<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _____)
<TABLE>
<S> <C>
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
[X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Pennwood Bancorp, Inc.
- --------------------------------------------------------------------------------
(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
[Pennwood Bancorp letterhead]
October 7, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Pennwood Bancorp, Inc. The meeting will be held at the main office of
Pennwood Savings Bank, located at 683 Lincoln Avenue, Bellevue, Pennsylvania on
Wednesday, November 17, 1999 at 6:00 p.m., Eastern Time. The matters to be
considered by stockholders at the Annual Meeting are described in the
accompanying materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend
the meeting in person. We urge you to mark, sign, and date your proxy card
today and return it in the envelope provided, even if you plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
Your continued support of and interest in Pennwood Bancorp, Inc. are
sincerely appreciated.
Sincerely,
/s/ PAUL S. PIEFFER
------------------------------
Paul S. Pieffer
President and Chief
Executive Officer
<PAGE> 3
PENNWOOD BANCORP, INC.
683 LINCOLN AVENUE
BELLEVUE, PENNSYLVANIA 15202
(412) 761-1234
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 17, 1999
---------------
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders ("Annual
Meeting") of Pennwood Bancorp, Inc. (the "Company") will be held at the main
office of Pennwood Savings Bank located at 683 Lincoln Avenue, Bellevue,
Pennsylvania on Wednesday, November 17, 1999 at 6:00 p.m., Eastern Time, for
the following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
(1) To elect two (2) directors to a three-year term and one (1)
director to a two-year term, and in each case until their
successors are elected and qualified.
(2) To ratify the appointment by the Board of Directors of KPMG
LLP, as the Company's independent auditors for the fiscal year
ending June 30, 2000; and
(3) To transact such other business as may properly come before
the meeting or any adjournment thereof. Management is not
aware of any other such business.
The Board of Directors has fixed September 22, 1999 as the voting
record date for the determination of stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournment thereof. Only those
stockholders of record as of the close of business on that date will be
entitled to vote at the Annual Meeting or at any such adjournment.
By Order of the Board of Directors
/s/ JAMES W. KIHM
------------------------------
James W. Kihm
Vice President and Secretary
Bellevue, Pennsylvania
October 7, 1999
================================================================================
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING
OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
================================================================================
<PAGE> 4
PENNWOOD BANCORP, INC.
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 17, 1999
This Proxy Statement is furnished to holders of common stock, $.01
par value per share ("Common Stock"), of Pennwood Bancorp, Inc. (the
"Company"), the holding company of Pennwood Savings Bank (the "Savings Bank").
Proxies are being solicited on behalf of the Board of Directors of the Company
to be used at the Annual Meeting of Stockholders ("Annual Meeting") to be held
at the main office of the Savings Bank, located at 683 Lincoln Avenue,
Bellevue, Pennsylvania on Wednesday, November 17, 1999 at 6:00 p.m., Eastern
Time, and at any adjournment thereof for the purposes set forth in the Notice
of Annual Meeting of Stockholders. This Proxy Statement is first being mailed
to stockholders on or about October 7, 1999.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted for the matters described below and, upon the
transaction of such other business as may properly come before the meeting, in
accordance with the best judgment of the persons appointed as proxies. Any
stockholder giving a proxy has the power to revoke it at any time before it is
exercised by (i) filing with the Secretary of the Company written notice
thereof (James W. Kihm, Vice President and Secretary, Pennwood Bancorp, Inc.,
683 Lincoln Avenue, Bellevue, Pennsylvania 15202); (ii) submitting a
duly-executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person. Proxies solicited hereby may be exercised only at the Annual Meeting
and any adjournment thereof and will not be used for any other meeting.
