SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 2)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Fiscal Year Ended June 30, 2000 OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______________ to ______________________
Commission File No. 0-23817
NORTHWEST BANCORP, INC.
-----------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2900888
-------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Liberty and Second Streets, Warren, Pennsylvania 16365
------------------------------------------------ ----------
(Address of Principal Executive Offices) Zip Code
(814) 726-2140
------------------------------
(Registrant's telephone number)
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, par
value $.10 per share
--------------------
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
requirements for the past 90 days. YES X . NO .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ].
As of June 30, 2000, there were issued and outstanding 12,136,594 shares of
the Registrant's Common Stock, not including 35,224,175 shares held by Northwest
Bancorp, M.H.C., the Registrant's mutual holding company.
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, which amount includes voting stock held by officers and
directors, computed by reference to the last sale price on June 30, 2000, as
reported by the Nasdaq National Market, was approximately $83.4 million.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
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, and the Company's executive officers who are not
directors. 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
-------- --- ------------ --------- --------- --------- --------
Directors
<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) *
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
Timothy A. Huber 43 Senior Vice President- N/A N/A 72,244(14) *
Business Banking
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>
------------------------------------
* 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) 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
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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.
(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 28,000 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 38,000 shares of Common Stock which are
exercisable within 60 days of the date as of which beneficial ownership is
being determined.
(18) 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 for the Bank since
1984 and was named Chief Operating Officer in 1996. Mr. Wagner was appointed
Executive Vice
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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.
Thomas K. Creal, III has been a partner in the architectural firm of Creal,
Hyde & 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
Timothy A. Huber has been employed by the Bank since 1985 and currently
serves as Senior Vice President of Business Banking.
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.
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
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<PAGE>
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.
ITEM 11. EXECUTIVE COMPENSATION
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").
5
<PAGE>
(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, Audit, Risk Management, Long Range
Planning, Personnel and Pension, and Community Reinvestment Committees are paid
a total of $500 for attendance at committee meetings 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 sixty percent of the annual retainer paid
immediately prior to retirement plus sixty percent 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 present at the 1995 Annual Meeting. The 1995 Stock
Option Plan is a self-administering plan that granted to nonemployee Directors
Ferrier, McDowell, Stadler, Yahn, Creal, Doyle, Carr and four former directors
nonstatutory options for each such director to purchase 22,000 (split adjusted)
shares of Common Stock. Such shares vest 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.
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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 stockholders other than the
Mutual Holding Company 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 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 $250,000 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
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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 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, Huber,
LaRocca, Ordiway, Parry and Vecellio had 40, 16, 16, 14, 25, 18 and 23 years of
credited service (i.e., benefit service), respectively.
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The accrued annual pension benefit as of June 30, 2000 for Messrs. Hanna,
Wagner, Huber, LaRocca, Ordiway, Parry and Vecellio are $109,980, $50,603,
$18,722, $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.
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>
$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 their
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.
9
<PAGE>
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-
Options at The-Money Options at
Shares Acquired Value Fiscal Year-End (1) Fiscal Year-End (2)
Name Upon Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John O. Hanna -- -- 273,000 /-- $273,000 /--
William J. Wagner -- -- 80,000 /-- 80,000 /--
Timothy A. Huber -- -- 28,000 /-- 28,000 /--
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.
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, 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 principal
federal regulator at such time) reviewed the terms of the lease and had no
objection to the lease arrangement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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.
<TABLE>
<CAPTION>
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Common Stock
Beneficial Owners Ownership (1) Outstanding
------------------- ---------------- -----------------
<S> <C> <C>
Northwest Bancorp, MHC (2) 35,224,175 74.4%
Liberty and Second Streets
Warren, Pennsylvania 16365-2353
10
<PAGE>
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)
</TABLE>
------------------------------------
(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.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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. However, recent
regulations now permit executive officers and directors to receive the same
terms through benefit or compensation plans 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. 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. In
addition, 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 also 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, 1998, to specified person's did not exceed $5
million.
In addition, 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.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The following documents were previously filed as part of this Form 10-K.
(A) Independent Auditors' Report
(B) Consolidated Statements of Financial Condition - at June 30, 2000
and 1999
11
<PAGE>
(C) Consolidated Statements of Income - Years ended June 30, 2000,
1999 and 1998
(D) Consolidated Statements of Changes in Shareholders' Equity -
Years ended June 30, 2000, 1999 and 1998
(E) Consolidated Statements of Cash Flows - Years ended June 30,
2000, 1999 and 1998
(F) Notes to Consolidated Financial Statements.
(a)(2) Financial Statement Schedules
(b) Reports on Form 8-K
The Company has not filed a Current Report on Form 8-K during the
quarter ended June 30, 2000.
(c) Exhibits
(a)(3) Exhibits: -----------------
<TABLE>
<CAPTION>
Reference to
Regulation Prior Filing or
S-K Exhibit Exhibit Number
Number Document Attached Hereto
----------- ------------------------------------------- ----------------
<S> <C> <C>
2 Plan of acquisition, reorganization, None
arrangement, liquidation or succession
3 Articles of Incorporation and Bylaws *
4 Instruments defining the rights of *
security holders, including indentures
9 Voting trust agreement None
10(1) Restated Deferred Compensation Plan for *
Directors
10(2) Retirement Plan for Outside Directors *
10(3) Northwest Savings Bank Nonqualified *
Supplemental Retirement Plan
10(4) Employee Stock Ownership Plan *
10(5) Employment Agreement between the Bank and *
John O. Hanna, President and Chief Executive
Officer
10(6) Employee Severance Compensation Plan *
11 Statement re: computation of per share earnings None
12 Statement re: computation or ratios Not required
12
<PAGE>
16 Letter re: change in certifying None
accountant
18 Letter re: change in accounting None
principles
21 Subsidiaries of Registrant 21
22 Published report regarding matters None
submitted to vote of security holders
23 Consent of experts and counsel 23
24 Power of Attorney Not Required
28 Information from reports furnished to None
State insurance regulatory authorities
99 Additional exhibits None
</TABLE>
------------
* Incorporated by reference to the Company's Registration Statement on Form
S-4 (File No. 333-31687), originally filed with the SEC on July 21, 1997,
as amended on October 9, 1997 and November 4, 1997.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NORTHWEST BANCORP, INC.
Date: October 26, 2000 By: /s/Gregory C. LaRocca
-----------------------------------------
Gregory C. LaRocca, Senior Vice President
and Secretary
14
