SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _______)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a 6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Thistle Group Holdings, Co.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[Thistle Group Holdings, Co. Letterhead]
June 23, 1999
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Thistle Group
Holdings, Co. (the "Company"), I cordially invite you to attend a Special
Meeting of Stockholders ("Meeting") to be held at Williamson's Restaurant, One
Belmont Avenue, Bala Cynwyd, Pennsylvania, on Wednesday, July 21, 1999 at 9:00
a.m. local time. The attached Notice of Special Meeting and Proxy Statement
describe the formal business to be transacted at the Meeting.
The Board of Directors of the Company has determined that the matters
to be considered at the Meeting, described in the accompanying Notice of Special
Meeting and Proxy Statement, are in the best interest 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.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID RETURN
ENVELOPE AS QUICKLY AS POSSIBLE. This will not prevent you from voting in person
at the Meeting, but will assure that your vote is counted if you are unable to
attend the Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/John F. McGill, Jr.
----------------------------------------
John F. McGill, Jr.
President and
Chief Executive Officer
<PAGE>
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THISTLE GROUP HOLDINGS, CO.
6060 RIDGE AVENUE
PHILADELPHIA, PENNSYLVANIA 19128
(215) 483-2800
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be Held on July 21, 1999
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NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the "Meeting") of
Thistle Group Holdings, Co. (the "Company"), will be held at Williamson's
Restaurant, One Belmont Avenue, Bala Cynwyd, Pennsylvania, on Wednesday, July
21, 1999 at 9:00 a.m. local time.
The Meeting is for the purpose of considering and acting upon the following
matters:
1. The approval of the Thistle Group Holdings, Co. 1999 Stock Option Plan
(the "Option Plan"); and
2. The approval of the Roxborough-Manayunk Bank 1999 Restricted Stock
Plan (the "RSP").
The transaction of such other business as may properly come before the
Meeting or any adjournments thereof may also be acted upon. If necessary, the
Meeting will be adjourned to solicit additional proxies with respect to approval
of the Option Plan and the RSP. The Board of Directors is not aware of any other
business to come before the Meeting.
Action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Pursuant to the
Company's Bylaws, the Board of Directors has fixed the close of business on June
11, 1999 as the record date for determination of the stockholders entitled to
vote at the Meeting and any adjournments thereof.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE AND QUICKLY RETURN THE ENCLOSED PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. ANY SIGNED PROXY GIVEN BY THE STOCKHOLDER MAY BE REVOKED
BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY
EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY
REVOKE HIS PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING.
HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN
NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE
PERSONALLY AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Francis E. McGill
---------------------------------------------
Francis E. McGill, Secretary
Philadelphia, Pennsylvania
June 23, 1999
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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<PAGE>
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PROXY STATEMENT
OF
THISTLE GROUP HOLDINGS, CO.
6060 RIDGE AVENUE
PHILADELPHIA, PENNSYLVANIA 19128
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SPECIAL MEETING OF STOCKHOLDERS
July 21, 1999
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Thistle Group Holdings, Co. (the
"Company") to be used at a Special Meeting of Stockholders of the Company which
will be held at Williamson's Restaurant, One Belmont Avenue, Bala Cynwyd,
Pennsylvania, on Wednesday, July 21, 1999 at 9:00 a.m. local time (the
"Meeting"). The accompanying Notice of Special Meeting of Stockholders and this
Proxy Statement are being first mailed to stockholders on or about June 23,
1999. The Company is the parent corporation of Roxborough-Manayunk Bank (the
"Bank"). The Company was formed as a Pennsylvania corporation in March 1998 at
the direction of the Bank to acquire all of the outstanding stock of the Bank
issued in connection with the completion of the "second step" mutual-to-stock
reorganization of the Bank and FJF Financial, M.H.C. on July 14, 1998 (the
"Conversion").
At the Meeting, stockholders will consider and vote upon (1) the
approval of the Option Plan, and (2) the approval of the RSP. The Board of
Directors knows of no additional matters that will be presented for
consideration at the Meeting. Execution of a proxy, however, confers on the
designated proxyholder the discretionary authority to vote the shares
represented by such proxy in accordance with their best judgment on such other
business, if any, that may properly come before the Meeting or any adjournment
thereof.
The approval of the Option Plan provides for authorizing the issuance
of an additional 785,637 shares of common stock of the Company ("Common Stock")
upon the exercise of stock options to be awarded to officers, Directors, key
employees and other persons providing services to the Company or any present or
future parent or subsidiary of the Company from time to time. The approval of
the RSP provides for authorization to issue up to an additional 314,254 shares
of Common Stock upon awards to personnel of experience and ability in key
positions of responsibility with the Bank and its subsidiaries from time to
time. At the present time, the Bank intends to acquire such Common Stock for RSP
purposes through open-market purchases. The RSP has the authority, however, to
purchase such Common Stock directly from the Company. See "Proposal I --
Approval of the Option Plan -- Effect of Mergers, Change of Control and Other
Adjustments, and Possible Dilutive Effects of the Option Plan" and "Proposal II
- --Approval of the RSP -- Possible Dilutive Effects of RSP."
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<PAGE>
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address above or by the filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a stockholder attends the Meeting and
votes in person. Proxies solicited by the Board of Directors will be voted in
accordance with the directions given therein. Where no instructions are
indicated, signed proxies will be voted "FOR" Proposal I and "FOR" Proposal II
at the Meeting or any adjournment thereof.
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
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Employees, officers, and Directors of the Company have an interest in
certain matters being presented for stockholder approval. Upon stockholder
approval, employees, officers, and Directors of the Company may be granted stock
options and restricted stock awards pursuant to the Option Plan and the RSP. The
approval of the Option Plan and the RSP are being presented as Proposal I and
Proposal II, respectively. See "Voting Securities and Principal Holders Thereof"
for information regarding the number of shares of Common Stock beneficially
owned by executive officers and Directors.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on June 11, 1999
(the "Record Date"), are entitled to one vote for each share of common stock of
the Company (the "Common Stock") then held. As of the Record Date, the Company
had 7,825,718 shares of Common Stock issued and outstanding.
The articles of incorporation of the Company ("Articles of
Incorporation") provides that in no event shall any record owner of any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who beneficially owns in excess of 10% of the then outstanding shares
of Common Stock (the "Limit") be entitled or permitted to any vote with respect
to the shares held in excess of the Limit. Beneficial ownership is determined
pursuant to the definition in the Articles of Incorporation and includes shares
beneficially owned by such person or any of his or her affiliates (as such terms
are defined in the Articles of Incorporation), or which such person or any of
his or her affiliates has the right to acquire upon the exercise of conversion
rights or options and shares as to which such person or any of his or her
affiliates or associates have or share investment or voting power, but neither
any employee stock ownership or similar plan of the Company or any subsidiary,
nor any trustee with respect thereto or any affiliate of such trustee (solely by
reason of such capacity of such trustee), shall be deemed, for purposes of the
Articles of Incorporation, to beneficially own any Common Stock held under any
such plan.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
Meeting. With respect to any matter, any shares for which a broker indicates on
the proxy that it does not have discretionary authority as to such shares to
vote on such matter (the "Broker Non-Votes") will be considered present for
purposes of determining whether a quorum is present. In the event there are not
sufficient votes for a quorum or to ratify any proposals at the time of the
Meeting, the Meeting may be adjourned in order to permit the further
solicitation of proxies.
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<PAGE>
As to matters being proposed for stockholder action as set forth in
Proposal I and Proposal II, the proxy being provided by the Board of Directors
enables a stockholder to check the appropriate box on the proxy to (i) vote
"FOR" the item, (ii) vote "AGAINST" the item, or (iii) vote to "ABSTAIN" on such
item. An affirmative vote of the holders of a majority of the total votes cast
at the Meeting on each matter, in person or by proxy, is required to constitute
stockholder approval for each of Proposals I and II. Shares as to which the
"ABSTAIN" box is selected on the proxy will have the effect of a vote against
the matter. Broker Non-Votes will not be counted in determining the voting on
the matter.
Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The following
table sets forth, as of the Record Date, persons or groups who own more than 5%
of the Common Stock and the ownership of all executive officers and Directors of
the Company as a group. Other than as noted below, management knows of no person
or group that owns more than 5% of the outstanding shares of Common Stock at the
Record Date.
<TABLE>
<CAPTION>
Percent of Shares of
Amount and Nature of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------ -------------------- -----------------------
<S> <C> <C>
Roxborough-Manayunk Bank 697,982 (1) 8.9%
Employee Stock Ownership Plan Trust ("ESOP")
6060 Ridge Avenue
Philadelphia, Pennsylvania 19128
Brandes Investment Partners, L.P. 534,190 (2) 6.8%
12750 High Bluff Drive
San Diego, California 92130
Wellington Management Company, LLP 477,500 (3) 6.1%
75 State Street
Boston, Massachusetts 02109
All Directors and Executive Officers as a Group 660,676 8.4%
(9 persons)
</TABLE>
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(1) A portion of these shares are held in a suspense account and will be
allocated among participants annually on the basis of compensation as the
ESOP debt is repaid. As of the Voting Record Date, 90,423 shares have been
allocated under the ESOP to participant accounts.
(2) Based on a Schedule 13G filed with the SEC on February 12, 1999.
(3) Based upon a Schedule 13G filed with the SEC on February 9, 1999.
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<PAGE>
The following table sets forth the amount of Common Stock beneficially
owned by each Director and each of the named executive officers of the Company.
Common Stock Beneficially
Owned(1)(2)
----------------------------
Name of Individual Title Shares %
- ------------------ ----- ------ ---------
John F. McGill, Jr. President/Director 173,231(3)(4) 2.2
Patrick T. Ryan Director 52,758 *
Francis E. McGill, III Secretary/Director 53,147 *
Add B. Anderson, Jr. Director 117,714(3) 1.5
Jerry Naessens Chief Financial 118,803(5) 1.5
Officer/Director
William A. Lamb, Sr. Director 37,974 *
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* Less than 1% of the Common Stock outstanding.
(1) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which shares
the individuals effectively exercise sole or shared voting and investment
power, unless otherwise indicated.
(2) Beneficial ownership as of the Record Date.
(3) Excludes 697,982 shares of Common Stock held by the ESOP which such person
serves as trustee and exercises shared voting and investment power. Shares
which are unallocated (607,559 shares) and shares for which no voting
directions are received are voted by the trustees as directed by the ESOP
Committee or the Board. Once allocated to participant accounts, such Common
Stock will be voted by the trustee as directed by the beneficial owner of
such Common Stock. The trustees act as fiduciaries within the meaning of
the Employee Retirement Income Security Act of 1974, as amended. The
individuals serving as trustee disclaim beneficial ownership of the Common
Stock held under the ESOP.
(4) Includes exercisable options to purchase 61,067 shares of Common Stock.
(5) Includes exercisable options to purchase 44,413 shares of Common Stock.
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DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
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Director Compensation
The Company does not pay any compensation for membership on the Board
of Directors. Non-employee members of the Bank's Board of Directors received
fees of $1,000 per month during the 1998 fiscal year plus a $1,200 retainer.
Members of the Board's Budget, Audit and Executive Committees were paid $1,000
for each meeting attended during fiscal 1998. The Bank paid a total of $138,400
in directors' fees for the fiscal year ended December 31, 1998.
Executive Compensation
Summary Compensation Table. The following table sets forth for the year
ended December 31, 1998, certain information as to the compensation received by
the Chief Executive Officer and each executive officer of the Company who
received total cash compensation in excess of $100,000. All compensation is paid
by the Bank.
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<PAGE>
All Other
Annual Compensation Compensation
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Name and Fiscal
Principal Position Year Salary Bonus ($)(1)
- ------------------ ---- ------ ----- ------
John F. McGill, Jr. 1998 $225,000 $71,250 $21,738
President and Chief 1997 200,000 35,000 26,046
Executive Officer
Jerry A. Naessens 1998 $200,000 $50,000 $93,779
Chief Financial Officer 1997 175,000 8,750 68,481
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(1) Includes Common Stock allocated under the ESOP valued at $2,700 and
$2,046, in fiscal 1998 and 1997, respectively, for each of the named
executive officers. The amounts also include contributions of $19,038
and $24,000, in fiscal 1998 and 1997, respectively, to the Bank's
profit sharing plan on behalf of Messrs. McGill and Naessens, and an
accrual of $72,041 and $42,435 in fiscal 1998 and 1997, respectively,
under the Bank's supplemental retirement plan for Mr. Naessens.
