<PAGE>
Filed pursuant to Rule 424(b)(3)
SEC File No. 333-63099
Prospectus Supplement to the Prospectus
Dated November 12, 1998
PROSPECTUS SUPPLEMENT
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FIRST PLACE FINANCIAL CORP.
90,827 PARTICIPATION INTERESTS
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF WARREN
401(K) SAVINGS PLAN
This Prospectus Supplement relates to the offer and sale to participants
(the "Participants") in First Federal Savings and Loan Association of Warren
401(k) Savings Plan (the "Plan") of participation interests and shares of common
stock, par value $.01 per share (the "Common Stock") of First Place Financial
Corp. (the "Holding Company"), as set forth herein.
In connection with the proposed conversion of First Federal Savings and
Loan Association of Warren (the "Association") from a mutual savings and loan
association to a stock savings and loan association (the "Conversion"), the Plan
has been amended to permit the investment of Plan assets in Common Stock of the
Holding Company. The amended Plan will permit Participants to direct the
trustee of the Plan (the "Trustee") to invest in Common Stock with amounts in
the Plan attributable to such Participants. Such investments in Common Stock
would be made by means of the First Place Financial Corp. Stock Fund (the
"Employer Stock Fund"). Based upon the value of the Plan assets at June 30,
1998, 90,827 shares of Common Stock could be purchased with Plan assets
(assuming a purchase price of $10.00 per share). This Prospectus Supplement
relates to the initial election of Participants to direct that all or a portion
of their accounts be invested in the Employer Stock Fund in connection with the
Conversion and also to elections by Participants to direct that all or a portion
of their accounts be invested in the Employer Stock Fund after the Conversion.
The Prospectus dated November 12, 1998 of the Holding Company (the
"Prospectus"), which is attached to this Prospectus Supplement, includes
detailed information with respect to the Conversion, the Common Stock and the
financial condition, results of operations and business of the Association.
This Prospectus Supplement, which provides detailed information with respect to
the Plan, should be read only in conjunction with the Prospectus and should be
retained for future reference. Terms not otherwise defined in this Prospectus
Supplement are defined in the Plan or the Prospectus.
A Participant's eligibility to purchase Common Stock in the Conversion
through the Plan is subject to the Participant's general eligibility to purchase
shares of Common Stock in the Conversion and the maximum and minimum purchase
limitations set forth in the Plan of Conversion. See "The ConversionLimitations
on Common Stock Purchases" in the Prospectus.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY EACH
PARTICIPANT, SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION, OR ANY OTHER FEDERAL
AGENCY OR ANY STATE SECURITIES COMMISSION, NOR HAS SUCH COMMISSION, OFFICE OR
OTHER AGENCY OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS AND ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE BANK INSURANCE FUND
OR THE SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY, NOR ARE THE SHARES OF COMMON STOCK
GUARANTEED BY THE COMPANY OR THE ASSOCIATION. THE ENTIRE AMOUNT OF A
PURCHASER'S PRINCIPAL IS SUBJECT TO LOSS.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS NOVEMBER 12, 1998.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE PROSPECTUS OR THIS PROSPECTUS
SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE ASSOCIATION OR THE PLAN. THIS
PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE ASSOCIATION OR THE PLAN SINCE THE DATE
HEREOF, OR THAT THE INFORMATION HEREIN CONTAINED OR INCORPORATED BY REFERENCE IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE OFFERING............................................... S-4
Securities Offered....................................... S-4
Election to Purchase Common Stock in the Conversion...... S-4
Value of Participation Interests......................... S-4
Method of Directing Transfer............................. S-4
Time for Directing Transfer.............................. S-4
Irrevocability of Transfer Direction..................... S-5
Direction to Purchase Common Stock After the Conversion.. S-5
Purchase Price of Common Stock........................... S-5
Nature of a Participant's Interest in the Common Stock... S-5
Voting and Tender Rights of Common Stock................. S-5
DESCRIPTION OF THE PLAN.................................... S-6
Introduction............................................. S-6
Eligibility and Participation............................ S-6
Contributions Under the Plan............................. S-7
Limitations on Contributions............................. S-7
Investment of Contributions.............................. S-9
Benefits Under the Plan.................................. S-11
Withdrawals and Distributions From the Plan.............. S-11
Administration of the Plan............................... S-12
Reports to Plan Participants............................. S-12
Plan Administrator....................................... S-12
Amendment and Termination................................ S-12
Merger, Consolidation or Transfer........................ S-12
Federal Income Tax Consequences.......................... S-13
ERISA and Other Qualification............................ S-14
Restrictions on Resale................................... S-14
SEC Reporting and Short-Swing Profit Liability........... S-15
LEGAL OPINIONS............................................. S-15
</TABLE>
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<PAGE>
THE OFFERING
SECURITIES OFFERED
The securities offered hereby are participation interests in the Plan. Up
to 90,827 shares (assuming the actual purchase price is $10.00 per share) of
Common Stock may be acquired by the Plan to be held in the Employer Stock Fund.
The Holding Company is the issuer of the Common Stock. Only employees of the
Association (hereinafter referred to as the "Employer") may participate in the
Plan. The Common Stock to be issued hereby is conditioned on the consummation
of the Conversion. A Participant's investment in units in the Employer Stock
Fund in the Conversion is subject to the priority set forth in the Plan of
Conversion.
Information with regard to the Plan is contained in this Prospectus
Supplement and information with regard to the Conversion and the financial
condition, results of operations and business of the Association is contained in
the attached Prospectus. The address of the principal executive office of the
Association is 185 East Market Street, Warren, Ohio 44482. The Association's
telephone number is (330) 373-1221.
ELECTION TO PURCHASE COMMON STOCK IN THE CONVERSION
In connection with the Association's Conversion, the Plan has been amended
to permit each Participant to direct that all or part of the funds which
represent his or her beneficial interest in the assets of the Plan may be
transferred to an investment fund that will invest in Common Stock (the Employer
Stock Fund) and, to the extent shares are available, to use such funds to
purchase Common Stock issued in connection with the Conversion, and to purchase
Common Stock in the open market. If there is not enough Common Stock available
in the Conversion to fill all subscriptions, the Common Stock would be
apportioned and the Plan may not be able to purchase all of the Common Stock
requested by the Participants. In such case, the amount that is not invested in
the Employer Stock Fund will be reallocated to the Strong Money Market Fund. The
ability of each Participant to invest in the Employer Stock Fund in the
Conversion pursuant to directions to transfer all or a portion of their
beneficial assets in the Plan will be based on such Participant's status as an
Eligible Account Holder, Supplemental Eligible Account Holder or Other Member
pursuant to the Plan of Conversion, the subscription priorities set forth in the
Plan of Conversion and the availability of Common Stock. The Trustee of the Plan
will follow the Participants' directions. Funds not transferred to the Employer
Stock Fund will remain in the other investment funds of the Plan as directed by
the Participant on the attached Investment Form and in the telephone response
system.
