SCHEDULE 14-A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
Northwest Bancorp, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),14a-6(i)(1),or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
.......................................................................
2) Aggregate number of securities to which transaction applies:
.......................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
.......................................................................
4) Proposed maximum aggregate value of transaction:
........................................................................
[ ] 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: November 7, 2000
<PAGE>
[NORTHWEST LOGO]
November ___, 2000
Dear Stockholder:
We cordially invite you to attend the 2000 Annual Meeting of Stockholders of
Northwest Bancorp, Inc. (the "Company"). The Annual Meeting will be held at the
Knights of Columbus Hall, located at 219 2nd Avenue, Warren, Pennsylvania, at
11:00 a.m. (Pennsylvania time) on December 20, 2000.
The enclosed Notice of Annual Meeting and Proxy Statement describes the formal
business to be transacted. During the Annual Meeting we will also report on the
operations of the Company. Directors and officers of the Company, as well as a
representative of our independent auditors, will be present to respond to any
questions that stockholders may have.
The business to be conducted at the Annual Meeting includes the election of
three directors, the approval of the Company's conversion to a Federal
corporation, the approval of a stock option plan and the ratification of the
appointment of KPMG LLP as auditors for the Company's 2001 fiscal year.
The Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interests of the Company and
its stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.
Also enclosed for your review is our 2000 Annual Report to Stockholders, which
contains detailed information concerning the activities and operating
performance of the Company. On behalf of the Board of Directors, we urge you to
sign, date and return the enclosed proxy card as soon as possible even if you
currently plan to attend the Annual Meeting. This will not prevent you from
voting in person, but will assure that your vote is counted if you are unable to
attend the Annual Meeting.
Sincerely,
John O. Hanna
Chairman of the Board,
President and Chief Executive Officer
<PAGE>
NORTHWEST BANCORP, INC.
301 Second Avenue
Warren, Pennsylvania 16365-2353
(814) 726-2140
NOTICE OF
2000 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On December 20, 2000
Notice is hereby given that the 2000 Annual Meeting of Northwest Bancorp,
Inc., (the "Company") will be held at the Knights of Columbus Hall, 219 2nd
Avenue, Warren, Pennsylvania, on December 20, 2000 at 11:00 a.m. Pennsylvania
time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Company;
2. The approval of the Plan of Charter Conversion by which the Company
will convert to a Federal corporation from a Pennsylvania corporation;
3. The ratification and approval of the Northwest Bancorp, Inc. 2000
Stock Option Plan;
4. The ratification of the appointment of KPMG LLP as auditors for the
Company for the fiscal year ending June 30, 2001; and
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 the Meeting may be
adjourned. Stockholders of record at the close of business on October 31, 2000,
are the stockholders entitled to vote at the Meeting, and any adjournments
thereof.
EVEN IF YOU DO NOT PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY
PROXY THAT YOU GIVE MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED. YOU MAY
REVOKE A PROXY BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION
OR A DULY EXECUTED PROXY BEARING A LATER DATE. IF YOU ATTEND THE MEETING YOU MAY
REVOKE YOUR PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING.
HOWEVER, IF YOUR SHARES ARE NOT REGISTERED IN YOUR NAME, YOU WILL NEED
ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE PERSONALLY AT THE
MEETING.
By Order of the Board of Directors
Gregory C. LaRocca
Senior Vice President and Corporate Secretary
Warren, Pennsylvania
November ____, 2000
--------------------------------------------------------------------------------
A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
--------------------------------------------------------------------------------
<PAGE>
Proxy Statement
NORTHWEST BANCORP, INC.
301 Second Avenue
Warren, Pennsylvania 16365-2353
(814) 726-2140
2000 ANNUAL MEETING OF STOCKHOLDERS
December 20, 2000
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Northwest Bancorp, Inc. (the
"Company") to be used at the 2000 Annual Meeting of Stockholders of Northwest
Bancorp, Inc. (the "Meeting"), which will be held at the Knights of Columbus
Hall, 219 2nd Avenue, Warren, Pennsylvania, on December 20, 2000, at 11:00 a.m.,
Pennsylvania time, and all adjournments of the Meeting. The accompanying Notice
of Annual Meeting of Stockholders and this Proxy Statement are first being
mailed to stockholders on or about November _______, 2000.
REVOCATION OF PROXIES
Stockholders who execute proxies in the form solicited hereby retain the
right to revoke them in the manner described below. Unless so revoked, the
shares represented by such proxies will be voted at the Meeting and all
adjournments thereof. Proxies solicited on behalf of the Board of Directors of
the Company will be voted in accordance with the directions given thereon. You
must sign and return your Proxy to the Company in order for your vote to be
counted. Proxies received by the Company which are signed, but contain no
instructions for voting will be voted "FOR" the proposals set forth in this
Proxy Statement for consideration at the Meeting.
Proxies may be revoked by sending written notice of revocation to the
Secretary of the Company, Gregory C. LaRocca, at the address of the Company
shown above, or by returning a duly executed proxy bearing a later date. The
presence at the Meeting of any stockholder who had given a proxy shall not
revoke such proxy unless the stockholder delivers his or her ballot in person at
the Meeting or delivers a written revocation to the Secretary of the Company
prior to the voting of such proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Holders of record of the Company's common stock, par value $.10 per share
(the "Common Stock"), as of the close of business on October 31, 2000 (the
"Record Date") are entitled to one vote for each share then held. As of the
Record Date, there were 47,377,134 shares of Common Stock issued and
outstanding. The presence in person or by proxy of a majority of the outstanding
shares of Common Stock entitled to vote is necessary to constitute a quorum at
the Meeting. Abstentions and broker non-votes will be counted for purposes of
determining that a quorum is present.
As to the election of directors, the Proxy Card being provided by the Board
of Directors 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 cast, without regard to
either broker non-votes, or proxies as to which the authority to vote for the
nominees being proposed is withheld.
As to the approval of the Plan of Charter Conversion, by checking the
appropriate box, a stockholder may: (i) vote FOR the proposal; (ii) vote AGAINST
the proposal; or (iii) ABSTAIN from voting on the proposal. Under
1
<PAGE>
applicable law, the approval of this proposal shall be determined by a majority
of the outstanding shares of common stock of the Company. Accordingly, broker
non-votes, proxies marked ABSTAIN, and shares that are not voted will have the
same effect as a vote against the Plan of Charter Conversion.
As to the ratification and approval of the Northwest Bancorp, Inc. 2000
Stock Option Plan, by checking the appropriate box, a stockholder may: (i) vote
FOR the proposal; (ii) vote AGAINST the proposal; or (iii) ABSTAIN from voting
on the proposal. The approval of this proposal requires the affirmative vote of
a majority of the outstanding shares of common stock of the Company.
Accordingly, broker non-votes, proxies marked ABSTAIN, and shares that are not
voted will have the same effect as a vote against the Northwest Bancorp, Inc.
2000 Stock Option Plan.
As to the ratification of KPMG LLP as the Company's independent auditors,
by checking the appropriate box, a stockholder may: (i) vote FOR the
ratification; (ii) vote AGAINST the ratification; or (iii) ABSTAIN from voting
on such ratification. The affirmative vote of holders of a majority of the votes
cast at the Meeting in person or by proxy, without regard to broker non-votes,
is required for the ratification of KPMG LLP as auditors for the fiscal year
ending June 30, 2001. Shares as to which the "ABSTAIN" box has been selected on
the proxy card will be counted as shares present and entitled to vote and will
have the same effect as a vote against the matter.
Management of the Company anticipates that the Northwest Bancorp, MHC (the
"Mutual Holding Company"), the majority stockholder of the Company, will vote
all of its shares in favor of all the matters set forth above. If the Mutual
Holding Company votes all of its shares in favor of each proposal, the approval
of each proposal would be assured.
Persons and groups who beneficially own in excess of 5% of the Common Stock
are required to file certain reports with the Securities and Exchange Commission
(the "SEC") regarding such ownership pursuant to the Securities Exchange Act of
1934 (the "Exchange Act"). The following table sets forth, as of June 30, 2000,
the shares of Common Stock beneficially owned by executive officers and
directors as a group and by each person who was the beneficial owner of more
than 5% of the outstanding shares of Common Stock.
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Common Stock
Beneficial Owners Ownership (1) Outstanding
------------------------- ---------------- -----------------
Northwest Bancorp, MHC (2) 35,224,175 74.4%
Liberty and Second Streets
Warren, Pennsylvania 16365-2353
Northwest Bancorp, MHC, 36,590,165 77.3%
and all the Bank's directors and
executive officers as a group
(15 directors and officers) (2)
------------------------------------
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner for purposes of this table, of any shares of Common
Stock if he has shared voting or investment power with respect to such
security, or has a right to acquire beneficial ownership at any time within
60 days from the date as of which beneficial ownership is being determined.
As used herein, "voting power" is the power to vote or direct the voting of
shares and "investment power" is the power to dispose or direct the
disposition of shares, and includes all shares held directly as well as by
spouses and minor children, in trust and other indirect ownership, over
which shares the named individuals effectively exercise sole or shared
voting or investment power.
(2) Includes shares of Common Stock held by Mutual Holding Company, of which
the Company's executive officers and directors are also executive officers
and trustees. Excluding shares of Common Stock held by Mutual Holding
Company, the Company's executive officers and directors owned 1,365,990
shares of Common Stock, or 2.9% of the outstanding shares.
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PROPOSAL I--ELECTION OF DIRECTORS
The Company's Board of Directors consists of 10 members. The Company's
bylaws provide that approximately one-third of the directors are to be elected
annually. Directors of the Company are generally elected to serve for a
three-year period, or a shorter period if the director is elected to fill a
vacancy, and until their respective successors shall have been elected and shall
qualify. Three directors will be elected at the Meeting and will serve until
their successors have been elected and qualified. The Nominating Committee has
nominated John O. Hanna, Richard L. Carr and John M. Bauer to serve as directors
for three year terms. All of the nominees are currently members of the Board of
Directors.
The table below sets forth certain information regarding the composition of
the Company's Board of Directors as of June 30, 2000, including the terms of
office of Board members. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is withheld as to
the nominee) will be voted at the Meeting for the election of the nominees
identified below. If the nominees are unable to serve, the shares represented by
all such proxies will be voted for the election of such substitute as the Board
of Directors may recommend. At this time, the Board of Directors knows of no
reason why the nominees might be unable to serve, if elected. Except as
indicated herein, there are no arrangements or understandings between the
nominees and any other person pursuant to which such nominees were selected.
<TABLE>
<CAPTION>
Shares of
Positions Common Stock
Held in the Director Current Term Beneficially Percent
Name (1) Age Bank Since (2) to Expire Owned (3) Of Class
-------- --- ------------ --------- --------- ------------ ----------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
John O. Hanna 68 Chairman of the Board, 1970 2000 478,831(4) *
President, Chief Executive
Officer and Director
Richard L. Carr 59 Director 1982 2000 47,656(5) *
John M. Bauer 58 Director 1999 2000 10,700(6) *
DIRECTORS CONTINUING IN OFFICE
Robert G. Ferrier 60 Director 1980 2001 32,254(7) *
Richard E. McDowell 56 Director 1972 2001 82,800(8) *
Joseph T. Stadler 68 Director 1970 2001 36,700(9) *
Walter J. Yahn 72 Director 1972 2001 57,043(10) *
William J. Wagner 46 Executive Vice President, 1994 2002 159,911(11) *
Treasurer,
Chief Financial Officer
and Director
Thomas K. Creal, III 61 Director 1982 2002 21,200(12) *
John J. Doyle 72 Director 1970 2002 23,975(13) *
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Gregory C. LaRocca 49 Senior Vice President- N/A N/A 83,914(15) *
Administration and
Corporate Secretary
Robert A. Ordiway 52 Senior Vice President- N/A N/A 83,121(16) *
Community Banking
Raymond R. Parry 63 Senior Vice President- N/A N/A 99,326(17)
Consumer Lending
James E. Vecellio 51 Senior Vice President- N/A N/A 78,561(18) *
Operations
</TABLE>
3
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------------------------------------
* Less than 1%.
(1) The mailing address for each person listed is 301 Second Avenue, Warren,
Pennsylvania 16365-2353.
(2) Reflects initial appointment to the Board of Directors of the Bank for
directors elected prior to 1998. Each director of the Company is also a
trustee of the Mutual Holding Company, which owns the majority of the
issued and outstanding shares of Common Stock.
(3) See definition of "beneficial ownership" in the table in "Voting Securities
and Principal Holders Thereof."
(4) Includes options to purchase 273,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(5) Includes options to purchase 22,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(6) Includes options to purchase 400 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(7) Includes options to purchase 22,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(8) Includes options to purchase 13,200 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(9) Includes options to purchase 22,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined and 9,600 restricted shares which had not vested as of the
date beneficial ownership is being determined.
(10) Includes options to purchase 12,000 shares of common stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(11) Includes options to purchase 80,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(12) Includes options to purchase 8,800 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(13) Includes options to purchase 15,600 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(14) Includes options to purchase 28,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(15) Includes options to purchase 28,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(16) Includes options to purchase 38,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(17) Includes options to purchase 44,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
The principal occupation during the past five years of each director of the
Company is set forth below. All directors have held their present positions for
five years unless otherwise stated.
John O. Hanna has been employed by the Company since 1960, and was Chief
Executive Officer of the Bank from 1972 until August, 1998. Mr. Hanna was
elected Chairman of the Board on August 1, 1998 and remains President and Chief
Executive Officer of the Company. Mr. Hanna is also a director of the Blair
Corporation, a mail order company, and serves as Chairman of the Distribution
Committee of the Warren Foundation. Mr. Hanna is also President, Chief Executive
Officer, and a Director of Jamestown Savings Bank, a New York-chartered savings
bank and a wholly-owned subsidiary of the Company.
William J. Wagner was named President and Chief Executive Officer of the
Bank on August 1, 1998 and remains Executive Vice President, Treasurer and CFO
of the Company. Mr. Wagner was the Chief Financial Officer of the Bank since
1984 and was named Chief Operating Officer in 1996. Mr. Wagner was appointed
Executive Vice President in 1992 and was elected to the Board of Directors in
1994. Mr. Wagner is a certified public accountant. Mr. Wagner is also
Secretary/Treasurer and a Director of Jamestown Savings Bank.
John M. Bauer is co-founder, partner and President of Contact Technologies,
Inc. an electrical component manufacturer in St. Marys, Pennsylvania. He has
served in that capacity since 1989.
4
<PAGE>
Thomas K. Creal, III has been a partner in the architectural firm of Creal
& Larson, in Warren, Pennsylvania since 1969.
John J. Doyle has been President of Perry Construction Company, Erie,
Pennsylvania, since 1989.
Richard L. Carr served as Superintendent of the Titusville Area School
District, Titusville, Pennsylvania from 1986 until his retirement in 1996. Since
his retirement, he has served as a consultant to the University of Findlay
located in Findlay, Ohio. Mr. Carr also serves as Chairman of the Board of the
Titusville Area Medical Center.
Robert G. Ferrier has been President of Ferrier Hardware, Inc. since 1957
and President of Drexel Realty, Erie, Pennsylvania since 1972.
Richard E. McDowell has served as President of the University of Pittsburgh
at Bradford, Bradford, Pennsylvania since 1970. Dr. McDowell is also a director
of Bradford Educational Foundation, the Blaisdell Foundation, and the Bradford
Regional Medical Center.
Joseph T. Stadler retired in January 1995. Prior to that time, he served as
Vice President-Manufacturing of Superior Bronze Corporation in Erie,
Pennsylvania.
Walter J. Yahn is Chairman of the Board, founder, and Chief Executive
Officer of the Erie Advanced Manufacturing Company, Erie, Pennsylvania. He has
served in this capacity since 1971.
Executive Officers who are not Directors
Gregory C. LaRocca was employed by the Bank beginning in 1992, and
currently serves as Senior Vice President of Administration and Corporate
Secretary for the Bank and the Company. He was previously Chief Executive
Officer of American Federal Savings, which merged with the Bank in March of
1992.
Robert A. Ordiway has been employed by the Bank since 1975, most recently
as Senior Vice President of Community Banking. Mr. Ordiway is also a Director of
Jamestown Savings Bank.
Raymond R. Parry has been employed by the Bank since 1981, most recently as
Senior Vice President of Consumer Lending and is President of Northwest Consumer
Discount Company, a wholly owned subsidiary of the Bank.
James E. Vecellio was employed by the Bank beginning in 1977, and currently
serves as Senior Vice President of Information Technology for the Bank and the
Company.
Meetings and Committees of the Board of Directors
The business of the Company is conducted at regular and special meetings of
the full Board and its standing committees. The standing committees consist of
the Executive, Audit, Personnel and Pension, Risk Management, Long Range
Planning, Trust and Community Reinvestment Committees. The full Board of
Directors acts as Nominating Committee for the Company. Mr. Hanna, President of
the Company, is an ex officio member of each of the committees, except for the
Audit Committee. During the fiscal year ended June 30, 2000, the Board of
Directors met at 12 regular meetings and no special meetings were called. No
member of the Board or any committee thereof attended less than 75% of said
meetings.
The Audit Committee consists of Directors Bauer, who serves as Chairman,
Doyle, Young and Stadler. This committee meets with the internal auditor to
review audit programs and the results of audits of specific areas as well as
other regulatory compliance issues. In addition, the Audit Committee meets with
the independent certified public
5
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accountants to review the results of the annual audit and other related matters.
Each member of the Audit Committee is "independent" as defined in the listing
standards of the National Association of Securities Dealers. The Company's Board
of Directors has adopted a written charter for the Audit Committee, which is
attached to this proxy statement as Exhibit E. The Audit Committee met five
times during the fiscal year ended June 30, 2000.
The Personnel and Pension Committee of the Board of Directors consists of
Directors Carr, who serves as Chairman, Hanna, Bauer, Creal and Stadler. The
committee meets when needed to review all employment policies and the
performance and remuneration of the officers and employees of the Company, and
to review and approve all compensation and benefit programs implemented by the
Company and all matters relating to pension plan administration. The committee
met five times during the fiscal year ended June 30, 2000.
Audit Committee Report
The Audit Committee has issued a report which states as follows:
o We have reviewed and discussed with management the Company's
audited consolidated financial statements for the fiscal year
ended June 30, 2000;
o We have discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No
61; and
o We have received the written disclosures and the letter from
the independent accountants required by Independence Standards
Board Standard No. 1, "Independence Discussions with Audit
Committees," and have discussed with the independent
accountants their independence.
o Based on the review and discussions referred to above, we
recommend to the Board of Directors that the audited
consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30,
2000.
This report has been provided by the Audit Committee, which consists of
Directors Bauer, who serves as Chairman, Doyle, Young and Stadler.
Ownership Reports by Officers and Directors
The Common Stock is registered pursuant to Section 12(g) of the Exchange
Act. The officers and directors of the Company and beneficial owners of greater
than 10% of the Common Stock ("10% beneficial owners") are required to file
reports on Forms 3, 4 and 5 with the SEC disclosing beneficial ownership and
changes in beneficial ownership of the Common Stock. SEC rules require
disclosure in the Company's Proxy Statement and Annual Report on Form 10-K of
the failure of an officer, director or 10% beneficial owner of the Common Stock
to file a Form 3, 4 or 5 on a timely basis. Based on the Company's review of
such ownership reports, the Company believes that Director Ferrier filed two
late reports, and that ten transactions were not reported on a timely basis.
Based on the Company's review of such ownership reports, no other officer,
director or 10% beneficial owner of the Company failed to file such ownership
reports on a timely basis for the fiscal year ended June 30, 2000.
Compensation Committee Interlocks and Insider Participation
The Company's Personnel and Pension Committee determines the salaries to be
paid each year to the officers of the Company. The Personnel and Pension
Committee consists of Directors Carr, who serves as Chairman, Bauer, Hanna,
Creal and Stadler. Mr. Hanna is also President and Chief Executive Officer of
the Company. The Company leases approximately 13,000 square feet of office space
from Mr. Hanna at an annual rent of $47,600. The leasing value of the property
was appraised by two outside appraisers at the time the Company and Mr. Hanna
entered into the lease. The Federal Home Loan Bank Board (the Bank's
6
<PAGE>
principal federal regulator at such time) reviewed the terms of the lease and
had no objection to the lease arrangement.