Pension Plan. The Bank sponsors a defined benefit pension plan (the
"Pension Plan"). All full-time employees and part-time employees of the Bank who
work 1,000 hours are eligible to participate after one year of service and
attainment of age 21. A qualifying employee becomes fully vested in the Pension
Plan upon completion of five years service or when the normal retirement age
(the later of age 65 or the 5th anniversary of the first day of the Pension Plan
year in which the participant commenced participation in the Pension Plan) is
attained.
Benefits are payable in the form of various annuity alternatives,
including a joint and survivor option, or in a lump-sum amount. The following
table shows the estimated annual benefits payable under the Pension Plan based
on the respective employee's years of benefit service and applicable average
annual salary, as calculated under the Pension Plan. Benefits under the Pension
Plan take into account permitted disparity allowed under the Code. Benefits
shown below are based on the covered compensation of an employee retiring at age
65 in 1998.
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<PAGE>
Years of Benefit Service
-----------------------------------------------------
15 20 25 30 35
------- ------- ------- ------- --------
$ 60,000...... $ 7,921 $10,562 $13,203 $15,843 $18,484
80,000...... 11,221 14,962 18,703 22,443 18,703
100,000...... 14,521 19,362 24,203 29,043 33,884
125,000...... 18,646 24,862 31,078 37,293 43,509
150,000...... 22,771 30,362 37,953 45,543 53,134
160,000...... 24,552 32,736 40,920 49,104 57,288
The Pension Plan provides for monthly payments to each participating
employee at normal retirement age. The annual allowance payable under the
Pension Plan is equal to the sum of (A) and (B), where (A) equals the product of
(i) .65% of the participant's average monthly compensation, based on the highest
five (5) consecutive years and excluding compensation in excess of $160,000, and
(ii) the participant's years of participation as of his normal retirement date,
and (B) equals the product of (i) .45% of the participant's average monthly
compensation in excess of covered compensation (as defined in Section 401 of the
Code), and (ii) the participant's years of participation as of his normal
retirement date (but not to exceed thirty-five (35) years). A participant who is
vested in the Pension Plan may elect an early retirement (at age 55 with 20
years of service or age 62 with 10 years of service), and may elect to receive a
reduced monthly benefit. The Pension Plan also provides for payments in the
event of disability or death. At December 31, 1998, John F. McGill, Jr. and
Jerry Naessens had 14 and 7 years of credited service under the Pension Plan.
Total pension expense for 1996, 1997 and 1998 amounted to $131,360, $143,394 and
$166,900, respectively.
Supplemental Retirement Agreement. In November, 1993, the Bank entered
into non-qualified retirement and death benefit agreement with Jerry Naessens,
Chief Financial Officer. The agreement was subsequently amended in June 1996. In
recognition of the services provided by Mr. Naessens to the Bank, the retirement
agreement provides that Mr. Naessens (or his spouse) shall receive at age 67 a
monthly retirement benefit of $4,167. If Mr. Naessens becomes permanently and
totally disabled prior to age 67, he will receive the monthly supplemental
retirement benefits upon reaching age 67. The retirement agreement provides that
Mr. Naessens' spouse shall receive a pro-rated monthly death benefit if he dies
while employed by the Bank prior to age 67, based on his age at the time of
death.
Employment Agreements. The Bank and Company have entered into an
employment agreement with John F. McGill, Jr., President and Chief Executive
Officer which is effective through January 21, 2002, unless extended by the
Board. The Bank has entered into an employment agreement with Jerry A. Naessens,
Chief Financial Officer of the Bank which is effective through January 1, 2002,
unless extended by the Board. The agreements may be terminable by the Bank for
"just cause" as defined in the employment agreements. If the Bank terminates the
employees without just cause, such employee will be entitled to a continuation
of his salary from the date of termination through the remaining term of the
employment agreement. Each employment agreement contains a provision stating
that in the event of the termination of employment in connection with, or within
one year after, any change in control of the Bank or the Company (as defined in
the employment agreements), the employee will be paid a lump sum amount equal to
2.99 times their annual average compensation for the five most recent years. If
such payments were to be made under the employment agreements, as of January 1,
1999, such payments would equal approximately $522,000 and $467,000 respectively
to John F. McGill, Jr. and Jerry Naessens. The employment agreements
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<PAGE>
may be renewed annually by the Board of Directors upon a determination of
satisfactory performance within the Board's sole discretion. If any of the
employees shall become disabled during the term of their respective employment
agreements, the employee shall nevertheless continue to receive payment of his
base salary for a period of 12 months but such period shall not exceed the
remaining term of the employment agreement, and 80% of such base salary for the
remaining term of the employee's employment agreement. Disability payments under
the employment agreements shall be reduced by any other benefit payments made
under other disability programs in effect for Bank employees.
Employee Stock Ownership Plan. The Bank sponsors the ESOP for the
exclusive benefit of employees. The Board of Directors has appointed a committee
(the "ESOP Committee") to administer the ESOP, and has also appointed trustees
(the "ESOP Trustees"). Directors John McGill, Jr. and Add B. Anderson serve as
the members of the ESOP Committee and as the ESOP Trustees. The Board of
Directors or the ESOP Committee may instruct the ESOP Trustees regarding
investments of funds contributed to the ESOP. The ESOP Trustees must vote all
allocated shares held in the ESOP in accordance with the instructions of the
participating employees. Unallocated shares and allocated shares for which no
timely direction is received will be voted by the ESOP Trustees as directed by
the Board of Directors or the ESOP Committee.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of
Securities
Underlying Value of Unexercised
Unexercised in-the-Money
Options/SARs at Options/SARs at
Shares December 31, 1998 December 31,1998
Acquired on Value (#) Exercisable/ ($) Exercisable/
Name Exercise (#) Realized($) Unexercisable Unexercisable (1)
- ---- ------------ ----------- ------------- --------------------
<S> <C> <C> <C> <C>
John F. McGill, Jr. -0- -0- 61,068/0 $470,355/0
President and CEO
Jerry A. Naessens, -0- -0- 44,412/0 $341,528/0
Chief Financial Officer
</TABLE>
- ------------------
(1) Based on the average exercise price and the closing price of the Common
Stock of $ 9.625 on December 31, 1998.
-7-
<PAGE>
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PROPOSAL I - APPROVAL OF THE OPTION PLAN
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General
The Company's Board of Directors has adopted the Option Plan. The
Option Plan is subject to approval by the Company's stockholders. Pursuant to
the Option Plan, up to 785,637 shares of Common Stock (10% of the shares of
Common Stock sold to the public in the Conversion) are to be reserved under the
Company's authorized but unissued shares for issuance by the Company upon
exercise of stock options to be granted to officers, Directors, key employees
and other persons from time to time. The purpose of the Option Plan is to
attract and retain qualified personnel for positions of substantial
responsibility and to provide additional incentive to certain officers,
Directors, key employees and other persons to promote the success of the
business of the Company and the Bank. The Option Plan, which shall become
effective upon the date of approval of the Option Plan by the stockholders of
the Company ("Effective Date"), provides for a term of ten years, after which
time no awards may be made. The following summary of the material features of
the Option Plan is qualified in its entirety by reference to the complete
provisions of the Option Plan which is attached hereto as Exhibit A.
The Option Plan will be administered by the Board of Directors or a
committee of not less than two non-employee Directors appointed by the Company's
Board of Directors and serving at the pleasure of the Board (the "Option
Committee"). Members of the Option Committee shall be deemed "Non-Employee
Directors" within the meaning of Rule 16b-3 pursuant to the 1934 Act. The Option
Committee may select the officers and employees to whom options are to be
granted and the number of options to be granted based upon several factors
including prior and anticipated future job duties and responsibilities, job
performance, the Bank's financial performance and a comparison of awards given
by other institutions that have converted from mutual to stock form. A majority
of the members of the Option Committee shall constitute a quorum and the action
of a majority of the members present at any meeting at which a quorum is present
shall be deemed the action of the Option Committee.
Officers, Directors, key employees and other persons who are designated
by the Option Committee will be eligible to receive, at no cost to them, options
under the Option Plan (the "Optionees"). Each option granted pursuant to the
Option Plan shall be evidenced by an instrument in such form as the Option
Committee shall from time to time approve. It is anticipated that options
granted under the Option Plan will constitute either Incentive Stock Options
(options that afford favorable tax treatment to recipients upon compliance with
certain restrictions pursuant to Section 422 of the Internal Revenue Code
("Code") and that do not normally result in tax deductions to the Company) or
Non-Incentive Stock Options (options that do not afford recipients favorable tax
treatment under Code Section 422). Option shares may be paid for in cash, shares
of Common Stock, or a combination of both. The Company will receive no monetary
consideration for the granting of stock options under the Option Plan. Further,
the Company will receive no consideration other than the option exercise price
per share for Common Stock issued to Optionees upon the exercise of those
Options.
Shares issuable under the Option Plan may be from authorized but
unissued shares, treasury shares or shares purchased in the open market. An
Option which expires, becomes unexercisable, or is forfeited for any reason
prior to its exercise will again be available for issuance under the Option
Plan. No Option or any right or interest therein is assignable or transferable
except by will or the laws of descent and distribution. The Option Plan shall
continue in effect for a term of ten years from the Effective Date.
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<PAGE>
Stock Options
The Option Committee may grant either Incentive Stock Options or
Non-Incentive Stock Options. In general, if an Optionee ceases to serve as an
employee of the Company for any reason other than disability or death, an
exercisable Incentive Stock Option may continue to be exercisable for three
months but in no event after the expiration date of the option, except as may
otherwise be determined by the Option Committee at the time of the award. In the
event of the disability or death of an Optionee during employment, an
exercisable Incentive Stock Option will continue to be exercisable for one year
and two years, respectively, to the extent exercisable by the Optionee
immediately prior to the Optionee's disability or death but only if, and to the
extent that, the Optionee was entitled to exercise such Incentive Stock Options
on the date of termination of employment. The terms and conditions of
Non-Incentive Stock Options relating to the effect of an Optionee's termination
of employment or service, disability, or death shall be such terms as the Option
Committee, in its sole discretion, shall determine at the time of termination of
service, disability or death, unless specifically determined at the time of
grant of such options.
The exercise price for the purchase of Common Stock subject to an
Option may not be less than one hundred percent (100%) of the Fair Market Value
of the Common Stock covered by the Option on the date of grant of such Option.
For purposes of determining the Fair Market Value of the Common Stock, if the
Common Stock is traded otherwise than on a national securities exchange at the
time of the granting of an Option, then the exercise price per share of the
Option shall be not less than the mean between the last bid and ask price on the
date the Option is granted or, if there is no bid and ask price on said date,
then on the immediately prior business day on which there was a bid and ask
price. If no such bid and ask price is available, then the exercise price per
share shall be determined in good faith by the Option Committee. If an officer
or employee owns Common Stock representing more than ten percent of the
outstanding Common Stock at the time an Incentive Stock Option is granted, then
the exercise price shall not be less than one hundred and ten percent (110%) of
the Fair Market Value of the Common Stock at the time the Incentive Stock Option
is granted. No more than $100,000 of Incentive Stock Options can become
exercisable for the first time in any one year for any one person. The Option
Committee may impose additional conditions upon the right of an Optionee to
exercise any Option granted hereunder which are not inconsistent with the terms
of the Option Plan or the requirements for qualification as an Incentive Stock
Option, if such Option is intended to qualify as an incentive stock option.
No shares of Common Stock shall be issued upon the exercise of an
Option until full payment has been received by the Company, and no Optionee
shall have any of the rights of a stockholder of the Company until shares of
Common Stock are issued to such Optionee. Upon the exercise of an Option by an
Optionee (or the Optionee's personal representative), the Option Committee, in
its sole and absolute discretion, may make a cash payment to the Optionee, in
whole or in part, in lieu of the delivery of shares of Common Stock. Such cash
payment to be paid in lieu of delivery of Common Stock shall be equal to the
difference between the Fair Market Value of the Common Stock on the date of the
Option exercise and the exercise price per share of the Option. Such cash
payment shall be in exchange for the cancellation of such Option. Such cash
payment shall not be made in the event that such transaction would result in
liability to the Optionee and the Company under Section 16(b) of the 1934 Act,
and regulations promulgated thereunder.
The Option Plan provides that the Board of Directors of the Company may
authorize the Option Committee to direct the execution of an instrument
providing for the modification, extension or renewal of any outstanding option,
provided that no such modification, extension or renewal shall confer on the
Optionee any right or benefit which could not be conferred on the Optionee by
the grant of a new Option at
-9-
<PAGE>
such time, and shall not materially decrease the Optionee's benefits under the
Option without the Optionee's consent, except as otherwise provided under the
Option Plan.