VALUE OF PARTICIPATION INTERESTS
The market value of the assets of the Plan as of June 30, 1998, was
$908,275 and each Participant was informed of the value of his or her beneficial
interest in the Plan. This value represented the past contributions to the Plan
by the Employers and the Participants and any earnings or losses thereon, less
previous withdrawals. The assets of the Plan are valued on a daily basis and
each Participant can obtain the value of his or her beneficial interest in the
Plan on a continual basis via the telephone response system at (800) 544-6278.
METHOD OF DIRECTING TRANSFER
The last page of this Prospectus Supplement is a form to direct a transfer
to the Employer Stock Fund (the "Investment Form"). If a Participant wishes to
transfer all or part (in multiples of not less than 1%) of his or her beneficial
interest in the assets of the Plan to the Employer Stock Fund being established
in connection with the Conversion, he or she should indicate that decision in
part 2 of the Investment Form. In addition, a Participant must revise their
investment allocations through the telephone response system at (800) 544-6278.
Specific instructions on how to reallocate through the telephone response system
are available from the Human Resources Department, (330) 373-1221. If a
Participant does not wish to make such an election, he or she does not need to
take any action.
TIME FOR DIRECTING TRANSFER
Participants must submit directions to transfer amounts to the Employer
Stock Fund which will purchase Common Stock issued in connection with the
Conversion between December 9, 1998 and 12:00 Noon, Eastern Time, on December
15, 1998. The Investment Form should be returned to the Association's Human
Resources Department and the reallocation through the telephone response system
must be completed by 12:00 Noon, Eastern Time, December 15, 1998.
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<PAGE>
IRREVOCABILITY OF TRANSFER DIRECTION
A Participant's direction to transfer amounts credited to such
Participant's account in the Plan to the Employer Stock Fund in order to
purchase shares of Common Stock in connection with the Conversion shall be
irrevocable. Participants, however, will be able to direct the reinvestment of
their accounts ("Accounts") after the Conversion under the Plan as explained
below.
DIRECTION TO PURCHASE COMMON STOCK AFTER THE CONVERSION
After the Conversion, a Participant shall be able to direct that a certain
percentage (in multiples of not less than 1%) of the net value of such
Participant's interests in the trust fund established for the Plan (the "Trust
Fund") be transferred to the Employer Stock Fund and invested in Common Stock,
or to the other investment funds available under the Plan. Alternatively, a
Participant may direct that a certain percentage of such Participant's interest
in the Employer Stock Fund be transferred to the Trust Fund to be invested in
accordance with the terms of the Plan. Participants will be permitted to direct
that future contributions made to the Plan by or on their behalf will be
invested in Common Stock. Following the initial election, the allocation of a
Participant's interest in the Employer Stock Fund may be made on a daily basis
using the Plan's telephone response system. Special restrictions apply to
transfers directed by those Participants who are officers, directors and
principal shareholders of the Association who are subject to the provisions of
Section 16(b) of the Securities Exchange Act of 1934, as amended (the "1934
Act").
PURCHASE PRICE OF COMMON STOCK
The funds transferred to the Employer Stock Fund for the purchase of Common
Stock in connection with the Conversion will be used by the Trustee to purchase
shares of Common Stock. The price to be paid by the Trust Fund for such shares
of Common Stock will be the same price as is paid by all persons who purchase
shares of Common Stock in the Conversion.
Common Stock purchased by the Trustee after the Conversion will be acquired
in open market transactions. The prices paid by the Trustee for shares of
Common Stock will not exceed "adequate consideration" as defined in Section
3(18) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
NATURE OF A PARTICIPANT'S INTEREST IN THE COMMON STOCK
The Common Stock will be held in the name of the Trustee for the Plan, as
trustee. Each Participant has an allocable interest in the investment funds of
the Plan but not in any particular assets of the Plan. Accordingly, a specific
number of shares of Common Stock will not be directly attributable to the
account of any Participant. Earnings, e.g., gains and losses, are allocated to
the Account of a Participant based on units in the Employer Stock Fund held by
the Participants. Therefore, earnings with respect to a Participant's Account
should not be affected by the investment designations (including investments in
Common Stock) of other Participants.
VOTING AND TENDER RIGHTS OF COMMON STOCK
The Trustee generally will exercise voting and tender rights attributable
to all Common Stock held by the Trust Fund as directed by Participants with
interests in the Employer Stock Fund. With respect to each matter as to which
holders of Common Stock have a right to vote, each Participant will be allocated
a number of voting instruction rights reflecting such Participant's
proportionate interest in the Employer Stock Fund. The number of shares of
Common Stock held in the Employer Stock Fund that are voted in the affirmative
and negative on each matter shall be proportionate to the number of voting
instruction rights exercised in the affirmative and negative, respectively. In
the event of a tender offer for Common Stock, the Plan provides that each
Participant will be allotted a number of tender instruction rights reflecting
such Participant's proportionate interest in the Employer Stock Fund. The
percentage of shares of Common Stock held in the Employer Stock Fund that will
be tendered will be the same as the percentage of the total number of tender
instruction rights that are exercised in favor of tendering. The remaining
shares of Common Stock held in the
S-5
<PAGE>
Employer Stock Fund will not be tendered. The Plan makes provision for
Participants to exercise their voting instruction rights and tender instruction
rights on a confidential basis.
DESCRIPTION OF THE PLAN
INTRODUCTION
The Plan was established effective January 1, 1993 as First Federal Savings
and Loan Association of Warren 401(k) Savings Plan (the "Plan"). The Plan is a
cash or deferred arrangement established in accordance with the requirements
under Section 401(a) and Section 401(k) of the Internal Revenue Code of 1986
(the "Code"). The Plan will be submitted to the Internal Revenue Service (the
"IRS") in a timely manner for a determination that the Plan, as amended, is
qualified under Section 401(a) of the Code, and that its related trust(s) are
qualified under Section 501(a) of the Code.
The Association intends that the Plan, in operation, will comply with the
requirements under Section 401(a) and Section 401(k) of the Code. The
Association will adopt any amendments to the Plan that may be necessary to
ensure the qualified status of the Plan under the Code and applicable Treasury
Regulations.
Employee Retirement Income Security Act. The Plan is an "individual
---------------------------------------
account plan" other than a "money purchase pension plan" within the meaning of
ERISA. As such, the Plan is subject to all of the provisions of Title I
(Protection of Employee Benefit Rights) and Title II (Amendments to the Internal
Revenue Code Relating to Retirement Plans) of ERISA, except the funding
requirements contained in Part 3 of Title I of ERISA which by their terms do not
apply to an individual account plan (other than a money purchase pension plan).
