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. )
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 (as permitted by Rule 14a 6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
WSB Holding Company
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
WSB HOLDING COMPANY
Parent Company of
WORKINGMENS
BANK
807 Middle St. * Pittsburgh, PA 15212 * Phone (412) 231-7297
September 28, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of WSB Holding
Company (the "Company"), I cordially invite you to attend the Annual Meeting of
Stockholders to be held at 5035 Curry Road, Pittsburgh, Pennsylvania, on Monday,
October 19, 1998, at 4:30 p.m. The attached Notice of Annual Meeting and Proxy
Statement describe the formal business to be transacted at the Annual Meeting.
During the Annual Meeting, I will report on the operations of the Company.
Directors and officers of the Company, as well as a representative of Stokes
Kelly & Hinds, LLC, certified public accountants, will be present to respond to
any questions stockholders may have.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND
DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID
RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you from voting
in person at the Annual Meeting, but will assure that your vote is counted if
you are unable to attend the Annual Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/ Robert D. Neudorfer
----------------------------------------
Robert Neudorfer
President
South Hills Office
5035 Curry Road * Pittsburgh, PA 15236 * Phone: (412) 655-8670
<PAGE>
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WSB HOLDING COMPANY
807 MIDDLE STREET
PITTSBURGH, PENNSYLVANIA 15212
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 19, 1998
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of WSB Holding Company ("the Company"), will be held at 5035 Curry Road,
Pittsburgh, Pennsylvania on Monday, October 19, 1998, at 4:30 p.m.
The Meeting is for the purpose of considering and acting upon the following
matters:
1. The election of two directors of the Company;
2. The ratification of the WSB Holding Company 1998 Stock Option Plan;
3. The ratification of the Workingmens Bank Restricted Stock Plan;
4. The ratification of the appointment of Stokes Kelly & Hinds, LLC as
independent auditors of the Company for the fiscal year ending June 30,
1999; and
5. 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 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 September 1, 1998 are the stockholders
entitled to vote at the Meeting and any adjournments thereof.
EACH STOCKHOLDER, WHETHER OR NOT HE PLANS TO ATTEND THE MEETING, IS REQUESTED TO
SIGN, DATE AND RETURN THE ENCLOSED PROXY WITHOUT DELAY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. ANY SIGNED PROXY GIVEN BY THE STOCKHOLDER MAY BE REVOKED
BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY
EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY
REVOKE HIS PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING.
HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN
NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE
PERSONALLY AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Johanna C. Guehl
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Johanna C. Guehl
Secretary
Pittsburgh, Pennsylvania
September 28, 1998
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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<PAGE>
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PROXY STATEMENT
OF
WSB HOLDING COMPANY
807 MIDDLE STREET
PITTSBURGH, PENNSYLVANIA 15212
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ANNUAL MEETING OF STOCKHOLDERS
October 19, 1998
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of WSB Holding Company (the "Company") to
be used at the Annual Meeting of Stockholders of the Company which will be held
at 5035 Curry Road, Pittsburgh, Pennsylvania, on October 19, 1998, 4:30 p.m.
local time (the "Meeting"). The accompanying Notice of Annual Meeting of
Stockholders and this Proxy Statement are being first mailed to stockholders on
or about September 28, 1998. The Company acquired all of the outstanding stock
of Workingmens Bank (the "Bank") issued in connection with the completion of the
Bank's mutual-to-stock conversion on August 28, 1997 (the "Conversion").
At the Meeting, stockholders will consider and vote upon (i) the
election of two directors, (ii) the ratification of the WSB Holding Company 1998
Stock Option Plan (the "1998 Stock Option Plan"), (iii) the ratification of the
Workingmens Bank Restricted Stock Plan ("RSP"), (iv) the ratification of the
appointment of Stokes Kelly & Hinds, LLC, as independent auditors of the Company
for the fiscal year ending June 30, 1999, and (v) such other matters as may
properly come before the Meeting or any adjournments thereof. The Board of
Directors of the Company (the "Board" or the "Board of Directors") knows of no
additional matters that will be presented for consideration at the Meeting.
Execution of a proxy, however, confers on the designated proxy holder
discretionary authority to vote the shares represented by such proxy in
accordance with their best judgment on such other business, if any, that may
properly come before the Meeting or any adjournment thereof.
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VOTING AND REVOCABILITY OF PROXIES
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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 above or by the filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a stockholder attends the Meeting and
votes in person. Proxies solicited by the Board of Directors will be voted in
accordance with the directions given therein. Where no instructions are
indicated, signed proxies will be voted "FOR" the nominees for directors set
forth below. 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.
<PAGE>
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on September 1, 1998
(the "Record Date"), are entitled to one vote for each share of common stock of
the Company (the "Common Stock") then held. As of the Record Date, the Company
had 330,600 shares of Common Stock issued and outstanding.
The Articles of Incorporation of the Company ("Articles of
Incorporation") provide that in no event shall any record owner of any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who beneficially owns in excess of 10% of the then outstanding shares
of Common Stock (the "Limit") be entitled or permitted to any vote with respect
to the shares held in excess of the Limit. Beneficial ownership is determined
pursuant to the definition in the Articles of Incorporation and includes shares
beneficially owned by such person or any of his or her affiliates (as such terms
are defined in the Articles of Incorporation), or which such person or any of
his or her affiliates has the right to acquire upon the exercise of conversion
rights or options and shares as to which such person or any of his or her
affiliates or associates have or share investment or voting power, but neither
any employee stock ownership or similar plan of the Company or any subsidiary,
nor any trustee with respect thereto or any affiliate of such trustee (solely by
reason of such capacity of such trustee), shall be deemed, for purposes of the
Articles of Incorporation, to beneficially own any Common Stock held under any
such plan.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
Meeting. With respect to any matter, any shares for which a broker indicates on
the proxy that it does not have discretionary authority as to such shares to
vote on such matter (the "Broker Non-Votes") will be considered present for
purposes of determining whether a quorum is present. In the event there are not
sufficient votes for a quorum or to ratify any proposals at the time of the
Meeting, the Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors, the proxy being provided by the Board
enables a stockholder to vote for the election of the nominees proposed by the
Board, or to withhold authority to vote for the nominees being proposed.
Directors are elected by a plurality of votes of the shares present in person or
represented by proxy at a meeting and entitled to vote in the election of
directors.
As to the ratification of the 1998 Stock Option Plan and the
ratification of the RSP, which are submitted as Proposals II and III,
respectively, a stockholder may: (i) vote "FOR" the ratification; (ii) vote
"AGAINST" the ratification; or (iii) "ABSTAIN" with respect to the ratification.
With respect to Proposals II and III, such votes shall be determined by a
majority of the total votes cast affirmatively or negatively on such matters
without regard to broker non-votes. Votes for which the "ABSTAINS" box is
selected for Proposals II and III shall have the effect of a vote against such
proposals.