Awards Under the Option Plan
The Board or the Option Committee shall from time to time determine the
officers, Directors, key employees and other persons who shall be granted Awards
under the Plan, the number of Awards to be granted to any Participant under the
Plan, and whether Awards granted to each such Participant under the Plan shall
be Incentive Stock Options and/or Non-Incentive Stock Options. In selecting
Participants and in determining the number of shares of Common Stock subject to
Options to be granted to each such Participant, the Board or the Option
Committee may consider the nature of the services rendered by each such
Participant, each such Participant's current and potential contribution to the
Company and such other factors as may be deemed relevant. Participants who have
been granted an Award may, if otherwise eligible, be granted additional Awards.
In no event shall shares subject to Options granted to non-employee Directors in
the aggregate under the Option Plan exceed more than 25% of the total number of
shares authorized for delivery under the Option Plan. In no event shall shares
subject to Options granted to any employee exceed more than 30% of the total
number of shares authorized for delivery under the Option Plan.
Pursuant to the terms of the Option Plan, Non-Incentive Stock Options
to purchase up to 15,000 shares of Common Stock will be granted to each
non-employee Director of the Company and/or the Bank, as of the Effective Date,
at an exercise price equal to the Fair Market Value of the Common Stock on such
date of grant. Options may be granted to newly appointed or elected non-employee
Directors within the sole discretion of the Option Committee, and the exercise
price shall be equal to the Fair Market Value of such Common Stock on the date
of grant. The Options granted to non-employee Directors on the Effective Date
will be exercisable at a rate of 33a% upon grant and 33a% annually thereafter.
Such Options granted to non-employee Directors will remain exercisable for up to
ten years from such date of grant without regard to continued service as a
Director or Director Emeritus. Upon a Change in Control of the Company or the
Bank, such Options shall be deemed immediately 100% exercisable for their
remaining term.
Options awarded to John F. McGill, Jr. and Jerry Naessens are
immediately exercisable. Options awarded to employees shall continue to be
exercisable during continued service as an employee, Director or Director
Emeritus. Options not exercised within three months of termination of service as
an employee shall thereafter be deemed non-incentive stock options.
The number of Options awarded to other senior officers will be
determined by the Committee and will be exercisable as follows: Options awarded
at the time of stockholder approval are first exercisable at the rate of 33a% as
of the date of grant and 33a% annually thereafter during continued service as an
employee, Director or Director Emeritus. Such awards shall be 100% exercisable
in the event of death, disability, or upon a change in control of the Company or
the Bank.
The table below presents information related to stock option awards
granted, subject to stockholder approval of the Option Plan.
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<PAGE>
NEW PLAN BENEFIT
OPTION PLAN
-----------
Dollar Number of Options
Name and Position Value(1) Granted
- ----------------- -------- -------
John F. McGill, Jr.
President, CEO and Director N/A 171,575
Jerry A. Naessens
Chief Financial Officer and Director N/A 117,845
Executive Group
(2 persons) N/A 289,420
Non-Executive Director Group
(6 persons) N/A 114,000(2)
Non-Executive Officer Employee Group
(7) persons N/A 198,565
- ---------------------
(1) The exercise price of such Options shall be equal to the Fair Market Value
of the Common Stock on the date of stockholder approval of the Option Plan.
Accordingly, the dollar value of the options was not determinable at the
time of mailing this Proxy Statement. On June 11, 1999, the last reported
sale price on the Nasdaq National Market was $9.125 per share.
(2) Includes awards to four non-employee directors of the Company and two
non-employee directors of the Bank that are not on the Company board.
Effect of Mergers, Change of Control and Other Adjustments
Subject to any required action by the stockholders of the Company,
within the sole discretion of the Option Committee, the aggregate number of
shares of Common Stock for which Options may be granted hereunder or the number
of shares of Common Stock represented by each outstanding Option will be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend or any other increase
or decrease in the number of shares of Common Stock effected without the receipt
or payment of consideration by the Company. Subject to any required action by
the stockholders of the Company, in the event of any change in control,
recapitalization, merger, consolidation, exchange of shares, spin-off,
reorganization, tender offer, partial or complete liquidation or other
extraordinary corporate action or event (including a special or non-recurring
dividend that has the effect of a return of capital distribution to
stockholders), the Option Committee, in its sole discretion, shall have the
power, prior to or subsequent to such action or events, to (i) appropriately
adjust the number of shares of Common Stock subject to each Option, the exercise
price per share of such Option, and the consideration to be given or received by
the Company upon the exercise of any outstanding Options; (ii) cancel any or all
previously granted Options, provided that appropriate consideration is paid to
the Optionee in connection therewith; and/or (iii) make such other adjustments
in connection with the Option Plan as the Option Committee, in its sole
discretion, deems necessary, desirable, appropriate or advisable. However, no
action may be taken by the Option Committee which would cause Incentive Stock
Options granted pursuant to the Option Plan to fail to meet the requirements of
Section 422 of the Code without the consent of the Optionee.
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<PAGE>
The Option Committee will at all times have the power to accelerate the
exercise date of all Options granted under the Option Plan. In the case of a
Change in Control of the Company as determined by the Option Committee, all
outstanding Options shall become immediately exercisable. A Change in Control is
defined to include (i) the sale of all, or a material portion, of the assets of
the Company; (ii) the merger or recapitalization of the Company whereby the
Company is not the surviving entity; (iii) a change in control of the Company as
otherwise defined or determined by the OTS or its regulations; or (iv) the
acquisition, directly or indirectly, of the beneficial ownership (within the
meaning of Section 13(d) of the 1934 Act and rules and regulations promulgated
thereunder) of 25% or more of the outstanding voting securities of the Company
by any person, trust, entity, or group. This limitation shall not apply to the
purchase of shares by underwriters in connection with a pubic offering of
Company stock or the purchase of shares of up to 25% of any class of securities
of the Company by a tax-qualified employee stock benefit plan which is exempt
from the approval requirements set forth under 12 C.F.R. ss.574.3(c)(1)(vi).
In the event of such a Change in Control, the Option 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: (i) 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 Optionee will receive upon
consummation of the Change in Control transaction a cash payment for each Option
surrendered equal to the difference between (1) the Fair Market Value of the
consideration to be received for each share of Common Stock in the Change in
Control transaction 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 (ii) in the event of a transaction under the terms of
which the holders of the Common Stock of the Company will receive upon
consummation thereof a cash payment (the "Merger Price") for each share of
Common Stock exchanged in the Change in Control transaction, to make or to
provide for a cash payment to the Optionees equal to the difference between (A)
the Merger Price times the number of shares of Common Stock subject to such
Options held by each Optionee (to the extent then exercisable at prices not in
excess of the Merger Price) and (B) the aggregate exercise price of all such
surrendered Options in exchange for such surrendered Options.
The power of the Option Committee to accelerate the exercise of Options
and the immediate exercisability of Options in the case of a Change in Control
of the Company could have an anti-takeover effect by making it more costly for a
potential acquiror to obtain control of the Company due to the higher number of
shares outstanding following such exercise of Options. The power of the Option
Committee to make adjustments in connection with the Option Plan, including
adjusting the number of shares subject to Options and canceling Options, prior
to or after the occurrence of an extraordinary corporate action, allows the
Option Committee to adapt the Option Plan to operate in changed circumstances,
to adjust the Option Plan to fit a smaller or larger company, and to permit the
issuance of Options to new management following such extraordinary corporate
action. However, this power of the Option Committee also has an anti-takeover
effect, by allowing the Option Committee to adjust the Option Plan in a manner
to allow the present management of the Company to exercise more options and hold
more shares of the Company's Common Stock, and to possibly decrease the number
of Options available to new management of the Company.
-12-
<PAGE>
Although the Option Plan may have an anti-takeover effect, the
Company's Board of Directors did not adopt the Option Plan specifically for
anti-takeover purposes. The Option Plan could render it more difficult to obtain
support for stockholder proposals opposed by the Company's Board and management
in that recipients of Options could choose to exercise such Options and thereby
increase the number of shares for which they hold voting power. Also, the
exercise of such Options could make it easier for the Board and management to
block the approval of certain transactions requiring the voting approval of 80%
of the Common Stock in accordance with the Articles of Incorporation. In
addition, the exercise of such Options could increase the cost of an acquisition
by a potential acquiror.
Amendment and Termination of the Option Plan
The Board of Directors may alter, suspend or discontinue the Option
Plan, except that no action of the Board shall increase the maximum number of
shares of Common Stock issuable under the Option Plan, materially increase the
benefits accruing to Optionees under the Option Plan or materially modify the
requirements for eligibility for participation in the Option Plan unless such
action of the Board shall be subject to approval or ratification by the
stockholders of the Company.
Possible Dilutive Effects of the Option Plan
The Common Stock to be issued upon the exercise of Options awarded
under the Option Plan may either be authorized but unissued shares of Common
Stock or shares purchased in the open market. In that the stockholders of the
Company do not have preemptive rights, to the extent that the Company funds the
Option Plan, in whole or in part, with authorized but unissued shares, the
interests of current stockholders may be diluted. If upon the exercise of all of
the Options, the Company delivers newly issued shares of Common Stock (i.e.,
785,637 shares of Common Stock), then the dilutive effect to current
stockholders as of the Record Date would be approximately 9.1%. The Board of
Directors can avoid dilution for awards under the Option Plan by using
repurchased shares.
Federal Income Tax Consequences
Under present federal tax laws, awards under the Option Plan will have
the following consequences:
1. The grant of an Option will not by itself result in the
recognition of taxable income to an Optionee nor entitle the
Company to a tax deduction at the time of such grant.
2. The exercise of an Option which is an "Incentive Stock Option"
within the meaning of Section 422 of the Code generally will not,
by itself, result in the recognition of taxable income to an
Optionee nor entitle the Company to a deduction at the time of
such exercise. However, the difference between the Option
exercise price and the Fair Market Value of the Common Stock on
the date of Option exercise is an item of tax preference which
may, in certain situations, trigger the alternative minimum tax
for an Optionee. An Optionee will recognize capital gain or loss
upon resale of the shares of Common Stock received pursuant to
the exercise of Incentive Stock Options, provided that such
shares are held for at least one year after transfer of the
shares or two years after the grant of the Option, whichever is
later. Generally, if the shares are not held for that period, the
Optionee will recognize ordinary income upon disposition in an
amount equal to the difference between the Option exercise price
and the Fair Market Value of the Common Stock on the date of
exercise, or, if less, the sales proceeds of the shares acquired
pursuant to the Option.
-13-
<PAGE>
3. The exercise of a Non-Incentive Stock Option will result in the
recognition of ordinary income by the Optionee on the date of
exercise in an amount equal to the difference between the
exercise price and the Fair Market Value of the Common Stock
acquired pursuant to the Option.
4. The Company will be allowed a tax deduction for federal tax
purposes equal to the amount of ordinary income recognized by an
Optionee at the time the Optionee recognizes such ordinary
income.
5. In accordance with Section 162(m) of the Code, the Company's tax
deductions for compensation paid to the most highly paid
executives named in the Company's Proxy Statement may be limited
to no more than $1 million per year, excluding certain
"performance-based" compensation. The Company intends for the
award of Options under the Option Plan to comply with the
requirement for an exception to Section 162(m) of the Code
applicable to stock option plans so that the Company's deduction
for compensation related to the exercise of Options would not be
subject to the deduction limitation set forth in Section 162(m)
of the Code.
Accounting Treatment
The Company expects to use the "intrinsic value based method" as
prescribed by APB Opinion 25. Accordingly, neither the grant nor the exercise of
an Option under the Option Plan currently requires any charge against earnings
under generally accepted accounting principles. On March 31, 1999, the Financial
Accounting Standards Board issued an exposure draft of an interpretation of APB
Opinion 25 by which the Company would be required to record compensation expense
quarterly for the fair market value of the stock options granted to non-employee
directors. However, it is anticipated that any stock options vested before the
effective date of the interpretation (expected to be September 1999) will not
require any recognition of compensation expense. Common Stock issuable pursuant
to outstanding Options which are exercisable under the Option Plan will be
considered outstanding for purposes of calculating earnings per share on a fully
diluted basis.
Stockholder Approval
Stockholder approval of the Option Plan is being sought in order to
qualify the Option Plan for the granting of Incentive Stock Options in
accordance with the Code, to enable Optionees to qualify for certain exemptive
treatment from the short-swing profit recapture provisions of Section 16(b) of
the 1934 Act, to meet the requirements under the rules of the Nasdaq National
Market for continued listing of the Company's Common Stock, and to meet the
requirements for the tax-deductibility of certain compensation items under
Section 162(m) of the Code. An affirmative vote of the holders of a majority of
the total votes cast at the Meeting, in person or by proxy, is required to
constitute stockholder approval of this Proposal I.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
OPTION PLAN.