Report of the Board of Directors on Executive Compensation
Under rules established by the SEC, the Company is required to provide
certain data and information in regard to the compensation and benefits provided
to its Chief Executive Officer and other executive officers. The disclosure
requirements for the Chief Executive Officer and other executive officers
include the use of tables and a report explaining the rationale and
considerations that led to fundamental executive compensation decisions
affecting those individuals. In fulfillment of this requirement, the Company's
Personnel and Pension Committee, has prepared the following report for inclusion
in this Proxy Statement.
The Personnel and Pension Committee annually reviews the performance of the
Chief Executive Officer and other executive officers, and approves changes to
base compensation as well as the level of bonus, if any, to be awarded to
executive officers other than Mr. Hanna. Mr. Hanna's compensation is determined
by a formula fixed by the terms of his employment agreement. In addition, the
Personnel and Pension Committee recommends bonuses to be awarded to Mr. Hanna
and certain other officers based on a numerical formula relating to the
Company's return on average assets for the year ended June 30, 1999 and prior
years, and beginning with the fiscal year ended June 30, 2000 a numerical
formula based on the Company's return on average equity. Based on this formula,
and the Company's return on average assets for the fiscal year ended June 30,
1999, a 20% bonus was awarded to Mr. Hanna, which was paid during the fiscal
year ended June 30, 2000. Based on the new formula, and the Company's return on
average equity for the fiscal year ended June 30, 2000, a 20% bonus will be paid
to Mr. Hanna during the fiscal year ending June 30, 2001. Mr. Hanna was also
paid the holiday bonus discussed below. Differences between the amount of these
bonuses and the amounts set forth in the "Executive Compensation" table relate
largely to the timing of the payment of bonuses. In determining whether the base
salary of other executive officers should be adjusted, the Company's Personnel
and Pension Committee takes into account individual performance, performance of
the Company, the size of the Company and the complexity of its operations, and
information regarding compensation paid to executives performing similar duties
for financial institutions in the Company's market area. In addition, all
employees of the Company including officers generally receive a holiday bonus
equal to approximately 5% of base compensation.
While the Personnel and Pension Committee does not use strict numerical
formulas to determine changes in compensation and while it weighs a variety of
different factors in its deliberations, it has emphasized and will continue to
emphasize earnings, profitability, capital position and income level, and return
on average equity as factors in setting the compensation. Other non-quantitative
factors considered by the Company's Personnel and Pension Committee in fiscal
2000 included general management oversight of the Company, the quality of
communication with the Personnel and Pension Committee, and the productivity of
employees. Finally, the Personnel and Pension Committee considered the standing
of the Company with customers and the community, as evidenced by the level of
customer/community complaints and compliments. While each of the quantitative
and non-quantitative factors described above was considered by the Personnel and
Pension Committee, such factors were not assigned a specific weight in
evaluating the performance of the Company's executives. Rather, all factors were
considered, and based upon the effectiveness of such officers in addressing each
of the factors, and the range of compensation paid to officers of peer
institutions, the Personnel and Pension Committee approved salary increases for
the Company's five executive officers not covered by an employment agreement.
This report has been provided by the Personnel and Pension Committee
consisting of Directors Richard L. Carr, Chairman, and John M. Bauer, John O.
Hanna, Thomas K. Creal, III and Joseph T. Stadler.
7
<PAGE>
Stock Performance Graph
Set forth hereunder is a stock performance graph comparing (a) the
cumulative total return on the Common Stock between June 30, 1995 and June 30,
2000, (b) the cumulative total return on stocks included in the Nasdaq Bank
Index over such period, and (c) the cumulative total return on stocks included
in the Nasdaq Composite Index over [GRAPHIC OMITTED]
<TABLE>
<CAPTION>
6/30/95 6/30/96 6/30/97 6/30/98 6/30/99 6/30/00
<S> <C> <C> <C> <C> <C> <C>
Northwest Bancorp, Inc. 100 119.94 169.32 349.79 224.55 157.5
Nasdaq Stock Market 100 128.39 156.15 205.58 296.02 437.30
Nasdaq Bank Index 100 130.23 203.56 282.13 278.62 228.56
</TABLE>
such period. Cumulative return assumes the reinvestment of dividends, and is
expressed in dollars based on an assumed investment of $100.
There can be no assurance that the Company's stock performance will
continue in the future with the same or similar trend depicted in the graph. The
Company will not make or endorse any predictions as to future stock performance.
8
<PAGE>
Executive Compensation
The following table sets forth for the fiscal years ended June 30, 2000,
1999, and 1998, certain information as to the total remuneration paid by the
Company to the Chairman, President and Chief Executive Officer, and Executive
Vice President and Chief Financial Officer of the Company, and for the fiscal
year ended June 30, 2000 certain information as to the total remuneration paid
by the Company to the four most highly compensated executive officers of the
Company or the Bank other than the Chief Executive Officer and the Executive
Vice President ("Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------- ------------------------------------
Awards Payouts
Other -------------------------- -------- All
Name and Year Annual Restricted Options/ Other
principal position Ended Salary Compensation Stock SARS(#) LTIP Compensation
6/30 (1)($) Bonus($) (2) Awards(#) Payouts (3)($)
--------------------- ----- ------ -------- ------------- -------------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John O. Hanna 2000 400,000 92,000 -- -- -- -- 33,790
President and Chief 1999 400,000 100,000 -- -- -- -- 39,754
Executive Officer 1998 399,992 99,999 -- -- -- -- 38,936
William J. Wagner 2000 249,615 52,356 -- -- -- -- 15,380
Executive Vice 1999 224,539 56,227 -- -- -- -- 20,906
President, Chief 1998 186,096 42,230 -- -- -- -- 19,781
Operating Officer and
Chief Financial Officer
Gregory C. LaRocca 2000 104,877 20,544 -- -- -- -- 7,963
Senior Vice President 1999 96,959 21,560 -- -- -- -- 10,814
and Corporate Secretary 1998 93,458 18,635 -- -- -- -- 9,869
Robert A. Ordiway 2000 108,346 21,972 -- -- -- -- 8,269
Senior Vice President- 1999 102,908 23,045 -- -- -- -- 11,121
Community Banking 1998 94,946 18,672 -- -- -- -- 10,179
Raymond R. Parry 2000 104,877 20,544 -- -- -- -- 7,963
Senior Vice President- 1999 96,959 21,560 -- -- -- -- 10,814
Consumer Lending 1998 93,458 18,635 -- -- -- -- 9,869
James E. Vecellio 2000 105,938 21,497 -- -- -- -- 8,105
Senior Vice President- 1999 101,954 22,549 -- -- -- -- 11,354
Operations 1998 97,958 19,650 -- -- -- -- 10,670
</TABLE>
(1) Includes amounts deferred at the election of named officers pursuant to the
Northwest Retirement Savings Plan (the "401(k) Plan").
(2) For the fiscal years ended June 30, 2000, 1999 and 1998, there were no
perquisites exceeding the lesser of $50,000 or 10% of the individual's
total salary and bonus for the year.
(3) Includes shares awarded pursuant to the Company's employee stock ownership
plan, amounts paid for life insurance premiums, and Bank contributions to
the 401(k) Plan.
Directors' Compensation
As of July 1, 2000, nonemployee directors of the Company and the Bank are
paid a total retainer of $12,000 per year plus $500 per board meeting of the
Bank and the Company attended or $400 if participating via conference call.
Nonemployee members of the Executive, Trust, Audit, Risk Management, Long Range
Planning, Personnel and Pension, and Community Reinvestment Committees are paid
a total of $500 for attendance at committee meetings
9
<PAGE>
for both the Company and the Bank, or a total of $400 if such committee meetings
are held on a day of regularly scheduled Board meetings or if the meetings are
held via conference call.
The Company sponsors a non-tax qualified deferred compensation plan for
directors (the "Deferred Compensation Plan") that enables a director to elect to
defer all or a portion of his directors' fees. The amounts deferred are credited
with interest at the rate paid on the Company's five year certificate of
deposit. Deferred amounts are payable upon retirement of a director on or after
attaining age 59-1/2 but no later than age 72, in the form of a lump sum or in
five or ten equal installments. Payments to a director, or to his designated
beneficiary, may also be made from the Deferred Compensation Plan upon the
director's death, total and permanent disability, or termination of service from
the Board. Participants in the Deferred Compensation Plan would not recognize
taxable income with respect to the Deferred Compensation Plan benefits until the
assets are actually distributed.
The Company maintains a retirement plan for outside directors (the
"Directors Plan"). Directors who have served the Board for five years or more
and are not Bank employees are eligible to receive benefits under the Directors
Plan. Upon a director's retirement from the Board on or after five years of
service and the attainment of age 60, the director is entitled to receive a
retirement benefit equal to 60% of the annual retainer paid immediately prior to
retirement plus 60% of the board meeting fees paid for the director's attendance
at board meetings at the annual rate which was in effect immediately prior to
his retirement. If a director retires after five years or more of service but
before attaining age 60, the director is entitled to one-half of the benefits
otherwise available to him. Retirement benefits commence on the first day of the
calendar quarter following the director's attainment of age 65, or if retirement
occurs later, on the first day of the calendar quarter following retirement.
Such retirement benefits are paid for a period equal to the lesser of the number
of a director's completed full years of service, his life, or ten years. No
survivor benefits are payable under the Directors Plan. During the fiscal year
ended June 30, 2000, the expense to the Bank of the Directors Plan was $69,912.
1995 Stock Option Plan. During the fiscal year ended June 30, 1996, the
Bank adopted, and the Company has succeeded to, the Northwest Savings Bank and
Northwest Bancorp, MHC 1995 Stock Option Plan (the "1995 Stock Option Plan").
The 1995 Stock Option Plan was approved by a majority of stockholders other than
the Mutual Holding Company ("Minority Stockholders") present at the 1995 Annual
Meeting. The 1995 Stock Option Plan is a self-administering plan that granted to
each of nonemployee directors Ferrier, McDowell, Stadler, Yahn, Creal, Doyle,
Carr and four former directors nonstatutory options to purchase 22,000 (split
adjusted) shares of Common Stock. Such shares vested in five equal annual
installments over a five year period beginning on December 20, 1995. The 1995
Stock Option Plan further provides that each new non-employee director shall be
granted options to purchase 500 shares of Common Stock to the extent options
remain available in, or are returned to, the 1995 Stock Option Plan. The
exercise price per share for each option is equal to 95% of the fair market
value of the Common Stock on the date the option was granted, or in the case of
all options awarded during the fiscal year ended June 30, 1996, $5.58 per share
(as adjusted for the May 22, 1996 stock split, and the November 14, 1997 stock
split). All options granted under the 1995 Stock Option Plan expire upon the
earlier of ten years following the date of grant or one year following the date
the optionee ceases to be a director. However, in the event of termination of
service or employment due to death, disability, normal retirement or a change of
control of the Company, nonstatutory stock options may be exercised for up to
five years.
1995 Directors Recognition and Retention Plan. During the fiscal year ended
June 30, 1996, the Bank adopted, and the Company has succeeded to, the Northwest
Savings Bank and Northwest Bancorp, MHC Recognition and Retention Plan for
Employees and Outside Directors (the "1995 Recognition Plan"). The 1995
Recognition Plan was approved by a majority of Minority Stockholders present at
the 1995 Annual Meeting. During the fiscal year ended June 30, 1996, the Bank
contributed sufficient funds to the 1995 Recognition Plan to enable it to
purchase 552,000 shares of Common Stock from the Bank, a total of 132,000 (as
adjusted for the May 22, 1996 stock split and the November 14, 1997 stock split)
shares of which were awarded to nonemployee Directors Ferrier, McDowell,
Stadler, Yahn, Creal, Doyle, Carr and four former directors. Such awards of
Common Stock ("Restricted Stock") are restricted by the terms of the 1995
Recognition Plan. Participants earn (become vested in) shares of Restricted
Stock covered by an award, and all restrictions lapse in five equal annual
installments, commencing on either
10
<PAGE>
December 20, 1995 or January 5, 1996. Awards become fully vested upon a
participant's disability, death, retirement or following termination of service
in connection with a change in control of the Company. Unvested shares of
Restricted Stock are forfeited by a director who is not an employee upon failure
to seek reelection, failure to be reelected, or resignation from the Board.
Prior to vesting, recipients of awards under the 1995 Recognition Plan receive
dividends and may vote the shares of Restricted Stock allocated to them. The
Committee will vote shares as to which no instructions are received and any
unallocated shares in the same proportion as allocated shares for which
instructions are given.
Employment Agreements
As of November 1993, the Bank renewed a five-year employment agreement, to
which the Company has succeeded, with John O. Hanna, President and Chief
Executive Officer of Northwest Bancorp, Inc., which was originally entered into
in November 1985. The contract, which would have terminated in November 1998,
has been modified to expire on June 30, 2001. The previous employment agreement
provided for a five-year term and continued through November 1998. The agreement
provides that the base salary of Mr. Hanna shall be at the top quartile of
compensation of executives in the Company's peer group. However, Mr. Hanna chose
to cap his salary at $400,000. Under the employment agreement, Mr. Hanna is also
entitled to certain perquisites and other personal benefits. In the event of his
death, the employment agreement requires the Company to continue to pay Mr.
Hanna's salary to his beneficiaries for one year, and continue medical benefits
for his spouse for her lifetime. The employment agreement provides for
termination by the Company for just cause at any time, and in such event, no
compensation or other benefits would be due under the agreement. The Company may
terminate his employment for reasons other than just cause upon 12 months
written notice to the executive. In such event, Mr. Hanna would be entitled to
100% of his annual compensation for the two-year period following termination,
computed in accordance with the formula used to increase the executive's salary
for each year during employment (as determined in accordance with the
Compensation Survey). In the event of a reorganization, merger or consolidation,
as defined in the employment agreement, the executive is entitled to terminate
his employment upon 12 months written notice to the Company, and receive the
above salary termination benefits. Payments under the employment agreement will
not constitute an excess parachute payment under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"). The employment agreement provides
for a reduction or complete elimination of benefits should the executive
commence employment for another employer during the two-year period after
termination of employment with the Bank.
As of July, 1998, the Company and Mr. William J. Wagner, have entered into
a three-year employment agreement under which Mr. Wagner has agreed to serve as
President and Chief Executive Officer of the Bank and Director of the Company.
On each anniversary date the contract will renew for an additional year, and if
it is not renewed it will expire 24 months following the anniversary date. Under
the agreement, Mr. Wagner's current base salary of $285,000 may be increased but
not decreased. In the event the Bank terminates the executive's employment for
reasons other than for cause, or in the event the executive resigns from the
Bank following a change of control of the Bank or the Company or under certain
other circumstances, the executive or his beneficiaries would be entitled to
severance pay of three times the sum of the highest rate of base salary plus the
highest rate of cash bonus paid to him during the prior three years. The Bank
would also continue the executive's life, health and dental coverage for 36
months from the date of termination. Payments to the executive would be reduced,
if necessary, so as not to be an "excess parachute payment" as defined by Code
Section 280G (relating to payments made in connection with a change in control).
The executive's employment may be terminated in accordance with the Bank's
retirement policy or in accordance with any retirement arrangement established
by the Bank with Mr. Wagner's consent. Upon Mr. Wagner's retirement, he will be
entitled to all benefits available to him under any retirement or other benefit
plan maintained by the Bank. In the event of the executive's disability for a
period of six months, the Bank may terminate the agreement provided that the
Bank will be obligated to pay the executive his base salary for the longer of
the remaining term of the agreement or one year, reduced by any benefits paid to
the executive pursuant to any disability insurance policy or similar arrangement
maintained by the Bank. In the event of the executive's death, the Bank will pay
his base salary to his named beneficiaries for one year following his death, and
will continue life, medical and dental benefits to his family for three years.
The employment agreement contains a non-compete provision which
11
<PAGE>
restricts Mr. Wagner from competing with the Bank under certain circumstances
following a termination of employment.
Defined Benefit Plan
The Bank maintains a noncontributory defined benefit plan ("Retirement
Plan"). All employees age 21 or older who have worked at the Bank for a period
of one year and have been credited with 1,000 or more hours of employment with
the Bank during the year are eligible to accrue benefits under the Retirement
Plan. The Bank annually contributes an amount to the Retirement Plan necessary
to satisfy the actuarially determined minimum funding requirements in accordance
with the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
At June 30, 2000, the Retirement Plan fully met its funding requirements under
Section 412 of the Code.
At the normal retirement age of 65, the plan is designed to provide a life
annuity with a minimum payment period of ten years. The retirement benefit
provided is an amount equal to 1.6% of a participant's average monthly salary
based on the average of the five consecutive years of the last ten calendar
years providing the highest monthly average multiplied by the participant's
years of service to the normal retirement date (up to a maximum of 25 years)
plus: (i) 0.6% of such average monthly compensation in excess of one-twelfth of
covered compensation (as defined in the plan) multiplied by the participant's
total number of years of service up to a maximum of 25 years, and (ii) for
participants who retire on or after June 1, 1995, .6% of such participant's
average monthly compensation multiplied by the participant's number of years of
service between 25 years and 35 years. Retirement benefits are also payable upon
retirement due to early and late retirement, disability or death. A reduced
benefit is payable upon early retirement at or after age 55 and the completion
of fifteen years of service with the Company (or after 25 years of service and
no minimum age). Upon termination of employment other than as specified above, a
participant who was employed by the Company for a minimum of five years is
eligible to receive his or her accrued benefit commencing, generally, on such
participant's normal retirement date. Benefits under the Retirement Plan are
payable in various annuity forms. For the plan year ended December 31, 1999, the
Company made a contribution to the Retirement Plan of $1,400,000.
The following table indicates the annual retirement benefit that would be
payable under the Retirement Plan upon retirement at age 65 in calendar year
2000, expressed in the form of a single life annuity with 10 years guaranteed
for the final average salary and benefit service classifications specified
below.
<TABLE>
<CAPTION>
Years of Service and Annual Benefit Payable at Retirement
Average ------------------------------------------------------------------------------
Compensation 15 20 25 30 35 40
------------ -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
25,000 $ 6,000 $ 8,000 $10,000 $ 10,750 $ 11,500 $ 11,500
50,000 $ 12,000 $16,000 $20,000 $ 21,500 $ 23,000 $ 23,000
75,000 $ 19,021 $25,361 $31,701 $ 33,951 $ 36,201 $ 36,201
100,000 $ 27,271 $36,361 $45,451 $ 48,451 $ 51,451 $ 51,451
125,000 $ 35,521 $47,361 $59,201 $ 62,951 $ 66,701 $ 66,701
150,000 plus $ 43,771 $58,361 $72,951 $ 77,451 $ 81,951 $ 81,951
</TABLE>
As of the plan year ended December 31, 1999, Messrs. Hanna, Wagner,
LaRocca, Ordiway, Parry and Vecellio had 40, 16, 14, 25, 18 and 23 years of
credited service (i.e., benefit service), respectively.
The accrued annual pension benefit as of June 30, 2000 for Messrs. Hanna,
Wagner, LaRocca, Ordiway, Parry and Vecellio are $109,980, $50,603,$19,621,
$39,178, $33,027 and $41,070, respectively. Mr. Hanna's benefit is greater than
indicated in the table above because his pre-1994 average monthly compensation
is grandfathered and not limited by the $150,000 cap on compensation which
became effective beginning January 1, 1994.
12
<PAGE>
Supplemental Executive Retirement Plan
The Bank has adopted a non-qualified supplemental executive retirement plan
("SERP") for certain executives of the Bank to compensate those executive
participants in the Bank's Retirement Plan whose benefits are limited by Section
415 of the Code (which caps annual benefits at $130,000 in 1999) or Section
401(a)(17) of the Code (which caps compensation at $150,000 as indexed beginning
in 1994). The SERP provides the designated executives with retirement benefits
generally equal to the difference between the benefit that would be available
under the Retirement Plan but for the limitations imposed by Code Sections
401(a)(17) and 415 and that which is actually funded as a result of the
limitations.