As to the ratification of independent auditors as set forth in Proposal
IV, by checking the appropriate box, a stockholder may: vote "FOR" the item;
(ii) vote "AGAINST" the item; or (iii) vote to "ABSTAIN" on such item. Unless
otherwise required by law, all other matters shall be determined by a majority
of votes cast affirmatively or negatively without regard to (a) Broker
Non-Votes, or (b) proxies marked "ABSTAIN" as to that matter.
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, as amended (the
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<PAGE>
"1934 Act"). The following table sets forth, as of the Record Date, persons or
groups who own more than 5% of the Common Stock and the ownership of all
executive officers and directors of the Company as a group. Other than as noted
below, management knows of no person or group that owns more than 5% of the
outstanding shares of Common Stock at the Record Date.
<TABLE>
<CAPTION>
Percent of Shares
Amount and Nature of of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------ -------------------- -----------------
<S> <C> <C>
Workingmens Bank
Employee Stock Ownership Plan ("ESOP")
807 Middle Street
Pittsburgh, Pennsylvania 15212 (1) 26,448 8.0%
Jeffrey L. Gendell
Tontine Partners, L.P.
31 West 52nd Street, 17th Floor
New York, New York 10019 (2) 33,050 9.9%
All directors and officers of the
Company as a group 80,836 24.4%
(seven persons) (3)
</TABLE>
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(1) Based upon a Schedule 13G filed with the Securities and Exchange
Commission (the "SEC") on February 13, 1998, the ESOP purchased such
shares for the exclusive benefit of plan participants with funds
borrowed from the Company. These shares are held in a suspense account
and will be allocated among ESOP participants annually on the basis of
compensation as the ESOP debt is repaid. The Board of Directors has
appointed non-employee directors to the ESOP Plan Committee to
administer the ESOP and to serve as ESOP Trustees. The ESOP Committee
or the Board instructs the ESOP Trustee regarding investment of ESOP
plan assets. The ESOP Trustee must vote all shares allocated to
participant accounts under the ESOP as directed by participants.
Unallocated shares, and shares for which no timely voting direction is
received, will be voted by the ESOP Trustee as directed by the ESOP
Committee. As of the Voting Record Date, 1,102 shares have been
allocated under the ESOP to participant accounts.
(2) Based upon an amended Schedule 13D filed with the SEC on September 8,
1997, for which shared voting and dispositive power is shown with
respect to 33,050 shares.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which
shares the individuals effectively exercise sole voting and investment
power, unless otherwise indicated. Excludes 26,448 shares held by the
ESOP over which certain directors, as trustees to the ESOP, exercise
shared voting and investment power. Such individuals disclaim
beneficial ownership with respect to such shares held by the ESOP.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the 1934 Act requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership of the Common Stock, on Forms
3, 4 and 5, with the Securities and Exchange Commission ("SEC") and to provide
copies of those Forms 3, 4 and 5 to the Company. Due to an administrative error,
the Form 5 for each director and executive officer was not filed in a timely
fashion. The Company is not aware of any beneficial owner of more than ten
percent of its Common Stock.
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<PAGE>
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
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Employees, officers, and directors of the Company have an interest in
certain matters being presented for stockholder ratification. Ratification of
the 1998 Stock Option Plan and the RSP are being presented as Proposals II and
III, respectively. See "Voting Securities And Principal Holders Thereof" for
information regarding the voting control of shares of Common Stock held by
executive officers and directors.
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PROPOSAL I - INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
DIRECTORS CONTINUING IN OFFICE, AND EXECUTIVE OFFICERS
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Election of Directors
The Articles of Incorporation require that the Board of Directors be
divided into four classes. The directors are elected by the stockholders of the
Company for staggered four-year terms, or until their successors are elected and
qualified. The Board of Directors currently consist of six members. Two
directors will be elected at the Meeting to serve for a four-year term or until
their successors have been elected and qualified.
Joseph J. Manfred and John P. Mueller have been nominated by the Board
of Directors to serve as directors. Messrs. Manfred and Mueller are currently
members of the Board. Each has been nominated for a four-year term to expire in
2002. It is intended that the persons named in the proxies solicited by the
Board will vote for the election of the named nominees. If any of the nominees
are 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 the nominees might be unavailable to serve.
The following table sets forth information with respect to the
nominees, their name, age, the year they first became a director of the Company
or the Bank, the expiration date of their current term as a director, and the
number and percentage of shares of the Common Stock beneficially owned. Each
director of the Company is also a member of the Board of Directors of the Bank.
Beneficial ownership of executive officers and directors of the Company, as a
group, is shown under "Voting Securities and Principal Holders Thereof."
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<PAGE>
<TABLE>
<CAPTION>
Shares of
Common Stock
Current Beneficially
Year First Term Owned as of
Name and Title Elected or to September 1, Percent
- -------------- Age(1) Appointed(2) Expire 1998 (3) Owned
------ ------------ ------- --------- ------
<S> <C> <C> <C> <C> <C>
BOARD NOMINEES FOR TERM TO EXPIRE IN 2002
Joseph J. Manfred 75 1973 1998 8,661(4)(5) 2.6%
Director
John P. Mueller 60 1994 1998 13,161(4)(5) 3.9%
Director
DIRECTORS CONTINUING IN OFFICE
Robert Neudorfer 61 1988 2000 19,244(6) 5.8%
President and Director
Stanford H. Rosenberg 64 1985 2001 12,630(5) 3.8%
Vice President and Director
Johanna C. Guehl 44 1990 1999 5,686(5) 1.7%
Secretary and Director
John T. Ringland 70 1998 1999 13,161(5) 3.9%
Director
</TABLE>
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(1) At March 31, 1998.
(2) Refers to the year the individual first became a director of the Company
or the Bank.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust, and other indirect ownership, over which shares
the individuals effectively exercise sole or shared voting and investment
power, unless otherwise indicated.
(4) Excludes 26,448 shares of Common Stock held under the ESOP for which such
individual serves as either a member of the ESOP Committee or as an ESOP
Trustee. Such individual disclaims beneficial ownership with respect to
shares held in a fiduciary capacity. The ESOP purchased such shares for
the exclusive benefit of ESOP participants with funds borrowed from the
Company. These shares are held in a suspense account and will be allocated
among ESOP participants annually on the basis of compensation as the ESOP
debt is repaid. The Board of Directors has appointed Messrs. Manfred and
Mueller to serve on the ESOP Committee and to serve as ESOP Trustees. The
ESOP Committee or the Board instructs the ESOP Trustee regarding
investment of ESOP plan assets. The ESOP Trustees must vote all shares
allocated to participant accounts under the ESOP as directed by ESOP
participants. Unallocated shares and shares for which no timely voting
direction is received will be voted by the ESOP Trustees as directed by
the ESOP Committee. As of the Voting Record Date, 1,102 shares have been
allocated under the ESOP to participant accounts.
(5) Includes 661 shares awarded under the Restricted Stock Plan approved by
the stockholders on March 16, 1998 (the "RSP"). Excludes 1,653 stock
options granted under the 1998 Stock Option Plan approved by the
stockholders on March 16, 1998 (the "SOP") which are not exercisable
within 60 days of the Voting Record Date.