The Plan is not subject to Title IV (Plan Termination Insurance) of ERISA.
Neither the funding requirements contained in Part 3 of Title I of ERISA nor the
plan termination insurance provisions contained in Title IV of ERISA will be
extended to Participants (as defined below) or beneficiaries under the Plan.
APPLICABLE FEDERAL LAW REQUIRES THE PLAN TO IMPOSE SUBSTANTIAL RESTRICTIONS
ON THE RIGHT OF A PLAN PARTICIPANT TO WITHDRAW AMOUNTS HELD FOR HIS BENEFIT
UNDER THE PLAN PRIOR TO THE PARTICIPANT'S TERMINATION OF EMPLOYMENT WITH THE
ASSOCIATION. A SUBSTANTIAL FEDERAL TAX PENALTY MAY ALSO BE IMPOSED ON
WITHDRAWALS MADE PRIOR TO THE PARTICIPANT'S ATTAINMENT OF AGE 59-1/2, REGARDLESS
OF WHETHER SUCH A WITHDRAWAL OCCURS DURING HIS EMPLOYMENT WITH THE ASSOCIATION
OR AFTER TERMINATION OF EMPLOYMENT.
Reference to Full Text of Plan. The following statements are summaries of
------------------------------
certain provisions of the Plan. They are not complete and are qualified in
their entirety by the full text of the Plan. Copies of the Plan are available
to all employees by filing a request with the Plan Administrator, R. Patrick
Wilkinson, First Federal Savings and Loan Association of Warren, 185 East Market
Street, Warren, Ohio 44482. The Plan Administrator's telephone number is (333)
373-1221. Each employee is urged to read carefully the full text of the Plan.
ELIGIBILITY AND PARTICIPATION
Any employee of the Employer is eligible to participate in the Plan as soon
as the employee reaches age 21 and completes one year of service with the
Employer. Employees covered by a collective bargaining agreement which does not
expressly provide for their coverage under the Plan and certain nonresident
aliens are not eligible to participate in the Plan.
As of June 30, 1998, there were approximately 155 employees eligible to
participate in the Plan, and 114 employees had elected to participate in the
Plan.
S-6
<PAGE>
CONTRIBUTIONS UNDER THE PLAN
401(k) Plan Contributions. Each Participant in the Plan is permitted to
-------------------------
elect to reduce such Participant's Compensation (as defined below) pursuant to a
"salary reduction election" by an amount not to exceed the limitation on
contributions permitted by the Plan and the Code and have that amount
contributed to the Plan on such Participant's behalf. Such amounts ("Elective
Contributions") are credited to the Participant's Elective Account. See
"Limitations on Contributions" below. For purposes of the Plan, "Compensation"
means the compensation receivable by an Employee from the Employer for the
calendar year prior to any reductions pursuant to the salary reduction election.
Compensation includes salary, Elective Contributions, wages, overtime,
commissions, bonuses and wage continuation payments to an employee who is
absent due to an illness or disability of a short-term nature. "Compensation"
does not include expense allowances, severance pay, fees, contributions other
than Elective Contributions made to the Plan and contributions made by the
Employer to any other pension, insurance welfare or other employee benefit plan.
As of January 1, 1998, the annual compensation of each Participant taken into
account under the Plan is limited to $160,000 (adjusted for increases in the
cost of living as permitted by the Code). Generally, a Participant may elect to
modify the amount contributed to the Plan under such participant's salary
reduction election not more often than twice each year by providing written
notice to the Plan Administrator within a reasonable time before commencement of
the first day of the payroll period for which the modification is to become
effective. However, special restrictions apply to persons subject to Section 16
of the 1934 Act. Elective Contributions are transferred by the Employer to the
Trustee of the Plan.
Notwithstanding the preceding, a Participant who receives a hardship
distribution under the terms of the Plan may not be eligible to make additional
contributions under a salary reduction election or have matching contributions
made on his behalf for a period of twelve (12) months after the receipt of the
hardship distribution.
Employer Contributions. The Employer contributes to the Plan for each Plan
----------------------
Year a percentage of the Participant's Elective Contributions, between 0% and
4% of the Participant's Compensation for the Plan Year. Such amounts are
credited to his or her Participant's Account. After the Conversion, at the
discretion of the Association, the Employer contributions may be credited to the
Participant's Account in First Federal Savings and Loan Association of Warren
Employee Stock Ownership Plan. The amount of the Employer Matching Contribution
is subject, however, to approval by the Board of Directors of the Association
and is not guaranteed for any period in the future. At its discretion, the
Employer may make an additional contribution to the Plan as of the end of the
Plan Year in an amount determined by the Employer for the purpose of ensuring
that the Plan complies with Section 401(k) of the Code. Such amounts are
credited to Participants' Elective Accounts based on each Participant's
compensation. Such special contributions may be made only to the accounts of
non-highly compensated employees.
LIMITATIONS ON CONTRIBUTIONS
Limitations on Annual Additions and Benefits. Pursuant to the requirements
--------------------------------------------
of the Code, the Plan provides that the amount of contributions allocated to
each Participant's Elective Account and Participant's Account during any Plan
Year may not exceed the lesser of 25% of the Participant's (S)415 Compensation
for the Plan Year or $30,000 (adjusted for increases in the cost of living as
permitted by the Code). A Participant's (S)415 Compensation is a Participant's
Compensation, excluding any Employer contribution to the Plan or to any other
plan of deferred compensation or any distributions from a plan of deferred
compensation. In addition, annual additions shall be limited to the extent
necessary to prevent the limitations set forth in the Code for all of the
qualified defined benefit plans and defined contribution plans maintained by the
Association from being exceeded. To the extent that these limitations would be
exceeded by reason of excess annual additions with respect to a Participant,
such excess will be disposed of as follows:
(i) Any excess amount in the Participant's Account will be used to reduce
the Employer's contributions for such Participant in the next Limitation Year,
and each succeeding Limitation Year if necessary;
(ii) If an excess amount still exists, and the Participant is not covered
---
by the Plan at the end of the Limitation Year, the excess amount will be held
unallocated in a suspense account which will then be applied to reduce future
Employer contributions for all remaining Participants in the next Limitation
Year, and each succeeding Limitation Year if necessary;
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<PAGE>
(iii) If a suspense account is in existence at any time during the
Limitation Year, it will not share in any earnings or losses of the Trust Fund.