Pre-retirement survivor benefits are provided for designated beneficiaries
of participants who do not survive until retirement in an amount equal to the
lump sum actuarial equivalent of the participant's accrued benefit under the
SERP. Pre-retirement benefits are payable in 120 equal monthly installments. The
SERP is considered an unfunded plan for tax and ERISA purposes. All obligations
arising under the SERP are payable from the general assets of the Bank.
The benefits paid under the SERP supplement the benefits paid by the
Retirement Plan. The following table indicates the expected aggregate annual
retirement benefit payable from the Retirement Plan and SERP to SERP
participants, expressed in the form of a single life annuity with a 10-year
guaranteed payment for the final average salary and benefit service
classifications specified below:
<TABLE>
<CAPTION>
Years of Service and Benefit Payable at Retirement
Average ------------------------------------------------------------------------------
Compensation 15 20 25 30 35 40
------------ -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 27,271 $ 36,361 $ 45,451 $ 48,451 $ 51,451 $ 51,451
$125,000 $ 35,521 $ 47,361 $ 59,201 $ 62,951 $ 66,701 $ 66,701
$150,000 $ 43,771 $ 58,361 $ 72,951 $ 77,451 $ 81,951 $ 81,951
$175,000 $ 52,021 $ 69,361 $ 86,701 $ 91,451 $ 97,201 $ 97,201
$200,000 $ 60,271 $ 80,361 $100,451 $106,451 $ 112,451 $ 112,451
$250,000 $ 76,771 $102,361 $127,951 $135,451 $ 142,951 $ 142,951
$300,000 $ 93,271 $124,361 $155,451 $164,451 $ 173,451 $ 173,451
$350,000 $109,771 $146,361 $182,951 $193,451 $ 203,951 $ 203,951
$400,000 $126,271 $168,361 $210,451 $222,451 $ 234,451 $ 234,951
</TABLE>
At June 30, 2000, John O. Hanna had 40 years of credited service under the
SERP. Mr. Wagner had three years as a participant in the SERP because his income
exceeded the amounts permitted under Sections 401(a)(17) of the Code. The Bank's
pension cost attributable to the SERP was approximately $287,121 for the fiscal
year ended June 30, 2000.
1995 Stock Option Plan
During the fiscal year ended June 30, 1996, the Bank adopted, and the
Company has succeeded to, the Northwest Savings Bank and Northwest Bancorp, MHC
1995 Stock Option Plan (the "1995 Stock Option Plan"). The 1995 Stock Option
Plan was approved at the 1995 Annual Meeting by the majority of stockholders
other than the Mutual Holding Company present at such meeting. No options were
granted to the Named Executive Officers under the 1995 Stock Option Plan during
the fiscal year ended June 30, 2000. Set forth below is certain information
concerning exercised and unexercisable options during the fiscal year ended June
30, 2000, by the Named Executive Officers.
13
<PAGE>
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-
Shares Acquired Value Options at The-Money Options at
Name Upon Exercise Realized Fiscal Year-End (1) Fiscal Year-End (2)
Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
John O. Hanna -- -- 273,000 /-- $273,000 /--
William J. Wagner -- -- 80,000 /-- 80,000 /--
Gregory C. LaRocca -- -- 28,000 /-- 28,000 /--
Raymond R. Parry -- -- 38,000 /-- 38,000 /--
Robert A. Ordiway -- -- 28,000 /-- 28,000 /--
James E. Vecellio -- -- 44,000 /-- 44,000 /--
</TABLE>
-----------------------------
(1) Adjusted for the May 22, 1996, two-for-one stock split and the November
14,1997 two-for-one stock split.
(2) Equals the difference between the aggregate exercise price of such options
and the aggregate fair market value of the shares of Common Stock that
would be received upon exercise, assuming such exercise occurred on June
30, 2000, at which date the last sale of the Common Stock as quoted on the
Nasdaq National Market was at $6.875 per share.
Transactions With Certain Related Persons
Federal law requires that 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. Federal regulations
permit executive officers and directors to receive the same terms that are
widely available to other employees as long as the director or executive officer
is not given preferential treatment compared to the other participating
employees, and the Bank offers its employees interest rate discounts of up to 50
basis points in loans made by the Bank to such persons for personal use. The
Company's policy is that loans made to a director in excess of $100,000 for
non-residential purposes must be approved in advance by a majority of the
disinterested members of the Board of Directors. Loans to executive officers
must be approved by the full Board of Directors regardless of amounts. Except as
described above, loans to the Company's current directors, principal officers,
nominees for election as directors, securityholders known by the Company to own
more than 5% of the Company's outstanding common stock, or associates of such
persons (together, "specified persons"), are made in the ordinary course of
business on substantially the same terms as those prevailing at the time for
comparable transactions with other than specified persons, and do not involve
more than a normal risk of collectibility or present other unfavorable features.
The aggregate amount of extensions of credit outstanding at any time during the
fiscal year ended June 30, 2000, to specified persons did not exceed $1 million.
The Company leases approximately 13,000 square feet of office space from
Mr. Hanna at an annual rent of $47,600. The leasing value of the property was
appraised by two outside appraisers at the time the Bank and Mr. Hanna entered
into the lease. The FHLBB (the Bank's principal federal regulator at such time)
reviewed the terms of the lease and had no objection to the lease arrangement.
The Company intends that, except as described above, all transactions
between the Company and its executive officers, directors, holders of 10% or
more of the shares of any class of its common stock and affiliates thereof, will
contain terms no less favorable to the Company than could have been obtained by
it in arms-length negotiations with unaffiliated persons and will be approved by
a majority of independent outside directors of the Company not having any
interest in the transaction.
14
<PAGE>
PROPOSAL II--APPROVAL OF THE PLAN OF CHARTER CONVERSION
General
The Board of Directors of the Company intends to approve a Plan of Charter
Conversion by which the Company would convert from a Pennsylvania corporation to
a Federal corporation chartered by the Office of Thrift Supervision ("OTS").
This action will be taken by the Board of Directors after evaluating the
advantages and disadvantages of being regulated by either (i) both the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") and the
Pennsylvania Department of Banking, or (ii) the OTS. This action will also be
taken in light of the decision by the Board of Trustees of the Mutual Holding
Company similarly to convert the Mutual Holding Company's charter to a federal
charter from a Pennsylvania charter. In connection with the conversion of the
Company and the Mutual Holding Company to Federal charters, each of the
Company's savings bank subsidiaries intends to make an election under Section
10(l) of the Home Owners' Loan Act to have its holding companies chartered and
regulated by the OTS. However, each subsidiary itself will retain its state
savings bank charter. The Board of Directors may terminate the Plan of
Conversion at any time if the Board determines that termination is in the
Company's best interest.
The Company currently operates in what is commonly referred to as the
"two-tier" mutual holding company structure, whereby the Mutual Holding Company
owns a majority of the Company's outstanding common stock and the Company owns
100% of the outstanding common stock of the Bank. Both the Company and the
Mutual Holding Company are currently regulated by Pennsylvania and Federal law.
Under Pennsylvania law the Mutual Holding Company is regulated as a Pennsylvania
mutual holding company and both the Company and the Mutual Holding Company are
regulated as Pennsylvania bank holding companies. Under Federal law both the
Mutual Holding Company and the Company are regulated as bank holding companies.
The Mutual Holding Company, the Company and the Bank have determined that
regulation by both the Federal Reserve Board and the Pennsylvania Department of
Banking is duplicative. For this reason, and the other reasons discussed in this
proxy statement, the Mutual Holding Company and the Company have determined that
it is in their best interests to be regulated by a single regulator, the OTS.
Accordingly, the Company is asking stockholders to approve the conversion of the
Company's existing Pennsylvania Articles of Incorporation to a Federal Charter
pursuant to the Plan of Charter of Conversion.
The charter conversion will be accomplished as follows or in any other
manner acceptable to the Board of Directors and applicable regulatory
authorities: (i) the Mutual Holding Company will organize a Federal corporation
as a federal mid-tier stock holding company subsidiary; (ii) the Company will
merge with and into the Federal corporation with the Federal corporation as the
surviving entity; and (iii) in connection with the merger in step (ii) above,
all of the issued and outstanding shares of Company common stock will be
canceled and converted into and become an equal number of shares of common stock
of the Federal corporation by operation of law. The agreement by which the
merger referred to in step (ii) will occur is attached to this proxy statement
as Exhibit C. The description of the charter conversion herein is qualified in
its entirety by reference to this agreement.
The Company and the Mutual Holding Company intend to apply to the OTS for
approval of the charter conversions. Consummation of the charter conversions,
even if approved by stockholders of the Company, will be subject to approval by
the OTS. If the Company and the Mutual Holding Company fail to receive OTS
approval or if OTS approval is made subject to conditions that the Board of
Directors deems unacceptable, the charter conversions will not be consummated.
Set forth below is a discussion of the reasons for the charter conversion,
the impact of the charter conversion on the Company, and a comparison of
regulatory differences and differences in stockholders' rights that will result
from the charter conversion. The following discussion includes a discussion of
the material differences between the Company's current Pennsylvania Articles of
Incorporation and Bylaws and the Company's proposed Federal Charter and Bylaws.
The following discussion is qualified in its entirety by reference to these
corporate documents. Stockholders are urged to review these documents for
additional details. The proposed Federal Charter and Bylaws are attached to this
proxy statement as Exhibits A and B, respectively.
15
<PAGE>
Reasons for the Charter Conversion of the Company
The Board of Directors believes that the charter conversion of the Company
is advisable and in the best interests of the Company and its stockholders.
Among the factors considered by the Board of Directors in approving the Plan of
Charter Conversion were the following:
o The OTS has recently adopted regulations that the Board of Directors
believes enhance the attractiveness of the federal mutual holding
company charter and will benefit the Company and its stockholders. The
new OTS rules will permit the Mutual Holding Company to waive the
receipt of dividends paid by the Company without causing dilution to
the ownership interests of stockholders other than the Mutual Holding
Company in the event of a conversion of the Mutual Holding Company to
stock form. By contrast, the Federal Reserve Board has not, as a
matter of policy, permitted mutual holding companies to waive the
receipt of dividends. The Board of Directors believes that it is
important for the Mutual Holding Company to be able to waive the
receipt of dividends if it has no immediate need for additional
capital. A waiver of dividends by the Mutual Holding Company will
enable the Company to retain capital that can be more beneficially
invested by the Company or the Bank for the benefit of all
stockholders. Moreover, if the Mutual Holding Company waives the
receipt of dividends from the Company, there will be no tax payable on
the waived dividends.
o The OTS also has proposed new rules regarding the regulation and
operation of mutual holding companies that, if adopted, would
significantly enhance the mutual holding company structure. In
particular, the OTS has proposed rules that would facilitate ongoing
operations, capital raising, acquisition flexibility and stock
benefits in order to make mutual holding companies more competitive
with stock holding companies. Even if the proposed OTS rules are not
adopted in final form, the OTS has expressed its interest generally in
making the mutual holding company charter a charter of choice for
mutual institutions considering converting to stock form.
o The Board of Directors of the Company also believes that the OTS,
among Federal banking regulators, has the greatest expertise in
regulating mutual holding companies and in processing mutual holding
company transactions, which typically raise more complex issues than
transactions by stock holding companies. The Board of Directors wishes
to take advantage of this expertise so that the Company and the Bank
may pursue potential transactions with a higher level of certainty.
However, there are no such transactions that are currently
contemplated by the Company.
o Under current OTS regulations, a federally chartered holding company
has no consolidated capital requirements, which enhances the
flexibility to leverage its balance sheet and finance acquisitions. By
contrast, the Company currently is subject to capital adequacy
guidelines for bank holding companies. Although the OTS has proposed
new rules that impose capital requirements, the Company believes that
these rules permit more flexibility than those of the Federal Reserve
Board.
o The federal mutual holding company charter has been modernized and
improved under recently enacted financial modernization legislation.
Specifically, federal mutual holding companies now have all of the
powers of financial holding companies, plus certain additional
enumerated powers.
o The charter conversion will result in the Company and the Mutual
Holding Company being regulated by the OTS only. Currently, the Mutual
Holding Company and the Company are regulated by both the Federal
Reserve Board and the Pennsylvania Department of Banking.
The Board of Directors of the Company also considered the potential
disadvantages of the charter conversion. Among the potential disadvantages is a
proposed amendment by the OTS to its mutual-to-stock conversion regulations.
This proposed amendment would require a converting institution (including
federal mutual holding companies that convert to stock form) to demonstrate in a
business plan that it would have a return on equity that is acceptable to the
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OTS without regard to dividends or stock repurchases. If adopted, the new rule
would give the OTS considerable discretion to deny stock conversion applications
by well-capitalized institutions. There can be no assurance that this proposed
regulation will be adopted, nor can the Company draw any conclusions as to how
any regulation might be applied either generally or specifically to the Mutual
Holding Company in the event of a "second-step conversion." The Company and the
Mutual Holding Company have no current plans to undertake a second-step
conversion.
Conditions to the Charter Conversion
The charter conversion will not be completed unless: (i) the Plan of
Charter Conversion is approved by a majority of the outstanding shares of common
stock of the Company; (ii) the Company receives a favorable opinion of counsel
as to the federal income tax consequences of the charter conversion; and (iii)
the charter conversion is approved by the OTS.
The Mutual Holding Company, which owns a majority of the outstanding shares
of common stock of the Company, intends to vote its shares in favor of the Plan
of Charter Conversion. In addition, members of the Board of Directors and
management of the Company intend to vote their shares in favor of the Plan of
Charter Conversion. If the Mutual Holding Company votes all of its shares in
favor of the Plan of Charter Conversion, the approval of the Plan of Charter
Conversion would be assured.
Impact of the Charter Conversion on Operations
The charter conversion will have no impact on the day-to-day operations of
the Company, the Bank, or the Mutual Holding Company. The Bank will continue to
be a Pennsylvania savings bank, and will continue its operations at the same
locations, with the same management, and subject to all the rights, obligations
and liabilities of the Bank existing immediately prior to the charter
conversion. The charter conversion is not expected to result in any material
increased expenses or regulatory burden to the Mutual Holding Company, the
Company or the Bank. Following the charter conversion, the Company will continue
to file periodic reports and proxy materials with the SEC.
Holding Company Powers and Regulation
The following is a description of the powers and regulation of bank holding
companies and mutual holding companies regulated by the Federal Reserve Board
and savings and loan holding companies and mutual holding companies regulated by
the OTS. This description does not purport to be complete and is qualified in
its entirety by reference to the applicable laws and regulations.
Regulatory Authority. Currently, the Company is regulated as a bank holding
company by the Federal Reserve Board under the Bank Holding Company Act and the
regulations of the Federal Reserve Board. The Federal Reserve Board also has
extensive enforcement authority over bank holding companies, including, among
other things, the ability to assess civil money penalties, to issue cease and
desist or removal orders and to require that a holding company divest
subsidiaries (including its bank subsidiaries). In general, enforcement actions
may be initiated for violations of law and regulations and for unsafe or unsound
practices.
Following the charter conversion, the Company will be regulated as a mutual
holding company and a savings and loan holding company under the Home Owners'
Loan Act, and will be required to register with and be subject to OTS
examination and supervision, as well as certain OTS reporting requirements.
Among other things, this authority permits the OTS to restrict or prohibit
activities that are determined to be a serious risk to the Bank.
Permissible Activities. The Bank Holding Company Act generally prohibits a
bank holding company (including a mutual holding company regulated as a bank
holding company) from engaging directly or indirectly in activities other than
those directly related to or incidental to banking, managing or controlling
banks, or providing services for its subsidiaries. The principal exceptions to
these prohibitions involve certain non-bank activities which, by statute or
Federal Reserve Board regulation or order, have been identified as activities
closely related to the business of banking or managing or controlling banks.
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The list of activities permitted by the Federal Reserve Board includes, among
other things: owning a savings association, mortgage company, finance company,
credit card company or factoring company; performing certain data processing
operations; providing certain investment and financial advice; underwriting and
acting as an insurance agent for certain types of credit-related insurance;
leasing property on a full payout, non-operating basis; selling money orders,
travelers' checks and United States savings bonds; appraising real estate and
personal property; providing tax planning and preparation services; and, subject
to certain limitations, providing securities brokerage services for customers.
The recently enacted Gramm-Leach-Bliley Act has expanded the permissible
activities of bank holding companies that elect to be regulated as "financial
holding companies." Financial holding companies are companies that elect to be
so treated and that meet certain safety and soundness and management
requirements, and have a "satisfactory" rating under the Community Reinvestment
Act. Financial holding companies may engage in all activities that are
permissible for bank holding companies as well as additional activities that are
determined to be "financial in nature" or complementary or incidental to such
activities, including insurance and securities underwriting activities. The
Company has not elected to be regulated as a financial holding company.
Under the Home Owners' Loan Act and OTS regulations, a federal mutual
holding company is permitted to, among other things: (i) own a savings
association or savings bank; (ii) acquire a mutual institution; (iii) merge with
or acquire another mutual holding company, one of whose subsidiaries is a
savings institution; (iv) acquire non- controlling amounts of the stock of
savings institutions and savings institution holding companies, subject to
certain restrictions; (v) invest in any corporation that a savings association
may invest in under federal law or under the law of any state where the savings
association has its home office; (vi) furnish or perform management services for
a savings institution subsidiary; (vii) hold, manage or liquidate assets owned
or acquired from a savings institution subsidiary of such company; (viii) hold
or manage properties used or occupied by a savings institution subsidiary of
such company; and (ix) act as a trustee under deed or trust. In addition, a
federal mutual holding company may engage in any other activity that is
permissible for bank holding companies under the Bank Holding Company Act, or in
which multiple savings and loan holding companies may engage. Finally, federal
mutual holding companies may engage in any activity in which a financial holding
company may engage, including maintaining an insurance agency, escrow business
and underwriting securities and insurance. Moreover, a federal mutual holding
company may engage in the activities of a financial holding company without
having to make the financial holding company election that is applicable to bank
holding companies.
Holding Company Regulatory Capital Requirements. As a bank holding company,
the Company currently is subject to the Federal Reserve Board's capital adequacy
guidelines on a consolidated basis. Under Federal Reserve Board policy, a bank
holding company must serve as a source of strength for its subsidiary bank.
Under this policy, the Federal Reserve Board may require, and has required in
the past, a holding company to contribute additional capital to an
undercapitalized savings bank. Following the charter conversion, the Company
would be regulated as a savings and loan holding company. Savings and loan
holding companies do not have any regulatory capital requirements (although the
OTS has proposed rules that impose capital requirements on savings and loan
holding companies). Accordingly, after the charter conversion, the Company would
not be subject to the capital requirements of the Federal Reserve Board.
Mergers and Acquisitions. As a savings bank holding company, the Company
currently is required to obtain the approval of the Federal Reserve Board
before: (i) acquiring, directly or indirectly, the ownership or control of any
voting securities of another bank or bank holding company if, after such
acquisition, it would own or control more than 5% of such shares; (ii) acquiring
all or substantially all of the assets of another bank or bank holding company;
or (iii) merging or consolidating with another bank holding company. The Bank
Holding Company Act also prohibits a bank holding company, with certain
exceptions, from acquiring direct or indirect ownership or control of more than
5% of the voting shares of any company that is not a bank or bank holding
company. The Home Owners' Loan Act prohibits a savings and loan holding company
from, directly or indirectly, acquiring more than 5% of the voting stock of
another savings association or savings and loan holding company, or from
acquiring such an institution or company by merger, consolidation, or purchase
of its assets, without the prior written approval of the OTS. In evaluating
applications by holding companies to acquire other financial institutions, both
the OTS and the Federal Reserve Board
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consider the financial and managerial resources and future prospects of the
acquiror and the merging institution, the convenience and needs of the community
and competitive factors.
Payment of Cash Dividends. The Federal Reserve Board has issued a policy
statement on payment of cash dividends by bank holding companies that states
that a bank holding company should pay cash dividends only to the extent that
the holding company's net income for the past year is sufficient to cover both
the cash dividends and a rate of earnings retention that is consistent with the
holding company's capital needs, asset quality and overall financial condition.
The Federal Reserve Board has also indicated that it would be inappropriate for
a company experiencing serious financial problems to borrow funds to pay
dividends. Furthermore, under the prompt corrective action regulations adopted
by the Federal Reserve Board, the Federal Reserve Board may prohibit a bank
holding company from paying any dividends if the holding company's bank
subsidiary is classified as "under-capitalized." OTS regulations generally do
not restrict the ability of a savings and loan holding company to pay dividends.