(6) Includes 3,306 shares awarded under the RSP. Excludes 8,265 stock options
granted under the SOP which are not exercisable within 60 days of the
Voting Record Date.
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<PAGE>
Executive Officers of the Company
The following individuals hold the executive offices in the Company set
forth below opposite their names.
<TABLE>
<CAPTION>
Name Age as of
- ---- March 31, 1998 Positions Held With the Company
-------------- -------------------------------
<S> <C> <C>
Robert Neudorfer 61 President and Director
Stanford H. Rosenberg 64 Vice President and Director
Ronald W. Moreschi 55 Vice President and Treasurer
</TABLE>
Biographical Information
Set forth below is certain information with respect to the directors,
including director nominees and executive officers of the Company. All directors
of the Bank in June 1997 became directors of the Company at that time. Executive
Officers receive compensation from the Bank. See "-- Executive Compensation."
All directors and executive officers have held their present positions for five
years unless otherwise stated.
Joseph J. Manfred has been a member of the board of directors and
Chairman of the Board since 1973. Mr. Manfred is a choir member of St. John
Fisher Church and a eucharistic minister for Forbes Regional Hospital. Mr.
Manfred is also a retired insurance agent who owned Manfred Insurance Agency.
John P. Mueller has been a member of the board of directors since 1994.
Mr. Mueller is President and majority stockholder of Mueller's Hardware in
Pittsburgh. He is also the President of East Allegheny Business District and a
member of the board of directors of St. Ambrose Manor and Northside Chamber of
Commerce.
Robert Neudorfer has been employed by the Bank since 1975 and has been
the President and a member of the board of directors since 1988. Mr. Neudorfer
is a member of the board of directors and the treasurer of Community Development
Foundation and is also a member of the board of directors of the Western
Pennsylvania League of Savings Institutions. Mr. Neudorfer is a choir member of
the Baldwin Community United Methodist Church.
Stanford H. Rosenberg has been Director and Vice President since 1985.
Since 1974, he has been a professor at La Roche College in Pittsburgh.
Johanna C. Guehl has been a Director and Secretary since 1991. Since
1991, Ms. Guehl has been a partner in the law firm of Barbender & Guehl. Ms.
Guehl is a member of the board of directors for Women's Leadership Assembly and
she is the treasurer for Center For Victims of Violent Crimes an Women's
Business Network.
John T. Ringland has been a member of the board of directors since
1978. Mr. Ringland is a retired controller for Minsky Brothers.
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<PAGE>
Executive Officer Who is Not a Director
Ronald W. Moreschi has been vice president and treasurer since 1987.
Nominations for Director
Pursuant to Article 7.F., Section 15 of the Company's Articles of
Incorporation, nominations, other than those made by or at the direction of the
Board of Directors, shall be made pursuant to a notice in writing to the
Secretary of the Company that is delivered to, or mailed and received at, the
principal executive offices of the Company not less than 60 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders of
the Company; provided, however, that with respect to the first scheduled annual
meeting, notice by the stockholder must be so delivered or received no later
than the close of business on the tenth day following the day on which notice of
the date of the scheduled meeting must be delivered or received no later than
the close of business on the fifth day preceding the date of the meeting.
Such stockholder's notice shall set forth (a) as to each person whom
the stockholder proposes to nominate for election or re-election as a director
and as to the stockholder giving the notice (i) the name, age, business address,
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of Common Stock
which are beneficially owned by such person on the date of such stockholder
notice, and (iv) any other information relating to such person that is required
to be disclosed in solicitations of proxies with respect to nominees for
election as directors; and (b) as to the stockholder giving the notice (i) the
name and address, as they appear on the Company's books, of such stockholder and
any other stockholders known by such stockholder to be supporting such nominees
and (ii) the class and number of shares of Common Stock which are beneficially
owned by such stockholder on the date of such stockholder notice and, to the
extent known, by any other stockholders known by such stockholder to be
supporting such nominees on the date of such stockholder notice. At the request
of the Board of Directors, any person nominated by, or at the direction of, the
Board for election as a director at an annual meeting shall furnish to the
Secretary of the Company that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee.
The Board of Directors may reject any nomination by a stockholder not
made in accordance with the requirements of the Bylaws. If the presiding officer
at the meeting determines that a nomination was not made in accordance with the
terms of the Bylaws, he shall so declare at the annual meeting and the defective
nomination shall be disregarded.
Meetings and Committees of the Board of Directors
The Board of Directors of the Company conducts its business through
meetings of the Board of the Bank and through activities of its committees.
During the fiscal year ended June 30, 1998, the Board of Directors held 12
regular meetings and 9 special meetings. No director attended fewer than 75% of
the total meetings of the Board of Directors and committees during the time such
director served during the fiscal year ended June 30, 1998.
The Company's full Board of Directors acts as a nominating committee
("Nominating Committee") for selecting the management's nominees for election of
directors in accordance with the Company's Bylaws. This non-standing committee
met once during the 1998 fiscal year.
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<PAGE>
The Compensation and Benefits Committee is comprised of non-employee
directors Manfred, Guehl, Mueller and Ringland. This standing committee
establishes the Bank's salary budget, director and committee member fees, and
employee benefits provided by the Bank for approval by the Board of Directors.
The Committee met twice during the 1998 fiscal year.
The Audit Committee is comprised of Johanna C. Guehl and John T.
Ringland. The President also attends these meetings but he is excused during
certain portions. The Audit Committee is responsible for developing and
maintaining the Bank's audit program. The Committee also meets with the Bank's
outside auditors to discuss the results of the annual audit and any related
matters. The Audit Committee met once during the 1998 fiscal year.
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DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
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Director Compensation
In the fiscal year ended 1998, each non-salaried director was paid a
monthly fee (including two paid absences) of $700 and the Chairman of the Board
was paid a monthly fee of $750. For the fiscal year ended June 30, 1998, total
fees paid by the Bank to Directors were $42,600.
Stock Awards. On March 16, 1998, the stockholders of the Company
approved the 1998 Stock Option Plan and RSP. Pursuant to the terms of the 1998
Stock Option Plan, directors Manfred, Rosenberg, Guehl, Mueller and Ringland
received options to purchase 1,683 shares of Common Stock; under the RSP, the
directors received 661 shares of restricted stock. The options granted to these
directors become first exercisable at a rate of 20% as of March 16, 1999 and 20%
annually thereafter. Restricted stock granted to these directors will vest 20%
as of March 16, 1999 and an additional 20% annually thereafter.
Executive Officer Compensation
The Company has no full time employees, but relies on the employees of
the Bank for the limited services required by the Company. All compensation paid
to officers and employees is paid by the Bank.
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<PAGE>
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the president. No executive
officer of either the Bank or the Company had a salary and bonus during the
three years then ended June 30, 1998 that exceeded $100,000 for services
rendered in all capacities to the Bank or the Company.