VOTING
Only stockholders of record of the Company at the close of business
on September 22, 1999 ("Voting Record Date") are entitled to notice of and to
one vote per share on all matters properly presented at the Annual Meeting and
at any adjournment thereof. On the Voting Record Date, there were 557,139
shares of Common Stock of the Company issued and outstanding and the Company
had no other class of equity securities outstanding. Directors are elected by
a plurality of the votes cast with a quorum present. The presence, either in
person or by proxy, of the holders of a majority of the shares of Common Stock
outstanding on September 22, 1999 is necessary to constitute a quorum at the
Annual Meeting. The affirmative vote of the holders of a majority of the total
votes cast at the Annual Meeting is required for the proposal to ratify the
independent auditors for fiscal 2000. Abstentions are considered in
determining the presence of a quorum will not be counted as votes cast.
Accordingly, abstentions will have no effect on the plurality vote required for
the election of directors or the proposal to ratify the independent auditors.
<PAGE> 5
Under rules applicable to broker-dealers, the proposals to be considered at the
Annual Meeting are considered "discretionary" items upon which brokerage firms
may vote in their discretion on behalf of their clients if such clients have
not furnished voting instructions and for which there will not be "broker
non-votes."
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
DIRECTORS WHOSE TERMS CONTINUE AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Articles of Incorporation of the Company provide that the Board
of Directors of the Company shall be divided into three classes which are as
equal in number as possible, and that members of each class of directors are to
be elected for a term of three years. One class is to be elected annually.
Stockholders of the Company are not permitted to cumulate their votes for the
election of directors.
The nominees for director are not related to any other director or
executive officer of the Company by blood, marriage or adoption, and each
currently serves as a director of the Company.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees for director listed
below. If the nominees should be unable or unwilling to stand for election at
the time of the Annual Meeting, the proxies will nominate and vote for any
replacement nominees recommended by the Board of Directors. At this time, the
Board of Directors knows of no reason why the nominees listed below may not be
able to serve as directors if elected.
The three persons who receive the greatest number of votes of the
holders of Common Stock represented in person or by proxy at the Annual Meeting
will be elected directors of the Company.
The following tables present information concerning the nominees
for director of the Company and each director whose term continues, including
tenure as a director of the Savings Bank.
NOMINEES FOR DIRECTOR WITH THREE-YEAR TERMS EXPIRING IN 2002
<TABLE>
<CAPTION>
Positions Held Director
Name Age in the Company Since(1)
- ------------------------- ------ ----------------------------- ---------------
<S> <C> <C> <C>
Mary M. Frank 81 Vice Chairman 1971
John B. Mallon 78 Director 1975
</TABLE>
2
<PAGE> 6
NOMINEE FOR DIRECTOR WITH TWO-YEAR TERM EXPIRING IN 2001
<TABLE>
<CAPTION>
Positions Held Director
Name Age in the Company Since(1)
- -------------------------- ------- ------------------------------------ -------------
<S> <C> <C> <C>
C. Joseph Touhill 61 Chairman 1991
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR ELECTION OF THE ABOVE NOMINEES
FOR DIRECTOR.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
DIRECTORS WHOSE TERMS EXPIRE IN 2000
<TABLE>
<CAPTION>
Positions Held Director
Name Age in the Company Since(1)
- -------------------------- ------- ------------------------------------ -------------
<S> <C> <C> <C>
Paul S. Pieffer 51 Director, President and Chief 1985
Executive Officer
Robert W. Hannan 60 Director 1991
Michael Kotyk 69 Director 1993
</TABLE>
DIRECTOR WHOSE TERM EXPIRES IN 2001
<TABLE>
<CAPTION>
Positions Held Director
Name Age in the Company Since(1)
- -------------------------- ------- ------------------------------------ -------------
<S> <C> <C> <C>
H. J. Zoffer 69 Director 1991
</TABLE>
- -------------
(1) Includes service as a director of the Savings Bank.
Each of the directors of the Company is also a director of the Savings
Bank. Set forth below is information with respect to the principal occupations
during at least the last five years for each of the directors.
3
<PAGE> 7
Mary M. Frank. Ms. Frank has served as Vice Chairman of the Board of
Directors of the Savings Bank since 1985 and Treasurer of the Savings Bank
since 1992. Prior thereto, Ms. Frank served as the Executive Vice President
and Secretary of the Savings Bank from 1975 to 1985. Ms. Frank is the wife of
Mr. Charles R. Frank.