Stock Repurchases. A bank holding company is required to give the Federal
Reserve Board prior written notice of any purchase or redemption of its
outstanding equity securities if the gross consideration for the purchase or
redemption, when combined with the net consideration paid for all such purchases
or redemptions during the preceding 12 months, is equal to 10% or more of its
consolidated net worth. The Federal Reserve Board may disapprove such a purchase
or redemption if it determines that the proposal would constitute an unsafe or
unsound practice or would violate any law, regulation, Federal Reserve Board
order, or any condition imposed by, or written agreement with, the Federal
Reserve Board. This notification requirement does not apply to any company that
meets the well-capitalized standard for commercial banks, has a safety and
soundness examination rating of at least a "2" and is not subject to any
unresolved supervisory issues. Holding companies of recently converted savings
institutions, regardless of whether they are holding companies regulated by the
OTS or Federal Reserve Board, are restricted in their ability to repurchase
shares of common stock for one year after the conversion. The Bank converted to
the mutual holding company form of organization in 1994, and the Company is not
subject to these post-conversion repurchase restrictions, and will not be
subject to them after the charter conversion.
Qualified Thrift Lender Test. In order for the Company to be regulated as a
savings and loan holding company by the OTS (rather than as a bank holding
company by the Federal Reserve Board), the Bank must qualify as a "qualified
thrift lender" under OTS regulations or satisfy the "domestic building and loan
association" test under the Internal Revenue Code. Under the qualified thrift
lender test, a savings institution is required to maintain at least 65% of its
"portfolio assets" (total assets less: (i) specified liquid assets up to 20% of
total assets; (ii) intangibles, including goodwill; and (iii) the value of
property used to conduct business) in certain "qualified thrift investments"
(primarily residential mortgages and related investments, including certain
mortgage-backed and related securities) in at least nine months out of each 12
month period. The Bank currently maintains the majority of its portfolio assets
in qualified thrift investments and would have met the qualified thrift lender
test in each of the last 12 months had the Bank been subject to this test.
Federal Securities Laws. The Company's common stock currently is registered
with the SEC under the Securities Exchange Act of 1934. The Company currently
observes the information, proxy solicitation, insider trading restrictions and
other requirements under this act. The charter conversion will not change the
registration of the common stock under this act, as the Company will continue to
comply with the requirements of this act following the charter conversion.
Indemnification of Officers and Directors and Limitation of Liability
Pennsylvania Articles of Incorporation and Bylaws. The Company's current
Pennsylvania Articles of Incorporation and Bylaws seek to ensure that the
ability of directors and executive officers to exercise their best business
judgment in managing corporate affairs, subject to their continuing fiduciary
duties of loyalty to the Company and its stockholders, is not unreasonably
impeded by exposure to the potentially high personal costs or other
uncertainties of litigation. The Company's current Pennsylvania Bylaws include a
detailed description of the circumstances in which a person will be indemnified.
In general, the Bylaws require the Company to indemnify
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officers and directors against all expense, liability and loss including fees
and expenses reasonably incurred by him because he was a director or officer. In
order to be indemnified, the officer or director must have acted in good faith
and in a manner he reasonably believed to be in the best interests of the
Company. As regards criminal proceedings, the officer or director must not have
had reasonable cause to believe his conduct was unlawful.
The Pennsylvania Bylaws require that the determination that indemnification
of the representative is proper in the circumstances shall be made:
o by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the action or proceeding;
o if such a quorum is not obtainable, or if obtainable and a majority
vote of a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or
o by the stockholders.
Expenses, including attorneys' fees, incurred in defending any action or
proceeding shall be paid by the Company in advance of the final disposition of
the action or proceeding. To receive advance payment, the officer or director
must submit an undertaking to the Company to repay the amount if it is
ultimately determined that he is not entitled to be indemnified by the Company
as authorized by the Bylaws.
Federal Charter and Bylaws. The proposed Federal Charter and Bylaws do not
similarly provide for indemnification of directors and executive officers or for
limitation of liability of these persons. However, the OTS has indicated that as
a matter of policy, mid-tier stock holding companies are subject to the same
regulations with respect to indemnification to which federal savings banks are
subject. OTS regulations require a federal savings bank to indemnify its
directors, officers and employees against legal and other expenses incurred in
defending lawsuits brought or threatened against them by reason of their
performance as directors, officers, or employees. Indemnification may be made
only if final judgment on the merits is in his favor or in case of (i)
settlement, (ii) final judgment against him, or (iii) final judgment in his
favor, other than on the merits, if a majority of the disinterested directors of
the savings bank determines that he was acting in good faith within the scope of
his employment or authority as he could reasonably have perceived it under the
circumstances and for a purpose he could have reasonably believed under the
circumstances was in the best interests of the savings bank or its stockholders.
If a majority of the disinterested directors of the bank concludes that in
connection with an action any person ultimately may become entitled to
indemnification, the directors may authorize payment of reasonable costs and
expenses arising from defense or settlement of such action. A savings bank is
required to give the OTS at least sixty (60) days notice of its intention to
make indemnification and no indemnification shall be made if the OTS objects to
the savings bank in writing.
To the best of management's knowledge, there is currently no pending or
threatened litigation for which indemnification may be sought.
Comparison of Stockholder Rights and Certain Anti-Takeover Provisions
As a result of the charter conversion, holders of the Company's common
stock, whose rights are presently governed by Federal and Pennsylvania law and
the Company's Pennsylvania Articles of Incorporation and Bylaws, will become
stockholders of the Company whose rights will be governed by Federal law and the
proposed Federal Charter and Bylaws.
Capital Stock. Both the Pennsylvania Articles of Incorporation and the
Federal Charter authorize the Company to issue 100,000,000 shares of common
stock, par value $.10 per share, and 10,000,000 shares of serial preferred
stock.
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Cumulative Voting. Neither the Pennsylvania Articles of Incorporation nor
the Federal Charter provide for cumulative voting.
Preemptive Rights. Under both the Pennsylvania Articles of Incorporation
and the Federal Charter, holders of common stock will not be entitled to
preemptive rights with respect to any shares that may be issued.
Vacancies on the Board of Directors. Under the Pennsylvania Articles of
Incorporation, a majority vote of directors then in office may appoint new
directors to fill vacancies on the Board and directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders at which the
term of office of the class to which they have been chosen expires. In contrast,
the Federal Charter provides that any director appointed by a majority of the
remaining directors to fill a vacancy shall serve for a term of office
continuing only until the next election of directors by stockholders.
Number and Term of Directors. The Pennsylvania Articles of Incorporation
provides that the number of directors shall be fixed from time to time
exclusively by the Board of Directors and that the directors shall be divided
into three classes. The Bylaws provide that the number of directors shall be not
less than five nor more than 15. The Federal Charter provides that the number of
directors shall be not fewer than five nor more than 15, unless the OTS approves
a greater or lesser number. The Federal Bylaws specify that the number of
directors shall be ten. The Federal Bylaws also provide for the Board of
Directors to be classified into three classes as nearly equal in number as
possible.
Presentation of New Business at Meetings of Stockholders. The Pennsylvania
Bylaws generally provide that for a stockholder to properly bring business
before an annual meeting of stockholders, he must deliver notice not less than
90 days prior to the anniversary date of the mailing of the proxy statement in
connection with the previous year's annual meeting. In addition, the
Pennsylvania Bylaws provide that notice of stockholder nominations to the Board
of Directors be delivered not less than 90 days prior to the date of the
anniversary date of the mailing of the proxy statement in connection with the
previous year's annual meeting.
The Federal Bylaws provide that any new business to be taken up at an
annual meeting of stockholders must be filed with the Secretary at least five
days prior to the date of the annual meeting. Such Bylaws also provide that no
nominations for directors by stockholders shall be considered at an annual
meeting unless made by stockholders in writing and delivered to the Secretary at
least five days prior to the date of the annual meeting.
Amendment of Chartering Instrument and Bylaws. Amendments to the
Pennsylvania Articles of Incorporation must be approved by a majority vote of
its Board of Directors and, to the extent required by law, by a majority of the
outstanding shares of its voting stock. The affirmative vote of the holders of
at least 75% of the outstanding voting stock is required to amend provisions of
the Pennsylvania Articles of Incorporation relating to the Company's directors,
meetings of stockholders, liability of directors and officers, restrictions on
offers and acquisitions of the Company's common stock, and amendments to the
Pennsylvania Articles of Incorporation, if such amendments are not approved by
the affirmative vote of 80% of the Company's Directors. To the extent permitted
by applicable law, the Board of Directors may amend the Pennsylvania Bylaws by a
majority vote. Stockholders may amend the Pennsylvania Bylaws by a majority
vote, except that a 75% vote is required to amend provisions that are
inconsistent with provisions of the Pennsylvania Articles of Incorporation
relating to the Company's directors, meetings of stockholders, liability of
directors and officers, restrictions on offers and acquisitions of the Company's
common stock, and amendments to the Pennsylvania Articles of Incorporation, if
such amendments are not approved by the affirmative vote of 80% of the Company's
Directors then in office.
The Federal Charter may be amended if such amendment is proposed by the
Board of Directors and approved by stockholders by a majority of the votes
eligible to be cast, unless a higher vote is required by the OTS. The Federal
Bylaws may be amended upon approval by a majority vote of the authorized Board
of Directors or by a majority vote of the votes cast by stockholders of the
Company (and upon receipt of approval by the OTS, if applicable).
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Limitation on Voting Rights. The Pennsylvania Articles of Incorporation
provide that no person other than the Mutual Holding Company, may directly or
indirectly offer to acquire or acquire the beneficial ownership of more than 10%
of the issued and outstanding shares of any class of an equity security of the
Company. This restriction does not apply to any tax qualified employee benefit
plan or arrangement established by the Company or a subsidiary of the Company,
or any other offer or acquisition approved in advance by the affirmative vote of
80% of the members of the Corporation's Board of Directors. If shares are
acquired in violation of this provision, all shares beneficially owned by any
person in excess of 10% shall be considered "Excess Shares" and shall not be
counted as shares entitled to vote and shall not be voted in connection with any
matters submitted to stockholders for a vote. The proposed Charter of the
Federal Corporation does not contain a similar provision regarding voting of
shares in excess of the Limit.
Optional Exchange of Stock Certificates
After the charter conversion, stock certificates evidencing shares of
common stock of the Company under its current Pennsylvania Articles of
Incorporation and Bylaws will represent, by operation of law, the same number of
shares of Company common stock under the Federal Charter and Bylaws. Holders of
common stock will not be required to exchange their existing stock certificates
for certificates of the Federal corporation, but will have the option to do so.
DO NOT SEND YOUR STOCK CERTIFICATES TO THE COMPANY AT THIS TIME.
Tax Consequences
The Company has received an opinion of its special counsel, Luse Lehman
Gorman Pomerenk & Schick, A Professional Corporation, Washington, D.C., that the
charter conversion constitutes a reorganization under Section 368 of the
Internal Revenue Code, and that no gain or loss will be recognized by Company
stockholders as a result of the charter conversion. It should be noted that this
opinion of counsel is not binding upon the Internal Revenue Service. Each
Company stockholder should consult his own tax counsel as to specific federal,
state and local tax consequences of the charter conversion, if any, to such
stockholder.
Accounting Treatment
The charter conversion will be accounted for in the same manner as a
pooling-of-interests transaction.
Amendment or Termination of the Plan of Charter Conversion
The Board of Directors of the Company may cause the Plan of Charter
Conversion to be amended or terminated if the Board determines for any reason
that such amendment or termination would be advisable. However, no such
amendment may be made to the Plan of Charter Conversion after stockholder
approval if such amendment is deemed to be materially adverse to the
stockholders of the Company.
THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE CHARTER CONVERSION IS IN
THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE
"FOR" THE PLAN OF CHARTER CONVERSION.
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PROPOSAL III--RATIFICATION AND APPROVAL OF THE
NORTHWEST BANCORP, INC. 2000 STOCK OPTION PLAN
General
The Board of Directors intends to adopt the Northwest Bancorp, Inc. 2000
Stock Option Plan (the "Stock Option Plan"). Pursuant to the Stock Option Plan,
options to purchase up to 800,000 shares of Common Stock may be granted to the
Company's, and its affiliates', including the Bank's key employees and directors
who are not otherwise officers or employees of the Company and/or its affiliates
("outside directors"). Shares reserved for issuance under the Stock Option Plan
may be obtained through open market purchases.
The Board of Directors of the Company believes that it is appropriate to
adopt a flexible and comprehensive stock option plan that permits the granting
of a variety of long-term incentive awards to outside directors and key
employees as a means of enhancing and encouraging the recruitment and retention
of those individuals on whom the continued success of the Bank and the Company
most depends. Attached as Appendix D to this Proxy Statement is the complete
text of the form of Stock Option Plan. The principal features of the Stock
Option Plan are summarized below.
Principal Features of the Stock Option Plan
The Stock Option Plan provides for awards in the form of stock options,
reload options, and limited stock appreciation rights ("Limited Rights"). Each
award shall be on such terms and conditions, consistent with the Stock Option
Plan and applicable OTS Regulations, as the committee administering the Stock
Option Plan may determine.
The term of stock options generally will not exceed ten years from the date
of grant (or ten years and one day in the case of non-qualified stock options).
Stock options granted under the Stock Option Plan may be either "Incentive Stock
Options" as defined under Section 422 of the Code or stock options not intended
to qualify as such ("nonstatutory stock options").
Shares issued upon the exercise of a stock option may be either reacquired
shares held by the Company in its treasury, or shares purchased by the plan. Any
shares subject to an award that terminates, expires or is forfeited unexercised
will again be available for issuance under the Stock Option Plan. Generally, in
the discretion of the Board, all or any nonstatutory stock options granted under
the Stock Option Plan may be transferable by the participant but only to the
persons or classes of persons determined by the Board. No other award or any
right or interest therein is assignable or transferable except under certain
limited exceptions set forth in the Stock Option Plan.
The Stock Option Plan is administered by a committee (the "Committee")
consisting of either two or more "non-employee directors" (as defined in the
Stock Option Plan), or the entire Board of the Company. The members of the
Committee shall be appointed by the Board of the Company. Pursuant to the terms
of the Stock Option Plan, outside directors and key employees of the Company or
its affiliates, including the Bank, are eligible to participate. The Committee
will determine to whom the awards will be granted, in what amounts, and the
period over which such awards will vest. In granting awards under the Stock
Option Plan, the Committee will consider, among other things, position and years
of service, and the value of the individual's services to the Company and/or its
affiliate(s). The exercise price will be at least 100% of the fair market value
of the underlying Common Stock at the time of the grant. The exercise price may
be paid in cash or Common Stock.
Stock Options. Incentive stock options can only be granted to key employees
of the Bank, the Company or an "Affiliate" (i.e., a parent or subsidiary
corporation of the Bank or the Company). Outside directors will be granted
nonstatutory stock options. No option granted to an officer in connection with
the Stock Option Plan will be exercisable as an Incentive Stock Option subject
to incentive tax treatment if exercised more than three months after the date on
which the optionee terminates employment with the Bank and/or the Company,
except as set forth below.
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In the event a participant ceases to maintain continuous service with the
Company or an affiliate by reason of normal retirement, death or disability, or
coincident to or following a change in control (as defined in the plan), options
still subject to restrictions will vest and be free of these restrictions and
can be exercised for up to five years after cessation of service but in no event
beyond the expiration of the options' original term. In the event a participant
ceases to maintain continuous service for any other reason, the participant will
forfeit all nonvested options. The participant's vested options will remain
exercisable for up to one year. If an optionee terminates employment with the
Bank, the Company or an Affiliate, any Incentive Stock Options exercised more
than three months following the date the optionee terminates employment shall be
treated as a nonstatutory stock option as described above; provided, however,
that in the event of death or disability, incentive stock options may be
exercised and receive incentive tax treatment for up to at least one year
following termination of employment, subject to the requirements of the Code.
In the event of death or disability of an optionee, the Company, if
requested by the optionee or beneficiary, may elect, in exchange for the option,
to pay the optionee or beneficiary, the amount by which the fair market value of
the Common Stock exceeds the exercise price of the option on the date of the
optionee's termination of service for death or disability.
Limited Stock Appreciation Rights. The Committee may grant Limited Rights
to key employees simultaneously with the grant of any option. A Limited Right
gives the option holder the right, upon a change in control of the Company or
the Bank, to receive the excess of the market value of the shares represented by
the Limited Rights on the date exercised over the exercise price. Limited Rights
generally will be subject to the same terms and conditions and exercisable to
the same extent as stock options, as described above. Payment upon exercise of
Limited Rights will be in cash, or in the event of a change in control in which
pooling accounting treatment is a condition to the transaction, for shares of
stock of the Company, or in the event of a merger transaction, for shares of the
acquiring corporation or its parent, as applicable.
Limited Rights may be granted at the time of, and must be related to, the
grant of a stock option. The exercise of one will reduce to that extent the
number of shares represented by the other. If a Limited Right is granted with
and related to an Incentive Stock Option, the Limited Right must satisfy all the
restrictions and limitations to which the related Incentive Stock Option is
subject.
Reload Options. Reload options may also be granted at the time of the grant
of a stock option. Reload options entitle the option holder, who has delivered
shares that he or she owns as payment of the exercise price for option stock, to
a new option to acquire additional shares equal in amount to the shares he or
she has traded in. Reload options may also be granted to replace option shares
retained by the employer for payment of the option holder's withholding tax. The
option price at which additional shares of stock can be purchased by the option
holder through the exercise of a reload option is equal to the market value of
the previously owned stock at the time it was surrendered to the employer. The
option period during which the reload option may be exercised expires at the
same time as that of the original option that the holder has exercised.
Effect of Adjustments. Shares as to which awards may be granted under the
Stock Option Plan, and shares then subject to awards, will be adjusted by the
Stock Option Committee in the event of any merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination or
exchange of shares or other change in the corporate structure of the Company.
In the case of any merger, consolidation or combination of the Company with
or into another holding company or other entity, whereby either the Company is
not the continuing holding company or its outstanding shares are converted into
or exchanged for securities, cash or other property, or any combination thereof,
any individual to whom a stock option or Limited Rights has been granted at
least six months prior to such event will have the right (subject to the
provisions of the Stock Option Plan and any applicable vesting period) upon
exercise of the option or Limited Rights to an amount equal to the excess of
fair market value on the date of exercise of the consideration receivable in the
merger, consolidation or combination with respect to the shares covered or
represented by the stock option or Limited Rights over the exercise price of the
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option multiplied by the number of shares with respect to which the option or
Limited Right has been exercised.
Amendment and Termination. The Board may at any time, amend, suspend or
terminate the Stock Option Plan or any portion thereof, provided, however, that
no such amendment, suspension or termination shall impair the rights of any
individual, without his consent, in any Award made pursuant to the plan. Unless
previously terminated, the Stock Option Plan shall continue in effect for a term
of ten years, after which no further awards may be granted under the Stock
Option Plan.
Federal Income Tax Consequences. Under present federal income tax laws,
awards under the Stock Option Plan will have the following consequences:
(1) The grant of an award, by itself, will neither result in the
recognition of taxable income to the recipient nor entitle the Company
to a deduction at the time of such grant.
(2) The exercise of a stock option which is an "Incentive Stock Option"
within the meaning of Section 422 of the Code will generally not, by
itself, result in the recognition of taxable income to the individual
nor entitle the Company to a deduction at the time of such exercise.
However, the difference between the exercise price and the fair market
value of the option shares on the date of exercise is an item of tax
preference which may, in certain situations, trigger the alternative
minimum tax. The alternative minimum tax is incurred only when it
exceeds the regular income tax. The alternative minimum tax will be
payable at the rate of 26% to the first $175,000 of "ordinary income"
in excess of $33,750 (single person) or $45,000 (married person filing
jointly). This tax applies at a flat rate of 28% of so much of the
taxable ordinary income in excess of $175,000. The alternative minimum
tax will be payable at a maximum rate of 20% on net capital gain. If a
taxpayer has alternative minimum taxable income in excess of $150,000
(married persons filing jointly) or $112,500 (single person), the
$45,000 or $33,750 exemptions are reduced by an amount equal to 25% of
the amount by which the alternative minimum taxable income of the
taxpayer exceeds $150,000 or $112,500, respectively. The individual
will recognize long term capital gain or loss upon the resale of the
shares received upon such exercise, provided the individual holds the
shares for more than eighteen months from the date of exercise.