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
-------------------------------- -----------------------
#Securities
Restricted Underlying All
Name and Fiscal Other Annual Stock Options/ Other
Principal Position Year Salary Bonus Compensation(1) Award(s)(2) SARs(3) Compensation(4)(5)
- ------------------- ---- ------ ----- --------------- ----------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert Neudorfer 1998 $66,420 $4,000 -- $52,069 8,265 $9,092
President 1997 61,000 4,000 -- N/A N/A 0
</TABLE>
- ------------------------------
(1) Aggregate value does not exceed the lesser of $5,000 or 10% of Mr.
Neudorfer's salary.
(2) Represents the award of 3,306 shares of Common Stock under the RSP as of
March 16, 1998 on which date the market price of such stock was $15.75 per
share. Such stock awards become non-forfeitable at the rate of 20% shares
per year commencing on March 16, 1999. Dividend rights associated with
such stock are accrued and held in arrears to be paid at the time that
such stock becomes non-forfeitable. As of June 30, 1998, based upon a
market price of $14.50 per share, such award of 3,306 shares had an
aggregate value of $47,937.
(3) Such awards under the 1998 Stock Option Plan are first exercisable at the
rate of 20% per year commencing on March 16, 1999. The exercise price
equals the market value of the Common Stock on the date of grant of
$15.75.
(4) At June 30, 1998, consists of 661.25 shares of stock allocated under the
ESOP as of November 30, 1997, with a market value at such date of $9,092.
(5) Executive is a participant in the Bank's defined benefit plan providing
that upon retirement after age 65 and completion of 25 or more years of
service, the annual pension benefit payable will be equal to 42.8% of
final average compensation. Such benefits will be payable as a life
annuity. Mr. Neudorfer has completed 23 years of service with the Bank.
Based upon Mr. Neudorfer's current level of compensation, such benefits
payable at age 65 are estimated to be $25,680 per year.
Employment Agreement. The Bank has entered into an employment agreement
with Robert Neudorfer, President of the Bank ("Agreement"). The Agreement has a
three year term. Mr. Neudorfer's base compensation under the Agreement is
$66,420. Under the Agreement, Mr. Neudorfer's employment may be terminated by
the Bank for "just cause" as defined in the Agreement. If the Bank terminates
Mr. Neudorfer without just cause, Mr. Neudorfer will be entitled to a
continuation of his salary from the date of termination through the remaining
term of the Agreement. In the event of the termination of employment in
connection with any change in control of the Bank during the term of the
Agreement, Mr. Neudorfer will be paid in a lump sum an amount equal to 2.00
times his prior year's taxable compensation. In the event of a change in control
at June 30, 1998, Mr. Neudorfer would have been entitled to a lump sum payment
of approximately $130,000.
Other Benefits
Employee Stock Ownership Plan. The Bank maintains an employee stock
ownership plan ("ESOP") for the exclusive benefit of participating employees.
Participating employees are employees who have completed one year of service
with the Bank and attained age 21. The ESOP is funded by contributions made by
the Bank in cash or the Common Stock. The ESOP has borrowed funds from the
Company in order to purchase Common Stock in the Conversion. This loan is
secured by the shares purchased and earnings of ESOP assets. Shares purchased
with such loan proceeds are held in a suspense account for allocation among
participants as the loan is repaid. The Bank is contributing $48,932
-9-
<PAGE>
annually to the ESOP to meet principal obligations under the ESOP loan. This
loan is expected to be fully repaid by the year 2007.
Stock Awards
The following tables sets forth additional information concerning stock
options granted during the 1998 fiscal year pursuant to the 1998 Stock Option
Plan to the named executive officer in the Summary Compensation Table and the
year end value of such outstanding options.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS TABLE
Option/SAR Grants in Last Fiscal Year (1)
Individual Grants
---------------------------------------------------------------------------
% of Total
# of Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted(#) Fiscal Year ($/Sh) Date
- ---- ---------- ----------- ------ ----
<S> <C> <C> <C> <C>
Robert Neudorfer 8,265 53% $15.75 March 16, 2008
</TABLE>
- -----------------
(1) No Stock Appreciation Rights (SARs) are authorized under the plan.
Aggregated Option/SAR Exercises in Last Fiscal Year,
and FY-End Option/SAR Values
----------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs at Options/SARs
FY-End (#) at FY-End ($)
Shares Acquired
Name on Exercise (#) Value Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- --------------- -------------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Robert Neudorfer 0 0 0/8,265 $ 0/$ 0
</TABLE>
- ------------------
(1) Based upon an exercise price of $15.75 per share and estimated price of
14.50 at June 30, 1998.
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
Certain Related Transactions
The Bank, like many financial institutions, has followed a policy of
granting various types of loans to officers, directors, and employees. The loans
have been made in the ordinary course of business and on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with the Bank's other customers, and do not involve
more than the normal risk of collectibility, or present other unfavorable
features.
-10-
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL II - RATIFICATION OF THE 1998 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
General
The Board of Directors adopted the 1998 Stock Option Plan and the
Company's stockholders approved it on March 16, 1998 ("Effective Date").
Pursuant to the 1998 Stock Option Plan, up to 33,060 shares of Common Stock are
reserved for issuance by the Company upon exercise of stock options to be
granted to officers, directors, key employees and other persons from time to
time. The purpose of the 1998 Stock Option Plan is to attract and retain
qualified personnel for positions of substantial responsibility and to provide
additional incentive to certain officers, directors, key employees and other
persons to promote the success of the business of the Company and the Bank.
Pursuant to regulations of the Office of the Thrift Supervision (the
"OTS") applicable to stock benefit plans established or implemented within one
year following the completion of a mutual-to-stock conversion of a federally
chartered savings institution such as the Bank, the 1998 Stock Option Plan
contains certain restrictions and limitations. The 1998 Stock Option Plan
provides that options granted to employees or directors become first exercisable
no more rapidly than ratably over a five-year period (with acceleration upon
death or disability or a Change in Control, as such term is defined in the 1998
Stock Option Plan); provided, however, that such accelerated vesting is not
inconsistent with the regulations of the OTS at the time of such acceleration.
Recent OTS interpretive letters permit awards under stock benefit plans to
accelerate vesting of awards upon a Change in Control; provided that
stockholders ratify such plan provisions by action of stockholders taken more
than one year following the completion of the mutual-to-stock conversion. The
Board of Directors is seeking ratification of the 1998 Stock Option Plan (as
previously approved by the stockholders on March 16, 1998) as a means of
complying with the OTS interpretive letters.
Ratification of the RSP does not increase the number of shares reserved
for issuance thereunder, alter the classes of individuals eligible to
participate in the 1998 Stock Option Plan, or otherwise amend or modify the
terms of the 1998 Stock Option Plan. In the event that the 1998 Stock Option
Plan is not ratified by stockholders at the Meeting, the 1998 Stock Option Plan
will nevertheless remain in effect. However, any employee or director of the
Company or the Bank that has their service terminated prior to the vesting of
such stock awards may forfeit such unvested awards to the extent that may be
required under applicable OTS regulations and policies.