John B. Mallon. Mr. Mallon is presently retired. Prior thereto, Mr.
Mallon served as the President of Suburban General Hospital located in
Pittsburgh, Pennsylvania from 1952 to 1986.
C. Joseph Touhill. Mr. Touhill has been the Discipline Lead For
Process and Environmental Engineering of Foster Wheeler Environmental
Corporation since April 1999. Prior thereto, Mr. Touhill has been the
President of Touhill Technology Management Corporation, Pittsburgh,
Pennsylvania, from July 1997 to April 1999. Previously, he was the Executive
Vice President of EG & G Environmental, Inc. located in Pittsburgh,
Pennsylvania from 1994 to 1997. Prior thereto, Mr. Touhill served as the Group
Senior Vice President of ICF Kaiser International located in Pittsburgh,
Pennsylvania from 1990 to 1994.
Paul S. Pieffer. Mr. Pieffer has served as President and Chief
Executive Officer of the Savings Bank since 1985. Prior thereto, Mr. Pieffer
was the Vice President of South Pittsburgh Savings and Loan Association,
Pittsburgh, Pennsylvania, from 1973 to 1985.
Robert W. Hannan. Mr. Hannan presently serves as the Interim
President and Chief Executive Officer of the National Association of Chain
Drugstores. Prior thereto, Mr. Hannan was the Vice Chairman of Eckerd
Corporation, Largo, Florida from February 1997 to July 1998. Previously he
served as the President of Thrift Drug Inc. located in Pittsburgh, Pennsylvania
from 1987 to 1997.
Michael Kotyk. Mr. Kotyk is presently retired. Prior thereto, Mr.
Kotyk was the Technical Director of Materials Technology at U.S. Steel
Corporation, Pittsburgh, Pennsylvania, from 1991 to 1993.
H. J. Zoffer. Mr. Zoffer has been Dean Emeritus since August 1996 and
a Professor since August 1966 of the Joseph M. Katz Graduate School of Business
at the University of Pittsburgh. Mr. Zoffer was the Dean of the Joseph M. Katz
Graduate School of Business from 1968 until August 1996. Mr. Zoffer is a
member of the Boards of Directors of the Homestate Pennsylvania Growth Fund,
Pennsylvania Select Bank and Finance Fund and Homestate Year 2000 Fund.
4
<PAGE> 8
STOCKHOLDER NOMINATIONS
Section 3.12 of the Company's Articles of Incorporation governs
nominations for election to the Board of Directors and requires all such
nominations, other than those made by the Board, to be made at a meeting of
stockholders called for the election of directors, and only by a stockholder
who has complied with the notice provisions in that section. Stockholder
nominations must be made pursuant to timely notice in writing to the Secretary
of the Company. To be timely, a stockholder's notice must be delivered to, or
mailed and received at, the principal executive offices of the Company not
later than (i) 90 days prior to the anniversary date of the mailing of proxy
materials by the Company for the immediately preceding annual meeting and (ii)
with respect to an election to be held at a special meeting of stockholders for
the election of directors, the close of business on the tenth day following the
date on which notice of such meeting is first given to stockholders. Each such
notice shall set forth: (a) the name and address of the stockholder who
intends to make the nomination and of the person or persons to be nominated;
(b) a representation that the stockholder is a holder of record of stock of the
Company entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified in the notice;
(c) a description of all arrangements or understandings between the stockholder
and each nominee and any arrangements or understandings between the stockholder
and each nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made by the
stockholder; (d) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission; and (e)
the consent of each nominee to serve as a director of the Company if so
elected. The presiding officer of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing procedures.