Limitation on 401(k) Plan Contributions. The annual amount of deferred
---------------------------------------
Compensation under a salary reduction election of a Participant (when aggregated
with any elective deferrals of the Participant under a simplified employee
pension plan or a tax-deferred annuity) may not exceed $7,000 adjusted for
increases in the cost of living as permitted by the Code (the limitation for
1998 is $10,000). Contributions in excess of this limitation ("excess
deferrals") will be included in the Participant's gross income for federal
income tax purposes in the year they are made. In addition, any such excess
deferral will again be subject to federal income tax when distributed by the
Plan to the Participant, unless the excess deferral (together with any income
allocable thereto) is distributed to the Participant not later than the first
April 15th following the close of the taxable year in which the excess deferral
is made. Any income on the excess deferral that is distributed not later than
such date shall be treated, for federal income tax purposes, as earned and
received by the Participant in the taxable year in which the excess deferral is
made.
Limitation on Plan Contributions for Highly Compensated Employees.
-----------------------------------------------------------------
Sections 401(k) and 401(m) of the Code limit the amount of Deferred Compensation
that may be made to the Plan in any Plan Year on behalf of Highly Compensated
Employees (defined below) in relation to the amount of Deferred Compensation
made by or on behalf of all other employees eligible to participate in the Plan.
Specifically, the actual deferral percentage (i.e., the average of the ratios,
calculated separately for each eligible employee in each group, by dividing the
amount of Deferred Compensation credited to the Participant's Elective Account
by such eligible employee's compensation for the Plan Year) of the Highly
Compensated Employees may not exceed the greater of (i) 125% of the actual
deferral percentage of all other eligible employees, or (ii) the lesser of (x)
200% of the actual deferral percentage of all other eligible employees, or (y)
the actual deferral percentage of all other eligible employees plus two
percentage points. In addition, the actual contribution percentage for such
Plan Years (i.e., the average of the ratios calculated separately for each
eligible employee in each group, by dividing the amount of voluntary employee
and employer matching contributions credited to the Participant's Account and
Participant's Elective Account by such eligible employee's compensation for the
Plan Year) of the Highly Compensated Employees may not exceed the greater of
(i) 125% of the actual contribution percentage of all other eligible employees,
or (ii) the lesser of (x) 200% of the actual contribution percentage of all
other eligible employees, or (y) the actual contribution percentage of all other
eligible employees plus two percentage points.
In general, a Highly Compensated Employee includes any employee who (1) was
a five percent owner of the Employer at any time during the year or preceding
year; or (2) had compensation for the preceding year in excess of $80,000 and,
if the Employer so elects, was in the top 20% of employees by compensation for
such year. The dollar amounts in the foregoing sentence are for 1998. Such
amounts are adjusted annually to reflect increases in the cost of living.
In order to prevent the disqualification of the Plan, any amount
contributed by Highly Compensated Employees that exceed the average deferral
limitation in any Plan Year ("excess aggregate contributions"), together with
any income allocable thereto, must be distributed to such Highly Compensated
Employees before the close of the following Plan Year. However, the Employer
will be subject to a 10% excise tax on any excess contributions unless such
excess contributions, together with any income allocable thereto, either are
recharacterized or are distributed before the close of the following Plan Year.
Top-Heavy Plan Requirements. If for any Plan Year the Plan is a Top-Heavy
---------------------------
Plan (as defined below), then (i) the Association may be required to make
certain minimum contributions to the Plan on behalf of non-key employees (as
defined below), and (ii) certain additional restrictions would apply with
respect to the combination of annual additions to the Plan and projected annual
benefits under any defined benefit plan maintained by the Association.
In general, the Plan will be regarded as a "Top-Heavy Plan" for any Plan
Year if, as of the last day of the preceding Plan Year, the aggregate balance of
the Accounts of Participants who are Key Employees exceeds 60% of the aggregate
balance of the Accounts of all Participants. Key Employees generally include
any employee who, at any time during the Plan Year or any of the four preceding
Plan Years, is (1) an officer of the Association having annual compensation in
excess of $60,000 who is in an administrative or policy-making capacity, (2) one
of the ten employees
S-8
<PAGE>
having annual compensation in excess of $30,000 and owning, directly or
indirectly, the largest interests in the Association, (3) a 5% owner of the
Association, (i.e., owns directly or indirectly more than 5% of the outstanding
stock of the Association, or stock possessing more than 5% of the total combined
voting power of all stock of the Association) or (4) a 1% owner of the
Association having annual compensation in excess of $150,000. The dollar amounts
in the foregoing sentence are for 1998.
INVESTMENT OF CONTRIBUTIONS
All amounts credited to Participants' Accounts under the Plan are held in
the Trust Fund which is administered by the Trustee appointed by the
Association's Board of Trustees.
Prior to the effective date of the Conversion, the Accounts of a
Participant held in the Trust Fund have been invested by the Trustee at the
direction of the Participant in the following funds:
a. Strong Discovery Fund
b. Strong Government Securities Fund
c. Strong Corporate Bond Fund
d. Strong International Stock Fund
e. Strong Asset Allocation Fund
f. Strong Money Market Fund
g. Strong Opportunity Fund
h. Strong Short Term Bond Fund
i. Strong Total Return Fund
j. Aim Constellation Fund
k. Aim Global Aggressive Growth A
l. Aim Value A
The Plan, as amended effective November 1, 1998, now provides that in
addition to the funds specified above, a Participant who is employed by the
Association may direct the Trustee to invest all or a portion of his
Participant's Elective Account and Participant's Account in the Employer Stock
Fund.
Once in any calendar quarter a Participant may elect (in increments of 1%),
to have both past and future contributions and additions to the Participant's
Elective Account invested either in the Employer Stock Fund or among such other
funds. Participants may also elect to have past contributions to their
Participant's Accounts invested in either the Employer Stock Fund or among such
other funds. Participant's Accounts may be invested in Employer Stock under the
proposed terms of First Federal Savings and Loan Association of Warren Employee
Stock Ownership Plan being implemented by the Association. Following the initial
election, the allocation of a Participant's interest in the Employer Stock Fund
may be made on a daily basis through the telephone response system. Because
investment allocations only are required to be made in increments of 1%,
Participants can invest their Accounts in each of the thirteen available
investment funds.
A Participant who receives a loan from the Plan has a separate account
established under the Plan. The amount of the loan is obtained from the
Investment Accounts in which the Borrower's accounts are invested on a pro-rata
basis according to the terms of the Plan. The balance of a Participant's loan
account represents the unpaid principal and interest (if any) of such
participant's loan from the Plan. Repayments of principal and payments of
interest on loans are invested by the Trustee in the same manner as if the
repayment were a contribution.
The Participants interest in the Employer Stock Fund consists of units
whose value is related to a pro rata portion of the net asset value ("NAV") of
the Employer Stock Fund. The NAV is determined daily and all realized and
unrealized gains, dividends, and expenses are used to calculate the NAV. For
purposes of such valuation, all assets of the Trust are valued at their fair
market value.