The 1998 Option Plan is administered by the Board of Directors or a
committee of not less than two non-employee directors appointed by the Company's
Board of Directors and serving at the pleasure of the Board (the "Option
Committee"). Members of the Option Committee shall be deemed "Non- Employee
Directors" within the meaning of Rule 16b-3 pursuant to the 1934 Act. The Option
Committee may select the officers and employees to whom options are to be
granted and the number of options to be granted based upon several factors
including prior and anticipated future job duties and responsibilities, job
performance, the Bank's financial performance and a comparison of awards given
by other institutions. A majority of the members of the Option Committee shall
constitute a quorum and the action of a majority of the members present at any
meeting at which a quorum is present shall be deemed the action of the Option
Committee.
-11-
<PAGE>
Officers, directors, key employees and other persons who are designated
by the Option Committee will be eligible to receive, at no cost to them, options
under the 1998 Stock Option Plan (the "Optionees"). Each option granted pursuant
to the 1998 Stock Option Plan shall be evidenced by an instrument in such form
as the Option Committee shall from time to time approve. Option shares may be
paid for in cash, shares of Common Stock, or a combination of both. The Company
will receive no monetary consideration for the granting of stock options under
the 1998 Stock Option Plan. Further, the Company will receive no consideration
other than the option exercise price per share for Common Stock issued to
Optionees upon the exercise of those options.
Shares of Common Stock issuable under the 1998 Stock Option Plan may be
from authorized but unissued shares, treasury shares or shares purchased in the
open market. An option which expires, becomes unexercisable, or is forfeited for
any reason prior to its exercise will again be available for issuance under the
1998 Stock Option Plan. No option or any right or interest therein is assignable
or transferable except by will or the laws of descent and distribution. The 1998
Stock Option Plan shall continue in effect for a term of ten years from the
Effective Date.
Stock Options
The Option Committee may grant either Incentive Stock Options or
Non-Incentive Stock Options. In general, if an Optionee ceases to serve as an
employee of the Company for any reason other than disability or death, an
exercisable Incentive Stock Option may continue to be exercisable for three
months but in no event after the expiration date of the option, except as may
otherwise be determined by the Option Committee at the time of the award. In the
event of the disability or death of an Optionee during employment, an
exercisable Incentive Stock Option will continue to be exercisable for one year
and two years, respectively, to the extent exercisable by the Optionee
immediately prior to the Optionee's disability or death but only if, and to the
extent that, the Optionee was entitled to exercise such Incentive Stock Options
on the date of termination of employment. The terms and conditions of
Non-Incentive Stock Options relating to the effect of an Optionee's termination
of employment or service, disability, or death shall be such terms as the Option
Committee, in its sole discretion, shall determine at the time of termination of
service, disability or death, unless specifically determined at the time of
grant of such options.
Currently, the 1998 Stock Option requires that options granted to
employees or directors become first exercisable no more rapidly than ratably
over a five-year period (with acceleration upon death or disability or a Change
in Control, as such terms are defined in the 1998 Stock Option Plan); provided,
however, that such accelerated vesting is not inconsistent with the regulations
of the OTS at the time of such acceleration. Ratification of the 1998 Stock
Option Plan at the Meeting will conform the acceleration of vesting of options
upon a Change in Control with applicable OTS interpretive letters. Such
stockholder ratification will be effective with respect to previously awarded
options and any options that may be granted in the future. Pursuant to the 1998
Stock Option Plan, upon a Change in Control, all options previously granted and
outstanding as of the date of a Change in Control will automatically become
exercisable and non-forfeitable.
No shares of Common Stock shall be issued upon the exercise of an
option until full payment has been received by the Company, and no Optionee
shall have any of the rights of a stockholder of the Company until shares of
Common Stock are issued to such Optionee. Upon the exercise of an option by an
Optionee (or the Optionee's personal representative), the Option Committee, in
its sole and absolute discretion, may make a cash payment to the Optionee, in
whole or in part, in lieu of the delivery of
-12-
<PAGE>
shares of Common Stock. Such cash payment to be paid in lieu of delivery of
Common Stock shall be equal to the difference between the fair market value of
the Common Stock on the date of the option exercise and the exercise price per
share of the option. Any cash payment shall be in exchange for the cancellation
of such option. A cash payment shall not be made in the event that such
transaction would result in liability to the Optionee and the Company under
Section 16(b) of the 1934 Act, and regulations promulgated thereunder.
The 1998 Stock Option Plan provides that the Board of Directors of the
Company may authorize the Option Committee to direct the execution of an
instrument providing for the modification, extension or renewal of any
outstanding option, provided that no such modification, extension or renewal
shall confer on the Optionee any right or benefit which could not be conferred
on the Optionee by the grant of a new option at such time, and shall not
materially decrease the Optionee's benefits under the option without the
Optionee's consent, except as otherwise provided under the 1998 Stock Option
Plan.
Awards Under the 1998 Stock Option Plan
The Board or the Option Committee shall from time to time determine the
officers, directors, key employees and other persons who shall be granted
options under the Plan, the number of options to be granted to any participant,
and whether options granted to each such Plan participant shall be Incentive
Stock Options and/or Non-Incentive Stock Options. In selecting participants and
in determining the number of shares of Common Stock subject to options to be
granted to each such participant, the Board or the Option Committee may consider
the nature of the services rendered by each such participant, each such
participant's current and potential contribution to the Company and such other
factors as may be deemed relevant. Participants who have been granted an option
may, if otherwise eligible, be granted additional options. In no event shall
shares of Common Stock subject to options granted to non-employee directors in
the aggregate under this 1998 Stock Option Plan exceed more than 30% of the
total number of shares of Common Stock authorized for delivery under this Plan,
and no more than 5% of total shares of Common Stock may be awarded to any
individual non-employee director. In no event shall shares of Common Stock
subject to options granted to any employee exceed more than 25% of the total
number of shares of Common Stock authorized for delivery under the 1998 Stock
Option Plan.
The table below presents information related to options previously
awarded by the Company under the 1998 Stock Option Plan. Ratification of the
1998 Stock Option Plan does not impact the number of options previously awarded.
Stockholder ratification of the 1998 Stock Option Plan confirms the provisions
of the 1998 Stock Option Plan previously approved by stockholders of the
Company. In accordance with the 1998 Stock Option Plan, all outstanding options
shall become immediately exercisable in the event of a Change in Control of the
Company or the Bank.
PREVIOUSLY AWARDED BENEFITS
1998 STOCK OPTION PLAN
----------------------
<TABLE>
<CAPTION>
Number of Options
Name and Position Previously Granted(1)(2)
- ----------------- ------------------------
<S> <C>
Robert Neudorfer, President and Director.............. 8,265(3)
Executive Officer Group (2 persons)................... 10,910(3)
Non-Executive Officer Director Group
(5 persons)......................................... 8,265(4)
Non-Executive Officer Employee Group ................. 2,645(3)
</TABLE>
-13-
<PAGE>
- -----------------------------
(1) The exercise price of such options is equal to the fair market value of
the Common Stock on the date of grant.