COMMITTEES AND MEETINGS OF THE BOARD OF THE SAVINGS BANK AND COMPANY
Regular meetings of the Board of Directors of the Company are held on
a quarterly basis. The Board of Directors of the Company held a total of eight
regular and special meetings during the fiscal year ended June 30, 1999. No
incumbent director attended fewer than 75% of the aggregate total number of
meetings of the Board of Directors held during the fiscal year ended June 30,
1999, and the total number of meetings held by all committees on which he or
she served during such year.
The entire Board of Directors of the Company acts as a Nominating
Committee for selection of nominees for election as directors of the Company.
The Board, acting as the Nominating Committee, met one time during the fiscal
year ended June 30, 1999.
5
<PAGE> 9
The Board of Directors of the Savings Bank meets on a monthly basis
and may have additional special meetings. During the fiscal year ended June
30, 1999, the Board of Directors met twelve times. The Board of Directors of
the Savings Bank has established the following committees:
Audit Committee. The Audit Committee consists of Messrs. Touhill
(Chairman) and Mallon and Ms. Frank. The Audit Committee reviews the records
and affairs of the Savings Bank, recommends the Savings Bank's external auditor
and reviews their reports. The Audit Committee met two times in fiscal 1999.
Personnel/Compensation Committee. The Personnel/Compensation
Committee consists of Messrs. Mallon (Chairman), Hannan, Zoffer, Pieffer and
Ms. Frank. The Personnel Committee reviews the performance of the Savings
Bank's officers, makes recommendations as to pay increases and evaluates the
Savings Bank's overall personnel requirements. The Personnel Committee met two
times in fiscal 1999.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Set forth below is information with respect to the principal
occupations during the last five years for the executive officers of the
Company and the Savings Bank who do not serve as directors.
James W. Kihm. Mr. Kihm has been the Vice President and Secretary of
the Company since January 1997 and has held those positions with Savings Bank
since 1985. Prior thereto, Mr. Kihm was the Vice President of Concord Liberty
Savings and Loan Association, Pittsburgh, Pennsylvania, from 1981 to 1985.
Joseph W. Messner. Mr. Messner has been the Vice President of Lending
of the Savings Bank since June 1994. Prior thereto, Mr. Messner served as an
underwriter with Creditvest, Inc. located in Pittsburgh, Pennsylvania from 1992
to 1994 and served as a loan officer at Norwest Mortgage, Pittsburgh,
Pennsylvania, from August 1991 to January 1992 and at NVR Mortgage, Pittsburgh,
Pennsylvania, from 1987 to April 1991.
6
<PAGE> 10
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) each person or
entity, including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), who or which was
known to the Company to be the beneficial owner of more than 5% of the issued
and outstanding Common Stock, (ii) the directors of the Company, (iii) certain
executive officers of the Company, and (iv) all directors and executive
officers of the Company and the Savings Bank as a group.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial of Beneficial
Owner or Number of Ownership as of Percent of
Persons in Group September 22, 1999(1) Common Stock*
-------------------- --------------------- ------------
<S> <C> <C>
Pennwood Bancorp, Inc. 65,080(2) 11.7%
Employee Stock Ownership Plan Trust
683 Lincoln Avenue
Bellevue, Pennsylvania 15202
Directors:
Mary M. Frank 21,898(3)(4) 3.9
John B. Mallon 10,463(3)(4) 1.9
C. Joseph Touhill 8,564(3)(4) 1.5
H.J. Zoffer 11,897(3) 2.1
Paul S. Pieffer 36,203(3)(5) 6.5
Robert W. Hannan 13,897(3) 2.5
Michael Kotyk 11,797(3) 2.1
All directors and executive officers 135,491(2)(3)(6) 24.3%
of the Company and the Savings Bank
as a group (9 persons)
</TABLE>
(Footnotes on next page)
7
<PAGE> 11
- ---------------
* As of September 22, 1999, there were 557,139 shares of Common Stock
issued and outstanding.
(1) Based upon filings made pursuant to the Exchange Act and information
furnished by the respective individuals. Under regulations promulgated
pursuant to the Exchange Act, shares of Common Stock are deemed to be
beneficially owned by a person if he or she directly or indirectly has
or shares (i) voting power, which includes the power to vote or to
direct the voting of the shares, or (ii) investment power, which
includes the power to dispose or to direct the disposition of the
shares. Unless otherwise indicated, the named beneficial owner has
sole voting and dispositive power with respect to the shares.
