<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
/X/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant
to Rule 14a-11(c) or Rule 14a-12
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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
- --------------------------------------------------------------------------------
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
3002 HARRISON AVENUE
CINCINNATI, OHIO 45211-5789
(513) 661-5735
- --------------------------------------------------------------------------------
March 11, 1998
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
Monday, April 13, 1998 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 13, 1998
- --------------------------------------------------------------------------------
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 Monday, April 13, 1998.
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 March 3, 1998 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
March 11, 1998
- --------------------------------------------------------------------------------
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 13, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Monday, April 13, 1998,
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 March 11, 1998.
- --------------------------------------------------------------------------------
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 March 3, 1998 (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>
Amount and Nature Percent of Shares
Name and Address of Beneficial of Common Stock
of Beneficial Owner Ownership (1) Outstanding
- ------------------- ----------------- -----------------
<S> <C> <C>
Westwood Homestead Financial Corporation 274,820 (2) 9.67%
Employee Stock Ownership Plan ("ESOP")
3002 Harrison Avenue
Cincinnati, Ohio 45211-5789
Michael P. Brennan 67,347 (3) 2.37
President and Chief Executive Officer
The Westwood Homestead Savings Bank
3002 Harrison Avenue
Cincinnati, Ohio 45211-5785
Kennedy Capital Management, Inc. 219,800 7.73
10829 Olive Boulevard
St. Louis, Missouri 63141
All Executive Officers and Directors 233,885 (4) 8.23
as a Group (10 persons)
</TABLE>
- ----------
(1) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; and stock in which the individual either has or shares
voting and/or investment power. Each person or relative of such person
whose shares are included herein exercises sole (or shared with a
spouse or other relative) voting and dispositive power as to the shares
reported.
(2) These shares are currently held in a suspense account for future
allocation and distribution among participants as the loan used to
purchase the shares is repaid. The ESOP trustees vote all allocated
shares in accordance with the instructions of the participating
employees. Unallocated shares and allocated shares for which no
instructions have been received are voted by the trustees in the same
proportion as participants vote allocated stock; provided that, in the
absence of any voting directions as to allocated stock, (i) the
Company's Board of Directors shall direct the trustees as to the voting
of all shares of unallocated stock, and (ii) in the absence of such
direction from the Company's Board of Directors, the ESOP trustees
shall have sole discretion as to the voting of such shares.
(3) Includes 17,316 shares underlying currently exercisable stock options
granted under the Company's 1997 Stock Option Plan (the "Option Plan"),
5,687 shares awarded through the Company's Management Recognition Plan
("MRP"), 8,281 shares of Common Stock allocated through the Company's
Employee Stock Ownership Plan ("ESOP"), 22,228 shares beneficially owns
in his capacity as trustee of the trust for the Company's Directors'
Retirement Plan, and 13,835 shares over which Mr. Brennan has direct
ownership. See " Executive Compensation" and "Director Compensation."
(4) Includes 75,637 shares in which the directors and officers own
individually, 16,093 shares allocated to officers under the ESOP,
43,727 shares underlying currently exercisable stock options granted to
directors and executive officers under the Option Plan, 14,358 shares
awarded to the directors and executive officers under the MRP and
61,842 shares with respect to which Directors Bennet, Bockhorst,
Heimerdinger, Higley and Jacobs have voting power by virtue of their
positions as trustees of a trust formed to hold assets of the MRP. Also
includes 22,228 shares which Mr. Brennan and one other officer have the
authority to vote in their capacity as trustees of the trust for the
Company's Directors' Retirement Plan. Does not include shares with
respect to which Directors Bockhorst, Bennet, Heimerdinger, Higley and
Jacobs have voting power by virtue of their positions as trustees of
the trust holding 274,820 shares of the ESOP. See "Directors'
Compensation."
2
<PAGE> 6
- --------------------------------------------------------------------------------
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 Michael P. Brennan, Carl H. Heimerdinger
and Roger M. Higley, 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.
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
nonvotes, 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,
with the exception of Mr. Brennan. 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 Current Beneficially
Age at Director Term Owned at the
Name December 31, 1997 of the Bank to Expire Record Date (1)
---- ----------------- ----------- --------- ---------------
<S> <C> <C> <C> <C>
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
Michael P. Brennan 55 1995 1998 67,347 (2)
Carl H. Heimerdinger 83 1947 1998 13,944 (3)(4)
Roger M. Higley 59 1990 1998 13,399 (3)(4)
DIRECTORS CONTINUING IN OFFICE
Robert H. Bockhorst 59 1984 1999 10,354 (3)(4)
Raymond J. Brinkman 73 1990 1999 12,177 (4)
John B. Bennet, Sr. 65 1982 2000 6,644 (3)(4)
Mary Ann Jacobs 40 1987 2000 13,570 (4)
James D. Kemp 44 1989 2000 10,444 (4)
</TABLE>
3
<PAGE> 7
- ----------
(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) Includes 17,316 shares underlying currently exercisable stock options
granted under the Option Plan, 5,687 shares awarded through the MRP,
8,281 shares of Common Stock allocated through the Company's ESOP,
22,228 shares beneficially owns in his capacity as trustee of the trust
for the Company's Directors' Retirement Plan, and 13,835 shares over
which Mr. Brennan has direct ownership. See " Executive Compensation"
and "Director Compensation."