(2) Options shall vest, on the one year anniversary of the date of grant, 20%
annually during periods of continued service as an employee, director, or
director emeritus. Upon vesting, options shall remain exercisable for ten
years from the date of grant without regard to continued service as an
employee, director, or director emeritus.
(3) Options awarded to officers and employees will be exercisable as follows:
options awarded at the time of stockholder approval are first exercisable
at the rate of 20% on the one year anniversary of the date of grant and
20% annually thereafter during periods of continued service as an
employee, Director or Director Emeritus. Such awards shall be 100%
exercisable in the event of death, disability, or upon a change in control
of the Company or the Bank. Options awarded to employees shall continue to
be exercisable during continued service as an employee, Director or
Director Emeritus. Options not exercised within three months of
termination of service as an employee shall thereafter be deemed
non-incentive stock options.
(4) Options awarded to directors are first exercisable at a rate of 20% one
year after the date of grant and 20% annually thereafter, during such
period of service as a director or director emeritus, and shall remain
exercisable for ten years without regard to continued service as a
director or director emeritus. Upon disability, death, or a change in
control of the Company or the Bank, such awards shall be 100% exercisable.
Effect of Mergers, Change of Control and Other Adjustments
Subject to any required action by the stockholders of the Company,
within the sole discretion of the Option Committee, the aggregate number of
shares of Common Stock for which Options may be granted hereunder or the number
of shares of Common Stock represented by each outstanding Option will be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend or any other increase
or decrease in the number of shares of Common Stock effected without the receipt
or payment of consideration by the Company. Subject to any required action by
the stockholders of the Company, in the event of any change in control,
recapitalization, merger, consolidation, exchange of shares, spin-off,
reorganization, tender offer, partial or complete liquidation or other
extraordinary corporate action or event, the Option Committee, in its sole
discretion, shall have the power, prior to or subsequent to such action or
events, to (i) appropriately adjust the number of shares of Common Stock subject
to each option, the exercise price per share of such option, and the
consideration to be given or received by the Company upon the exercise of any
outstanding options; (ii) cancel any or all previously granted options, provided
that appropriate consideration is paid to the Optionee in connection therewith;
and/or (iii) make such other adjustments in connection with the 1998 Stock
Option Plan as the Option Committee, in its sole discretion, deems necessary,
desirable, appropriate or advisable. However, no action may be taken by the
Option Committee which would cause Incentive Stock Options granted pursuant to
the 1998 Stock Option Plan to fail to meet the requirements of Section 422 of
the Code without the consent of the Optionee. The 1998 Stock Option Plan
provision to accelerate the exercise of options and the immediate exercisability
of options in the case of a Change in Control of the Company could have an
anti-takeover effect by making it more costly for a potential acquiror to obtain
control of the Company due to the higher number of shares outstanding following
such exercise of options.
The power of the Option Committee to accelerate the exercise of options
and the immediate exercisability of Options in the case of a Change in Control
of the Company could have an anti-takeover effect by making it more costly for a
potential acquiror to obtain control of the Company due to the
-14-
<PAGE>
higher number of shares outstanding following such exercise of options. The
power of the Option Committee to make adjustments in connection with the 1998
Stock Option Plan, including adjusting the number of shares subject to options
and canceling options, prior to or after the occurrence of an extraordinary
corporate action, allows the Option Committee to adapt the 1998 Stock Option
Plan to operate in changed circumstances, to adjust the 1998 Stock Option Plan
to fit a smaller or larger company, and to permit the issuance of options to new
management following such extraordinary corporate action. However, this power of
the Option Committee also has an anti-takeover effect, by allowing the Option
Committee to adjust the 1998 Stock Option Plan in a manner to allow the present
management of the Company to exercise more options and hold more shares of the
Company's Common Stock, and to possibly decrease the number of options available
to new management of the Company.
Amendment and Termination of the 1998 Stock Option Plan
The Board of Directors may alter, suspend or discontinue the 1998 Stock
Option Plan, except that no action of the Board shall increase the maximum
number of shares of Common Stock issuable under the 1998 Stock Option Plan,
materially increase the benefits accruing to Optionees under the 1998 Stock
Option Plan or materially modify the requirements for eligibility for
participation in the 1998 Stock Option Plan unless such action of the Board
shall be subject to approval or ratification by the stockholders of the Company.
Possible Dilutive Effects of the 1998 Stock Option Plan
The Common Stock to be issued upon the exercise of options awarded
under the 1998 Stock Option Plan may either be authorized but unissued shares of
Common Stock or shares purchased in the open market. Because the stockholders of
the Company do not have preemptive rights, to the extent that the Company funds
the 1998 Stock Option Plan, in whole or in part, with authorized but unissued
shares, the interests of current stockholders will be diluted. If upon the
exercise of all of the options, the Company delivers newly issued shares of
Common Stock (i.e., 33,060, shares of Common Stock), then the dilutive effect to
current stockholders would be approximately 9.1%. Ratification of the 1998 Stock
Option Plan does not increase the maximum number of shares issuable under the
1998 Stock Option Plan as previously approved by stockholders.
Federal Income Tax Consequences
Under present federal tax laws, awards under the 1998 Stock Option Plan
will have the following consequences:
1. The grant of an option will not by itself result in the recognition of
taxable income to an Optionee nor entitle the Company to a tax deduction
at the time of such grant.
2. The exercise of an option which is an "Incentive Stock Option" within the
meaning of Section 422 of the Code generally will not, by itself, result
in the recognition of taxable income to an Optionee nor entitle the
Company to a deduction at the time of such exercise. However, the
difference between the option exercise price and the fair market value of
the Common Stock on the date of option exercise is an item of tax
preference which may, in certain situations, trigger the alternative
minimum tax for an Optionee. An Optionee will recognize capital gain or
loss upon resale of the shares of Common Stock received pursuant to the
exercise of Incentive Stock Options, provided that such
-15-
<PAGE>
shares are held for at least one year after transfer of the shares or two
years after the grant of the option, whichever is later. Generally, if the
shares are not held for that period, the Optionee will recognize ordinary
income upon disposition in an amount equal to the difference between the
option exercise price and the fair market value of the Common Stock on the
date of exercise, or, if less, the sales proceeds of the shares acquired
pursuant to the option.
3. The exercise of a Non-Incentive Stock Option will result in the
recognition of ordinary income by the Optionee on the date of exercise in
an amount equal to the difference between the exercise price and the fair
market value of the Common Stock acquired pursuant to the option.
4. The Company will be allowed a tax deduction for federal tax purposes equal
to the amount of ordinary income recognized by an Optionee at the time the
Optionee recognizes such ordinary income.