S-9
<PAGE>
A. Previous Funds.
--------------
Prior to November 1, 1998, contributions under the Plan were invested in
the twelve funds specified above. The annual percentage return on these funds
for the prior three years was:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ ---------------
<S> <C> <C> <C>
a. Strong Discovery Fund 10.85% 1.49% 34.83%
b. Strong Government Securities Fund 9.05 2.82 19.90
c. Strong Corporate Bond Fund 11.88 5.53 25.38
d. Strong International Stock Fund (14.20) 8.19 7.82
e. Strong Asset Allocation Fund 16.67 10.45 21.96
f. Strong Money Market Fund 5.38 5.14 5.79
g. Strong Opportunity Fund 23.45 18.14 27.27
h. Strong Short Term Bond Fund 7.16 6.76 11.99
i. Strong Total Return Fund 24.17 14.07 27.00
j. Aim Constellation Fund 12.92 16.27 35.45
k. Aim Global Aggressive Growth A 12.24 14.34 41.51
l. Aim Value A 23.95 14.52 34.85
</TABLE>
B. The Employer Stock Fund.
-----------------------
The Employer Stock Fund will consist of investments in Common Stock made on
and after the consummation of the Conversion. Each Participant's proportionate
undivided beneficial interest in the Employer Stock Fund is measured by units.
Each day a unit value will be calculated by determining the market value of the
Common Stock actually held and adding to that any cash held by the Trustee.
This total will be divided by the number of units outstanding to determine the
unit value of the Employer Stock Fund.
On the occasion of the payment of a cash dividend, the unit value will be
determined before the dividend is distributed. The Trustee may use the dividend
to purchase additional shares of Common Stock, thereby increasing the total
value of the Employer Stock Fund, and the value of each unit. The Board of
Directors of the Holding Company may consider a policy of paying cash dividends
on the Common Stock in the future; however, no decision as to the amount or
timing of cash dividends, if any, has been made. The Trustee will, to the
extent practicable, use all amounts held by it in the Employer Stock Fund to
purchase shares of Common Stock of the Association. It is expected that all
purchases will be made at prevailing market prices. Under certain
circumstances, the Trustee may be required to limit the daily volume of shares
purchased. Pending investment in Common Stock, assets held in the Employer
Stock Fund will be placed in bank deposits and other short-term investments.
Any brokerage commissions, transfer fees and other expenses incurred in the
sale and purchase of Common Stock for the Employer Stock Fund will be paid out
of a cash account managed by the Trustee. Therefore, although Participants'
accounts will not be directly adjusted for such fees, the market value of their
accounts will be reduced.
As of the date of this Prospectus Supplement, none of the shares of Common
Stock have been issued or are outstanding and there is no established market for
the Common Stock. Accordingly, there is no record of the historical performance
of the Employer Stock Fund. Performance will be dependent upon a number of
factors, including the financial condition and profitability of the Holding
Company and the Association and market conditions for the Common Stock
generally. See "Market for the Common Stock" in the Prospectus.
INVESTMENTS IN THE EMPLOYER STOCK FUND MAY INVOLVE CERTAIN SPECIAL RISKS IN
INVESTMENTS IN COMMON STOCK OF THE COMPANY. FOR A DISCUSSION OF THESE RISK
FACTORS, SEE "RISK FACTORS" IN THE PROSPECTUS.
S-10
<PAGE>
BENEFITS UNDER THE PLAN
Vesting. A Participant, at all times, has a fully vested, nonforfeitable
-------
interest in his Participant's Elective Account and the earnings thereon under
the Plan. A Participant vests in his Participant's Account under the Plan
according to the following schedule:
<TABLE>
<CAPTION>
Period of Service Vested Percentage
----------------- -----------------
<S> <C>
Less than 5 years 0%
5 years or more 100%
</TABLE>
WITHDRAWALS AND DISTRIBUTIONS FROM THE PLAN
APPLICABLE FEDERAL LAW REQUIRES THE PLAN TO IMPOSE SUBSTANTIAL RESTRICTIONS
ON THE RIGHT OF A PLAN PARTICIPANT TO WITHDRAW AMOUNTS HELD FOR HIS BENEFIT
UNDER THE PLAN PRIOR TO THE PARTICIPANT'S ATTAINMENT OF AGE 59 1/2 UNLESS A
PARTICIPANT RETIRES AS PERMITTED UNDER THE PLAN REGARDLESS OF WHETHER SUCH A
WITHDRAWAL OCCURS DURING HIS EMPLOYMENT WITH THE ASSOCIATION.
Withdrawals Prior to Termination of Employment. Subject to the hardship
----------------------------------------------
distribution rules under the Plan, a Participant may withdraw all or a portion
of his (i) Participant's Elective Account and (ii) the vested interest in his
Participant's Account. The hardship distribution requirements ensure that
Participants have a true financial need before a withdrawal may be made.
A Participant may make a withdrawal from his Participant's Elective Account
and Participant's Account after he turns 59 1/2. A Participant after attaining
age 59 1/2 may withdraw contributions to his Account, contributions to the
vested portion of his Participant's Account at any time. However, such
withdrawals may not be made more often than two times during any Plan Year.
Distribution Upon Retirement, Disability or Termination of Employment.
---------------------------------------------------------------------
Payment of benefits to a Participant who retires, incurs a disability, or
otherwise terminates employment generally shall be made in a lump sum cash
payment as soon as administratively feasible after such termination of
employment if the vested value of the Participant's Account is $3,500 or less.
If the vested portion of the Participant's Account balance is greater than
$3,500, the Participant may request a distribution (subject to the minimum
distribution rules) in a lump sum payment: (a) as soon as administratively
possible after termination, (b) as of any Valuation Date up to 13 months after
termination or (c) as of the date the Participant attains normal retirement age.
At the request of the Participant, the distribution may include an in kind
distribution of Common Stock of the Holding Company equal to the number of
shares that can be purchased with the Participant's balance in the Employer
Stock Fund. Benefit payments ordinarily shall be made not later than 60 days
following the end of the Plan Year in which occurs the latest of the
Participant's: (i) termination of employment; (ii) the attainment of age 65 or
(iii) 10th anniversary of commencement of participation in the Plan; but in no
event later than the April 1 following the calendar year in which the
Participant attains age 70 1/2. However, if the vested portion of the
Participant's Account balances exceeds $3,500, no distribution shall be made
from the Plan prior to the Participant's attaining age 65 unless the Participant
elects to receive an earlier distribution.
Distribution upon Death. A Participant who dies prior to the benefit
-----------------------
commencement date for retirement, disability or termination of employment, and
who has a surviving spouse shall have his benefits paid to the surviving spouse
in a lump sum as soon as administratively possible following the date of his
death, unless the Participant elected prior to his death or the beneficiary so
elects within 90 days of the Participant's death, to receive such distribution
in a lump sum payment as of any Valuation Date which occurs within one year of
the Participant's death. With respect to an unmarried Participant, and in the
case of a married Participant with spousal consent to the designation of another
beneficiary, payment of benefits to the beneficiary of a deceased Participant
shall be made in the form of a lump-sum payment in cash or in Common Stock in
the same manner described above as to a Participant with a surviving spouse.