(2) The Pennwood Bancorp, Inc. Employee Stock Ownership Plan Trust ("ESOP
Trust") holds Common Stock on behalf of employee participants of the
plan. As of the Voting Record Date, 19,524 shares have been allocated
to the accounts of participating employees and will be voted in
accordance with such participants instructions. The 45,556 shares held
in the ESOP Trust which are unallocated will be voted by Messrs.
Pieffer and Mallon (the "Trustees") pursuant to the terms of the ESOP
in the same proportion for and against each proposal as the allocated
shares are actually voted by participants. The shares held in the ESOP
Trust are not included in the individual beneficial ownership amounts
of the Trustees.
(3) Includes shares of Common Stock underlying vested stock options granted
under the Company's 1997 Stock Option Plan ("Stock Option Plan") in the
following amounts: Mary M. Frank, 1,356; John B. Mallon, 1,356; C.
Joseph Touhill, 1,356; H. J. Zoffer, 1,356; Paul S. Pieffer, 8,136;
Robert W. Hannan, 1,356; and Michael Kotyk, 1,356.
(4) Does not include 21,481 shares of Common Stock held in trust (the "RRP
Trust") for the Pennwood Bancorp, Inc. 1997 Recognition and Retention
Plan ("RRP") which have not yet been earned and allocated. Messrs.
John B. Mallon and C. Joseph Touhill and Ms. Mary M. Frank serve as
Trustees of the RRP Trust. Pursuant to the terms of the RRP, shares of
Common Stock held in the RRP Trust which have not yet been earned and
allocated are voted by the Trustees in their sole discretion.
(5) Includes 4,814 shares allocated to the account of Mr. Pieffer pursuant
to the Company's ESOP.
(6) Includes 10,864 shares allocated to the accounts of all executive
officers as a group pursuant to the Company's ESOP.
8
<PAGE> 12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of certain information
concerning the compensation paid by the Company and the Savings Bank for
services rendered in all capacities during the three years ended June 30, 1999
to the Chief Executive Officer. No other executive officer of the Company and
its subsidiaries had total compensation during the last fiscal year in excess
of $100,000.
<TABLE>
<CAPTION>
===================================================================================================================================
Annual Compensation Long Term Compensation
-------------------------------------------------------------------
Awards
----------------------- All Other
Name and Fiscal Other Annual Stock Compensation
Principal Position Year Salary Bonus Compensation(1) Grants(2) Options(3) (4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul S. Pieffer 1999 $88,500 -- -- -- -- $13,186
President and Chief 1998 87,000 -- -- -- -- 22,491
Executive Officer 1997 84,500 -- -- $86,177 20,340 19,352
===================================================================================================================================
</TABLE>
(1) Does not include amounts attributable to miscellaneous benefits
received by the named executive officer. In the opinion of management
of the Company, the costs to the Company of providing such benefits to
the executive officer during the indicated periods did not exceed the
lesser of $50,000 or 10% of the total of annual salary and bonus
reported for the individual.
(2) In fiscal 1997, represents the grant of 8,134 shares of restricted
Common Stock pursuant to the RRP (as adjusted pursuant to the
anti-dilution provisions of the RRP to reflect the Stock Split (defined
below)) which had the indicated value on the date of grant. The fair
market value of the aggregate restricted stock held by Mr. Pieffer at
June 30, 1999 equaled $73,714. Restricted Common Stock awarded
pursuant to the RRP vests over a five-year period at a rate of 20% per
year, beginning one year from the anniversary date of the grant.
Dividends declared in respect of unvested share awards are held by the
RRP Trust for the benefit of the recipient and such dividends,
including interest thereon, is paid out proportionately by the RRP
Trust to the recipients thereof after the share awards become earned.