5. In accordance with Section 162(m) of the Code, the Company's tax
deductions for compensation paid to the most highly paid executives named
in the Company's Proxy Statement may be limited to no more than $1 million
per year, excluding certain "performance-based" compensation. The Company
intends for the award of options under the 1998 Stock Option Plan to
comply with the requirement for an exception to Section 162(m) of the Code
applicable to stock option plans so that the Company's deduction for
compensation related to the exercise of options would not be subject to
the deduction limitation set forth in Section 162(m) of the Code.
Accounting Treatment
Neither the grant nor the exercise of an option under the 1998 Stock
Option Plan currently requires any charge against earnings under generally
accepted accounting principles. Common Stock issuable pursuant to outstanding
options which are exercisable under the 1998 Stock Option Plan will be
considered outstanding for purposes of calculating earnings per share on a fully
diluted basis.
Stockholder Ratification
Stockholder ratification of the 1998 Stock Option Plan is being sought
in accordance with interpretive letters of the OTS. An affirmative vote of a
majority of the votes cast at the Meeting on the matter, in person or by proxy,
is required to constitute stockholder ratification of the 1998 Stock Option
Plan, submitted as Proposal II.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE 1998 STOCK OPTION PLAN.
-16-
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL III - RATIFICATION OF THE RSP
- --------------------------------------------------------------------------------
General
The Board of Directors of the Company previously adopted the RSP as a
method of providing directors, officers, and key employees of the Bank with a
proprietary interest in the Company in a manner designed to encourage such
persons to remain in the employment or service of the Bank. As previously
approved by stockholders of the Company on March 16, 1998, the Bank contributed
sufficient funds to the RSP to purchase Common Stock representing up to 4% of
the aggregate number of shares issued in the Conversion (i.e., 13,224 shares of
Common Stock) in the open market. All of the Common Stock purchased by the RSP
was purchased at the fair market value of such stock on the date of purchase.
Awards under the RSP were made in recognition of expected future services to the
Bank by its directors, officers and key employees responsible for implementation
of the policies adopted by the Bank's Board of Directors and as a means of
providing a further retention incentive.
Pursuant to regulations of the Office of the Thrift Supervision (the
"OTS") applicable to stock benefit plans established or implemented within one
year following the completion of a mutual-to-stock conversion of a federally
chartered savings institution such as the Bank, the RSP contains certain
restrictions and limitations. The RSP provides that stock awards ("Awards")
granted to employees or directors become vested no more rapidly than ratably
over a five-year period (with acceleration upon death or disability or a Change
in Control, as such term is defined in the RSP); provided, however, that such
accelerated vesting is not inconsistent with the regulations of the OTS at the
time of such acceleration. Recent OTS interpretive letters permit awards under
stock benefit plans to accelerate vesting of awards upon a Change in Control;
provided that stockholders ratify such plan provisions by action of stockholders
taken more than one year following the completion of the mutual-to-stock
conversion. The Board of Directors is seeking ratification of the RSP (as
previously approved by the stockholders on March 16, 1998) as a means of
complying with the OTS interpretive letters.
Ratification of the RSP does not increase the number of shares reserved
for issuance thereunder, alter the classes of individuals eligible to
participate in the RSP, or otherwise amend or modify the terms of the RSP. In
the event that the RSP is not ratified by stockholders at the Meeting, the RSP
will nevertheless remain in effect. However, any employee or director of the
Company or the Bank that has their service terminated prior to the vesting of
such stock awards may forfeit such unvested awards to the extent that may be
required under applicable OTS regulations and policies.
Awards Under the RSP
Currently, the RSP requires that Awards granted to employees or
directors become first exercisable no more rapidly than ratably over a five-year
period (with accelerated vesting upon death or disability or a Change in
Control, as such terms are defined in the RSP); provided, however, that such
accelerated vesting is not inconsistent with the regulations of the OTS at the
time of such acceleration. Ratification of the RSP at the Meeting will conform
the acceleration of vesting of Awards upon a Change in Control with applicable
OTS interpretive letters. Such stockholder ratification will be effective with
respect to previously granted Awards and any Awards that may be granted in the
future. Pursuant to the RSP, upon a Change in Control, all Awards previously
granted and outstanding as of the date of a Change in Control will automatically
become exercisable and non-forfeitable.
-17-
<PAGE>
Benefits under the RSP ("Plan Share Awards") may be granted at the sole
discretion of a committee comprised of not less than two directors who are not
employees of the Bank or the Company (the "RSP Committee") appointed by the
Bank's Board of Directors. The RSP is managed by trustees (the "RSP Trustees")
who are non-employee directors of the Bank or the Company and who have the
responsibility to invest all funds contributed by the Bank to the trust created
for the RSP (the "RSP Trust"). Unless the terms of the RSP or the RSP Committee
specifies otherwise, awards under the RSP will be in the form of restricted
stock payable as the Plan Share Awards shall be earned and non- forfeitable.
Twenty percent (20%) of such awards shall be earned and non-forfeitable on the
one year anniversary of the date of grant of such awards, and 20% annually
thereafter, provided that the recipient of the award remains an employee,
Director or Director Emeritus during such period. A recipient of such restricted
stock will not be entitled to voting rights associated with such shares prior to
the applicable date such shares are earned. Dividends paid on Plan Share Awards
shall be held in arrears and distributed upon the date such applicable Plan
Share Awards are earned. Any shares held by the RSP Trust which are not yet
earned shall be voted by the RSP Trustees, as directed by the RSP Committee. If
a recipient of such restricted stock terminates employment or service for
reasons other than death, disability, or a change in control of the Company or
the Bank, the recipient forfeits all rights to the awards under restriction. If
the recipient's termination of employment or service is caused by death,
disability, or a change in control of the Company or the Bank (provided that
such accelerated vesting is not inconsistent with applicable regulations of the
OTS at the time of such change in control), all restrictions expire and all
shares allocated shall become unrestricted. Awards of restricted stock to
directors shall be immediately non-forfeitable in the event of the death or
disability of such director, or a change in control of the Company or the Bank
and distributed as soon as practicable thereafter. The Board of Directors can
terminate the RSP at any time, and if it does so, any shares not allocated will
revert to the Company.
Plan Share Awards under the RSP will be determined by the RSP
Committee. In no event shall any Employee receive Plan Share Awards in excess of
25% of the aggregate Plan Shares authorized under the Plan. Plan Share Awards
may be granted to newly elected or appointed non-employee Directors of the Bank
subsequent to the effective date (as defined in the RSP) provided that the Plan
Share Awards made to non-employee directors shall not exceed 30% of total Plan
Share Reserve in the aggregate under the Plan or 5% of the total Plan Share
Reserve to any individual non-employee Director.
The aggregate number of Plan Shares available for issuance pursuant to
the Plan Share Awards and the number of shares to which any Plan Share Award
relates shall be proportionately adjusted for any increase or decrease in the
total number of outstanding shares of Common Stock issued subsequent to the
effective date (as defined in the RSP) of the RSP resulting from any split,
subdivision or consolidation of the Common Stock or other capital adjustment,
change or exchange of Common Stock, or other increase or decrease in the number
or kind of shares effected without receipt or payment of consideration by the
Company.