S-11
<PAGE>
Nonalienation of Benefits. Except with respect to federal income tax
-------------------------
withholding and as provided with respect to a qualified domestic relations order
(as defined in the Code), benefits payable under the Plan shall not be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy of any kind, either
voluntary or involuntary, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of any rights to
benefits payable under the Plan shall be void.
ADMINISTRATION OF THE PLAN
The Trustee with respect to the Plan is the named fiduciary of the Plan for
purposes of Section 402 of ERISA.
Trustees. The Trustees are appointed by the Employer to serve at its
--------
pleasure. The current Trustees of the Plan are Steven R. Lewis, R. Patrick
Wilkinson and Robert S. McGeough.
The Trustees receive, hold and invest the contributions to the Plan in
trust and distributes them to Participants and beneficiaries in accordance with
the terms of the Plan and the directions of the Plan Administrator. The
Trustees are responsible for investment of the assets of the Trust Fund.
REPORTS TO PLAN PARTICIPANTS
The Administrator (as defined below) will furnish to each Participant a
statement at least quarterly showing (i) the balance in the Participant's
Account as of the end of that period, (ii) the amount of contributions allocated
to such participant's Account for that period, and (iii) the adjustments to such
participant's Account to reflect earnings or losses (if any). Account balance
information is updated and available on a daily basis using the telephone
response system at (800) 544-6278.
PLAN ADMINISTRATOR
Pursuant to the terms of the Plan, the Plan is administered by one or more
persons who are appointed by and who serve at the pleasure of the Association
(the "Administrator"). Currently, the Administrator is R. Patrick Wilkinson.
The address and telephone number of the Administrator is c/o 185 East Market
Street, Warren, Ohio 44482; (330) 373-1221. The Administrator is responsible
for the administration of the Plan, interpretation of the provisions of the
Plan, prescribing procedures for filing applications for benefits, preparation
and distribution of information explaining the Plan, maintenance of Plan
records, books of account and all other data necessary for the proper
administration of the Plan, and preparation and filing of all returns and
reports relating to the Plan which are required to be filed with the U.S.
Department of Labor and the IRS, and for all disclosures required to be made to
Participants, Beneficiaries and others under Sections 104 and 105 of ERISA.
AMENDMENT AND TERMINATION
It is the intention of the Association to continue the Plan indefinitely.
Nevertheless, the Association may terminate the Plan at any time. If the Plan
is terminated in whole or in part, then regardless of other provisions in the
Plan, each employee affected by such termination shall have a fully vested
interest in his Accounts. The Association reserves the right to make, from time
to time, any amendment or amendments to the Plan which do not cause any part of
the Trust to be used for, or diverted to, any purpose other than the exclusive
benefit of Participants or their beneficiaries or estates; provided, however,
that the Association may make any amendment it determines necessary or
desirable, with or without retroactive effect, to comply with ERISA.
MERGER, CONSOLIDATION OR TRANSFER
In the event of the merger or consolidation of the Plan with another plan,
or the transfer of the Trust Fund assets to another plan, the Plan requires that
each Participant would (if either the Plan or the other plan then terminated)
receive a benefit immediately after the merger, consolidation or transfer which
is equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had then
terminated).
S-12
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
The following is only a brief summary of certain federal income tax aspects
of the Plan which are of general application under the Code and is not intended
to be a complete or definitive description of the federal income tax
consequences of participating in or receiving distributions from the Plan. The
summary is necessarily general in nature and does not purport to be complete.
Moreover, statutory provisions are subject to change, as are their
interpretations, and their application may vary in individual circumstances.
Finally, the consequences under applicable state and local income tax laws may
not be the same as under the federal income tax laws. PARTICIPANTS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO ANY DISTRIBUTION FROM THE PLAN AND
TRANSACTIONS INVOLVING THE PLAN.
The Plan will be submitted to the IRS in a timely manner for a
determination that it is qualified under Section 401(a) and 401(k) of the Code,
and that the related Trust is exempt from tax under Section 501(a) of the Code.
A plan that is "qualified" under these sections of the Code is afforded special
tax treatment which include the following: (1) The sponsoring employer is
allowed an immediate tax deduction for the amount contributed to the Plan each
year; (2) Participants pay no current income tax on amounts contributed by the
employer on their behalf; and (3) earnings of the plan are tax-deferred thereby
permitting the tax-free accumulation of income and gains on investments. The
Plan will be administered to comply in operation with the requirements of the
Code as of the applicable effective date of any change in the law. The
Association expects to timely adopt any amendments to the Plan that may be
necessary to maintain the qualified status of the Plan under the Code.
Following such an amendment, the Association will submit the Plan to the IRS for
a determination that the Plan, as amended, continues to qualify under Sections
401(a) and 501(a) of the Code and that it continues to satisfy the requirements
for a qualified cash or deferred arrangement under Section 401(k) of the Code.
Should the Plan receive from the IRS an adverse determination letter regarding
its tax exempt status, all participants would generally recognize income equal
to their vested interest in the Plan, the participants would not be permitted to
transfer amounts distributed from the Plan to an IRA or to another qualified
retirement plan, and the Association may be denied certain deductions taken with
respect to the Plan.
Lump Sum Distribution. A distribution from the Plan to a Participant or
---------------------
the beneficiary of a Participant will qualify as a Lump Sum Distribution if it
is made: (i) within one taxable year of the Participant or beneficiary; (ii) on
account of the Participant's death, disability or separation from service, or
after the Participant attains age 59 1/2; and (iii) consists of the balance to
the credit of the Participant under this Plan and all other profit sharing
plans, if any, maintained by the Association. The portion of any Lump Sum
Distribution that is required to be included in the Participant's or
beneficiary's taxable income for federal income tax purposes (the "total taxable
amount") consists of the entire amount of such Lump Sum Distribution less the
amount of after-tax contributions, if any, made by the Participant to any other
profit sharing plans maintained by the Association which is included in such
distribution.