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<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL II - APPROVAL OF THE RESTRICTED STOCK PLAN
- --------------------------------------------------------------------------------
General
The Board of Directors of the Company and the Bank have adopted the RSP
as a method of providing Directors, officers, and key employees of the Bank with
a proprietary interest in the Company in a manner designed to encourage such
persons to remain in the employment or service of the Bank. The Bank will
contribute sufficient funds to the RSP to purchase Common Stock representing up
to 4% of the aggregate number of shares sold to the public in the Conversion
(i.e., 314,254 shares of Common Stock) in the open market. Alternatively, the
RSP may purchase authorized but unissued shares of Common Stock or treasury
shares from the Company. All of the Common Stock to be purchased by the RSP will
be purchased at the Fair Market Value of such stock on the date of purchase.
Awards under the RSP will be made in recognition of expected future services to
the Bank by its Directors, officers and key employees responsible for
implementation of the policies adopted by the Bank's Board of Directors and as a
means of providing a further retention incentive. The following is a summary of
the material features of the RSP which is qualified in its entirety by reference
to the complete provisions of the RSP which is attached hereto as Exhibit B.
Awards Under the RSP
Benefits under the RSP ("Plan Share Awards") may be granted at the sole
discretion of a committee comprised of not less than two Directors who are not
employees of the Bank or the Company (the "RSP Committee") appointed by the
Bank's Board of Directors. The RSP is managed by trustees (the "RSP Trustees")
who are non-employee Directors of the Bank or the Company and who have the
responsibility to invest all funds contributed by the Bank to the trust created
for the RSP (the "RSP Trust"). Unless the terms of the RSP or the RSP Committee
specifies otherwise, awards under the RSP will be in the form of restricted
stock payable as the Plan Share Awards shall be earned and non-forfeitable.
Twenty percent (20%) of such awards shall be earned and non-forfeitable as of
the effective date (as defined in the RSP) and 20% annually thereafter, provided
that the recipient of the award remains an employee, Director or Director
Emeritus during such period. A recipient of such restricted stock will not be
entitled to voting rights associated with such shares prior to the applicable
date such shares are earned. Dividends paid on Plan Share Awards shall be
distributed within 30 days of the dividend payment date attributable to the
dividends paid on the Common Stock. Any shares held by the RSP Trust which are
not yet earned shall be voted by the RSP Trustees, as directed by the RSP
Committee. If a recipient of such restricted stock terminates employment or
service for reasons other than death, disability, retirement or a Change in
Control of the Company or the Bank, the recipient forfeits all rights to the
awards under restriction. If the recipient's termination of employment or
service is caused by death, disability, retirement or a Change in Control of the
Company or the Bank, all restrictions expire and all shares allocated shall
become unrestricted. Awards of restricted stock to non-employee Directors shall
be immediately non-forfeitable in the event of a Change in Control of the
Company or the Bank and distributed as soon as practicable thereafter. The Board
of Directors can terminate the RSP at any time, and if it does so, any shares
not allocated will revert to the Company.
Plan Share Awards under the RSP will be determined by the RSP
Committee. In no event shall any employee receive Plan Share Awards in excess of
30% of the aggregate Plan Shares authorized under the RSP. Plan Share Awards may
be granted to newly elected or appointed non-employee Directors subsequent to
the effective date provided that the Plan Share Awards made to non-employee
Directors shall not exceed 25% of total Plan Share Reserve (as defined in the
RSP) in the aggregate under the RSP.
-15-
<PAGE>
The aggregate number of Plan Shares available for issuance pursuant to
the Plan Share Awards and the number of shares to which any Plan Share Award
relates shall be proportionately adjusted for any increase or decrease in the
total number of outstanding shares of Common Stock issued subsequent to the
effective date of the RSP resulting from any split, subdivision or consolidation
of the Common Stock or other capital adjustment, change or exchange of Common
Stock, or other increase or decrease in the number or kind of shares effected
without receipt or payment of consideration by the Company.
The following table presents information related to the award of Common
Stock under the RSP as authorized pursuant to the terms of the RSP or the
actions of the RSP Committee, subject to stockholder approval of the RSP.
NEW PLAN BENEFIT
RSP
---
Dollar Number of Awards
Name and Position Value ($)(1) Granted
- ----------------- ------------ -------
John F. McGill, Jr.
President, CEO and Director 783,956 85,913
Jerry A. Naessens
Chief Financial Officer and Director 449,415 49,251
Executive Group
(2 persons) 1,233,371 135,164
Non-Executive Director Group
(6 persons) 413,363 45,300(2)
Non-Executive Officer Employee Group
(7) persons 574,839 62,996
- -----------------
(1) These values are based on the last reported sale price for the Common Stock
as reported on the Nasdaq National Market on June 11, 1999, which was
$9.125 per share. The exact dollar value of the Common Stock granted will
equal the market price of the Common Stock on the date of vesting of such
awards. Accordingly, the exact dollar value is not presently determinable.
(2) Includes awards to four non-employee directors of the Company and two
non-employee directors of the Bank that are not on the Company board.
Amendment and Termination of the Plan
The Board may amend or terminate the RSP at any time. However, no
action of the Board may increase the maximum number of Plan Shares permitted to
be awarded under the RSP, except for adjustments in the Common Stock of the
Company, materially increase the benefits accruing to Participants under the RSP
or materially modify the requirements for eligibility for participation in the
RSP unless such action of the Board shall be subject to ratification by the
stockholders of the Company.
-16-
<PAGE>
Possible Dilutive Effects of RSP
It is the Company's present intention to fund the RSP through
open-market purchases of Common Stock, which will cause no dilutive effect. The
RSP provides, however, that Common Stock to be awarded may be acquired by the
RSP through open-market purchases or from authorized but unissued shares of
Common Stock from the Company. In that stockholders do not have preemptive
rights, to the extent that the Company utilizes authorized but unissued shares
to fund RSP awards, the interests of current stockholders may be diluted. If all
Plan Share Awards are funded with newly issued shares, the dilutive effect to
existing stockholders, as of the Record Date would be approximately 3.9%. The
Board of Directors can avoid dilution by using repurchased shares of Common
Stock.
Federal Income Tax Consequences
Common Stock awarded under the RSP is generally taxable to the
recipient at the time that such awards become earned and non-forfeitable, based
upon the Fair Market Value of such stock at the time of such vesting.
Alternatively, a recipient may make an election pursuant to Section 83(b) of the
Code within 30 days of the date of the transfer of such Plan Share Award to
elect to include in gross income for the current taxable year the Fair Market
Value of such award. Such election must be filed with the Internal Revenue
Service within 30 days of the date of the transfer of the stock award. The
Company will be allowed a tax deduction for federal tax purposes as a
compensation expense equal to the amount of ordinary income recognized by a
recipient of Plan Share Awards at the time the recipient recognizes taxable
ordinary income. A recipient of a Plan Share Award may elect to have a portion
of such award withheld by the RSP Trust in order to meet any necessary tax
withholding obligations.
Accounting Treatment
For accounting purposes, the Company will recognize compensation
expense in the amount of the Fair Market Value of the Common Stock subject to
Plan Share Awards at the grant date pro rata over the period of years during
which the awards are earned.
Stockholder Approval
The Company is submitting the RSP to stockholders for approval to
enable recipients of Plan Share Awards to qualify for certain exemptive
treatment from the short-swing profit recapture provisions of Section 16(b) of
the 1934 Act and to meet the rules of the Nasdaq National Market for the
continued listing of the Company's Common Stock. The affirmative vote of holders
of a majority of the total votes cast at the Meeting in person or by proxy, is
required to constitute stockholder approval of this Proposal II.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE RSP.
-17-
<PAGE>
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received by the Company no later than November
22, 1999. Any such proposals shall be subject to the requirements of the proxy
rules adopted under the 1934 Act. In the event the Company receives notice of a
stockholder proposal to take action at next year's annual meeting of
stockholders that is not submitted for inclusion in the Company's proxy
material, or is submitted for inclusion but is properly excluded from the proxy
material, the persons named in the proxy sent by the Company to its stockholders
intend to exercise their discretion to vote on the stockholder proposal in
accordance with their best judgment if notice of the proposal is not received at
the Company's main office by February 20, 2000.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described in this Proxy Statement. However, if
any other matters should properly come before the Meeting, it is intended that
proxies in the accompanying form will be voted in respect thereof in accordance
with the judgment of the persons named in the accompanying proxy. If the Company
did not have notice of a matter within a reasonable time before the mailing of
these proxy materials, it is expected that the persons named in the accompanying
proxy will exercise discretionary authority when voting on that matter.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. The Company has hired Regan &
Associates, Inc., New York, New York, to solicit proxies. Regan & Associates
fees for such solicitation is not expected to exceed $5,250. However, if the
Option Plan and RSP are not approved at the Meeting, Regan & Associates fees
will not exceed $1,750. 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.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Francis E. McGill, III
----------------------------------------
Francis E. McGill, III
Secretary
Philadelphia, Pennsylvania
June 23, 1999
-18-
<PAGE>
- --------------------------------------------------------------------------------
THISTLE GROUP HOLDINGS, CO.
6060 RIDGE AVENUE
PHILADELPHIA, PENNSYLVANIA 19128
(215) 483-2800
- --------------------------------------------------------------------------------
SPECIAL MEETING OF STOCKHOLDERS
July 21, 1999
- --------------------------------------------------------------------------------
The undersigned hereby appoints the Board of Directors of Thistle Group
Holdings, Co. (the "Company"), or its designee, with full powers of
substitution, to act as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of the Company which the undersigned is entitled to vote
at the Special Meeting of Stockholders (the "Meeting"), to be held at
Williamson's Restaurant, One Belmont Avenue, Bala Cynwyd, Pennsylvania, on
Wednesday, July 21, 1999 at 9:00 a.m. local time and at any and all adjournments
thereof, in the following manner:
FOR AGAINST ABSTAIN
--- ------- -------
1. The approval of the
Thistle Group Holdings, Co.
1999 Stock Option Plan. [_] [_] [_]
2. The approval of the
Roxborough-Manayunk Bank
1999 Restricted Stock Plan. [_] [_] [_]
In their discretion, such attorneys and proxies are authorized to vote upon such
other business as may properly come before the Meeting or any adjournments
thereof. If necessary, the Meeting will be adjourned to solicit additional
proxies with respect to approval of the Thistle Group Holdings, Co. 1999 Stock
Option Plan and the Roxborough-Manayunk Bank 1999 Restricted Stock Plan.
The Board of Directors recommends a vote "FOR" all of the above listed
propositions.
- --------------------------------------------------------------------------------
THIS SIGNED PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS SIGNED PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED.
IF ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS SIGNED PROXY WILL BE
VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME,
THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
MEETING.
- --------------------------------------------------------------------------------
-19-
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting, or
at any adjournments thereof, and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this Proxy,
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke this Proxy by filing a
subsequently dated Proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this Proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Special Meeting of Stockholders and a
Proxy Statement dated June 23, 1999.
Dated:
----------------------
- ----------------------------- --------------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ----------------------------- --------------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this Proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------
-20-
<PAGE>
Exhibit A
THISTLE GROUP HOLDINGS, CO.
1999 STOCK OPTION PLAN
1. Purpose of the Plan. The Plan shall be known as the Thistle Group
Holdings, Co. ("Company") 1999 Stock Option Plan (the "Plan"). The purpose of
the Plan is to attract and retain qualified personnel for positions of
substantial responsibility and to provide additional incentive to officers,
directors, key employees and other persons providing services to the Company, or
any present or future parent or subsidiary of the Company to promote the success
of the business. The Plan is intended to provide for the grant of "Incentive
Stock Options," within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code") and Non-Incentive Stock Options, options that
do not so qualify. The provisions of the Plan relating to Incentive Stock
Options shall be interpreted to conform to the requirements of Section 422 of
the Code.
2. Definitions. The following words and phrases when used in this Plan
with an initial capital letter, unless the context clearly indicates otherwise,
shall have the meaning as set forth below. Wherever appropriate, the masculine
pronoun shall include the feminine pronoun and the singular shall include the
plural.
(a) "Award" means the grant by the Committee of an Incentive
Stock Option or a Non-Incentive Stock Option, or any combination thereof, as
provided in the Plan.
(b) "Board" shall mean the Board of Directors of the Company,
or any successor or parent corporation thereto.
(c) "Change in Control" shall mean: (i) the sale of all, or a
material portion, of the assets of the Company; (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company, as otherwise defined or determined by
the Office of Thrift Supervision or regulations promulgated by it; or (iv) the
acquisition, directly or indirectly, of the beneficial ownership (within the
meaning of that term as it is used in Section 13(d) of the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder) of twenty-five
percent (25%) or more of the outstanding voting securities of the Company by any
person, trust, entity or group. This limitation shall not apply to the purchase
of shares by underwriters in connection with a public offering of Company stock,
or the purchase of shares of up to 25% of any class of securities of the Company
by a tax-qualified employee stock benefit plan which is exempt from the approval
requirements, set forth under 12 C.F.R. ss.574.3(c)(1)(vi) as now in effect or
as may hereafter be amended. The term "person" refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Committee as to whether a Change
in Control has occurred shall be conclusive and binding.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and regulations promulgated thereunder.