The following table presents information related to the previously
granted awards of Common Stock under the RSP as authorized pursuant to the terms
of the RSP. Ratification of such RSP does not change the number of shares
awarded or other terms. Such ratification of the RSP confirms the provisions of
the RSP previously approved by the stockholders of the Company.
-18-
<PAGE>
PRIOR AWARDS UNDER THE RSP
--------------------------
<TABLE>
<CAPTION>
Number of Shares
Name and Position Previously Granted (1)(2)
- ----------------- -------------------------
<S> <C>
Robert Neudorfer
President and Director .......................... 3,306
Executive Officer Group (2 persons)................ 4,099
Non-Executive Officer Director
Group (5 persons)................................ 3,305(3)
Non-Executive Officer Employee
Group............................................ 793
</TABLE>
- -------------------------------
(1) All Plan Share Awards presented herein shall be earned at the rate of 20%
one year from date of grant, and 20% annually thereafter. All awards
become immediately 100% vested upon death, disability, or termination of
service following a change in control (as defined in the RSP).
(2) Plan Share Awards shall continue to vest during periods of service as an
employee, director, or director emeritus.
(3) Each of five non-executive officer directors of the Bank were awarded 661
shares as of March 16, 1998.
Amendment and Termination of the Plan
The Board may amend or terminate the RSP at any time. However, no
action of the Board may increase the maximum number of Plan Shares permitted to
be awarded under the RSP, except for adjustments in the Common Stock of the
Company, materially increase the benefits accruing to Participants under the RSP
or materially modify the requirements for eligibility for participation in the
RSP unless such action of the Board shall be subject to ratification by the
stockholders of the Company.
Federal Income Tax Consequences
Common Stock awarded under the RSP is generally taxable to the
recipient at the time that such awards become earned and non-forfeitable, based
upon the fair market value of such stock at the time of such vesting.
Alternatively, a recipient may make an election pursuant to Section 83(b) of the
Code within 30 days of the date of the transfer of such Plan Share Award to
elect to include in gross income for the current taxable year the fair market
value of such award. Such election must be filed with the Internal Revenue
Service within 30 days of the date of the transfer of the stock award. The
Company will be allowed a tax deduction for federal tax purposes as a
compensation expense equal to the amount of ordinary income recognized by a
recipient of Plan Share Awards at the time the recipient recognizes taxable
ordinary income. A recipient of a Plan Share Award may elect to have a portion
of such award withheld by the RSP Trust in order to meet any necessary tax
withholding obligations.
Accounting Treatment
For accounting purposes, the Company will recognize compensation
expense in the amount of the fair market value of the Common Stock subject to
Plan Share Awards at the grant date pro rata over the period of years during
which the awards are earned.
-19-
<PAGE>
Stockholder Ratification
The Company is submitting the RSP to stockholders for ratification in
accordance with the interpretive letters of the OTS. An affirmative vote of a
majority of the votes cast at the Meeting on the matter, in person or by proxy,
is required to constitute stockholder ratification of the RSP, submitted as
Proposal III.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE RSP.
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PROPOSAL IV -- RATIFICATION OF APPOINTMENT OF AUDITORS
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Stokes Kelly & Hinds, LLC, was the Company's independent public
accountant for the 1998 fiscal year. The Board of Directors of the Company
presently intends to renew the Company's arrangement with Stokes Kelly & Hinds,
LLC to be its auditors for the fiscal year ended June 30, 1999. A representative
of Stokes Kelly & Hinds, LLC is expected to be present at the meeting to respond
to stockholders' questions and will have the opportunity to make a statement if
the representative so desires.
Ratification of the appointment of the auditors requires the approval
of a majority of the votes cast by the stockholders of the Company at the
Meeting. The Board of Directors recommends that stockholders vote "FOR" the
ratification of the appointment of Stokes, Kelly & Hinds, LLC, as the Company's
auditors for the fiscal year ending June 30, 1999.
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OTHER MATTERS
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The Board of Directors is not aware of any business to come before the
Meeting other than those matters described 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 judgment of the persons named in the accompanying proxy.
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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 for the year ended June 30,
1998, including financial statements, will be mailed to all stockholders of
record as of the close of business on September 1, 1998. 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.
-20-
<PAGE>
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STOCKHOLDER PROPOSALS
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In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive offices at
807 Middle Street, Pittsburgh, Pennsylvania 15212, no later than May 31, 1999.
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FORM 10-KSB
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A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
JUNE 30, 1998 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD
DATE UPON WRITTEN REQUEST TO THE SECRETARY, WSB HOLDING COMPANY, 807 MIDDLE
STREET, PITTSBURGH, PENNSYLVANIA 15212.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Johanna C. Guehl
----------------------------------
Johanna C. Guehl
Secretary
Pittsburgh, Pennsylvania
September 28, 1998
-21-
<PAGE>
Annex A
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WSB HOLDING COMPANY
807 MIDDLE STREET
PITTSBURGH, PENNSYLVANIA 15212
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ANNUAL MEETING OF STOCKHOLDERS
October 19, 1998
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The undersigned hereby appoints the Board of Directors of WSB Holding
Company (the "Company"), or its designee, with full powers of substitution, to
act as attorneys and proxies for the undersigned, to vote all shares of Common
Stock of the Company which the undersigned is entitled to vote at the Annual
Meeting of Stockholders (the "Meeting"), to be held at 5035 Curry Road,
Pittsburgh, Pennsylvania, on October 19, 1998, at 4:30 p.m. and at any and all
adjournments thereof, in the following manner:
<TABLE>
<CAPTION>
FOR WITHHELD
--- --------
<S> <C> <C> <C>
1. The election as directors of the nominees
listed below (except as marked to the contrary below): |_| |_|
Joseph J. Manfred
John P. Mueller
(Instruction: To withhold authority to vote
for any individual nominee, write that nominee's name
on the space provided below)
</TABLE>
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<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
2. The ratification of the WSB Holding Company
1998 Stock Option Plan. |_| |_| |_|
3. The ratification of the Workingmens Bank
Restricted Stock Plan. |_| |_| |_|
4. The ratification of the appointment of
Stokes Kelly & Hinds, LLC, as
independent auditors for the Company for
the fiscal year ending June 30, 1999. |_| |_| |_|
</TABLE>
The Board of Directors recommends a vote "FOR" the above listed
proposition.
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THIS SIGNED PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS SIGNED PROXY WILL BE VOTED FOR THE PROPOSITION STATED. IF ANY
OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS SIGNED PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD
OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting, or
at any adjournments thereof, and after notification to the Secretary of the
Company at the Meeting of the Stockholder's decision to terminate this Proxy,
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke this Proxy by filing a
subsequently dated Proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this Proxy.
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 September 28, 1998 and the 1998 Annual Report.
Dated: , 1998
------------------------ -----
- ------------------------------------- -----------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------------- -----------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this Proxy. 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.
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