(3) 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
274,820 shares of the ESOP.
(4) Includes 2,969, 2,969, 2,969, 2,969, 2,969, 2,969 and 2,969 shares
underlying currently exercisable stock options which are beneficially
owned respectively by Directors Heimerdinger, Higley, Brockhorst,
Brinkman, Bennet, Jacobs and Kemp.
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.
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. He is currently on America's Community Bankers' National Technology
Committee. His 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 is
an active runner who participates in local road races. He founded "The Great
Bearcat Run" for the benefit of the University of Cincinnati, his alma mater.
CARL H. HEIMERDINGER completed 50 years as a member of the Westwood
Homestead Board of Directors, he served as President from 1981 to February 1995,
and has served as Chairman of the Board 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.
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 has been a self-employed real estate investor since 1966. He has
retired from real estate appraising. Mr. Bockhorst 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.
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.
4
<PAGE> 8
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,
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
Branch Manager of the Cincinnati Office of 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.
- --------------------------------------------------------------------------------
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, 1997, the Board held 17 meetings. No director
attended fewer than 75% of the total number of Board meetings held during the
year ended December 31, 1997 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 Bennet. 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 two times in fiscal 1997.
The Company's Compensation Committee consists of directors Bennet
(Chairman), Brinkman, Heimerdinger, Higley, Bockhorst and Jacobs. 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 six times during fiscal 1997.
The Company's Mergers and Acquisitions Committee consists of directors
Brennan (Chairman), Heimerdinger, Jacobs, Kemp and Bennet. This committee
facilitates the process of considering possible mergers and acquisitions of
other financial institutions. The Mergers and Acquisitions Committee met three
times during fiscal 1997.
5
<PAGE> 9
- --------------------------------------------------------------------------------
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The Committee, which consists entirely of outside, non-employee
Directors, establishes and regularly reviews executive compensation levels and
policies. The Committee's objective in determining executive compensation is to
attract, retain and motivate Executive Officers for the long-term success of the
Company. The Committee believes the compensation levels of the Company's
Executive Officers are competitive and in line with those of comparable
companies.
Base salaries and bonuses are reviewed and adjusted annually following
review of the Company's performance during the previous year, individual
contributions to that performance and levels of responsibility. To align
Executive Officers interests more closely with that of shareholders of the
Company, the Committee annually considers the granting of stock options and
management recognition awards. The Company also maintains an employee stock
option plan in which Executive Officers are permitted to participate, which
allows Executives to receive awards of common stock, provided certain
eligibility requirements are met.
The base salary of the Chief Executive Officer (CEO) is provided for
under a rolling three year employment contract, with the base salary determined
on the basis of a review and evaluation of the compensation of Chief Executive
Officers of other financial institutions of similar size in the community as
well as peer group comparisons of at least two published company surveys. In
evaluating the performance of CEO Michael P. Brennan for 1997, the Committee
weighed a variety of different factors in its deliberations, and based on all
factors considered, the Committee approved an increase in the base salary of the
CEO and payment of a bonus for 1997.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Carl H. Heimerdinger
John B. Bennet, Sr.
Raymond J. Brinkman
Robert H. Bockhorst
Roger M. Higley
Robert H. Bockhorst
Mary Ann Jacobs
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 1997 exceeding $100,000 for services rendered in all capacities
to the Bank.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
----------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
NAME AND FISCAL ---------------------- STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS (1) OPTIONS COMPENSATION
- ------------------ ---- ------ ----- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Michael P. Brennan 1997 $ 125,000 $ 16,917 $ 485,155 86,582 (2) $ 103,122 (3)
President and Chief 1996 110,000 25,000 -- -- 6,405
Executive Officer 1995 93,491 20,000 -- -- 2,917
</TABLE>
(1) 5,687 shares of restricted Common Stock awarded under the MRP are
currently vested. An additional 5,687 shares will vest annually over
four years.
(2) 17,316 of the shares underlying these stock options are immediately
exercisable. Over the next four years options to purchase 17,316 shares
will vest annually.
(3) For the 1997 fiscal year, includes 6,066 of shares allocated under the
ESOP at a value of $17.00 per share.