Dividends declared in respect of each vested share held by the RRP
Trust are paid by the RRP Trust after its receipt thereof to the
recipient on whose behalf such share is then held by the RRP Trust.
(3) Options received during fiscal 1997 have been adjusted pursuant to the
anti-dilution provisions of the Stock Option Plan to reflect the
4-for-3 split of the Common Stock on May 15, 1998 ("Stock Split").
(4) Amounts represent the allocation of shares of Common Stock pursuant to
the Company's ESOP for the fiscal years indicated.
9
<PAGE> 13
STOCK OPTIONS
The Company did not grant any stock option awards to the named
executive officer during fiscal 1999.
The following table sets forth certain information concerning exercises
of stock options by the named executive officer during the fiscal year ended
June 30, 1999 and options held at June 30, 1999.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
===================================================================================================================
Number of Unexercised Value of Unexercised Options
Options at Year End(1) at Year End(2)
Shares -----------------------------------------------------------------
Acquired on Value Exercisable Unexercisable Exercisable Unexercisable
Name Exercise Realized
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Paul S. Pieffer -- -- 8,136 12,204 $73,732 $110,599
===================================================================================================================
</TABLE>
(1) Stock options granted prior to May 15, 1998 have been adjusted pursuant
to the anti-dilution provisions of the Stock Option Plan to reflect the
Stock Split.
(2) Based on a per share market price of $9.0625 at June 30, 1999.
DIRECTOR COMPENSATION
Members of the Board of Directors, with the exception of Mr. Pieffer,
and the Chairman of the Board receive $9,000 and $11,400, respectively, per
annum for serving on the Board. Members of the Board serving on committees do
not receive any additional compensation for serving on such committees.
Members of the Board of Directors are eligible to receive stock options
and stock appreciation rights pursuant to the Company's Stock Option Plan,
however, no such stock options or stock appreciation rights were awarded to
directors during fiscal 1999. In addition, members of the Board of Directors
are eligible to receive awards of restricted Common Stock pursuant to the
Company's RRP.
PENSION PLAN
The Savings Bank participates in a multiple employer defined benefit
pension plan that covers all employees that have attained 21 years of age and
have completed one full year of
10
<PAGE> 14
service (consisting of 1,000 hours worked during the year). In general, the
pension plan provides for benefits payable monthly at retirement or normal
retirement age 65 in an amount equal to a percentage of the participant's
average annual salary for the three consecutive years of highest salary during
his service with the Savings Bank, multiplied by the number of his years of
service, with a reduced level of benefits in the event of early retirement
prior to having attained age 65.
Payment of benefits under the pension plan generally will be made in
the form of a life annuity to an unmarried participant or in the form of a
qualified joint and survivor annuity to a married participant, although
alternative forms of benefits are available. The pension plan also provides a
death benefit payment, in the event of death prior to retirement.
For the year ended June 30, 1999, no pension expense was recognized by
the Savings Bank.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the Common Stock to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. Officers,
directors and greater than 10% stockholders are required by regulation to
furnish the Company with copies of all Section 16(a) forms they file. The
Company knows of no person who owns 10% or more of the Common Stock.
Based solely on review of the copies of such forms furnished to the
Company, or written representations from its officers and directors, the
Company believes that during, and with respect to, fiscal 1999, the Company's
officers and directors complied in all respects with the reporting requirements
promulgated under Section 16(a) of the Exchange Act, except with respect to the
reports noted below. The Company filed late reports on Form 5 on behalf of
each of the following persons with respect to fiscal 1998: Joseph W. Messner,
Paul S. Peiffer, James W. Kihm, H. J. Zoffer, Mary M. Frank, Charles R. Frank,
C. Joseph Touhill, John B. Mallon, Michael Kotyk and Robert W. Hannan.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
All loans or extensions of credit to executive officers and directors
must be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
the general public and must not involve more than the normal risk of repayment
or present other unfavorable features.