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(e) "Committee" shall mean the Board or the Stock Option
Committee appointed by the Board in accordance with Section 5(a) of the Plan.
(f) "Common Stock" shall mean the common stock of the Company,
or any successor or parent corporation thereto.
(g) "Company" shall mean the Thistle Group Holdings, Co., the
parent corporation of the Savings Bank, or any successor or Parent thereof.
(h) "Continuous Employment" or "Continuous Status as an
Employee" shall mean the absence of any interruption or termination of
employment with the Company or any present or future Parent or Subsidiary of the
Company. Employment shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the Company or
in the case of transfers between payroll locations, of the Company or between
the Company, its Parent, its Subsidiaries or a successor.
(i) "Director" shall mean a member of the Board of the Company
or the Savings Bank, or any successor or parent corporation thereto.
(j) "Director Emeritus" shall mean a person serving as a
director emeritus, advisory director, consulting director, or other similar
position as may be appointed by the Board of Directors of the Savings Bank or
the Company from time to time.
(k) "Disability" means (a) with respect to Incentive Stock
Options, the "permanent and total disability" of the Employee as such term is
defined at Section 22(e)(3) of the Code; and (b) with respect to Non-Incentive
Stock Options, any physical or mental impairment which renders the Participant
incapable of continuing in the employment or service of the Savings Bank or the
Parent in his then current capacity as determined by the Committee.
(l) "Effective Date" shall mean the date specified in Section
14 hereof.
(m) "Employee" shall mean any person employed by the Company
or any present or future Parent or Subsidiary of the Company.
(n) "Fair Market Value" shall mean: (i) if the Common Stock is
traded otherwise than on a national securities exchange, then the Fair Market
Value per Share shall be equal to the mean between the last bid and ask price of
such Common Stock on such date or, if there is no bid and ask price on said
date, then on the immediately prior business day on which there was a bid and
ask price. If no such bid and ask price is available, then the Fair Market Value
shall be determined by the Committee in good faith; or (ii) if the Common Stock
is listed on a national securities exchange, then the Fair Market Value per
Share shall be not less than the average of the highest and lowest selling price
of such Common Stock on such exchange on such date, or if there were no sales on
said date, then the Fair Market Value shall be not less than the mean between
the last bid and ask price on such date.
(o) "Incentive Stock Option" or "ISO" shall mean an option to
purchase Shares granted by the Committee pursuant to Section 8 hereof which is
subject to the limitations and restrictions of Section
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<PAGE>
8 hereof and is intended to qualify as an incentive stock option under Section
422 of the Code.
(p) "Non-Incentive Stock Option" or "Non-ISO" shall mean an
option to purchase Shares granted pursuant to Section 9 hereof, which option is
not intended to qualify under Section 422 of the Code.
(q) "Option" shall mean an Incentive Stock Option or
Non-Incentive Stock Option granted pursuant to this Plan providing the holder of
such Option with the right to purchase Common Stock.
(r) "Optioned Stock" shall mean stock subject to an Option
granted pursuant to the Plan.
(s) "Optionee" shall mean any person who receives an Option or
Award pursuant to the Plan.
(t) "Parent" shall mean any present or future corporation
which would be a "parent corporation" as defined in Sections 424(e) and (g) of
the Code.
(u) "Participant" means any director, officer or key employee
of the Company or any Parent or Subsidiary of the Company or any other person
providing a service to the Company who is selected by the Committee to receive
an Award, or who by the express terms of the Plan is granted an Award.
(v) "Plan" shall mean the Thistle Group Holdings, Co. 1999
Stock Option Plan.
(w) "Retirement" shall mean termination of service in all
capacities as an Employee, Director and Director Emeritus following attainment
of not less than age 55 and completion of not less than ten years of Service to
the Company or the Savings Bank. Service to the Company or the Savings Bank
rendered prior to the Effective Date shall be recognized in determining
eligibility to meet the requirements of Retirement under the Plan.
(x) "Savings Bank" shall mean Roxborough-Manayunk Bank, or
any successor corporation thereto.
(y) "Share" shall mean one share of the Common Stock.
(z) "Subsidiary" shall mean any present or future corporation
which constitutes a "subsidiary corporation" as defined in Sections 424(f) and
(g) of the Code.
3. Shares Subject to the Plan. Except as otherwise required by the
provisions of Section 12 hereof, the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed 785,637 Shares.
Such Shares may either be from authorized but unissued shares or shares
purchased in the market for Plan purposes. If an Award shall expire, become
unexercisable, or be forfeited for any reason prior to its exercise, new Awards
may be granted under the Plan with respect to the number of Shares as to which
such expiration has occurred.
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4. Six Month Holding Period.
Subject to vesting requirements, if applicable, except in the
event of death or Disability of the Optionee or a Change in Control of the
Company, a minimum of six months must elapse between the date of the grant of an
Option and the date of the sale of the Common Stock received through the
exercise of such Option.
5. Administration of the Plan.
(a) Composition of the Committee. The Plan shall be
administered by the Board of Directors of the Company or a Committee which shall
consist of not less than two Directors of the Company appointed by the Board and
serving at the pleasure of the Board. All persons designated as members of the
Committee shall meet the requirements of a "Non-Employee Director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, as
found at 17 CFR ss.240.16b-3.
(b) Powers of the Committee. The Committee is authorized (but
only to the extent not contrary to the express provisions of the Plan or to
resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the form and
content of Awards to be issued under the Plan and to make other determinations
necessary or advisable for the administration of the Plan, and shall have and
may exercise such other power and authority as may be delegated to it by the
Board from time to time. A majority of the entire Committee shall constitute a
quorum and the action of a majority of the members present at any meeting at
which a quorum is present shall be deemed the action of the Committee. In no
event may the Committee revoke outstanding Awards without the consent of the
Participant.
The President of the Company and such other officers as shall
be designated by the Committee are hereby authorized to execute written
agreements evidencing Awards on behalf of the Company and to cause them to be
delivered to the Participants. Such agreements shall set forth the Option
exercise price, the number of shares of Common Stock subject to such Option, the
expiration date of such Options, and such other terms and restrictions
applicable to such Award as are determined in accordance with the Plan or the
actions of the Committee.
(c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Committee shall be final and
conclusive on all persons affected thereby.
6. Eligibility for Awards and Limitations.
(a) The Committee shall from time to time determine the
officers, Directors, key employees and other persons who shall be granted Awards
under the Plan, the number of Awards to be granted to each such persons, and
whether Awards granted to each such Participant under the Plan shall be
Incentive and/or Non-Incentive Stock Options. In selecting Participants and in
determining the number of Shares of Common Stock to be granted to each such
Participant, the Committee may consider the nature of the prior and anticipated
future services rendered by each such Participant, each such Participant's
current and potential contribution to the Company and such other factors as the
Committee may, in its sole discretion, deem relevant. Participants who have been
granted an Award may, if otherwise eligible, be
A-4
<PAGE>
granted additional Awards.
(b) The aggregate Fair Market Value (determined as of the date
the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by each Employee during any calendar
year (under all Incentive Stock Option plans, as defined in Section 422 of the
Code, of the Company or any present or future Parent or Subsidiary of the
Company) shall not exceed $100,000. Notwithstanding the prior provisions of this
Section 6, the Committee may grant Options in excess of the foregoing
limitations, provided said Options shall be clearly and specifically designated
as not being Incentive Stock Options.
(c) In no event shall Shares subject to Options granted to
non-employee Directors in the aggregate under this Plan exceed more than 25% of
the total number of Shares authorized for delivery under this Plan pursuant to
Section 3 herein. In no event shall Shares subject to Options granted to any
Employee exceed more than 30% of the total number of Shares authorized for
delivery under the Plan.
7. Term of the Plan. The Plan shall continue in effect for a term of
ten (10) years from the Effective Date, unless sooner terminated pursuant to
Section 17 hereof. No Option shall be granted under the Plan after ten (10)
years from the Effective Date.
8. Terms and Conditions of Incentive Stock Options. Incentive Stock
Options may be granted only to Participants who are Employees. Each Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each Incentive Stock
Option granted pursuant to the Plan shall comply with, and be subject to, the
following terms and conditions:
(a) Option Price.
(i) The price per Share at which each Incentive
Stock Option granted by the Committee under the Plan may be exercised shall not,
as to any particular Incentive Stock Option, be less than the Fair Market Value
of the Common Stock on the date that such Incentive Stock Option is granted.
(ii) In the case of an Employee who owns Common
Stock representing more than ten percent (10%) of the outstanding Common Stock
at the time the Incentive Stock Option is granted, the Incentive Stock Option
exercise price shall not be less than one hundred and ten percent (110%) of the
Fair Market Value of the Common Stock on the date that the Incentive Stock
Option is granted.
(b) Payment. Full payment for each Share of Common Stock
purchased upon the exercise of any Incentive Stock Option granted under the Plan
shall be made at the time of exercise of each such Incentive Stock Option and
shall be paid in cash (in United States Dollars), Common Stock or a combination
of cash and Common Stock. Common Stock utilized in full or partial payment of
the exercise price shall be valued at the Fair Market Value at the date of
exercise. The Company shall accept full or partial payment in Common Stock only
to the extent permitted by applicable law. No Shares of Common Stock shall be
issued until full payment has been received by the Company, and no Optionee
shall have any of the rights of a stockholder of the Company until Shares of
Common Stock are issued to the Optionee.
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<PAGE>
(c) Term of Incentive Stock Option. The term of exercisability
of each Incentive Stock Option granted pursuant to the Plan shall be not more
than ten (10) years from the date each such Incentive Stock Option is granted,
provided that in the case of an Employee who owns stock representing more than
ten percent (10%) of the Common Stock outstanding at the time the Incentive
Stock Option is granted, the term of exercisability of the Incentive Stock
Option shall not exceed five (5) years.
(d) Exercise Generally. Except as otherwise provided in
Section 10 hereof, no Incentive Stock Option may be exercised unless the
Optionee shall have been in the employ of the Company at all times during the
period beginning with the date of grant of any such Incentive Stock Option and
ending on the date three (3) months prior to the date of exercise of any such
Incentive Stock Option. The Committee may impose additional conditions upon the
right of an Optionee to exercise any Incentive Stock Option granted hereunder
which are not inconsistent with the terms of the Plan or the requirements for
qualification as an Incentive Stock Option. Except as otherwise provided by the
terms of the Plan or by action of the Committee at the time of the grant of the
Options, the Options will be first exercisable at the rate of 20% on the date of
grant and 20% annually thereafter during such periods of service as an Employee,
Director or Director Emeritus.
(e) Cashless Exercise. Subject to vesting requirements, if
applicable, an Optionee who has held an Incentive Stock Option for at least six
months may engage in the "cashless exercise" of the Option. Upon a cashless
exercise, an Optionee shall give the Company 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 Optioned Stock and to deliver enough of
the proceeds to the Company to pay the Option exercise price and any applicable
withholding taxes. If the Optionee does not sell the Optioned Stock through a
registered broker-dealer or equivalent third party, the Optionee can give the
Company written notice of the exercise of the Option and the third party
purchaser of the Optioned Stock shall pay the Option exercise price plus any
applicable withholding taxes to the Company.
(f) Transferability. An Incentive Stock Option granted
pursuant to the Plan shall be exercised during an Optionee's lifetime only by
the Optionee to whom it was granted and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
9. Terms and Conditions of Non-Incentive Stock Options. Each
Non-Incentive Stock Option granted pursuant to the Plan shall be evidenced by an
instrument in such form as the Committee shall from time to time approve. Each
Non-Incentive Stock Option granted pursuant to the Plan shall comply with and be
subject to the following terms and conditions.
(a) Options Granted to Directors. Subject to the limitations
of Section 6(c), Non-Incentive Stock Options to purchase 15,000 shares of Common
Stock will be granted to each Director who is not an Employee as of the
Effective Date, at an exercise price equal to the Fair Market Value of the
Common Stock on such date of grant. The Options will be first exercisable at the
rate of 33a% on the date of grant and 33a% annually thereafter during such
periods of service as a Director or Director Emeritus. Such Options shall
continue to be exercisable for a period of ten years following the date of grant
without regard to the continued services of such Director as a Director or
Director Emeritus. Upon a Change in Control of the Savings Bank or the Company,
such Options shall be deemed immediately 100% exercisable. In the event of the
Optionee's death, such exercisable Options may be exercised by the personal
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<PAGE>
representative of his estate or person or persons to whom his rights under such
Option shall have passed by will or by the laws of descent and distribution.