Option Grants in Last Fiscal Year. The following table contains
information concerning the grant of stock options under the Company's Stock
Option Plan to the Chief Executive Officer during fiscal 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
-------------------------------------
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------------- POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN OR BASE EXPIRATION ----------------------
NAME GRANTED (1) FISCAL YEAR PRICE DATE 5% 10%
- ---- ----------- --------------- ----------- -------------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Michael P. Brennan 86,582 20% $ 14.01 9/29/07 $60,607 $121,215
</TABLE>
- ----------
(1) Mr. Brennan's option to purchase 86,852 shares, granted on September
29, 1997, is immediately exercisable for 20% of the underlying shares
and becomes exercisable for the remaining 80% of the shares on the
second through the fourth anniversary of the date of grant. To the
extent not already exercisable, the options generally become
immediately exercisable in the event of a change in control of the
Company.
7
<PAGE> 11
YEAR-END OPTION/SAR VALUES. The following table sets forth information
concerning the number and potential realizable value at the end of the fiscal
year of options held by the Chief Executive Officer. Mr. Brennan did not
exercise any options during fiscal year 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
-------------------------------- -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Michael P. Brennan 17,316 69,266 $ 51,775 $ 207,105
</TABLE>
- ----------
(1) Calculated based on the product of (a) the number of shares subject to
option times (b) the difference between the fair market value of the
underlying Common Stock at December 31, 1997, based on the closing sale
price of the Common Stock on that date as reported on the Nasdaq
National Market ($17 per share), and the exercise price of the options
which is the fair market value of $14.01 per share.
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 two years, with a one year extension, and 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
8
<PAGE> 12
payment" under Section 280G of the Internal Revenue Code of 1986, as amended. In
the event such payments would constitute an excess parachute payment, they would
be reduced accordingly. "Control" generally refers to the 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 $15,900 in 1997
in compensation for service provided to the Bank. The Chairman of the Board
received an additional $5,000 for his duties as Chairman. Employee directors do
not receive board fees. Chairman of the Board and Former Chief Executive Officer
of the Bank, Carl Heimerdinger, received an additional $5,000, pursuant to an
agreement with the Bank that expires in 1998. Director Brinkman received an
additional $2,500 per year for his position as internal auditor during 1997.
Non-employee directors also receive payment for medical insurance
costs. During fiscal year 1997, outside directors received as a reimbursement or
premium paid in the amount of $27,000 for these costs.
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.
Benefits under this plan increase with the length of a director's service on the
Bank's Board. During 1997, the Bank credited approximately $18,500 to directors'
accounts in this plan.
9
<PAGE> 13
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>
12/31/96 03/31/97 06/30/97 09/30/97 12/31/97
<S> <C> <C> <C> <C> <C>
Westwood Homestead Financial 112.79 127.40 136.19 169.40 193.30
Thrifts (Midwest) 113.17 123.41 146.71 173.76 192.37
S&P 500 108.32 111.23 130.42 140.06 144.00
</TABLE>
10
<PAGE> 14
- --------------------------------------------------------------------------------
RELATIONSHIP WITH INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
KPMG Peat Marwick LLP was the Company's independent certified public
accountant for the 1997 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, 1998. 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.
- --------------------------------------------------------------------------------
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. All insiders timely filed except that officers
Michael P. Brennan, John E. Essen, Gerald T. Mueller and directors Robert H.
Bockhorst, Raymond J. Brinkman, John B. Bennet, Sr., Carl H. Heimerdinger, Roger
M. Higley, Mary Ann Jacobs and James D. Kemp each inadvertently failed to file
one report covering two transactions.
- --------------------------------------------------------------------------------
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.
11
<PAGE> 15
- --------------------------------------------------------------------------------
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 November 11, 1998. 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
March 11, 1998
- --------------------------------------------------------------------------------
FORM 10-K
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
1997 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.
- --------------------------------------------------------------------------------
12
<PAGE> 16
REVOCABLE PROXY
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
CINCINNATI, OHIO
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 13, 1998
- --------------------------------------------------------------------------------
The undersigned hereby appoints John B. Bennet, Sr., Robert H.
Bockhorst and Raymond J. Brinkman, 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 Monday, April 13, 1998 at 9:00 a.m., local time,
and at any and all adjournments thereof, as follows:
<TABLE>
<CAPTION>
VOTE
FOR WITHHELD
--- --------
<S> <C> <C>
The election as directors of all
nominees listed below (except as / / / /
marked to the contrary below).
Michael P. Brennan
Carl H. Heimerdinger
Roger M. Higley
INSTRUCTION: TO WITHHOLD YOUR VOTE
FOR ANY INDIVIDUAL NOMINEE, INSERT THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
</TABLE>
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<PAGE> 17
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 further
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 March 11, 1998 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.
- --------------------------------------------------------------------------------