(3) The sale of an Incentive Stock Option share prior to the applicable
holding period, i.e., the longer of two years from the date of grant
of the Incentive Stock Option or one year from the date of exercise,
will cause any gain to be taxed at ordinary income tax rates, with
respect to the spread between the exercise price and the fair market
value of the share on the date of exercise and at short term capital
gains rates with respect to any post exercise appreciation in the
value of the share.
(4) The sale of an Incentive Stock Option share after one year from the
date of exercise will generally result in long term capital gain or
loss.
(5) The exercise of a stock option which is not an Incentive Stock Option,
i.e., a nonstatutory stock option, will result in the recognition of
ordinary income on the date of exercise in an amount equal to the
difference between the exercise price and the fair market value on the
date of exercise of the shares acquired pursuant to the stock option.
(6) The exercise of a Limited Rights will result in the recognition of
ordinary income by the individual on the date of exercise in an amount
of cash, and/or the fair market value on that date of the shares
acquired pursuant to the exercise.
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(7) Reload options are of the same type (nonstatutory or incentive stock
option) as the option that the option holder exercised. Therefore, the
tax consequences of the reload option are determined under the
applicable tax rules for nonstatutory or incentive stock options.
(8) The Company will be allowed a deduction at the time, and in the
amount, of any ordinary income recognized by the individual under the
various circumstances described above, provided that the Company meets
its federal withholding tax obligations.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED
PROXY, IF THE PROXY IS SIGNED AND RETURNED, WILL BE VOTED FOR THE RATIFICATION
AND APPROVAL OF THE STOCK OPTION PLAN.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION AND APPROVAL OF
THE STOCK OPTION PLAN.
PROPOSAL IV - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has approved the engagement of KPMG
LLP to be the Company's auditors for the fiscal year ending June 30, 2001,
subject to the ratification of the engagement by the Company's stockholders. At
the Meeting, the stockholders will consider and vote on the ratification of the
engagement of KPMG LLP for the Company's fiscal year ending June 30, 2001. A
representative of KPMG LLP is expected to attend the Meeting to respond to
appropriate questions and to make a statement if he so desires.
In order to ratify the selection of KPMG LLP as the auditors for the fiscal
year ending June 30, 2001, the proposal must receive at least a majority of the
votes cast, without regard to broker non-votes, either in person or by proxy, in
favor of such ratification. The Board of Directors recommends a vote "FOR" the
ratification of KPMG LLP as auditors for the 2001 fiscal year.
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED
AT AN ANNUAL MEETING
The Pennsylvania Bylaws and the proposed Federal Bylaws of the Company
provide an advance notice procedure for certain business, or nominations to the
Board of Directors, to be brought before an annual meeting. 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. To
be timely a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the Company by no later than a specified
time. The specified time in the case of the Pennsylvania Bylaws is not later
than 90 days prior to the anniversary date of the mailing of the proxy materials
in connection with the immediately preceding annual meeting of stockholders of
the Company. The specified time in the case of the Federal Bylaws is five days
before the date of the meeting. A stockholder's notice to the Secretary shall
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. The chairman of an annual
meeting shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in accordance with the
provisions of the Company's Bylaws, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted. This provision is not a limitation on any other
applicable laws and regulations. Accordingly, advance written notice of business
or nominations to the Board of Directors to be brought before the 2001 Annual
Meeting of Stockholders must be given to the Company no later than August
______, 2001 or, if the charter conversion is completed before this date, no
later than five days prior to such meeting.
26
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STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
the Company's 2001 Annual Meeting of Stockholders, any stockholder proposal to
take action at such meeting must be received at the Company's executive office,
301 Second Avenue, Warren, Pennsylvania 16365, no later than ________, 2001. Any
such proposals shall be subject to the requirements of the proxy rules adopted
under the Exchange Act.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Special Meeting other than the matters described above in the Proxy Statement.
However, if any matters should properly come before the Meeting, it is intended
that the holders of the proxies will act in accordance with their best
judgement.
MISCELLANEOUS
The cost of 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 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 2000 Annual Report to Stockholders has been mailed to all stockholders
of record as of the Record Date. Any stockholder who has not received a copy of
such Annual Report may obtain a copy by writing the Company. Such Annual Report
is not to be treated as a part of the proxy solicitation material nor as having
been incorporated herein by reference.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
JUNE 30, 2000, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD
DATE UPON WRITTEN REQUEST TO GREGORY C. LAROCCA, SECRETARY, NORTHWEST
BANCORP, INC., 301 SECOND AVENUE, WARREN, PENNSYLVANIA 16365-2353 (TELEPHONE
NUMBER: (814) 726-2140.
BY ORDER OF THE BOARD OF DIRECTORS
Gregory C. LaRocca
Senior Vice President and Corporate Secretary
Warren, Pennsylvania
November ___, 2000
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EXHIBIT A
NORTHWEST BANCORP, INC.
STOCK HOLDING COMPANY CHARTER
Section 1. Corporate Title. The full corporate title of the Mutual Holding
Company subsidiary holding company is Northwest Bancorp, Inc. (the "Company").
Section 2. Domicile. The domicile of the Company shall be located in the
City of Warren in the Commonwealth of Pennsylvania.
Section 3. Duration. The duration of the Company is perpetual.
Section 4. Purpose and Powers. The purpose of the Company is to pursue any
or all of the lawful objectives of a federal mutual holding company chartered
under Section 10(o) of the Home Owners' Loan Act, 12 U.S.C. 1467a(o), and to
exercise all of the express, implied, and incidental powers conferred thereby
and by all acts amendatory thereof and supplemental thereto, subject to the
Constitution and laws of the United States as they are now in effect, or as they
may hereafter be amended, and subject to all lawful and applicable rules,
regulations, and orders of the Office of Thrift Supervision (the "Office").
Section 5. Capital Stock. The total number of shares of all classes of the
capital stock that the Company has the authority to issue is 110,000,000 of
which 100,000,000 shares shall be common stock, par value $0.10 per share, and
of which 10,000,000 shares shall be serial preferred stock, par value $0.10 per
share. The shares may be issued from time to time as authorized by the board of
directors without the approval of its shareholders, except as otherwise provided
in this Section 5 or to the extent that such approval is required by governing
law, rule, or regulation. The consideration for the issuance of the shares shall
be paid in full before their issuance and shall not be less than the par value.
Neither promissory notes nor future services shall constitute payment or part
payment for the issuance of shares of the Company. The consideration for the
shares shall be cash, tangible or intangible property (to the extent direct
investment in such property would be permitted to the Company), labor, or
services actually performed for the Company, or any combination of the
foregoing. In the absence of actual fraud in the transaction, the value of such
property, labor, or services, as determined by the board of directors of the
Company, shall be conclusive. Upon payment of such consideration, such shares
shall be deemed to be fully paid and nonassessable. In the case of a stock
dividend, that part of the retained earnings of the Company that is transferred
to common stock or paid in capital accounts upon the issuance of shares as a
stock dividend shall be deemed to be the consideration for their issuance.
Except for shares issued in the initial organization of the Company, no
shares of capital stock (including shares issuable upon conversion, exchange, or
exercise of other securities) shall be issued, directly or indirectly, to
officers, directors, or controlling persons (except for shares issued to the
parent mutual holding company) of the Company other than as part of a general
public offering or as qualifying shares to a director, unless the issuance or
the plan under which they would be issued has been approved by a majority of the
total votes eligible to be cast at a legal meeting.
Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class or series of capital stock to
vote as a separate class or series or to more than one vote per share, and there
shall be no cumulation of votes for the election of directors. Provided, that
this restriction on voting separately by class or series shall not apply: (i) To
any provision which would authorize the holders of preferred stock, voting as a
class or series, to elect some members of the board of directors, less than a
majority thereof, in the event of default in the payment of dividends on any
class or series of preferred stock; (ii) To any provision which would require
the holders of preferred stock, voting as a class or series, to approve the
merger or consolidation of the Company with another corporation or the sale,
lease, or conveyance (other than by mortgage or pledge) of properties or
business in exchange for securities of a corporation other than the Company if
the preferred stock is exchanged for securities of such other
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corporation: Provided, that no provision may require such approval for
transactions undertaken with the assistance or pursuant to the direction of the
Office or the Federal Deposit Insurance Corporation; (iii) To any amendment
which would adversely change the specific terms of any class or series of
capital stock as set forth in this Section 5 (or in any supplementary sections
hereto), including any amendment which would create or enlarge any class or
series ranking prior thereto in rights and preferences. An amendment which
increases the number of authorized shares of any class or series of capital
stock, or substitutes the surviving Company in a merger or consolidation for the
Company, shall not be considered to be such an adverse change.
A description of the different classes and series of the Company's capital
stock and a statement of the designations, and the relative rights, preferences
and limitations of the shares of each class of and series of capital stock are
as follows:
A. Common Stock. Except as provided in this Section 5 (or in any
supplementary sections thereto) the holders of common stock shall exclusively
possess all voting power. Each holder of shares of common stock shall be
entitled to one vote for each share held by such holder, except as to the
cumulation of votes for the election of directors, unless the charter otherwise
provides there shall be no such cumulative voting.
Whenever there shall have been paid, or declared and set aside for payment,
to the holders of the outstanding shares of any class of stock having preference
over the common stock as to payment of dividends, the full amount of dividends
and of sinking fund, retirement fund or other retirement payments, if any, to
which such holders are respectively entitled in preference to the common stock,
then dividends may be paid on the common stock and on any class or series of
stock entitled to participate therewith as to dividends out of any assets
legally available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of the Company,
the holders of the common stock (and the holders of any class or series of stock
entitled to participate with the common stock in the distribution of assets)
shall be entitled to receive, in cash or in kind, the assets of the Company
available for distribution remaining after: (i) payment or provision for payment
of the Company's debts and liabilities; (ii) distributions or provision for
distributions in settlement of its liquidation account; and (iii) distributions
or provisions for distributions to holders of any class or series of stock
having preference over the common stock in the liquidation, dissolution, or
winding up of the Company. Each share of common stock shall have the same
relative rights as and be identical in all respects with all the other shares of
common stock.
B. Preferred Stock. The Company may provide in supplementary sections to
its charter for one or more classes of preferred stock, which shall be
separately identified. The shares of any class may be divided into and issued in
series, with each series separately designated so as to distinguish the shares
thereof from the shares of all other series and classes. The terms of each
series shall be set forth in a supplementary section to the charter. All shares
of the same class shall be identical, except as to the following relative rights
and preferences, as to which there may be variations between different series:
(a) The distinctive serial designation and the number of shares constituting
such series; (b) The dividend rate or the amount of dividends to be paid on the
shares of such series, whether dividends shall be cumulative and, if so, from
which date(s), the payment date(s) for dividends, and the participating or other
special rights, if any, with respect to dividends; (c) The voting powers, full
or limited, if any, of shares of such series; (d) Whether the shares of such
series shall be redeemable and, if so, the price(s) at which, and the terms and
conditions on which, such shares may be redeemed; (e) The amount(s) payable upon
the shares of such series in the event of voluntary or involuntary liquidation,
dissolution, or winding up of the Company; (f) Whether the shares of such series
shall be entitled to the benefit of a sinking or retirement fund to be applied
to the purchase or redemption of such shares, and if so entitled, the amount of
such fund and the manner of its application, including the price(s) at which
such shares may be redeemed or purchased through the application of such fund;
(g) Whether the shares of such series shall be convertible into, or exchangeable
for, shares of any other class or classes of stock of the Company and, if so,
the conversion price(s) or the rate(s) of exchange, and the adjustments thereof,
if any, at which such conversion or exchange may be made, and any other terms
and conditions of such conversion or exchange; (h) The price or other
consideration for which the shares of such series shall be issued; and (i)
Whether the shares of such series which are redeemed or converted shall
A-2
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have the status of authorized but unissued shares of serial preferred stock and
whether such shares may be reissued as shares of the same or any other series of
serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
The board of directors shall have authority to divide, by the adoption of
supplementary charter sections, any authorized class of preferred stock into
series and, within the limitations set forth in this section and the remainder
of this charter, fix and determine the relative rights and preferences of the
shares of any series so established.
Prior to the issuance of any preferred shares of a series established by a
supplementary charter section adopted by the board of directors, the Company
shall file with the Secretary to the Office a dated copy of that supplementary
section of this charter establishing and designating the series and fixing and
determining the relative rights and preferences thereof.
Section 6. Preemptive Rights. Holders of the capital stock of the Company
shall not be entitled to preemptive rights with respect to any shares of the
Company which may be issued.
Section 7. Directors. The Company shall be under the direction of a board
of directors. The authorized number of directors, as stated in the Company's
bylaws, shall not be fewer than five nor more than fifteen except when a greater
or lesser number is approved by the Director of the Office, or his or her
delegate.
Section 8. Amendment of Charter. Except as provided in Section 5, no
amendment, addition, alteration, change or repeal of this charter shall be made,
unless such is proposed by the board of directors of the Company, approved by
the shareholders by a majority of the votes eligible to be cast at a legal
meeting, unless a higher vote is otherwise required, and approved or preapproved
by the Office.
NORTHWEST BANCORP, INC.
ATTEST:
-----------------------------------------------------
Gregory C. LaRocca, Corporate Secretary
By:
-----------------------------------------------------
John O. Hanna, Chairman, President
and Chief Executive Officer
OFFICE OF THRIFT SUPERVISION
ATTEST:
-----------------------------------------------------
Secretary of Office of Thrift Supervision
By:
-----------------------------------------------------
Director of Office of Thrift Supervision
Effective Date:
-----------------------------------------------------
A-3
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EXHIBIT B
NORTHWEST BANCORP, INC.
BYLAWS
ARTICLE I - Home Office
The home office of Northwest Bancorp, Inc. (the "Company") shall be Liberty
and Second Streets, Warren, Pennsylvania 16365.
ARTICLE II - Shareholders
Section 1. Place of Meetings. All annual and special meetings of
shareholders shall be held at the home office of the Company or at such other
convenient place as the Board of Directors may determine.
Section 2. Annual Meeting. A meeting of the shareholders of the Company for
the election of directors and for the transaction of any other business of the
Company shall be held annually within 150 days after the end of the Company's
fiscal year on the third Wednesday in November, if not a legal holiday, and if a
legal holiday, then on the next day following which is not a legal holiday, at
11:00 a.m., or at such other date and time within such 150-day period as the
Board of Directors may determine.
Section 3. Special Meetings. Special meetings of the shareholders for any
purpose or purposes, unless otherwise prescribed by the regulations of the
Office of Thrift Supervision (the "Office"), may be called at any time by the
chairman of the board, the president, or a majority of the Board of Directors,
and shall be called by the chairman of the board, the president, or the
secretary upon the written request of the holders of not less than one-tenth of
all of the outstanding capital stock of the Company entitled to vote at the
meeting. Such written request shall state the purpose or purposes of the meeting
and shall be delivered to the home office of the Company addressed to the
chairman of the board, the president or the secretary.
Section 4. Conduct of Meetings. Annual and special meetings shall be
conducted in accordance with the most current edition of Robert's Rules of Order
unless otherwise prescribed by regulations of the Office or these bylaws or the
Board of Directors adopts another written procedure for the conduct of meetings.
The Board of Directors shall designate, when present, either the chairman of the
board or president to preside at such meetings.
Section 5. Notice of Meetings. Written notice stating the place, day, and
hour of the meeting and the purpose(s) for which the meeting is called shall be
delivered not fewer than 20 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the chairman of
the board, the president, the secretary or the directors calling the meeting, to
each shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the mail, addressed to
the shareholder at the address as it appears on the stock transfer books or
records of the Company as of the record date prescribed in Section 6 of this
Article II with postage prepaid. When any shareholders meeting, either annual or
special, is adjourned for 30 days or more, notice of the adjourned meeting shall
be given as in the case of an original meeting. It shall not be necessary to
give any notice of the time and place of any meeting adjourned for less than 30
days or of the business to be transacted at the meeting, other than an
announcement at the meeting at which such adjournment is taken.
Section 6. Fixing of Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment, or shareholders entitled to receive payment of any dividend, or
in order to make a determination of shareholders for any other proper purpose,
the Board of Directors shall fix in advance a date as the record date for any
such determination of shareholders. Such date in any case shall be not more than
60 days and, in case of a meeting of shareholders, not fewer than 10 days prior
to the date on which the particular action, requiring such determination of
shareholders, is to be taken. When a determination of shareholders entitled
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to vote at any meeting of shareholders has been made as provided in this
section, such determination shall apply to any adjournment.
Section 7. Voting List. At least 20 days before each meeting of the
shareholders, the officer or agent having charge of the stock transfer books for
shares of the Company shall make a complete list of the shareholders of record
entitled to vote at such meeting, or any adjournment, arranged in alphabetical
order, with the address and the number of shares held by each. This list of
shareholders shall be kept on file at the home office of the Company and shall
be subject to inspection by any shareholder of record or the shareholder's agent
at any time during usual business hours for a period of 20 days prior to such
meeting. Such list also shall be produced and kept open at the time and place of
the meeting and shall be subject to inspection by any shareholder of record or
the shareholder's agent during the entire time of the meeting. The original
stock transfer book shall constitute prima facie evidence of the shareholders
entitled to examine such list or transfer books or to vote at any meeting of
shareholders.
In lieu of making the shareholder list available for inspection by
shareholders as provided in the preceding paragraph, the Board of Directors may
elect to follow the procedures described in ss. 552.6(d) of the Office's
regulations as now or hereafter in effect.
Section 8. Quorum. A majority of the outstanding shares of the Company
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. If less than a majority of the outstanding shares
is represented at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. At such adjourned meeting
at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to constitute less than a quorum. If a quorum is present the
affirmative vote of the majority of the shares represented at the meeting and
entitled to vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater number of shareholders voting together or voting by
classes is required by law or the charter. Directors, however, are elected by a
plurality of the votes cast at an election of directors.
Section 9. Proxies. At all meetings of shareholders, a shareholder may vote
by proxy executed in writing by the shareholder or by his or her duly authorized
attorney in fact. Proxies may be given telephonically or electronically as long
as the holder uses a procedure for verifying the identity of the shareholder.
Proxies solicited on behalf of the management shall be voted as directed by the
shareholder or, in the absence of such direction, as determined by a majority of
the Board of Directors. No proxy shall be valid more than eleven months from the
date of its execution except for a proxy coupled with an interest.
Section 10. Voting of Shares in the Name of Two or More Persons. When
ownership stands in the name of two or more persons, in the absence of written
directions to the Company to the contrary, at any meeting of the shareholders of
the Company any one ore more of such shareholders may cast, in person or by
proxy, all votes to which such ownership is entitled. In the event an attempt is
made to cast conflicting votes, in person or by proxy, by the several persons in
whose names shares of stock stand, the vote or votes to which those persons are
entitled shall be cast as directed by a majority of those holding such and
present in person or by proxy at such meeting, but no votes shall be cast for
such stock if a majority cannot agree.
Section 11. Voting of Shares of Certain Holders. Shares standing in the
name of another corporation may be voted by any officer, agent, or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the Board of Directors of such corporation may determine. Shares held by an
administrator, executor, guardian, or conservator may be voted by him or her,
either in person or by proxy, without a transfer of such shares into his or her
name. Shares standing in the name of a trustee may be voted by him or her,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him or her without a transfer of such shares into his name. Shares held
in trust in an IRA or Keogh Account, however, may be voted by the Company if no
other instructions are received. Shares standing in the name of a receiver may
be voted by such receiver, and shares held by or under the control of a receiver
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<PAGE>
may be voted by such receiver without the transfer into his or her name if
authority to do so is contained in an appropriate order of the court or other
public authority by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Company nor shares
held by another corporation, if a majority of the shares entitled to vote for
the election of directors of such other corporation are held by the Company,
shall be voted at any meeting or counted in determining the total number of
outstanding shares at any given time for purposes of any meeting.
Section 12. Cumulative Voting. Stockholders may not cumulate their votes
for election of directors.