Options may be granted to newly appointed or elected non-employee Directors
within the sole discretion of the Committee. The exercise price per Share of
such Options granted shall be equal to the Fair Market Value of the Common Stock
at the time such Options are granted. Unless otherwise inapplicable, or
inconsistent with the provisions of this paragraph, the Options to be granted to
Directors hereunder shall be subject to all other provisions of this Plan.
(b) Option Price. The exercise price per Share of Common Stock
for each Non-Incentive Stock Option granted pursuant to the Plan shall be at
such price as the Committee may determine in its sole discretion, but in no
event less than the Fair Market Value of such Common Stock on the date of grant
as determined by the Committee in good faith.
(c) Payment. Full payment for each Share of Common Stock
purchased upon the exercise of any Non-Incentive Stock Option granted under the
Plan shall be made at the time of exercise of each such Non-Incentive Stock
Option and shall be paid in cash (in United States Dollars), Common Stock or a
combination of cash and Common Stock. Common Stock utilized in full or partial
payment of the exercise price shall be valued at its Fair Market Value at the
date of exercise. The Company shall accept full or partial payment in Common
Stock only to the extent permitted by applicable law. No Shares of Common Stock
shall be issued until full payment has been received by the Company and no
Optionee shall have any of the rights of a stockholder of the Company until the
Shares of Common Stock are issued to the Optionee.
(d) Term. The term of exercisability of each Non-Incentive
Stock Option granted pursuant to the Plan shall be not more than ten (10) years
from the date each such Non-Incentive Stock Option is granted.
(e) Exercise Generally. The Committee may impose additional
conditions upon the right of any Participant to exercise any Non-Incentive Stock
Option granted hereunder which is not inconsistent with the terms of the Plan.
Except as otherwise provided by the terms of the Plan or by action of the
Committee at the time of the grant of the Options, the Options will be first
exercisable at the rate of 20% on the date of grant and 20% annually thereafter
during such periods of service as an Employee, Director or Director Emeritus.
(f) Cashless Exercise. Subject to vesting requirements, if
applicable, an Optionee who has held a Non-Incentive Stock Option for at least
six months may engage in the "cashless exercise" of the Option. Upon a cashless
exercise, an Optionee shall give the Company 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 Optioned Stock and to deliver enough of
the proceeds to the Company to pay the Option exercise price and any applicable
withholding taxes. If the Optionee does not sell the Optioned Stock through a
registered broker-dealer or equivalent third party, the Optionee can give the
Company written notice of the exercise of the Option and the third party
purchaser of the Optioned Stock shall pay the Option exercise price plus any
applicable withholding taxes to the Company.
(g) Transferability. Any Non-Incentive Stock Option granted
pursuant to the Plan shall be exercised during an Optionee's lifetime only by
the Optionee to whom it was granted and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
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<PAGE>
10. Effect of Termination of Employment, Disability, Death and
Retirement on Incentive Stock Options.
(a) Termination of Employment. In the event that any
Optionee's employment with the Company shall terminate for any reason, other
than Disability or death, all of any such Optionee's
Incentive Stock Options, and all of any such Optionee's rights to purchase or
receive Shares of Common Stock pursuant thereto, shall automatically terminate
on (A) the earlier of (i) or (ii): (i) the respective expiration dates of any
such Incentive Stock Options, or (ii) the expiration of not more than three (3)
months after the date of such termination of employment; or (B) at such later
date as is determined by the Committee at the time of the grant of such Award
based upon the Optionee's continuing status as a Director or Director Emeritus
of the Savings Bank or the Company, but only if, and to the extent that, the
Optionee was entitled to exercise any such Incentive Stock Options at the date
of such termination of employment, and further that such Award shall thereafter
be deemed a Non-Incentive Stock Option. In the event that a Subsidiary ceases to
be a Subsidiary of the Company, the employment of all of its employees who are
not immediately thereafter employees of the Company shall be deemed to terminate
upon the date such Subsidiary so ceases to be a Subsidiary of the Company.
(b) Disability. In the event that any Optionee's employment
with the Company shall terminate as the result of the Disability of such
Optionee, such Optionee may exercise any Incentive Stock Options granted to the
Optionee pursuant to the Plan at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is one (1) year after the date of such termination of employment, but only
if, and to the extent that, the Optionee was entitled to exercise any such
Incentive Stock Options at the date of such termination of employment.
(c) Death. In the event of the death of an Optionee, any
Incentive Stock Options granted to such Optionee may be exercised by the person
or persons to whom the Optionee's rights under any such Incentive Stock Options
pass by will or by the laws of descent and distribution (including the
Optionee's estate during the period of administration) at any time prior to the
earlier of (i) the respective expiration dates of any such Incentive Stock
Options or (ii) the date which is two (2) years after the date of death of such
Optionee but only if, and to the extent that, the Optionee was entitled to
exercise any such Incentive Stock Options at the date of death. For purposes of
this Section 10(c), any Incentive Stock Option held by an Optionee shall be
considered exercisable at the date of his death if the only unsatisfied
condition precedent to the exercisability of such Incentive Stock Option at the
date of death is the passage of a specified period of time. At the discretion of
the Committee, upon exercise of such Options the Optionee may receive Shares or
cash or a combination thereof. If cash shall be paid in lieu of Shares, such
cash shall be equal to the difference between the Fair Market Value of such
Shares and the exercise price of such Options on the exercise date.
(d) Incentive Stock Options Deemed Exercisable. For purposes
of Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any
Optionee shall be considered exercisable at the date of termination of
employment if any such Incentive Stock Option would have been exercisable at
such date of termination of employment without regard to the Disability or death
of the Participant.
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(e) Termination of Incentive Stock Options; Vesting Upon
Retirement. Except as may be specified by the Committee at the time of grant of
an Option, to the extent that any Incentive Stock Option granted under the Plan
to any Optionee whose employment with the Company terminates shall not have been
exercised within the applicable period set forth in this Section 10, any such
Incentive Stock Option, and all rights to purchase or receive Shares of Common
Stock pursuant thereto, as the case may be, shall terminate on the last day of
the applicable period. Notwithstanding the foregoing, the Committee may
authorize at the time of the grant of an Option that such Award shall be
immediately 100% exercisable upon the Retirement of the Optionee.
11. Effect of Termination of Employment, Disability, Death or
Retirement on Non-Incentive Stock Options. The terms and conditions of
Non-Incentive Stock Options relating to the effect of the Retirement or other
termination of an Optionee's employment or service, Disability of an Optionee or
his death shall be such terms and conditions as the Committee shall, in its sole
discretion, determine at the time of termination of service, unless specifically
provided for by the terms of the Agreement at the time of grant of the Award.
12. Recapitalization, Merger, Consolidation, Change in Control and
Other Transactions.
(a) Adjustment. Subject to any required action by the
stockholders of the Company, within the sole discretion of the Committee, the
aggregate number of Shares of Common Stock for which Options may be granted
hereunder, the number of Shares of Common Stock covered by each outstanding
Option, and the exercise price per Share of Common Stock of each such Option,
shall all be proportionately adjusted for any increase or decrease in the number
of issued and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt or payment of consideration by the Company (other
than Shares held by dissenting stockholders).
(b) Change in Control. All outstanding Awards shall become
immediately exercisable in the event of a Change in Control of the Company. In
the event of such 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:
(i) 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 Optionee will receive upon consummation of the Change in
Control transaction a cash payment for each Option surrendered equal to the
difference between (1) the Fair Market Value of the consideration to be received
for each share of Common Stock in the Change in Control transaction times the
number of shares
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of Common Stock subject to such surrendered Options, and (2) the aggregate
exercise price of all such surrendered Options, or
(ii) in the event of a transaction under the terms
of which the holders of the Common Stock of the Company will receive upon
consummation thereof a cash payment (the "Merger Price") for each share of
Common Stock exchanged in the Change in Control transaction, to make or to
provide for a cash payment to the Optionees equal to the difference between (A)
the Merger Price times the number of shares of Common Stock subject to such
Options held by each Optionee (to the extent then exercisable at prices not in
excess of the Merger Price) and (B) the aggregate exercise price of all such
surrendered Options in exchange for such surrendered Options.
(c) Extraordinary Corporate Action. Notwithstanding any
provisions of the Plan to the contrary, subject to any required action by the
stockholders of the Company, in the event of any Change in Control,
recapitalization, merger, consolidation, exchange of Shares, spin-off,
reorganization, tender offer, partial or complete liquidation or other
extraordinary corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:
(i) appropriately adjust the number of Shares of
Common Stock subject to each Option, the Option exercise price per Share of
Common Stock, and the consideration to be given or received by the Company upon
the exercise of any outstanding Option;
(ii) cancel any or all previously granted Options,
provided that appropriate consideration is paid to the Optionee in connection
therewith; and/or
(iii) make such other adjustments in connection with
the Plan as the Committee, in
its sole discretion, deems necessary, desirable, appropriate or advisable;
provided, however, that no action shall be taken by the Committee which would
cause Incentive Stock Options granted pursuant to the Plan to fail to meet the
requirements of Section 422 of the Code without the consent of the Optionee.
(d) Acceleration. The Committee shall at all times have the
power to accelerate the exercise date of Options previously granted under the
Plan.
(e) Non-recurring Dividends. Upon the payment of a special or
non-recurring cash dividend that has the effect of a return of capital to the
stockholders, the Option exercise price per share shall be adjusted
proportionately and in an equitable manner.
Except as expressly provided in Sections 12(a), 12(b) and 12(e) hereof,
no Optionee shall have any rights by reason of the occurrence of any of the
events described in this Section 12.
13. Time of Granting Options. The date of grant of an Option under the
Plan shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each individual to whom an Option is so granted within a reasonable
time after the date of such grant in a form determined by the Committee.
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14. Effective Date. The Plan shall become effective upon the date of
approval of the Plan by the stockholders of the Company. The Committee may make
a determination related to Awards prior to the Effective Date with such Awards
to be effective upon the date of stockholder approval of the Plan.
15. Approval by Stockholders. The Plan shall be approved by
stockholders of the Company within twelve (12) months before or after the date
the Plan is approved by the Board.
16. Modification of Options. At any time and from time to time, the
Board may authorize the Committee to direct the execution of an instrument
providing for the modification of any outstanding Option, provided no such
modification, extension or renewal shall confer on the holder of said Option any
right or benefit which could not be conferred on the Optionee by the grant of a
new Option at such time, or shall not materially decrease the Optionee's
benefits under the Option without the consent of the holder of the Option,
except as otherwise permitted under Section 17 hereof.
17. Amendment and Termination of the Plan.
(a) Action by the Board. The Board may alter, suspend or
discontinue the Plan, except that no action of the Board may increase (other
than as provided in Section 12 hereof) the maximum number of Shares permitted to
be optioned under the Plan, materially increase the benefits accruing to
Participants under the Plan or materially modify the requirements for
eligibility for participation in the Plan unless such action of the Board shall
be subject to approval or ratification by the stockholders of the Company.
(b) Change in Applicable Law. Notwithstanding any other
provision contained in the Plan, in the event of a change in any federal or
state law, rule or regulation which would make the exercise of all or part of
any previously granted Option unlawful or subject the Company to any penalty,
the Committee may restrict any such exercise without the consent of the Optionee
or other holder thereof in order to comply with any such law, rule or regulation
or to avoid any such penalty.
18. Conditions Upon Issuance of Shares; Limitations on Option Exercise;
Cancellation of Option Rights.
(a) Shares shall not be issued with respect to any Option
granted under the Plan unless the issuance and delivery of such Shares shall
comply with all relevant provisions of applicable law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities laws and the
requirements of any stock exchange upon which the Shares may then be listed.
(b) The inability of the Company to obtain any necessary
authorizations, approvals or letters of non-objection from any regulatory body
or authority deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares issuable hereunder shall relieve the Company of
any liability with respect to the non-issuance or sale of such Shares.
(c) As a condition to the exercise of an Option, the Company
may require the person exercising the Option to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
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(d) Notwithstanding anything herein to the contrary, upon the
termination of employment or service of an Optionee by the Company or its
Subsidiaries for "cause" as defined at 12 C.F.R. 563.39(b)(1) as determined by
the Board of Directors, all Options held by such Participant shall cease to be
exercisable as of the date of such termination of employment or service.