Averaging Rules. The portion of the total taxable amount of a Lump Sum
---------------
Distribution that is attributable to participation after 1973 in this Plan or in
any other profit-sharing plan maintained by the Association (the "ordinary
income portion") will be taxable generally as ordinary income for federal income
tax purposes. However, a Participant who has completed at least five years of
participation in this Plan before the taxable year in which the distribution is
made, or a beneficiary who receives a Lump Sum Distribution on account of the
Participant's death (regardless of the period of the Participant's participation
in this Plan or any other profit-sharing plan maintained by the Employers), may
elect to have the ordinary income portion of such Lump Sum Distribution taxed
according to a special averaging rule ("five-year averaging"). The election of
the special averaging rules may apply only to one Lump Sum Distribution received
by the Participant or beneficiary, provided such amount is received on or after
the Participant turns 59-1/2 and the recipient elects to have any other Lump Sum
Distribution from a qualified plan received in the same taxable year taxed under
the special averaging rule. Under a special grandfather rule, individuals who
turned 50 by 1986 may elect to have their Lump Sum Distribution taxed under
either the five-year averaging rule or under the prior law ten-year averaging
rule. Such individuals also may elect to have that portion of the Lump Sum
Distribution attributable to the participant's pre-1974 participation in the
Plan taxed at a flat 20% rate as gain from the sale of a capital asset.
Common Stock Included in Lump Sum Distribution. If a Lump Sum Distribution
----------------------------------------------
includes Common Stock, the distribution generally will be taxed in the manner
described above, except that the total taxable amount will be reduced by the
amount of any net unrealized appreciation with respect to such Common Stock,
i.e., the excess of the value of such Common Stock at the time of the
distribution over its cost or other basis of the securities to the Trust. The
S-13
<PAGE>
tax basis of such Common Stock to the Participant or beneficiary for purposes of
computing gain or loss on its subsequent sale will be the value of the Common
Stock at the time of distribution less the amount of net unrealized
appreciation. Any gain on a subsequent sale or other taxable disposition of
such Common Stock, to the extent of the amount of net unrealized appreciation at
the time of distribution, will be considered long-term capital gain regardless
of the holding period of such Common Stock. Any gain on a subsequent sale or
other taxable disposition of the Common Stock in excess of the amount of net
unrealized appreciation at the time of distribution will be considered either
short-term capital gain or long-term capital gain depending upon the length of
the holding period of the Common Stock. The recipient of a distribution may
elect to include the amount of any net unrealized appreciation in the total
taxable amount of such distribution to the extent allowed by the regulations to
be issued by the IRS.
Distributions: Rollovers and Direct Transfers to Another Qualified Plan or
---------------------------------------------------------------------------
to an IRA. Pursuant to a change in the law, effective January 1, 1993,
- ----------
virtually all distributions from the Plan may be rolled over to another
Qualified Plan or to an IRA without regard to whether the distribution is a Lump
Sum Distribution or a Partial Distribution. Effective January 1, 1993,
Participants have the right to elect to have the Trustee transfer all or any
portion of an "eligible rollover distribution" directly to another plan
qualified under Section 401(a) of the Code or to an IRA. If the Participant
does not elect to have an "eligible rollover distribution" transferred directly
to another qualified plan or to an IRA, the distribution will be subject to an
mandatory federal withholding tax equal to 20% of the taxable distribution. An
"eligible rollover distribution" means any amount distributed from the Plan
except: (1) a distribution that is (a) one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the Participant or the joint lines of the Participant and
his or her designated beneficiary, or (b) for a specified period of ten years or
more; (2) any amount that is required to be distributed under the minimum
distribution rules; and (3) any other distributions excepted under applicable
federal law. The tax law change described above did not modify the special tax
treatment of Lump Sum Distributions, that are not rolled over or transferred
i.e., forward averaging, capital gains tax treatment and the nonrecognition of
net unrealized appreciation, discussed earlier.
ERISA AND OTHER QUALIFICATION
As noted above, the Plan is subject to certain provisions of the Employee
Retirement Income Security Act of 1974, as amended, and will be submitted to the
IRS for a determination that it is qualified under Section 401(a) of the Code.
THE FOREGOING IS ONLY A BRIEF SUMMARY OF CERTAIN FEDERAL INCOME TAX ASPECTS
OF THE PLAN WHICH ARE OF GENERAL APPLICATION UNDER THE CODE AND IS NOT INTENDED
TO BE A COMPLETE OR DEFINITIVE DESCRIPTION OF THE FEDERAL INCOME TAX
CONSEQUENCES OF PARTICIPATING IN OR RECEIVING DISTRIBUTIONS FROM THE PLAN.
ACCORDINGLY, EACH PARTICIPANT IS URGED TO CONSULT A TAX ADVISOR CONCERNING THE
FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF PARTICIPATING IN AND RECEIVING
DISTRIBUTIONS FROM THE PLAN.
RESTRICTIONS ON RESALE
Any person receiving a distribution of shares of Common Stock under the
Plan who is an "affiliate" of the Association as the term "affiliate" is used in
Rules 144 and 405 under the Securities Act of 1933, as amended (the "Securities
Act") (e.g., directors, officers and substantial shareholders of the
Association) may reoffer or resell such shares only pursuant to a registration
statement filed under the Securities Act assuming the availability thereof,
pursuant to Rule 144 or some other exemption of the registration requirements of
the Securities Act. Any person who may be an "affiliate" of the Association may
wish to consult with counsel before transferring any Common Stock owned by him.
In addition, Participants are advised to consult with counsel as to the
applicability of Section 16 of the 1934 Act which may restrict the sale of
Common Stock where acquired under the Plan, or other sales of Common Stock.
Persons who are not deemed to be "affiliates" of the Association at the
---
time of resale will be free to resell any shares of Common Stock to them under
the Plan, either publicly or privately, without regard to the Registration and
Prospectus delivery requirements of the Securities Act or compliance with the
restrictions and conditions contained in the exemptive rules thereunder. An
"affiliate" of the Association is someone who directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control, with the Association. Normally, a director, principal officer or major
shareholder of a corporation may be deemed to be an "affiliate" of that
corporation.
S-14
<PAGE>
A person who may be deemed an "affiliate" of the Association at the time of a
proposed resale will be permitted to make public resales of the Association's
Common Stock only pursuant to a "reoffer" Prospectus or in accordance with the
restrictions and conditions contained in Rule 144 under the Securities Act or
some other exemption from registration, and will not be permitted to use this
Prospectus in connection with any such resale. In general, the amount of the
Association's Common Stock which any such affiliate may publicly resell pursuant
to Rule 144 in any three-month period may not exceed the greater of one percent
of the Association's Common Stock then outstanding or the average weekly trading
volume reported on the National Association of Securities Dealers Automated
Quotation System during the four calendar weeks prior to the sale. Such sales
may be made only through brokers without solicitation and only at a time when
the Association is current in filing the reports required of it under the 1934
Act.