The Savings Bank's policy provides that all loans made by the Savings
Bank to its directors and officers are made in the ordinary course of business,
are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectibility or
11
<PAGE> 15
present other unfavorable features. As of June 30, 1999, the Savings Bank had
no loans outstanding to its executive officers and directors.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed KPMG LLP,
independent certified public accountants, to perform the audit of the Company's
financial statements for the year ending June 30, 2000, and further directed
that the selection of auditors be submitted for ratification by the stockholders
at the Annual Meeting.
The Company has been advised by KPMG LLP that neither that firm nor any
of its associates has any relationship with the Company or its subsidiaries
other than the usual relationship that exists between independent certified
public accountants and clients. KPMG LLP will have one or more representatives
at the Annual Meeting who will have an opportunity to make a statement, if they
so desire, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
JUNE 30, 2000.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to its 2000 Annual Meeting of Stockholders
must be received at the principal executive offices of the Company, 983 Lincoln
Avenue, Bellevue, Pennsylvania 15202, Attention: James W. Kihm, Vice President
and Secretary, no later than June 9, 2000. If such proposal is in compliance
with all of the requirements of Rule 14a-8 under the Exchange Act, it will be
included in the proxy statement and set forth on the form of proxy issued for
such annual meeting of stockholders. It is urged that any such proposals be sent
certified mail, return receipt requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Section 2.10 of the Company's
Bylaws, which provides that business at an annual meeting of stockholders must
be (a) properly brought before the meeting by or at the direction of the Board
of Directors, or (b) otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Secretary of the Company. A stockholder's notice to the Secretary must set
forth as to each matter the stockholder proposes to bring before the annual
meeting (a) a brief description of the business desired to be brought before the
annual meeting, (b) the name and address, as they appear on the Company's books,
of the stockholder proposing such business, (c) the class and number of shares
of the Company which are beneficially owned by the stockholder, and (d) any
material interest of the stockholder in such business. To be timely with respect
to the Company's 2000 Annual Meeting of Stockholders, a stockholder's notice
must be
12
<PAGE> 16
delivered to or mailed and received at the principal executive offices of the
Company no later than July 9, 2000.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year ended
June 30, 1999 accompanies this Proxy Statement. Such annual report is not part
of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB
FOR FISCAL 1999 REQUIRED TO BE FILED WITH THE COMMISSION UNDER THE EXCHANGE ACT.
SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO JAMES W. KIHM, VICE PRESIDENT AND
SECRETARY, PENNWOOD BANCORP, INC., 683 LINCOLN AVENUE, BELLEVUE, PENNSYLVANIA
15202. THE FORM 10-KSB IS NOT PART OF THE PROXY SOLICITATION MATERIALS.
OTHER MATTERS
Management is not aware of any business to come before the Annual
Meeting other than the matters described above in this Proxy Statement. However,
if any other matters should properly come before the meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.
The cost of the solicitation of proxies will be borne by the Company.
The Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending the proxy
materials to the beneficial owners of the Company's Common Stock. In addition to
solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.
By Order of the Board of Directors
/s/ PAUL S. PIEFFER
-------------------------------------
Paul S. Pieffer
President and Chief Executive Officer
October 7, 1999
13
<PAGE> 17
FORM OF REVOCABLE PROXY
PENNWOOD BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PENNWOOD
BANCORP, INC. ("COMPANY") FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON NOVEMBER 17, 1999 AND AT ANY ADJOURNMENT THEREOF.
The undersigned, being a stockholder of the Company as of September 22,
1999, hereby authorizes the Board of Directors of the Company, or any successors
thereto, as proxies with full powers of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
the main office of Pennwood Savings Bank, located at 683 Lincoln Avenue,
Bellevue, Pennsylvania, on Wednesday, November 17, 1999 at 6:00 p.m., Eastern
Time, and at any adjournment of said meeting, and thereat to act with respect to
all votes that the undersigned would be entitled to cast, if then personally
present, as follows:
1. ELECTION OF DIRECTORS
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
Nominees for three-year term: MARY M. FRANK AND JOHN B. MALLON
Nominee for two-year term: C. JOSEPH TOUHILL
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- -----------------
2. PROPOSAL to ratify the appointment of KPMG LLP as the Company's
independent auditors for the fiscal year ending June 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE> 18
SHARES OF THE COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF NOT
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS, FOR PROPOSAL 2 AND OTHERWISE AT
THE DISCRETION OF THE PROXIES. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO
THE TIME IT IS VOTED AT THE ANNUAL MEETING.