Section 13. Inspectors of Election. In advance of any meeting of
shareholders, the Board of Directors may appoint any person other than nominees
for office as inspectors of election to act at such meeting or any adjournment.
The number of inspectors shall be either one or three. Any such appointment
shall not be altered at the meeting. If inspectors of election are not so
appointed, the chairman of the board or the president may, or on the request of
not fewer than 10 percent of the votes represented at the meeting shall, make
such appointment at the meeting. If appointed at the meeting, the majority of
the votes present shall determine whether one or three inspectors are to be
appointed. In case any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment by the Board of
Directors in advance of the meeting or at the meeting by the chairman of the
board or the president.
Unless otherwise prescribed by regulations of the Office, the duties of
such inspectors shall include: determining the number of shares and the voting
power of each share, the shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of proxies; receiving votes,
ballots, or consents; hearing and determining all challenges and questions in
any way arising in connection with the rights to vote; counting and tabulating
all votes or consents; determining the result; and such acts as may be proper to
conduct the election or vote with fairness to all shareholders.
Section 14. Nominating Committee. The Board of Directors shall act as a
nominating committee for selecting the management nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver written nominations to the secretary at least 20 days prior to the date
of the annual meeting. Upon delivery, such nominations shall be posted in a
conspicuous place in each office of the Company. No nominations for directors
except those made by the nominating committee shall be voted upon at the annual
meeting unless other nominations by shareholders are made in writing and
delivered to the secretary of the Company at least five days prior to the date
of the annual meeting. Upon delivery, such nominations shall be posted in a
conspicuous place in each office of the Company. Ballots bearing the names of
all persons nominated by the nominating committee and by shareholders shall be
provided for use at the annual meeting. However, if the nominating committee
shall fail or refuse to act at least 20 days prior to the annual meeting,
nominations for directors may be made at the annual meeting by any shareholder
entitled to vote and shall be voted upon.
Section 15. New Business. Any new business to be taken up at the annual
meeting shall be stated in writing and filed with the secretary of the Company
at least five days prior to the date of the annual meeting, and all business so
stated, proposed, and filed shall be considered at the annual meeting; but no
other proposal shall be acted upon at the annual meeting. Any shareholder may
make any other proposal at the annual meeting and the same may be discussed and
considered, but unless stated in writing and filed with the secretary at least
five days before the meeting, such proposal shall be laid over for action at an
adjourned, special or annual meeting of the shareholders taking place 30 days or
more thereafter. This provision shall not prevent the consideration and approval
or disapproval at the annual meeting of reports of officers, directors, and
committees; but in connection with such reports, no new business shall be acted
upon at such annual meeting unless stated and filed as herein provided.
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Section 16. Informal Action by Shareholders. Any action required to be
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of shareholders, may be taken without a meeting if consent in
writing, setting forth the action to be taken, shall be given by all of the
shareholders entitled to vote with respect to the subject matter.
ARTICLE III - Board of Directors
Section 1. General Powers. The business and affairs of the Company shall be
under the direction of its Board of Directors. The Board of Directors shall
annually elect a chairman of the board and a president from among its members
and shall designate, when present, either the chairman of the board or the
president to preside at its meetings.
Section 2. Number and Term. The Board of Directors shall consist of ten
members and shall be divided into three classes as nearly equal in number as
possible. The members of each class shall be elected for a term of three years
and until their successors are elected and qualified. One class shall be elected
by ballot annually.
Section 3. Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this bylaw following the annual meeting
of shareholders. The Board of Directors may provide, by resolution, the time and
place for the holding of additional regular meetings without notice other than
such resolution. Directors may participate in a meeting by means of a conference
telephone or similar communications device through which all persons
participating can hear each other at the same time. Participation by such means
shall constitute presence in person for all purposes.
Section 4. Qualification. Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the Company
unless the company is a wholly-owned subsidiary of a holding company.
Section 5. Special Meetings. Special meetings of the Board of Directors may
be called by or at the request of the chairman of the board, the president or
one-third of the directors. The persons authorized to call special meetings of
the Board of Directors may fix any place, within the Company's normal lending
territory, as the place for holding any special meeting of the Board of
Directors called by such persons.
Members of the Board of Directors may participate in special meetings by
means of conference telephone or similar communications equipment by which all
persons participating in the meeting can hear each other. Such participation
shall constitute presence in person for all purposes.
Section 6. Notice. Written notice of any special meeting shall be given to
each director at least 24 hours prior thereto when delivered personally or by
telegram or at least five days prior thereto when delivered by mail at the
address at which the director is most likely to be reached. Such notice shall be
deemed to be delivered when deposited in the mail so addressed, with postage
prepaid if sent by mail, when delivered to the telegraph company if sent by
telegram or when the Company receives notice of delivery if electronically
transmitted. Any director may waive notice of any meeting by a writing filed
with the secretary. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the Board of Directors need be
specified in the notice of waiver of notice of such meeting.
Section 7. Quorum. A majority of the number of directors fixed by Section 2
of this Article III shall constitute a quorum for the transaction of business at
any meeting of the Board of Directors; but if less than such majority is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time. Notice of any adjourned meeting shall be given in the same manner
as prescribed by Section 5 of this Article III.
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Section 8. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless a greater number is prescribed by regulation of the Office
or by these bylaws.
Section 9. Action Without a Meeting. Any action required or permitted to be
taken by the Board of Directors at a meeting may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of
the directors.
Section 10. Resignation. Any director may resign at any time by sending a
written notice of such resignation to the home office of the Company addressed
to the chairman of the board or the president. Unless otherwise specified, such
resignation shall take effect upon receipt by the chairman of the board or the
president. More than three consecutive absences from regular meetings of the
Board of Directors, unless excused by resolution of the Board of Directors,
shall automatically constitute a resignation, effective when such resignation is
accepted by the Board of Directors.
Section 11. Vacancies. Any vacancy occurring on the Board of Directors may
be filled by the affirmative vote of a majority of the remaining directors
although less than a quorum of the Board of Directors. A director elected to
fill a vacancy shall be elected to serve until the next election of directors by
the shareholders. Any directorship to be filled by reason of an increase in the
number of directors may be filled by election by the Board of Directors for a
term of office continuing only until the next election of directors by the
shareholders.
Section 12. Compensation. Directors, as such, may receive a stated salary
for their services. By resolution of the Board of Directors, a reasonable fixed
sum, and reasonable expenses of attendance, if any, may be allowed for actual
attendance at each regular or special meeting of the Board of Directors. Members
of either standing or special committees may be allowed such compensation for
actual attendance at committee meetings as the Board of Directors may determine.
Section 13. Presumption of Assent. A director of the Company who is present
at a meeting of the Board of Directors at which action on any Company matter is
taken shall be presumed to have assented to the action taken unless his or her
dissent or abstention shall be entered in the minutes of the meeting or unless
he or she shall file a written dissent to such action with the person acting as
the secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the secretary of the Company within five days
after the date a copy of the minutes of the meeting is received. Such right to
dissent shall not apply to a director who voted in favor of such action.
Section 14. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director may be removed for cause by a vote of
the holders of a majority of the shares then entitled to vote at an election of
directors. Whenever the holders of the shares of any class are entitled to elect
one or more directors by the provisions of the charter or supplemental sections
thereto, the provisions of this section shall apply, in respect to the removal
of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class and not to the vote of the outstanding shares
as a whole.
ARTICLE IV - Executive And Other Committees
Section 1. Appointment. The Board of Directors, by resolution adopted by a
majority of the full board, may designate the chief executive officer and two or
more of the other directors to constitute an executive committee. The
designation of any committee pursuant to this Article IV and the delegation of
authority shall not operate to relieve the Board of Directors, or any director,
of any responsibility imposed by law or regulation.
Section 2. Authority. The executive committee, when the Board of Directors
is not in session, shall have and may exercise all of the authority of the Board
of Directors except to the extent, if any, that such authority shall be limited
by the resolution appointing the executive committee; and except also that the
executive committee shall not have the authority of the Board of Directors
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with reference to: the declaration of dividends; the amendment of the charter or
bylaws of the Company or recommending to the shareholders a plan of merger,
consolidation, or conversion; the sale, lease, or other disposition of all or
substantially all of the property and assets of the Company otherwise than in
the usual and regular course of its business; a voluntary dissolution of the
Company; a revocation of any of the foregoing; or the approval of a transaction
in which any member of the executive committee, directly or indirectly, has any
material beneficial interest.
Section 3. Tenure. Subject to the provisions of Section 8 of this Article
IV, each member of the executive committee shall hold office until the next
regular annual meeting of the Board of Directors following his or her
designation and until a successor is designated as a member of the executive
committee.
Section 4. Meetings. Regular meetings of the executive committee may be
held without notice at such times and places as the executive committee may fix
from time to time by resolution. Special meetings of the executive committee may
be called by any member thereof upon not less than one days notice stating the
place, date, and hour of the meeting, which notice may be written or oral. Any
member of the executive committee may waive notice of any meeting and no notice
of any meeting need be given to any member thereof who attends in person. The
notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
Section 5. Quorum. A majority of the members of the executive committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
Section 6. Action Without a Meeting. Any action required or permitted to be
taken by the executive committee at a meeting may be taken without a meeting if
a consent in writing, setting forth the action so taken, shall be signed by all
of the members of the executive committee.
Section 7. Vacancies. Any vacancy in the executive committee may be filled
by a resolution adopted by a majority of the full Board of Directors.
Section 8. Resignations and Removal. Any member of the executive committee
may be removed at any time with or without cause by resolution adopted by a
majority of the full Board of Directors. Any member of the executive committee
may resign from the executive committee at any time by giving written notice to
the president or secretary of the Company. Unless otherwise specified, such
resignation shall take effect upon its receipt; the acceptance of such
resignation shall not be necessary to make it effective.
Section 9. Procedure. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the Board of Directors for its information at
the meeting held next after the proceedings shall have occurred.
Section 10. Other Committees. The Board of Directors may by resolution
establish an audit, loan, or other committee composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
Company and may prescribe the duties, constitution, and procedures thereof.
ARTICLE V - Officers
Section 1. Positions. The officers of the Company shall be a president, one
or more vice presidents, a secretary and a treasurer, each of whom shall be
elected by the Board of Directors. The Board of Directors also may designate the
chairman of the board as an officer. The president shall be the chief executive
officer, unless the Board of Directors designates the chairman of the board as
chief executive officer. The president shall be a director of the Company. The
offices of the secretary and treasurer may be held by the same person and a vice
president also may be either the secretary or the treasurer. The Board of
Directors may designate one or more vice presidents as executive vice president
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or senior vice president. The Board of Directors also may elect or authorize the
appointment of such other officers as the business of the Company may require.
The officers shall have such authority and perform such duties as the Board of
Directors may from time to time authorize or determine. In the absence of action
by the Board of Directors, the officers shall have such powers and duties as
generally pertain to their respective offices.
Section 2. Election and Term of Office. The officers of the Company shall
be elected annually at the first meeting of the Board of Directors held after
each annual meeting of the shareholders. If the election of officers is not held
at such meeting, such election shall be held as soon thereafter as possible.
Each officer shall hold office until a successor has been duly elected and
qualified or until the officers death, resignation, or removal in the manner
hereinafter provided. Election or appointment of an officer, employee, or agent
shall not of itself create contractual rights. The Board of Directors may
authorize the Company to enter into an employment contract with any officer in
accordance with regulations of the Office; but no such contract shall impair the
right of the Board of Directors to remove any officer at any time in accordance
with Section 3 of this Article V.
Section 3. Removal. Any officer may be removed by the Board of Directors
whenever in its judgment the best interests of the Company will be served
thereby, but such removal, other than for cause, shall be without prejudice to
any contractual rights of the person so removed.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise may be filled by the Board
of Directors for the unexpired portion of the term.
Section 5. Remuneration. The remuneration of the officers shall be fixed
from time to time by the Board of Directors.
ARTICLE VI - Contracts, Loans, Checks, and Deposits
Section 1. Contracts. To the extent permitted by regulations of the Office,
and except as otherwise prescribed by these bylaws with respect to certificates
for shares, the Board of Directors may authorize any officer, employee or agent
of the Company to enter into any contract or execute and deliver any instrument
in the name of and on behalf of the Company. Such authority may be general or
confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the Company and
no evidence of indebtedness shall be issued in its name unless authorized by the
Board of Directors. Such authority may be general or confined to specific
instances.
Section 3. Checks, Drafts, etc. All checks, drafts, or other orders for the
payment of money, notes, or other evidences of indebtedness issued in the name
of the Company shall be signed by one or more officers, employees, or agents of
the Company in such manner as shall from time to time be determined by the Board
of Directors.
Section 4. Deposits. All funds of the Company not otherwise employed shall
be deposited from time to time to the credit of the association in any duly
authorized depositors as the Board of Directors may select.
ARTICLE VII - Certificates for Shares and Their Transfer
Section 1. Certificates for Shares. Certificates representing shares of
capital stock of the Company shall be in such form as shall be determined by the
Board of Directors and approved by the Office. Such certificates shall be signed
by the chief executive officer or by any other officer of the Company authorized
by the Board of Directors, attested by the secretary or an assistant secretary,
and sealed with the corporate seal or a facsimile thereof. The signature of such
officers upon a certificate may be facsimiles if the certificate is manually
signed on behalf of a transfer agent or a registrar other than the Company
itself or one of its employees. Each certificate for shares of capital stock
shall be consecutively numbered or otherwise identified. The name and address of
the person to whom the shares are issued, with the number of shares and date
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of issue, shall be entered on the stock transfer books of the Company. All
certificates surrendered to the Company for transfer shall be canceled and no
new certificate shall be issued until the former certificate for a like number
of shares has been surrendered and canceled, except that in the case of a lost
or destroyed certificate, a new certificate may be issued upon such terms and
indemnity to the Company as the Board of Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of capital stock of the
Company shall be made only on its stock transfer books. Authority for such
transfer shall be given only by the holder of record or by his or her legal
representative, who shall furnish proper evidence of such authority, or by his
or her attorney authorized by a duly executed power of attorney and filed with
the Company. Such transfer shall be made only on surrender for cancellation of
the certificate for such shares. The person in whose name shares of capital
stock stand on the books of the Company shall be deemed by the Company to be the
owner for all purposes.
ARTICLE VIII - Fiscal Year; Annual Audit
The fiscal year of the Company shall end on the 30th day of June of each
year. The Company shall be subject to an annual audit as of the end of its
fiscal year by independent public accountants appointed by and responsible to
the Board of Directors. The appointment of accountants shall be subject to
annual ratification by the shareholders.
ARTICLE IX - Dividends
Subject only to the terms of the Company's charter and the regulations and
orders of the Office, the Board of Directors may, from time to time, declare,
and the Company may pay, dividends on its outstanding shares of capital stock.
ARTICLE X - Corporate Seal
The Board of Directors shall provide a Company seal which shall be two
concentric circles between which shall be the name of the Company. The year of
incorporation or an emblem may appear in the center.
ARTICLE XI - Amendments
These bylaws may be amended in a manner consistent with regulations of the
Office and shall be effective after: (i) approval of the amendment by a majority
vote of the authorized Board of Directors, or by a majority vote of the votes
cast by the shareholders of the Company at any legal meeting; and (ii) receipt
of any applicable regulatory approval. When a Company fails to meet its quorum
requirements, solely due to vacancies on the board, then the affirmative vote of
a majority of the sitting board will be required to amend the bylaws.
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EXHIBIT C
AGREEMENT OF MERGER BETWEEN
NORTHWEST BANCORP, INC. (Pennsylvania) AND NORTHWEST BANCORP, INC. (Federal)
THIS AGREEMENT OF MERGER, dated as of ______________, 2001 is made by and
between Northwest Bancorp, Inc., a Pennsylvania corporation ("Mid-Tier Holding
Company") and Northwest Bancorp, Inc., a federal corporation (the "Federal
Mid-Tier").
R E C I T A L S :
1. The Mid-Tier Holding Company is a Pennsylvania corporation. As of the
date hereof, the Mid-Tier Holding Company has authorized capital stock
consisting of 100,000,000 shares of common stock and 10,000,000 shares of
preferred stock, of which there are _____________ shares of common stock and no
shares of preferred stock issued and outstanding.
2. Federal Mid-Tier is a federally chartered subsidiary holding company. As
of the date hereof, the Federal Mid-Tier has authorized capital stock consisting
of 100,000,000 shares of common stock and 10,000,000 shares of preferred stock,
of which there are 100 shares of common stock issued and outstanding and no
shares of preferred stock issued and outstanding.
3. At least two-thirds of the members of the board of directors of the
Mid-Tier Holding Company and the board of directors of the Federal Mid-Tier have
approved this Merger Agreement whereby Mid-Tier Holding Company shall be merged
with and into the Federal Mid-Tier with the Federal Mid-Tier as the surviving or
resulting mid-tier holding company (the "Mid-Tier Merger"), and authorized the
execution and delivery thereof.
4. A majority of the votes cast by stockholders of the Mid-Tier Holding
Company the Federal Mid-Tier have been voted in favor of the Mid-Tier Merger.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto have agreed as follows:
1. Merger. At and on the Effective Date of the Mid-Tier Merger, (i) the
Mid-Tier Holding Company shall merge with and into the Federal Mid-Tier with
Federal Mid-Tier as the resulting entity (the "Resulting Company"), and (ii) the
Mid-Tier Holding Company stockholders shall, without any further action on their
part, automatically receive shares of Federal Mid-Tier common stock in exchange
for their Mid-Tier Holding Company common stock on a one for one basis.
2. Effective Date. The Mid-Tier Merger shall not be effective until and
unless it is approved by the Office of Thrift Supervision (the "OTS") after
approval by a majority of the votes cast by stockholders of the Mid- Tier
Holding Company and the Federal Mid-Tier.
3. Name. The name of the Resulting Company shall be Northwest Bancorp, Inc.
4. Offices. The main office of the Resulting Company shall be 301 Second
Avenue, Warren, Pennsylvania.
5. Directors and Officers. The directors and officers of Mid-Tier Holding
Company immediately prior to the Effective Date shall be the directors and
officers of the Resulting Company after the Effective Date.
6. Rights and Duties of the Resulting Company. At the Effective Date, the
Mid-Tier Holding Company shall be merged with and into the Federal Mid-Tier with
the Federal Mid-Tier as the Resulting Company.
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The business of the Resulting Company shall be that of a federal stock holding
company as provided in its charter. All assets, rights, interests, privileges,
powers, franchises and property (real, personal and mixed) of the Mid-Tier
Holding Company shall be automatically transferred to and vested in the
Resulting Company by virtue of the Mid-Tier Merger without any deed or other
document of transfer. The Resulting Company, without any order or action on the
part of any court or otherwise and without any documents of assumption or
assignment, shall hold and enjoy all of the properties, franchises and
interests, including appointments, powers, designations, nominations and all
other rights and interests as the agent or other fiduciary in the same manner
and to the same extent as such rights, franchises, and interests and powers were
held or enjoyed by the Mid-Tier Holding Company and the Federal Mid-Tier. The
Resulting Company shall be responsible for all of the liabilities, restrictions
and duties of every kind and description of the Mid-Tier Holding Company and the
Federal Mid-Tier immediately prior to the Merger, including liabilities for all
debts, obligations and contracts of the Mid-Tier Holding Company and Federal
Mid-Tier, matured or unmatured, whether accrued, absolute, contingent or
otherwise and whether or not reflected or reserved against on balance sheets,
books of accounts or records of the Mid-Tier Holding Company and the Federal
Mid-Tier. All rights of creditors and other obligees and all liens on property
of the Mid-Tier Holding Company and Federal Mid-Tier shall be preserved and
shall not be released or impaired.
IN WITNESS WHEREOF, the Mid-Tier Holding Company and Federal Mid-Tier have
caused this Mid- Tier Merger Agreement to be executed as of the date first above
written.
Northwest Bancorp, Inc.
(a federal corporation)
ATTEST:
By:
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Gregory C. LaRocca, Corporate Secretary John O. Hanna, Chairman
Northwest Bancorp, Inc.
(a Pennsylvania Corporation)
ATTEST:
By:
--------------------------------------- ------------------------------
Gregory C. LaRocca, Corporate Secretary John O. Hanna, Chairman
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EXHIBIT D
NORTHWEST BANCORP, INC.