SEC REPORTING AND SHORT-SWING PROFIT LIABILITY
Section 16 of the 1934 Act imposes reporting and liability requirements on
officers, directors and persons beneficially owning more than ten percent of
public companies such as the Holding Company. Section 16(a) of the 1934 Act
requires the filing of reports of beneficial ownership. Within ten days of
becoming a person subject to the reporting requirements of Section 16(a), a Form
3 reporting initial beneficial ownership must be filed with the Securities and
Exchange Commission. Certain changes in beneficial ownership, such as
purchases, sales, gifts and participation in savings and retirement plans must
be reported periodically, either on a Form 4 within ten days after the end of
the month in which a change occurs, or annually on a Form 5 within 45 days after
the close of the Association's fiscal year. Participation in the Employer Stock
Fund of the Plan by officers, directors and persons beneficially owning more
than ten percent of Common Stock of the Holding Company must be reported to the
SEC annually on a Form 5 by such individuals. At June 30, 1998, 13.8% of the
Plan assets were allocated to executive officers.
In addition to the reporting requirements described above, Section 16(b) of
the 1934 Act provides for the recovery by the Holding Company of profits
realized by any officer, director or any person beneficially owning more than
ten percent of the Holding Company's Common Stock ("Section 16(b) Persons")
resulting from the purchase and sale or sale and purchase of the Holding
Company's Common Stock within any six-month period.
The SEC has adopted rules that provide exemption from the profit recovery
provisions of Section 16(b) for participant-directed employer security
transactions within an employee benefit plan, such as the Plan, provided certain
requirements are met. These requirements generally involve restrictions upon
the timing of elections to acquire or dispose of employer securities for the
accounts of Section 16(b) Persons.
Except for distributions of Common Stock due to death, disability,
retirement, termination of employment or under a qualified domestic relations
order, Section 16(b) Persons are required to hold shares of Common Stock
distributed from the Plan for six months following such distribution.
LEGAL OPINIONS
The validity of the issuance of the Common Stock will be passed upon by
Patton Boggs LLP, Washington, D.C., which firm acted as special counsel for the
Association in connection with the Association's Conversion from a mutual
savings and loan association to a stock savings and loan association.
S-15
<PAGE>
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF WARREN
401(K) SAVINGS PLAN
Investment Form
---------------
Name of Plan Participant:
------------------------------------------------------
Address:
------------------------------------------------------
------------------------------------------------------
Social Security Number:
------------------------------------------------------
1. INSTRUCTIONS. In connection with the proposed Conversion of First
------------
Federal Savings and Loan Association of Warren from a mutual savings and loan
association to a stock savings and loan association (the "Conversion"), First
Federal Savings and Loan Association of Warren 401(k) Savings Plan ("Plan") has
been amended to permit participants to direct their current account balances for
their Participant's Elective Account and Participant's Account into a new fund:
the Employer Stock Fund. The percentage of a participant's account transferred
at the direction of the participant into the Employer Stock Fund will be used to
purchase shares of common stock of First Place Financial Corp. (the "Common
Stock").
To direct a transfer of all or a part of the funds credited to your
accounts to the Employer Stock Fund, you should complete and file this form with
the Human Resources Department, no later than 12:00 Noon, Eastern Time, December
15, 1998. You will also need to change your investment allocations through the
telephone response system at (800) 544-6278 by 12:00 Noon, Eastern Time,
December 15, 1998. A representative for the Plan Administrator will retain a
copy of this form and return a copy to you. If you need any assistance in
completing this form or using the telephone response system, please contact the
Human Resources Department at (330) 373-1221. If you do not complete and return
this form to the Human Resources Department and change your allocation through
the telephone response system by 12:00 Noon, Eastern Time, December 15, 1998,
the funds credited to your accounts under the Plan will continue to be invested
in accordance with your prior investment direction, or in accordance with the
terms of the Plan if no investment direction has been provided.
2. INVESTMENT DIRECTIONS. I hereby authorize the Plan Administrator to
---------------------
direct the Trustee to reinvest the following percentage (in multiples of not
less than 1%) of my Elective Account and Participant's Account in the:
<TABLE>
<S> <C> <C>
a. Strong Discovery Fund ______%
b. Strong Government Securities Fund ______%
c. Strong Corporate Bond Fund ______%
d. Strong International Stock Fund ______%
e. Strong Asset Allocation Fund ______%
f. Strong Money Market Fund ______%
g. Strong Opportunity Fund ______%
h. Strong Short Term Bond Fund ______%
i. Strong Total Return Fund ______%
j. Aim Constellation Fund ______%
k. Aim Global Aggressive Growth A ______%
l. Aim Value A ______%
m. Employer Stock Fund ______%
</TABLE>
NOTE: The total percentage of directed investments stated above may not exceed
100%.
FOR THIS ELECTION TO BECOME EFFECTIVE, YOU MUST COMPLETE THIS INVESTMENT FORM
AND REALLOCATE YOUR ACCOUNTS THROUGH THE TELEPHONE RESPONSE SYSTEM. FAILURE TO
COMPLETE EITHER OF THESE STEPS WILL RESULT IN NO CHANGE TO YOUR INVESTMENT
DIRECTIONS.
S-16
<PAGE>
3. STATUS. Enter information below for all accounts you had at the
Eligibility Record Date (March 31, 1997), the Supplemental Eligibility Record
Date (September 30, 1998) and the Voting Record Date (October 31, 1998).
<TABLE>
<CAPTION>
===================================================================
<S> <C> <C>
Account Title
(Names on Account) Account Number Date Opened
- ---------------------- --------------------- ----------------------
- ---------------------- --------------------- ----------------------
- ---------------------- --------------------- ----------------------
- ---------------------- --------------------- ----------------------
- ---------------------- --------------------- ----------------------
===================================================================
</TABLE>
4. ACKNOWLEDGMENT OF PARTICIPANT. I understand that this Investment Form
shall be subject to all of the terms and conditions of the Plan. I acknowledge
that I have received a copy of the Prospectus and the Prospectus Supplement.
I UNDERSTAND THAT FOR MY DIRECTION TO BECOME EFFECTIVE I MUST CHANGE MY
INVESTMENT ALLOCATIONS THROUGH THE TELEPHONE RESPONSE SYSTEM PRIOR TO
12:00 Noon, DECEMBER 15, 1998
- -------------------------------------- -------------------------------------
Signature of Participant Date
- -----------------------------------------------------
ACKNOWLEDGMENT OF RECEIPT BY ADMINISTRATOR. This Investment Form was received
by the Plan Administrator and will become effective on the date noted below.
- ----------------------------- -----------------------------
Plan Administrator Date
THE PARTICIPATION INTERESTS REPRESENTED BY COMMON STOCK OFFERED HEREBY ARE
NOT DEPOSIT ACCOUNTS AND ARE NOT INSURED BY THE BANK INSURANCE FUND OR THE
SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENT AGENCY AND ARE NOT GUARANTEED BY THE COMPANY OR
ASSOCIATION. THE COMMON STOCK IS SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF THE PRINCIPAL INVESTED.
S-17