(e) Upon the exercise of an Option by an Optionee (or the
Optionee's personal representative), the Committee, in its sole and absolute
discretion, may make a cash payment to the Optionee, in whole or in part, in
lieu of the delivery of shares of Common Stock. Such cash payment to be paid in
lieu of delivery of Common Stock shall be equal to the difference between the
Fair Market Value of the Common Stock on the date of the Option exercise and the
exercise price per share of the Option. Such cash payment shall be in exchange
for the cancellation of such Option. Such cash payment shall not be made in the
event that such transaction would result in liability to the Optionee or the
Company under Section 16(b) of the Securities Exchange Act of 1934, as amended,
and regulations promulgated thereunder.
19. Reservation of Shares. During the term of the Plan, the Company
will reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
20. Unsecured Obligation. No Participant under the Plan shall have any
interest in any fund or special asset of the Company by reason of the Plan or
the grant of any Option under the Plan. No trust fund shall be created in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.
21. Withholding Tax. The Company shall have the right to deduct from
all amounts paid in cash with respect to the cashless exercise of Options under
the Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option, the Company shall have the right to
require the Participant or such other person to pay the Company the amount of
any taxes which the Company is required to withhold with respect to such Shares,
or, in lieu thereof, to retain, or to sell without notice, a number of such
Shares sufficient to cover the amount required to be withheld.
22. No Employment Rights. No Director, Employee or other person shall
have a right to be selected as a Participant under the Plan. Neither the Plan
nor any action taken by the Committee in administration of the Plan shall be
construed as giving any person any rights of employment or retention as an
Employee, Director or in any other capacity with the Company, the Savings Bank
or other Subsidiaries.
23. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, except to the
extent that federal law shall be deemed to apply.
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EXHIBIT B
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Roxborough-Manayunk Bank
Restricted Stock Plan
and Trust Agreement
Article I
---------
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Roxborough-Manayunk Bank ("Savings Bank") hereby establishes the
Restricted Stock Plan (the "Plan") and Trust (the "Trust") upon the terms and
conditions hereinafter stated in this Restricted Stock Plan and Trust Agreement
(the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
Article II
----------
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and to retain personnel of
experience and ability in key positions of responsibility with the Savings Bank
and its subsidiaries, by providing such personnel of the Savings Bank and its
subsidiaries with an equity interest in the parent corporation of the Savings
Bank, Thistle Group Holdings, Co. ("Parent"), as compensation for their prior
and anticipated future professional contributions and service to the Savings
Bank and its subsidiaries.
Article III
-----------
DEFINITIONS
The following words and phrases when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meaning as set forth below. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural.
3.01 "Beneficiary" means the person or persons designated by the
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, the Participant's estate.
3.02 "Board" means the Board of Directors of the Savings Bank, or any
successor corporation thereto.
3.03 "Cause" means the personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profits, intentional
failure to perform stated duties, willful violation of a material provision of
any law, rule or regulation (other than traffic violations and similar offense),
or a material violation of a final cease-and-desist order or any other action
which results in a substantial financial loss to the Parent, Savings Bank or its
Subsidiaries.
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3.04 "Change in Control" shall mean: (i) the sale of all, or a material
portion, of the assets of the Parent or Savings Bank; (ii) the merger or
recapitalization of the Parent or the Savings Bank whereby the Parent or Savings
Bank is not the surviving entity; (iii) a change in control of the Parent or
Savings Bank, as otherwise defined or determined by the Office of Thrift
Supervision ("OTS") or regulations promulgated by it; or (iv) the acquisition,
directly or indirectly, of the beneficial ownership (within the meaning of that
term as it is used in Section 13(d) of the 1934 Act and the rules and
regulations promulgated thereunder) of twenty-five percent (25%) or more of the
outstanding voting securities of the Parent or Savings Bank by any person,
trust, entity or group. This limitation shall not apply to the purchase of
shares of up to 25% of any class of securities of the Parent or Savings Bank by
a tax-qualified employee stock benefit plan which is exempt from the approval
requirements, set forth under 12 C.F.R. ss.574.3(c)(1)(vi) as now in effect or
as may hereafter be amended. The term "person" refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Committee as to whether a Change
in Control has occurred shall be conclusive and binding.
3.05 "Committee" means the Board of Directors of the Parent or the
Restricted Stock Plan Committee appointed by the Board of Directors of the
Parent pursuant to Article IV hereof.
3.06 "Common Stock" means shares of the common stock of the Savings
Bank or any successor corporation or Parent thereto.
3.07 "Conversion" means the effective date of the stock charter of the
Savings Bank and simultaneous acquisition of all of the outstanding stock of the
Savings Bank by the Parent.
3.08 "Director" means a member of the Board of the Savings Bank.
3.09 "Director Emeritus" means a person serving as a director emeritus,
advisory director, consulting director, or other similar position as may be
appointed by the Board of Directors of the Savings Bank or the Parent from time
to time.
3.10 "Disability" means any physical or mental impairment which renders
the Participant incapable of continuing in the employment or service of the
Savings Bank or the Parent in his current capacity as determined by the
Committee.
3.11 "Employee" means any person who is employed by the Savings Bank or
a Subsidiary.
3.12 "Effective Date" shall mean the date of stockholder approval of
the Plan by the Parent's stockholders.
3.13 "Parent" shall mean Thistle Group Holdings, Co., the parent
corporation of the Savings Bank.
3.14 "Participant" means an Employee, Director or Director Emeritus who
receives a Plan Share Award under the Plan.
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3.15 "Plan Shares" means shares of Common Stock held in the Trust which
are awarded or issuable to a Participant pursuant to the Plan.
3.16 "Plan Share Award" or "Award" means a right granted to a
Participant under this Plan to earn or to receive Plan Shares.
3.17 "Plan Share Reserve" means the shares of Common Stock held by
the Trust pursuant to Sections 5.03 and 5.04.
3.18 "Retirement" means the termination of service in all capacities as
an Employee, Director and Director Emeritus following attainment of not less
than age 55 and completion of not less than ten years of Service to the Parent
or the Savings Bank. Service to the Parent or the Savings Bank rendered prior to
the Effective Date shall be recognized in determining eligibility to meet the
requirements of Retirement under the Plan.
3.19 "Savings Bank" means Roxborough-Manayunk Bank, and any successor
corporation thereto.
3.20 "Subsidiary" means those subsidiaries of the Savings Bank which,
with the consent of the Board, agree to participate in this Plan.
3.21 "Trustee" or "Trustee Committee" means that person(s) or entity
nominated by the Committee and approved by the Board pursuant to Sections 4.01
and 4.02 to hold legal title to the Plan assets for the purposes set forth
herein.
Article IV
----------
ADMINISTRATION OF THE PLAN
4.01 Role of the Committee. The Plan shall be administered and
interpreted by the Board of Directors of the Parent or a Committee appointed by
said Board, which shall consist of not less than two non-employee members of the
Board, which shall have all of the powers allocated to it in this and other
sections of the Plan. All persons designated as members of the Committee shall
be "Non-Employee Directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended ("1934 Act"). The interpretation and
construction by the Committee of any provisions of the Plan or of any Plan Share
Award granted hereunder shall be final and binding. The Committee shall act by
vote or written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. The Committee shall report its actions and decisions with respect to
the Plan to the Board at appropriate times, but in no event less than one time
per calendar year. The Committee shall recommend to the Board one or more
persons or entity to act as Trustee in accordance with the provision of this
Plan and Trust and the terms of Article VIII hereof.
4.02 Role of the Board. The members of the Committee and the Trustee
shall be appointed or approved by, and will serve at the pleasure of the Board.
The Board may in its discretion from time to time remove members from, or add
members to, the Committee, and may remove, replace or add Trustees. The Board
shall have all of the powers allocated to it in this and other sections of the
Plan, may take any action
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under or with respect to the Plan which the Committee is authorized to take, and
may reverse or override any action taken or decision made by the Committee under
or with respect to the Plan, provided, however, that the Board may not revoke
any Plan Share Award already made except as provided in Section 7.01(b) herein.
4.03 Limitation on Liability. No member of the Board, the Committee or the
Trustee shall be liable for any determination made in good faith with respect to
the Plan or any Plan Share Awards granted. If a member of the Board, Committee
or any Trustee is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by any reason of anything done or not done by
him in such capacity under or with respect to the Plan, the Parent and the
Savings Bank shall indemnify such member against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in the best interests of the Parent, the Savings Bank and its Subsidiaries and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. Notwithstanding anything herein to the
contrary, in no event shall the Savings Bank take any actions with respect to
this Section 4.03 which is not in compliance with the limitations or
requirements set forth at 12 C.F.R. ss.545.121, as may be amended from time to
time.
Article V
---------
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 Amount and Timing of Contributions. The Board of Directors of the
Savings Bank shall determine the amounts (or the method of computing the
amounts) to be contributed by the Savings Bank to the Trust established under
this Plan. Such amounts shall be paid to the Trustee at the time of
contribution. No contributions to the Trust by Participants shall be permitted
except with respect to amounts necessary to meet tax withholding obligations.
5.02 Initial Investment. Any funds held by the Trust prior to
investment in the Common Stock shall be invested by the Trustee in such
interest-bearing account or accounts at the Savings Bank as the Trustee shall
determine to be appropriate.
5.03 Investment of Trust Assets. Following approval of the Plan by
stockholders of the Parent and receipt of any other necessary regulatory
approvals, the Trust shall purchase Common Stock of the Parent in an amount
equal to up to 100% of the Trust's assets, after providing for any required
withholding as needed for tax purposes, provided, however, that the Trust shall
not purchase more than 314,254 shares of Common Stock. The Trustee may purchase
shares of Common Stock in the open market or, in the alternative, may purchase
authorized but unissued shares of the Common Stock or treasury shares from the
Parent sufficient to fund the Plan Share Reserve.
5.04 Effect of Allocations, Returns and Forfeitures Upon Plan Share
Reserves. Upon the allocation of Plan Share Awards under Sections 6.02 and 6.05,
or the decision of the Committee to return Plan Shares to the Parent, the Plan
Share Reserve shall be reduced by the number of Shares subject to the Awards so
allocated or returned. Any Shares subject to an Award which are not earned
because of forfeiture by the Participant pursuant to Section 7.01 shall be added
to the Plan Share Reserve.
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<PAGE>
Article VI
----------
ELIGIBILITY; ALLOCATIONS
6.01 Eligibility. Employees are eligible to receive Plan Share Awards
within the sole discretion of the Committee. Directors who are not otherwise
Employees shall receive Plan Share Awards pursuant to Section 6.05.
6.02 Allocations. The Committee will determine which of the Employees
will be granted Plan Share Awards and the number of Shares covered by each
Award, provided, however, that in no event shall any Awards be made which will
violate the Charter or Bylaws of the Savings Bank or its Parent or Subsidiaries
or any applicable federal or state law or regulation. In the event Shares are
forfeited for any reason or additional Shares are purchased by the Trustee, the
Committee may, from time to time, determine which of the Employees will be
granted Plan Share Awards to be awarded from forfeited Shares. In selecting
those Employees and Directors Emeritus to whom Plan Share Awards will be granted
and the number of shares covered by such Awards, the Committee shall consider
the prior and anticipated future position, duties and responsibilities of the
Employees, the value of their prior and anticipated future services to the
Savings Bank and its Subsidiaries, and any other factors the Committee may deem
relevant. All actions by the Committee shall be deemed final, except to the
extent that such actions are revoked by the Board. Notwithstanding anything
herein to the contrary, in no event shall any Participant receive Plan Share
Awards in excess of 30% of the aggregate Plan Shares authorized under the Plan.
6.03 Form of Allocation. As promptly as practicable after a
determination is made pursuant to Section 6.02 or Section 6.05 that a Plan Share
Award is to be made, the Committee shall notify the Participant in writing of
the grant of the Award, the number of Plan Shares covered by the Award, and the
terms upon which the Plan Shares subject to the award may be earned. The date on
which the Committee makes its award determination or the date the Committee so
notifies the Participant shall be considered the date of grant of the Plan Share
Awards as determined by the Committee. The Committee shall maintain records as
to all grants of Plan Share Awards under the Plan.
6.04 Allocations Not Required. Notwithstanding anything to the contrary
at Sections 6.01, 6.02 or 6.05, no Employee shall have any right or entitlement
to receive a Plan Share Award hereunder, such Awards being at the sole
discretion of the Committee and the Board, nor shall the Employees as a group
have such a right. The Committee may, with the approval of the Board (or, if so
directed by the Board) return all Common Stock in the Plan Share Reserve to the
Savings Bank at any time, and cease issuing Plan Share Awards.