2000 STOCK OPTION PLAN
1. Purpose
The purpose of the Northwest Bancorp, Inc. 2000 Stock Option Plan (the
"Plan") is to advance the interests of Northwest Bancorp, Inc. (the "Company")
and its stockholders by providing Employees and Outside Directors of the Company
and its Affiliates, including Northwest Savings Bank (the "Bank"), upon whose
judgment, initiative and efforts the successful conduct of the business of the
Company and its Affiliates largely depends, with an additional incentive to
perform in a superior manner as well as to attract people of experience and
ability.
2. Definitions
"Affiliate" means any "parent corporation" or "subsidiary corporation" of
the Company or the Bank, as such terms are defined in Section 424(e) or 424(f),
respectively, of the Code, or a successor to a parent corporation or subsidiary
corporation.
"Award" means an Award of Non-Statutory Stock Options, Incentive Stock
Options, Reload Options and/or Limited Rights granted under the provisions of
the Plan.
"Bank" means Northwest Savings Bank or a successor corporation.
"Beneficiary" means the person or persons designated by a Participant to
receive any benefits payable under the Plan in the event of such Participant's
death. Such person or persons shall be designated in writing on forms provided
for this purpose by the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Participant's surviving spouse, if
any, or if none, his estate.
"Board" or "Board of Directors" means the board of directors of the
Company, unless otherwise noted herein.
"Cause" means personal dishonesty, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, or the willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or a final cease-and-desist order, any
of which results in a material loss to the Company or an Affiliate.
"Change in Control" means:
(1)(i) a reorganization, merger, merger conversion, consolidation or sale
of all or substantially all of the assets of the Bank or the Company or a
similar transaction in which the Bank or Company is not the resulting entity;
(ii) individuals who constitute the board of directors of the Bank or the Board
of Directors of the Company as of the date hereof (the "Incumbent Board"), cease
for any reason to constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose election was
approved by a vote of at least three- fourths of the directors composing the
Incumbent Board or whose nomination for election by the Bank's or Company's
stockholders or members was approved by the same nominating committee serving
under an Incumbent Board shall be for purposes of this section considered as
though he were a member of the Incumbent Board; or (iii) an acquisition of
"control" of the Bank or the Company as defined by the Home Owners Loan Act, as
amended, and applicable rules and regulations promulgated thereunder as in
effect at the time of the Change in Control (collectively, the "HOLA"), (iv) an
acquisition of control of the Bank or more than 25% of the Bank's stock
requiring submission of an application or notice under the HOLA, or (v) a mutual
to stock conversion of the Mutual Holding Company.
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(2) In the event the Mutual Holding Company converts from the mutual form
of organization to the stock form of organization (the "Stock Holding Company")
in a second step conversion at any time subsequent to the initial effective date
of this Plan, a "Change in Control" shall occur on the date the board of
directors of the Mutual Holding Company adopts the plan of conversion relating
to such transaction. For persons who begin service after such date, a "Change in
Control" shall mean a change in control of the Bank or the Stock Holding Company
of a nature that: (i) would be required to be reported in response to Item 1a of
the current report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act");
or (ii) results in a change in control of the Bank or the Stock Holding Company
within the meaning of the HOLA; or (iii) without limitation, such a change in
control shall be deemed to have occurred at such time as (a) any "person" (as
such term is used in Section 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Bank or the Stock Holding Company
representing 25% or more of the Bank's or Stock Holding Company's outstanding
securities ordinarily having the right to vote at the election of directors,
except for any securities of the Bank issued to the Stock Holding Company in
connection with the Reorganization and Stock Offering pursuant to the Stock
Holding Company's Plan of Reorganization and Stock Issuance and securities
purchased by the Bank's or the Stock Holding Company's employee stock benefit
plans; or (b)individuals who constitute the board of directors of the Bank or
the Stock Holding Company of the date on the second step conversion (also
referred to as the "Incumbent Board"), cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date of the second step conversion whose election was approved
by a vote of at least three-fourths of the directors composing the Incumbent
Board or whose nomination for election by the Bank's or Stock Holding Company's
stockholders or members was approved by the same nominating committee serving
under an Incumbent Board shall be for purposes of this section considered as
though he were a member of the Incumbent Board; or (c) a reorganization, merger,
consolidation, sale of all or substantially all of the assets of the Bank or the
Stock Holding Company or similar transaction; (d) a proxy statement is
distributed that solicits proxies from stockholders of the Stock Holding
Company, by someone other than the current management of the Stock Holding
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Bank or the Stock Holding Company or similar transaction
with one or more corporations as a result of which the outstanding shares of the
class of securities then subject to such plan are exchanged for or converted
into cash or property or securities not issued by the Bank or the Stock Holding
Company; or (e) a tender offer is made pursuant to which 25% or more of the
outstanding securities of the Bank of the Stock Holding Company are acquired.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Stock Benefits Committee consisting of either (i) at
least two Non-Employee Directors of the Company, or (ii) the entire Board of the
Company.
"Common Stock" means shares of the common stock of the Company, par value
$.10 per share.
"Company" means Northwest Bancorp, Inc. or a successor corporation.
"Continuous Service" means employment as an Employee and/or service as an
Outside Director without any interruption or termination of such employment
and/or service. Continuous Service shall also mean a continuation as a member of
the Board of Directors following a cessation of employment as an Employee. In
the case of an Employee, employment shall not be considered interrupted in the
case of sick leave, military leave or any other approved leave of absence or in
the case of transfers between payroll locations of the Company, its subsidiaries
or its successor.
"Date of Grant" means the actual date on which an Award is granted by the
Committee.
"Director" means a member of the Board.
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"Disability" means the permanent and total inability by reason of mental or
physical infirmity, or both, of an employee to perform the work customarily
assigned to him, or of a Director or Outside Director to serve as such.
Additionally, in the case of an employee, a medical doctor selected or approved
by the Board must advise the Committee that it is either not possible to
determine when such Disability will terminate or that it appears probable that
such Disability will be permanent during the remainder of said employee's
lifetime.
"Effective Date" means the date of, or a date determined by the Board of
Directors following, approval of the Plan by the Company's stockholders.
"Employee" means any person who is currently employed by the Company or an
Affiliate who is chosen by the Committee to participate in the Plan.
"Fair Market Value" means, when used in connection with the Common Stock on
a certain date, the reported closing price of the Common Stock as reported by
the Nasdaq stock market on the day prior to such date, or if the Common Stock
was not traded on the day prior to such date, on the next preceding day on which
the Common Stock was traded; provided, however, that if the Common Stock is not
reported on the Nasdaq stock market, Fair Market Value shall mean the average
sale price of all shares of Common Stock sold during the 30-day period
immediately preceding the date on which such stock option was granted, and if no
shares of stock have been sold within such 30-day period, the average sale price
of the last three sales of Common Stock sold during the 90-day period
immediately preceding the date on which such stock option was granted. In the
event Fair Market Value cannot be determined in the manner described above, then
Fair Market Value shall be determined by the Committee. The Committee is
authorized, but is not required, to obtain an independent appraisal to determine
the Fair Market Value of the Common Stock.
"Incentive Stock Option" means an Option granted by the Committee to an
Employee, which Option is designated as an Incentive Stock Option pursuant to
Section 8.
"Limited Right" means the right to receive an amount of cash based upon the
terms set forth in Section 9.
"Mutual Holding Company" means Northwest Bancorp, M.H.C.
"Non-Statutory Stock Option" means an Option granted by the Committee to
(i) an Outside Director or (ii) any other Participant and such Option is either
(A) not designated by the Committee as an Incentive Stock Option, or (B) fails
to satisfy the requirements of an Incentive Stock Option as set forth in Section
422 of the Code and the regulations thereunder.
"Non-Employee Director" means, for purposes of the Plan, a Director who (a)
is not employed by the Company or an Affiliate; (b) does not receive
compensation directly or indirectly as a consultant (or in any other capacity
than as a Director) greater than $60,000; (c) does not have an interest in a
transaction requiring disclosure under Item 404(a) of Regulation S-K; or (d) is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K.
"Normal Retirement" means retirement from employment or service on or after
any of the following: (i) the attainment of age 65 by an Employee or Outside
Director, (ii) the attainment of age 55 and the completion of 15 years of
employment or service as an Employee or Outside Director; or (iii) the
completion of 25 years of employment or service as an Employee or Outside
Director.
"Outside Director" means a Director of the Company or an Affiliate who is
not an employee of the Company or an Affiliate.
"Option" means an Award granted under Section 7 or Section 8.
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"Participant" means an Employee or Outside Director of the Company or its
Affiliates who receives or has received an award under the Plan.
"Reload Option" means an option to acquire shares of Common Stock
equivalent to the shares (i) used by a Participant to pay for an Option, or (ii)
deducted from any distribution in order to satisfy income tax required to be
withheld, based upon the terms set forth in Section 18.
"Right" means a Limited Right or a Dividend Equivalent Right.
"Termination for Cause" means the termination of employment or termination
of service on the Board caused by the individual's personal dishonesty, willful
misconduct, any breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, or the willful violation of any law, rule or
regulation (other than traffic violations or similar offenses), or a final
cease-and-desist order, any of which results in material loss to the Company or
one of its Affiliates.
3. Plan Administration Restrictions
The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it deems necessary or advisable. All determinations and interpretations made by
the Committee shall be binding and conclusive on all Participants in the Plan
and on their legal representatives and beneficiaries.
All transactions involving a grant, award or other acquisition from the
Company shall:
(a) be approved by the Company's full Board or by the Committee; or
(b) be approved, or ratified, in compliance with Section 14 of the Exchange
Act, by either: the affirmative vote of the holders of a majority of the
securities present, or represented and entitled to vote at a meeting duly held
in accordance with the laws of the state in which the Company is incorporated;
or the written consent of the holders of a majority of the securities of the
issuer entitled to vote provided that such ratification occurs no later than the
date of the next annual meeting of shareholders; or
(c) result in the acquisition of an Option or Limited Right that is held by
the Participant for a period of six months following the date of such
acquisition.
4. Types of Awards
Awards under the Plan may be granted in any one or a combination of: (a)
Incentive Stock Options; (b) Non-Statutory Stock Options; (c) Limited Rights;
and (d) Reload Options.
5. Stock Subject to the Plan
Subject to adjustment as provided in Section 16, the maximum number of
shares reserved for issuance under the Plan is 800,000 shares. To the extent
that Options or Rights granted under the Plan are exercised, the shares covered
will be unavailable for future grants under the Plan; to the extent that Options
together with any related Rights granted under the Plan terminate, expire or are
forfeited without having been exercised or, in the case of Limited Rights
exercised for cash, new Awards may be made with respect to these shares.
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6. Eligibility
Employees of the Company and its Affiliates shall be eligible to receive
Incentive Stock Options, Non-Statutory Stock Options, Limited Rights and/or
Reload Options under the Plan. Outside Directors shall be eligible to receive
Non-Statutory Stock Options and Reload Options under the Plan.
7. Non-Statutory Stock Options
The Committee may, from time to time, grant Non-Statutory Stock Options to
eligible Employees and Outside Directors. Non-Statutory Stock Options granted
under the Plan, including Non-Statutory Stock Options granted in exchange for
and upon surrender of previously granted Awards, are subject to the terms and
conditions set forth in this Section 7. The maximum number of shares subject to
a Non-Statutory Option that may be awarded under the Plan to any Employee shall
be 200,000.
(a) Option Agreement. Each Option shall be evidenced by a written option
agreement between the Company and the Participant specifying the number of
shares of Common Stock that may be acquired through its exercise and containing
such other terms and conditions that are not inconsistent with the terms of the
Plan.
(b) Price. The purchase price per share of Common Stock deliverable upon
the exercise of each Non-Statutory Stock Option shall be the Fair Market Value
of the Common Stock of the Company on the Date of Grant. Shares may be purchased
only upon full payment of the purchase price. Payment of the purchase price may
be made, in whole or in part, through the surrender of shares of the Common
Stock of the Company at the Fair Market Value of such shares determined in the
manner described in Section 2.
(c) Vesting. Unless the Committee shall specifically state to the contrary
at the time an Award is granted, Non-Statutory Stock Options awarded to
Employees and Outside Directors shall vest at the rate of 20% of the initially
awarded amount per year, commencing with the vesting of the first installment on
the Date of Grant, and succeeding installments on each anniversary of the Date
of Grant. No Options shall become vested by a Participant unless the Participant
maintains Continuous Service until the vesting date of such Option, except as
set forth herein. Notwithstanding any other provision of this Plan, in the event
of a Change in Control of the Company or the Bank, all Non-Statutory Stock
Options that have been awarded shall immediately vest.
(d) Exercise of Options. A vested Option may be exercised from time to
time, in whole or in part, by delivering a written notice of exercise to the
President or Chief Executive Officer of the Company, or his designee. Such
notice shall be irrevocable and must be accompanied by full payment of the
purchase price in cash or shares of Common Stock at the Fair Market Value of
such shares, determined on the exercise date in the manner described in Section
2 hereof. If previously acquired shares of Common Stock are tendered in payment
of all or part of the exercise price, the value of such shares shall be
determined as of the date of such exercise.
(e) Amount of Awards. Non-Statutory Stock Options may be granted to any
Employee or Outside Director in such amounts as determined by the Committee,
subject to the requirements of Section 7 above. In granting Non-Statutory Stock
Options, the Committee shall consider such factors as it deems relevant, which
factors may include, among others, the position and responsibility of the
Employee or Outside Director, the length and value of his service to the Bank,
the Company or the Affiliate, the compensation paid to the Employee or Outside
Director, and the Committee's evaluation of the performance of the Bank, the
Company or the Affiliate, according to measurements that may include, among
others, key financial ratios, level of classified assets and independent audit
findings.
(f) Term of Options. Unless the Committee determines otherwise, the term
during which Non-Statutory Stock Options granted to Outside Directors may be
exercised shall not exceed ten years from the Date of Grant. In no event shall a
Non-Statutory Stock Option be exercisable in whole or in part more than ten
years and one day from the Date of Grant. The Committee may, in its sole
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discretion, accelerate the time during which any Non-Statutory Stock Option
vests in whole or in part to the Employees and/or Outside Directors.
(g) Termination of Employment or Service. Upon the termination of an
Employee's employment or upon termination of an Outside Director's service for
any reason other than, Normal Retirement, death, Disability, Change in Control
or Termination for Cause, the Participant's Non-Statutory Stock Options shall be
exercisable only as to those shares that were immediately purchasable on the
date of termination and only for one year following termination. In the event of
Termination for Cause, all rights under a Participant's Non-Statutory Stock
Options shall expire upon termination. In the event of the Participant's
termination of employment or service due to Normal Retirement, death or
Disability, or coincident with or following a Change in Control all
Non-Statutory Stock Options held by the Participant, whether or not vested at
such time, shall vest and become exercisable by the Participant or his legal
representative or beneficiaries for five years following the date of such
termination, death or cessation of employment or service, provided that in no
event shall the period extend beyond the expiration of the Non-Statutory Stock
Option term.
(h) Transferability. In the discretion of the Board, all or any
Non-Statutory Stock Option granted hereunder may be transferable by the
Participant once the Option has vested in the Participant, provided, however,
that the Board may limit the transferability of such Option or Options to a
designated class or classes of persons.
8. Incentive Stock Options
The Committee may, from time to time, grant Incentive Stock Options to
Employees. Incentive Stock Options granted pursuant to the Plan shall be subject
to the following terms and conditions:
(a) Option Agreement. Each Option shall be evidenced by a written option
agreement between the Company and the Employee specifying the number of shares
of Common Stock that may be acquired through its exercise and containing such
other terms and conditions that are not inconsistent with the terms of the Plan.
(b) Price. Subject to Section 16 of the Plan and Section 422 of the Code,
the purchase price per share of Common Stock deliverable upon the exercise of
each Incentive Stock Option shall be not less than 100% of the Fair Market Value
of the Company's Common Stock on the date the Incentive Stock Option is granted.
However, if an Employee owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its Affiliates
(or under Section 424(d) of the Code is deemed to own stock representing more
than 10% of the total combined voting power of all classes of stock of the
Company or its Affiliates by reason of the ownership of such classes of stock,
directly or indirectly, by or for any brother, sister, spouse, ancestor or
lineal descendent of such Employee, or by or for any corporation, partnership,
estate or trust of which such Employee is a shareholder, partner or
Beneficiary), the purchase price per share of Common Stock deliverable upon the
exercise of each Incentive Stock Option shall not be less than 110% of the Fair
Market Value of the Company's Common Stock on the date the Incentive Stock
Option is granted. Shares may be purchased only upon payment of the full
purchase price. Payment of the purchase price may be made, in whole or in part,
through the surrender of shares of the Common Stock of the Company at the Fair
Market Value of such shares, determined on the exercise date, in the manner
described in Section 2.
(c) Vesting. Incentive Stock Options granted under the Plan shall vest in a
Participant at the rate or rates determined by the Committee. Unless the
Committee shall specifically state to the contrary at the time an Award is
granted, Incentive Stock Options awarded to Employees shall vest at the rate of
20% of the initially awarded amount per year commencing with the vesting of the
first installment on the Date of Grant, and succeeding installments on each
anniversary of the Date of Grant. Notwithstanding any other provisions of this
plan, in the event of a Change in Control of the Company or the Bank, all
Incentive Stock Options that have been awarded shall immediately vest.
(d) Exercise of Options. Vested Options may be exercised from time to time,
in whole or in part, by delivering a written notice of exercise to the President
or Chief Executive Officer of the Company or his designee. Such notice is
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irrevocable and must be accompanied by full payment of the exercise price in
cash or shares of Common Stock at the Fair Market Value of such shares
determined on the exercise date by the manner described in Section 2.
The Options comprising each installment may be exercised in whole or in
part at any time after such installment becomes vested, provided that the amount
able to be first exercised in a given year is consistent with the terms of
Section 422 of the Code. To the extent required by Section 422 of the Code, the
aggregate Fair Market Value (determined at the time the Option is granted) of
the Common Stock for which Incentive Stock Options are exercisable for the first
time by a Participant during any calendar year (under all plans of the Company
and its Affiliates) shall not exceed $100,000.
The Committee may, in its sole discretion, accelerate the time at which any
Incentive Stock Option may be exercised in whole or in part, provided that it is
consistent with the terms of Section 422 of the Code. Notwithstanding the above,
in the event of a Change in Control of the Company, all Incentive Stock Options
that have been awarded shall become immediately exercisable, provided, however,
that if the aggregate Fair Market Value (determined at the time the Option is
granted) of Common Stock for which Options are exercisable as a result of a
Change in Control, together with the aggregate Fair Market Value (determined at
the time the Option is granted) of all other Common Stock for which Incentive
Stock Options become exercisable during such year, exceeds $100,000, then the
first $100,000 of Incentive Stock Options (determined as of the Date of Grant)
shall be exercisable as Incentive Stock Options and any excess shall be
exercisable as Non-Statutory Stock Options (but shall remain subject to the
provisions of this Section 8 to the extent permitted).
(e) Amounts of Awards. Incentive Stock Options may be granted to any
eligible Employee in such amounts as determined by the Committee; provided that
the amount granted is consistent with the terms of Section 422 of the Code.
Notwithstanding the above, the maximum number of shares that may be subject to
an Incentive Stock Option awarded under the Plan to any Employee shall be
200,000. In granting Incentive Stock Options, the Committee shall consider such
factors as it deems relevant, which factors may include, among others, the
position and responsibilities of the Employee, the length and value of his or
her service to the Bank, the Company, or the Affiliate, the compensation paid to
the Employee and the Committee's evaluation of the performance of the Bank, the
Company, or the Affiliate, according to measurements that may include, among
others, key financial ratios, levels of classified assets, and independent audit
findings. The provisions of this Section 8(e) shall be construed and applied in
accordance with Section 422(d) of the Code and the regulations, if any,
promulgated thereunder.