Dated:__________________, 1999
----------------------------------
----------------------------------
Signature(s)
PLEASE SIGN THIS EXACTLY AS YOUR NAME(S)
APPEAR(S) ON THIS PROXY. WHEN SIGNING IN A
REPRESENTATIVE CAPACITY, PLEASE GIVE TITLE. WHEN
SHARES ARE HELD JOINTLY, ONLY ONE HOLDER NEED
SIGN.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 19
(FORM OF PROXY CARD) PENNWOOD BANCORP, INC.
The undersigned hereby instructs the Trustees of the Employee Stock
Ownership Plan and Trust ("ESOP") of Pennwood Bancorp, Inc. (the "Company") to
vote, as designated below, all the shares of Common Stock of the Company
allocated to the undersigned pursuant to the ESOP as of September 22, 1999, at
the Annual Meeting of Stockholders to be held at the main office of Pennwood
Savings Bank, located at 683 Lincoln Avenue, Bellevue, Pennsylvania, on
Wednesday, November 17, 1999 at 6:00 p.m., Eastern Time, and any adjournment
thereof.
1. ELECTION OF DIRECTOR
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
Nominees for three-year term: MARY M. FRANK AND JOHN B. MALLON
Nominee for two-year term: C. JOSEPH TOUHILL
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- ---------------------
2. PROPOSAL to ratify the appointment of KPMG LLP as the Company's
independent auditors for the fiscal year ending June 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Trustees are authorized to vote upon such other
business as may properly come before the meeting.
The Company's Board of Directors recommends a vote FOR the Election of
the Nominees for Director and for Proposal 2. Such votes are hereby solicited by
the Company's Board of Directors.
Dated: _______________, 1999
-----------------------
Signature
If you return this card properly signed but you do not otherwise specify, shares
will be voted for the Election of the Nominees for Director and for Proposal 2.
If you do not return this card, your shares will not be voted.
<PAGE> 20
[PENNWOOD BANCORP, INC. LETTERHEAD]
October ____, 1999
TO: Participants in the Employee Stock Ownership Plan of Pennwood Bancorp, Inc.
As described in the attached materials, your proxy as a stockholder of Pennwood
Bancorp, Inc. (the "Company") is being solicited in connection with the
proposals to be considered at the Company's upcoming Annual Meeting of
Stockholders. We hope you will take advantage of the opportunity to direct, on a
confidential basis, the manner in which shares of Common Stock of the Company
allocated to your account under the Company's Employee Stock Ownership Plan (the
"Plan") will be voted.
Enclosed with this letter is the Proxy Statement, which describes the matters to
be voted upon, and a voting instruction ballot, which will permit you to vote
the shares allocated to your account. After you have reviewed the Proxy
Statement, we urge you to vote your shares held pursuant to the Plan by marking,
dating, signing and returning the enclosed voting instruction ballot to the
Trustees of the Plan in the envelope provided. The Trustees will certify the
totals to the Company for the purpose of having those shares voted.
We urge each of you to vote, as a means of participating in the governance of
the affairs of the Company. If your voting instructions for the Plan are not
received, the shares allocated to your account will not be voted. While I hope
that you will vote in the manner recommended by the Board of Directors, the most
important thing is that you vote in whatever manner you deem appropriate. Please
take a moment to do so.
Please note the enclosed material relates only to those shares which have been
allocated to your account under the Plan. You will receive other voting material
for those shares owned by you individually and not under the Plan.
Sincerely,
/s/ PAUL S. PIEFFER
--------------------
Paul S. Pieffer
President