6.05 Awards to Directors. Notwithstanding anything herein to the
contrary, upon the Effective Date, a Plan Share Award consisting of 6,000 Plan
Shares shall be awarded to each Director of the Savings Bank that is not
otherwise an Employee. Such Plan Share Award shall be earned and non-forfeitable
at the rate of one-fifth as of the Effective Date and an additional one-fifth
following each of the next four successive years during such periods of service
as a Director or Director Emeritus. Further, such Plan Share Award shall be
immediately 100% earned and non-forfeitable upon a Change in Control of the
Savings Bank or Parent. Subsequent to the Effective Date, Plan Share Awards may
be awarded to newly elected or appointed Directors of the Savings Bank by the
Committee. Subsequent to the Effective Date, Plan Share Awards may be awarded to
newly elected or appointed Directors of the Savings Bank by the Committee,
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provided that total Plan Share Awards granted to non-employee Directors of the
Savings Bank shall not exceed 25% of the total Plan Share Reserve in the
aggregate under the Plan.
Article VII
-----------
EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Earnings Plan Shares; Forfeitures.
(a) General Rules. Unless the Committee shall specifically states to
the contrary at the time a Plan Share Award is granted, Plan Shares subject to
an Award shall be earned and non-forfeitable by a Participant at the rate of
one-fifth of such Award as of the date of the granting of such Award, and an
additional one-fifth following each of the next four successive years; provided
that such Participant remains an Employee, Director, or Director Emeritus during
such period.
(b) Revocation for Misconduct. Notwithstanding anything herein to the
contrary, the Board shall, by resolution, immediately revoke, rescind and
terminate any Plan Share Award, or portion thereof, previously awarded under
this Plan, to the extent Plan Shares have not been delivered thereunder to the
Participant, whether or not yet earned, in the case of a Participant who is
discharged from the employ or service of the Parent, Savings Bank or a
Subsidiary for Cause, or who is discovered after termination of employment or
service to have engaged in conduct that would have justified termination for
Cause. A determination of Cause shall be made by the Board within its sole
discretion.
(c) Exception for Terminations Due to Death, Disability or Retirement.
Notwithstanding the general rule contained in Section 7.01(a) above, all Plan
Shares subject to a Plan Share Award held by a Participant whose employment or
service with the Parent, Savings Bank or a Subsidiary terminates due to death,
Disability or Retirement, shall be deemed earned and nonforfeitable as of the
Participant's last date of employment or service with the Parent, Savings Bank
or Subsidiary and shall be distributed as soon as practicable thereafter.
(d) Exception for Termination after a Change in Control.
Notwithstanding the general rule contained in Section 7.01 above, all Plan
Shares subject to a Plan Share Award held by a Participant shall be deemed to be
immediately 100% earned and non-forfeitable in the event of a Change in Control
of the Parent or Savings Bank and shall be distributed as soon as practicable
thereafter.
7.02 Accrual and Payment of Dividends. A holder of a Plan Share Award,
whether or not 100% earned and non-forfeitable, shall also be entitled to
receive an amount equal to any cash dividends declared and paid with respect to
shares of Common Stock represented by such Plan Share Award between the date the
relevant Plan Share Award was granted to such Participant and the date the Plan
Shares are distributed. Such cash dividend amounts shall be paid to such
Participant, less applicable income tax withholding, within 30 days of the
dividend payment date attributable to such dividend payable on the Common Stock.
Such payment shall also include an appropriate amount of earnings, if any, of
the Trust assets with respect to any cash dividends so distributed.
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7.03 Distribution of Plan Shares.
(a) Timing of Distributions: General Rule. Except as provided in
Subsections (d) and (e) below, Plan Shares shall be distributed to the
Participant or his Beneficiary, as the case may be, as soon as practicable after
they have been earned. No fractional shares shall be distributed.
Notwithstanding anything herein to the contrary, at the discretion of the
Committee, Plan Shares may be distributed prior to such Shares being 100%
earned, provided that such Plan Shares shall contain a restrictive legend
detailing the applicable limitations of such shares with respect to transfer and
forfeiture.
(b) Form of Distribution. All Plan Shares, together with any shares
representing stock dividends, shall be distributed in the form of Common Stock.
One share of Common Stock shall be given for each Plan Share earned. Payments
representing cash dividends (and earnings thereon) shall be made in cash.
Notwithstanding anything within the Plan to the contrary, upon a Change in
Control whereby substantially all of the Common Stock of the Parent shall be
acquired for cash, all Plan Shares associated with Plan Share Awards, together
with any shares representing stock dividends associated with Plan Share Awards,
shall be, at the sole discretion of the Committee, distributed as of the
effective date of such Change in Control, or as soon as administratively
feasible thereafter, in the form of cash equal to the consideration received in
exchange for such Common Stock represented by such Plan Shares.
(c) Withholding. The Trustee may withhold from any payment or
distribution made under this Plan sufficient amounts of cash or shares of Common
Stock necessary to cover any applicable withholding and employment taxes, and if
the amount of such payment or distribution is not sufficient, the Trustee may
require the Participant or Beneficiary to pay to the Trustee the amount required
to be withheld in taxes as a condition of delivering the Plan Shares. The
Trustee shall pay over to the Parent, Savings Bank or Subsidiary which employs
or employed such Participant any such amount withheld from or paid by the
Participant or Beneficiary.
(d) Timing: Exception for 10% Shareholders. Notwithstanding Subsection
(a) above, no Plan Shares may be distributed prior to the date which is five
years from the effective date of the Conversion to the extent the Participant or
Beneficiary, as the case may be, would after receipt of such Shares own in
excess of ten percent (10%) of the issued and outstanding shares of Common Stock
held by parties other than Parent, unless such action is approved in advance by
a majority vote of disinterested directors of the Board of the Parent. Any Plan
Shares remaining undistributed solely by reason of the operation of this
Subsection (d) shall be distributed to the Participant or his Beneficiary on the
date which is five years from the effective date of the Conversion.
(e) Regulatory Exceptions. No Plan Shares shall be distributed,
however, unless and until all of the requirements of all applicable law and
regulation shall have been fully complied with, including the receipt of
approval of the Plan by the stockholders of the Parent by such vote, if any, as
may be required by applicable law and regulations as determined by the Board.
7.04 Voting of Plan Shares. After a Plan Share Award has become earned
and non-forfeitable, the Participant shall be entitled to direct the Trustee as
to the voting of the Plan Shares which are associated with the Plan Share Award
and which have not yet been distributed pursuant to Section 7.03, subject to
rules and procedures adopted by the Committee for this purpose. All shares of
Common Stock held by the Trust
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as to which Participants have not yet earned and are not entitled to direct, or
have not directed, the voting of such Shares, shall be voted by the Trustee as
directed by the Committee.
Article VIII
------------
TRUST
8.01 Trust. The Trustee shall receive, hold, administer, invest and
make distributions and disbursements from the Trust in accordance with the
provisions of the Plan and Trust and the applicable directions, rules,
regulations, procedures and policies established by the Committee pursuant to
the Plan.
8.02 Management of Trust. It is the intention of this Plan and Trust
that the Trustee shall have complete authority and discretion with respect to
the management, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust, except those attributable to cash dividends paid
with respect to Plan Shares not held in the Plan Share Reserve, in Common Stock
to the fullest extent practicable, except to the extent that the Trustee
determines that the holding of monies in cash or cash equivalents is necessary
to meet the obligations of the Trust. In performing their duties, the Trustees
shall have the power to do all things and execute such instruments as may be
deemed necessary or proper, including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust assets in
the Common Stock without regard to any law now or hereafter in force
limiting investments for Trustees or other fiduciaries. The investment
authorized herein may constitute the only investment of the Trust, and
in making such investment, the Trustee is authorized to purchase Common
Stock from the Parent or from any other source, and such Common Stock
so purchased may be outstanding, newly issued, or treasury shares.
(b) To invest any Trust assets not otherwise invested in accordance
with (a) above in such deposit accounts, and certificates of deposit
(including those issued by the Savings Bank), obligations of the United
States government or its agencies or such other investments as shall be
considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at any time
held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be registered in the
name of a nominee, without the addition of words indicating that such
security is an asset of the Trust (but accurate records shall be
maintained showing that such security is an asset of the Trust).
(e) To hold cash without interest in such amounts as may be in the
opinion of the Trustee reasonable for the proper operation of the Plan
and Trust.
(f) To employ brokers, agents, custodians, consultants and accountants.
(g) To hire counsel to render advice with respect to their rights,
duties and obligations hereunder, and such other legal services or
representation as they may deem desirable.
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(h) To hold funds and securities representing the amounts to be
distributed to a Participant or his Beneficiary as a consequence of a
dispute as to the disposition thereof, whether in a segregated account
or held in common with other assets.
(i) As may be directed by the Committee or the Board from time to time,
the Trustee shall pay to the Saving Bank earnings of the Trust attributable to
the Plan Share Reserve.
Notwithstanding anything herein contained to the contrary, the Trustee
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of a court for the exercise of any power
herein contained, or to maintain bond.
8.03 Records and Accounts. The Trustee shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Committee.
8.04 Earnings. All earnings, gains and losses with respect to Trust
assets shall be allocated in accordance with a reasonable procedure adopted by
the Committee, to bookkeeping accounts for Participants or to the general
account of the Trust, depending on the nature and allocation of the assets
generating such earnings, gains and losses. In particular, any earnings on cash
dividends received with respect to shares of Common Stock shall be allocated to
accounts for Participants, except to the extent that such cash dividends are
distributed to Participants, if such shares are the subject of outstanding Plan
Share Awards, or, otherwise to the Plan Share Reserve.
8.05 Expenses. All costs and expenses incurred in the operation and
administration of this Plan, including those incurred by the Trustee, shall be
paid by the Savings Bank.
8.06 Indemnification. Subject to the requirements and limitations of
applicable laws and regulations, the Parent and the Savings Bank shall
indemnify, defend and hold the Trustee harmless against all claims, expenses and
liabilities arising out of or related to the exercise of the Trustee's powers
and the discharge of their duties hereunder, unless the same shall be due to
their gross negligence or willful misconduct.
Article IX
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MISCELLANEOUS
9.01 Adjustments for Capital Changes. The aggregate number of Plan
Shares available for issuance pursuant to the Plan Share Awards and the number
of Shares to which any Plan Share Award relates shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the effective date of the Plan resulting
from any split, subdivision or consolidation of the Common Stock or other
capital adjustment, change or exchange of the Common Stock, or other increase or
decrease in the number or kind of shares effected without receipt or payment of
consideration by the Parent.
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9.02 Amendment and Termination of the Plan. The Board may, by
resolution, at any time, amend or terminate the Plan. The power to amend or
terminate the Plan shall include the power to direct the Trustee to return to
the Parent all or any part of the assets of the Trust, including shares of
Common Stock held in the Plan Share Reserve, as well as shares of Common Stock
and other assets subject to Plan Share Awards which have not yet been earned by
the Participants to whom they have been awarded. However, the termination of the
Trust shall not affect a Participant's right to earn Plan Share Awards and to
the distribution of Common Stock relating thereto, including earnings thereon,
in accordance with the terms of this Plan and the grant by the Committee or the
Board.
9.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall
not be transferable by a Participant, and during the lifetime of the
Participant, Plan Shares may only be earned by and paid to the Participant who
was notified in writing of the Award by the Committee pursuant to Section 6.03.
No Participant or Beneficiary shall have any right in or claim to any assets of
the Plan or Trust, nor shall the Parent, Savings Bank, or any Subsidiary be
subject to any claim for benefits hereunder.
9.04 No Employment Rights. Neither the Plan nor any grant of a Plan
Share Award or Plan Shares hereunder nor any action taken by the Trustee, the
Committee or the Board in connection with the Plan shall create any right,
either express or implied, on the part of any Participant to continue in the
employ or service of the Parent, Savings Bank, or a Subsidiary thereof.
9.05 Voting and Dividend Rights. No Participant shall have any voting
or dividend rights of a stockholder with respect to any Plan Shares covered by a
Plan Share Award, except as expressly provided in Sections 7.02 and 7.04 above,
prior to the time said Plan Shares are actually distributed to such Participant.
9.06 Governing Law. The Plan and Trust shall be governed by and
construed under the laws of the Commonwealth of Pennsylvania, except to the
extent that Federal Law shall be deemed applicable.
9.07 Effective Date. The Plan shall be effective as of the date of
approval of the Plan by stockholders of the Parent.
9.08 Term of Plan. This Plan shall remain in effect until the earlier
of (i) termination by the Board, (ii) the distribution of all assets of the
Trust, or (iii) 21 years from the Effective Date. Termination of the Plan shall
not effect any Plan Share Awards previously granted, and such Plan Share Awards
shall remain valid and in effect until they have been earned and paid, or by
their terms expire or are forfeited.
9.09 Tax Status of Trust. It is intended that the Trust established
hereby shall be treated as a grantor trust of the Savings Bank under the
provisions of Section 671 et seq. of the Internal Revenue Code of 1986, as
amended, as the same may be amended from time to time.
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