(f) Terms of Options. The term during which each Incentive Stock Option may
be exercised shall be determined by the Committee, provided, however, in no
event shall an Incentive Stock Option be exercisable in whole or in part more
than 10 years from the Date of Grant. Unless the Committee determines otherwise,
the term during which each Incentive Stock Option may be exercised shall not
exceed ten years. If any Employee, at the time an Incentive Stock Option is
granted to him, owns stock representing more than 10% of the total combined
voting power of all classes of stock of the Company or its Affiliate (or, under
Section 424(d) of the Code, is deemed to own stock representing more than 10% of
the total combined voting power of all classes of stock, by reason of the
ownership of such classes of stock, directly or indirectly, by or for any
brother, sister, spouse, ancestor or lineal descendent of such Employee, or by
or for any corporation, partnership, estate or trust of which such Employee is a
shareholder, partner or Beneficiary), the Incentive Stock Option granted to him
shall not be exercisable after the expiration of five years from the Date of
Grant.
(g) Termination of Employment. Upon the termination of an Employee's
service for any reason other than Normal Retirement, death, Disability, a Change
in Control, or Termination for Cause, the Employee's Incentive Stock Options
shall be exercisable only as to those shares that were immediately purchasable
by such Employee at the date of termination for a period of one year following
termination, provided, however, that such Option shall not be eligible for
treatment as an Incentive Stock Option in the event such Option is exercised
more than three months following termination. In the event of Termination for
Cause all rights under the Incentive Stock Options shall expire upon
termination.
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Upon termination of an Employee's employment due to Normal Retirement,
death, Disability, or following a Change in Control, all Incentive Stock Options
held by such Employee, whether or not exercisable at such time, shall be
exercisable for a period of five years following the date of his cessation of
employment, provided however, that any such Option shall not be eligible for
treatment as an Incentive Stock Option in the event such Option is exercised
more than three months following the date of his Normal Retirement or
termination of employment following a Change in Control; and provided further,
that no Option shall be eligible for treatment as an Incentive Stock Option in
the event such Option is exercised more than one year following termination of
employment due to Disability; and provided further, in order to obtain Incentive
Stock Option treatment for Options exercised by heirs or devisees of an
Optionee, the Optionee's death must have occurred while employed or within three
(3) months of termination of employment. In no event shall the exercise period
extend beyond the expiration of the Incentive Stock Option term.
(h) Transferability. No Incentive Stock Option granted under the Plan is
transferable except by will or the laws of descent and distribution and is
exercisable during his lifetime only by the Employee to which it is granted.
(i) Compliance with Code. The options granted under this Section 8 are
intended to qualify as Incentive Stock Options within the meaning of Section 422
of the Code, but the Company makes no warranty as to the qualification of any
Option as an Incentive Stock Option within the meaning of Section 422 of the
Code. If an Option granted hereunder fails for whatever reason to comply with
the provisions of Section 422 of the Code, and such failure is not or cannot be
cured, such Option shall be a Non-Statutory Stock Option.
9. Limited Rights
The Committee may grant a Limited Right simultaneously with the grant of
any Option to any Employee of the Bank, with respect to all or some of the
shares covered by such Option. Limited Rights granted under the Plan are subject
to the following terms and conditions:
(a) Terms of Rights. In no event shall a Limited Right be exercisable in
whole or in part before the expiration of six months from the date of grant of
the Limited Right. A Limited Right may be exercised only in the event of a
Change in Control.
The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
Option.
Upon exercise of a Limited Right, the related Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the exercise price and the Fair Market Value of the Common
Stock subject to the underlying Option. The Limited Right is transferable only
when the underlying Option is transferable and under the same conditions.
(b) Payment. Upon exercise of a Limited Right, the holder shall promptly
receive from the Company an amount of cash equal to the difference between the
Fair Market Value on the Date of Grant of the related Option and the Fair Market
Value of the underlying shares on the date the Limited Right is exercised,
multiplied by the number of shares with respect to which such Limited Right is
being exercised. In the event of a Change in Control in which pooling of
interests accounting treatment is a condition to the transaction, the Limited
Right shall be exercisable solely for shares of stock of the Company, or in the
event of a merger transaction, for shares of the acquiring corporation or its
parent, as applicable. The number of shares to be received on the exercise of
such Limited Right shall be determined by dividing the amount of cash that would
have been available under the first sentence above by the Fair Market Value
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at the time of exercise of the shares underlying the Option subject to the
Limited Right.
10. Reload Option
Simultaneously with the grant of any Option to a Participant, the Committee
may grant a Reload Option with respect to all or some of the shares covered by
such Option. A Reload Option may be granted to a Participant who satisfies all
or part of the exercise price of the Option with shares of Common Stock (as
described in Section 12(c) below). The Reload Option represents an additional
Option to acquire the same number of shares of Common Stock as is used by the
Participant to pay for the original Option. Reload Options may also be granted
to replace Common Stock withheld by the Company for payment of a Participant's
withholding tax under Section 18. A Reload Option is subject to all of the same
terms and conditions as the original Option except that (i) the exercise price
of the shares of Common Stock subject to the Reload Option will be determined at
the time the original Option is exercised and (ii) such Reload Option will
conform to all provisions of the Plan at the time the original Option is
exercised.
11. Surrender of Option
In the event of a Participant's termination of employment or termination of
service as a result of death or Disability, the Participant (or his or her
personal representative(s), heir(s), or devisee(s)) may, in a form acceptable to
the Committee make application to surrender all or part of the Options held by
such Participant in exchange for a cash payment from the Company of an amount
equal to the difference between the Fair Market Value of the Common Stock on the
date of termination of employment or the date of termination of service on the
Board and the exercise price per share of the Option. Whether the Company
accepts such application or determines to make payment, in whole or part, is
within its absolute and sole discretion, it being expressly understood that the
Company is under no obligation to any Participant whatsoever to make such
payments. In the event that the Company accepts such application and determines
to make payment, such payment shall be in lieu of the exercise of the underlying
Option and such Option shall cease to be exercisable.
12. Alternate Option Payment Mechanism
The Committee has sole discretion to determine what form of payment it will
accept for the exercise of an Option. The Committee may indicate acceptable
forms in the agreement with the Participant covering such Options or may reserve
its decision to the time of exercise. No Option is to be considered exercised
until payment in full is accepted by the Committee or its agent.
(a) Cash Payment. The exercise price may be paid in cash or by certified
check. To the extent permitted by law, the Committee may permit all or a portion
of the exercise price of an Option to be paid through borrowed funds.
(b) Cashless Exercise. Subject to vesting requirements, if applicable, a
Participant may engage in a "cashless exercise" of the Option. Upon a cashless
exercise, the Participant shall give the Bank written notice of the exercise of
the Option together with an order to a registered broker-dealer or equivalent
third party, to sell part or all of the Common Stock subject to the Option and
to deliver enough of the proceeds to the Bank to pay the Option exercise price
and any applicable withholding taxes. If the Participant does not sell the
Common Stock subject to the Option through a registered broker-dealer or
equivalent third party, the Participant may give the Bank written notice of the
exercise of the Option and the third party purchaser of the Common Stock subject
to the Option shall pay the Option exercise price plus applicable withholding
taxes to the Bank.
(c) Exchange of Common Stock. The Committee may permit payment of the
Option exercise price by the tendering of previously acquired shares of Common
Stock. All shares of Common Stock tendered in payment of the exercise price of
an Option shall be valued at the Fair Market Value of the Common Stock on the
date prior to the date of exercise. No tendered shares of Common Stock which
were acquired by the Participant upon the previous exercise of an Option or as
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awards under a stock award plan (such as the Company's Recognition and Retention
Plan) shall be accepted for exchange unless the Participant has held such shares
(without restrictions imposed by said plan or award) for at least six months
prior to the exchange.
13. Rights of a Stockholder
A Participant shall have no rights as a stockholder with respect to any
shares covered by a Non-Statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in the Plan or in
any Award granted confers on any person any right to continue in the employ of
the Company or its Affiliates or to continue to perform services for the Company
or its Affiliates or interferes in any way with the right of the Company or its
Affiliates to terminate his services as an officer, director or employee at any
time.
14. Agreement with Participants
Each Award of Options, Reload Options and/or Limited Rights will be
evidenced by a written agreement, executed by the Participant and the Company or
its Affiliates that describes the conditions for receiving the Awards, including
the date of Award, the purchase price, applicable periods, and any other terms
and conditions as may be required by the Board or applicable securities laws.
15. Designation of Beneficiary
A Participant may, with the consent of the Committee, designate a person or
persons to receive, in the event of death, any Option, Reload Option or Limited
Rights Award to which he would then be entitled. Such designation will be made
upon forms supplied by and delivered to the Company and may be revoked in
writing. If a Participant fails effectively to designate a Beneficiary, then his
estate will be deemed to be the Beneficiary.
16. Dilution and Other Adjustments
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, pro rata return of capital to all
shareholders, recapitalization, or any merger, consolidation, spin-off,
reorganization, combination or exchange of shares, or other similar corporate
change, or other increase or decrease in such shares, without receipt or payment
of consideration by the Company, the Committee will make such adjustments to
previously granted Awards, to prevent dilution or enlargement of the rights of
the Participant, including any or all of the following:
(a) adjustments in the aggregate number or kind of shares of Common Stock
that may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common Stock
covered by Awards already made under the Plan; or
(c) adjustments in the purchase price of outstanding Incentive and/or
Non-Statutory Stock Options, or any Limited Rights attached to such
Options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award. With respect to
Incentive Stock Options, no such adjustment shall be made if it would be deemed
a "modification" of the Award under Section 424 of the Code.
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17. Effect of a Change in Control on Option Awards
In the event of a Change in Control, the Committee and the Board of
Directors will take one or more of the following actions to be effective as of
the date of such Change in Control:
(a) provide that such Options shall be assumed, or equivalent options shall
be substituted ("Substitute Options") by the acquiring or succeeding corporation
(or an affiliate thereof), provided that: (A) any such Substitute Options
exchanged for Incentive Stock Options shall meet the requirements of Section
424(a) of the Code, and (B) the shares of stock issuable upon the exercise of
such Substitute Options shall constitute securities registered in accordance
with the Securities Act of 1933, as amended ("1933 Act") or such securities
shall be exempt from such registration in accordance with Sections 3(a)(2) or
3(a)(5) of the 1933 Act, (collectively, "Registered Securities"), or in the
alternative, if the securities issuable upon the exercise of such Substitute
Options shall not constitute Registered Securities, then the Participant will
receive upon consummation of the Change in Control a cash payment for each
Option surrendered equal to the difference between the (1) Fair Market Value of
the consideration to be received for each share of Common Stock in the Change in
Control times the number of shares of Common Stock subject to such surrendered
Options, and (2) the aggregate exercise price of all such surrendered Options;
or
(b) in the event of a transaction under the terms of which the holders of
Common Stock will receive upon consummation thereof a cash payment (the "Merger
Price") for each share of Common Stock exchanged in the Change in Control
transaction, make or provide for a cash payment to the Participants equal to the
difference between (1) the Merger Price times the number of shares of Common
Stock subject to such Options held by each Participant (to the extent then
exercisable at prices not in excess of the Merger Price), and (2) the aggregate
exercise price of all such surrendered Options.
18. Withholding
There may be deducted from each distribution of cash and/or Common Stock
under the Plan the minimum amount of any federal or state taxes, including
payroll taxes, that are applicable to such supplemental taxable income and that
are required by any governmental authority to be withheld. Shares of Common
Stock will be withheld where required from any distribution of Common Stock.
19. Amendment of the Plan
The Board may at any time, and from time to time, modify or amend the Plan
in any respect, or modify or amend an Award received by Employees and/or Outside
Directors; provided, however, that no such termination, modification or
amendment may affect the rights of a Participant, without his consent, under an
outstanding Award. Any amendment or modification of the Plan or an outstanding
Award under the Plan, including but not limited to the acceleration of vesting
of an outstanding Award for reasons other than the death, Disability, Normal
Retirement, or a Change in Control, shall be approved by the Committee or the
full Board of the Company.
20. Effective Date of Plan
The Plan shall become effective upon the date of, or a date determined by
the Board of Directors following, approval of the Plan by the Company's
stockholders.
21. Termination of the Plan
The right to grant Awards under the Plan will terminate upon the earlier of
(i) 10 years after the Effective Date, or (ii) the date on which the exercise of
Options or related rights equaling the maximum number of shares reserved under
the Plan occurs, as set forth in Section 5. The Board may suspend or terminate
the Plan at any time,
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provided that no such action will, without the consent of a Participant,
adversely affect his rights under a previously granted Award.
22. Applicable Law
The Plan will be administered in accordance with the laws of the
Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, the Company has caused the Plan to be executed by its
duly authorized officers and the corporate seal to be affixed and duly attested,
as of the ____ day of _________________, 2000.
Date Approved by Stockholders: _____________
Effective Date: _____________
ATTEST: NORTHWEST BANCORP, INC.
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Secretary President
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EXHIBIT E
NORTHWEST BANCORP, INC.
AUDIT COMMITTEE CHARTER
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
o Monitor the integrity of the bank's financial reporting
process and systems of internal controls regarding finance,
accounting, and legal compliance.
o Monitor the independence and performance of the bank's
independent auditors and internal auditing department.
o Provide an avenue of communication among the independent
auditors, management, the internal auditing department, and
the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization. The Audit Committee
has the ability to retain, at the bank's expense, special legal, accounting, or
other consultants or experts it deems necessary in the performance of its
duties.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
The Audit Committee members shall meet the requirements of the Nasdaq
National Market. The Audit Committee shall be comprised of three or more
directors as determined by the Board, each of whom shall be independent
non-executive directors, free from any relationship that would interfere with
the exercise of their independent judgment. All members of the Committee shall
have a basic understanding of finance and accounting and be able to read and
understand fundamental financial statements, and at least one member of the
Committee shall have accounting or related financial management expertise.
Audit Committee members shall be appointed by the Board of Directors.
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate.
The Committee shall meet privately in executive session at least annually
with management, the director of the internal audit department, the independent
auditors, and as a committee to discuss any matters that the Committee or each
of these groups believe shall be discussed.
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
The Audit Committee shall review and reassess the adequacy of this charter
at least annually. The charter shall be presented to the Board of Directors for
approval and have the document published in the proxy statement at least every
three years in accordance with SEC regulations.
The Audit Committee will review the bank's annual audited financial
statements prior to filing or distribution. The Committee shall include
discussion with management and independent auditors of significant issues
regarding accounting principles, practices, and judgments.
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In consultation with management, the independent auditors, and the internal
auditors, the Committee shall consider the integrity of the bank's financial
reporting processes and controls. The Committee shall discuss significant
financial risk exposures and the steps management has taken to monitor, control,
and report such exposures. The Committee shall review significant findings
prepared by the independent auditors and the internal auditing department
together with management's responses.
The Committee shall review with financial management and the independent
auditors the banks quarterly financial results prior to the release of earnings
and/or the bank's quarterly financial statements prior to filing or
distribution. They shall discuss any significant changes to the bank's
accounting principles and any items required to be communicated by the
independent auditors in accordance with Statement of Accounting Standards
("SAS") No. 611. The Chair of the Committee may represent the entire Audit
Committee for purposes of this review.
Independent Auditors
The independent auditors are ultimately accountable to the Audit Committee
and the Board of Directors. The Audit Committee shall review the independence
and performance of the auditors and annually recommend to the Board of Directors
the appointment of the independent auditors or recommend discharge of auditors
when circumstances warrant.
On an annual basis, the Committee shall review and discuss with the
independent auditors all significant relationships they have with the bank that
could impair the auditors' independence.
The Audit Committee shall review the independent auditors audit plan,
discuss scope, staffing, locations, reliance upon management, and internal audit
and general approach.
The Audit Committee shall discuss the results of the audit with the
independent auditors. They shall also discuss certain matters required to be
communicated to audit committees in accordance with SAS No. 612.
The Audit Committee shall consider the independent auditors' judgments
about the quality and appropriateness of the bank's accounting principles as
applied in its financial reporting.
The Audit Committee shall approve the fees and other significant
compensation to be paid to the independent auditors.
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(1) SAS No. 61 requires that if matters are identified during the interim
review which would need to be communicated under SAS No. 61, the auditor
must communicate them to the Audit Committee or be satisfied that they have
been communicated to the Audit Committee by management.
(2) SAS No. 61 requires that auditors discuss certain matters with Audit
Committees of all SEC engagements. The communication may be in writing or
oral and may take place before or after the financial statements are
issued. Items to be communicated include:
o The auditor's responsibility under Generally Accepted Auditing
Standards;
o Significant accounting policies;
o Management judgments and accounting estimates;
o Significant audit adjustments;
o Other information in documents containing audited financial
statements;
o Disagreements with management - including accounting principles, scope
of audit, disclosures;
o Consultation with other accountants by management.
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Internal Audit Department and Legal Compliance
The Audit Committee shall review the budget, plan, changes in the plan,
activities, organizational structure, and qualifications of the internal audit
department, as needed.
The Committee shall review the appointment, termination, and replacement of
senior audit executives.
As deemed appropriate, the Committee shall review reports prepared by the
internal audit department together with management's response and follow-up to
these reports.
On an annual basis, the Committee shall review with the bank's counsel, any
legal matters that could have a significant impact in the organization's
financial statements, the bank's compliance with applicable laws and
regulations, and inquiries received from regulators or government agencies.
Other Audit Committee Responsibilities
Annually, the Committee shall prepare a report to shareholders as required
by the Securities and Exchange Commission. The report shall be included in the
bank's annual proxy statement.
The Committee shall perform any other activities consistent with this
charter, the bank's by-laws, and governing law, as the Committee or the Board
deems necessary or appropriate.
Minutes of all meetings are to kept and periodically reported to the Board
of Directors.
Other Charter Disclosures
The Committee shall review annually the results of the monitoring of
compliance with the bank's Code of Conduct.
Periodically the Committee shall perform a self assessment of the audit
committee performance.
The Committee shall review financial and accounting personnel succession
planning within the company.
Annually, the Committee shall review policies and procedures implemented by
management associated with directors' and officers' expense accounts and
perquisites, as well as audit results of these activities.
Annually, review a summary of director and officers' related party
transactions and potential conflict of interest.
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REVOCABLE PROXY
NORTHWEST BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
December 20, 2000
The undersigned hereby appoints the official proxy committee consisting of
the entire Board of Directors 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 2000 Annual Meeting
of Stockholders ("Meeting") to be held at the Knights of Columbus Hall, located
at 219 2nd Avenue, Warren, Pennsylvania, at 11:00 a.m. The official proxy
committee is authorized to cast all votes to which the undersigned is entitled
as follows:
VOTE
FOR WITHHELD
|-| |-|
1. The election as directors
of all nominees listed below
(except as marked to the contrary
below)
John O. Hanna
Richard L. Carr
John M. Bauer
INSTRUCTION: To withhold your vote
for one ormore nominees, write the
name of the nominee(s) on the line(s)
below.
____________________________________
____________________________________
____________________________________
FOR AGAINST ABSTAIN
--- ------- -------
2. The approval of the Plan of Charter |-| |-| |-|
Conversion by which the Company will
convert to a Federal corporation from
a Pennsylvania corporation.
FOR AGAINST ABSTAIN
--- ------- -------
3. The ratification and approval of the |-| |-| |-|
Northwest Bancorp, Inc. 2000 Stock
Option Plan.
<PAGE>
FOR AGAINST ABSTAIN
--- ------- -------
4. The ratification of the appointment |-| |-| |-|
of KPMG LLP as auditors for the fiscal
year ending June 30, 2001.
The Board of Directors recommends a vote "FOR" each of the listed proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED ABOVE. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THE MAJORITY
OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF
NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or at any
adjournment thereof and after notification to the Secretary of the Company at
the Meeting of the stockholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated and of no further
force and effect. This proxy may also be revoked by sending written notice to
the Secretary of the Company at the address set forth on the Notice of Annual
Meeting of Stockholders, or by the filing of a later proxy prior to a vote being
taken on a particular proposal at the Meeting.
The undersigned acknowledges receipt from the Company prior to the execution of
this proxy of notice of the Meeting, a proxy statement dated October 8, 1999,
and audited financial statements.
Dated: _____________________, 2000 |-| Check Box if You Plan
to Attend Meeting
------------------------------- -----------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
------------------------------- -----------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.
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Please complete and date this proxy and return it
promptly in the enclosed postage-prepaid
envelope.
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