<PAGE>
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 Section 240.14a-11(c) or Section 240.14a-12
First Place Financial Corp.
----------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(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)(4) 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:
---------------------------------------------------------------------
[_] 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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Notes:
<PAGE>
FIRST PLACE FINANCIAL CORP.
185 East Market Street
Warren, Ohio 44482
(330) 373-1221
May 19, 1999
Fellow Stockholders:
You are cordially invited to attend a special meeting of stockholders (the
"Special Meeting") of First Place Financial Corp. (the "Company"), the holding
company for First Federal Savings and Loan Association of Warren, which will be
held on July 2, 1999, at 2:00 p.m., Eastern Time, at the Park Hotel, 136 North
Park Avenue, Warren, Ohio.
The attached Notice of the Special Meeting and the Proxy Statement describe
the formal business to be transacted at the Special Meeting. Directors and
officers of the Company will be present at the Special Meeting to respond to any
questions that our stockholders may have regarding the business to be
transacted.
The only scheduled business of the Special Meeting is the approval of the
First Place Financial Corp. 1999 Incentive Plan ("Incentive Plan").
The Board of Directors of the Company has determined that approval of the
Incentive Plan at the Special Meeting is in the best interests of the Company
and its stockholders. For the reasons set forth in the Proxy Statement, the
Board unanimously recommends that you vote "FOR" approval of the Incentive Plan.
Whether or not you expect to attend, please sign and return the enclosed
proxy card promptly. Your cooperation is appreciated since a majority of the
common stock must be represented, either in person or by proxy, to constitute a
quorum for the conduct of business.
On behalf of the Board of Directors and all of the employees of the
Company, I thank you for your continued interest and support.
Sincerely yours,
/s/ Steven R. Lewis
Steven R. Lewis
President, Chief Executive Officer
and Director
<PAGE>
FIRST PLACE FINANCIAL CORP.
185 East Market Street
Warren, Ohio 44482
(330) 373-1221
__________________________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on July 2, 1999
__________________________
NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the "Special
Meeting") of First Place Financial Corp. (the "Company") will be held on July 2,
1999, at 2:00 p.m., Eastern Time, at the Park Hotel, 136 North Park Avenue,
Warren, Ohio.
The purpose of the Special Meeting is to consider and vote upon the
following matters:
1. The approval of the First Place Financial Corp. 1999 Incentive Plan;
and
2. Such other matters as may properly come before the meeting and at any
adjournments thereof, including whether or not to adjourn the meeting.
The Board of Directors has established May 5, 1999, as the record date for
the determination of stockholders entitled to receive notice of and to vote at
the Special Meeting and at any adjournments thereof. Only recordholders of the
Common Stock of the Company as of the close of business on such record date will
be entitled to vote at the Special Meeting or any adjournments thereof. In the
event there are not sufficient votes for a quorum or to approve the foregoing
proposal at the time of the Special Meeting, the Special Meeting may be
adjourned in order to permit further solicitation of proxies by the Company. A
list of stockholders entitled to vote at the Special Meeting will be available
at the executive offices of the Company, 185 East Market Street, Warren, Ohio
44482, for a period of ten days prior to the Special Meeting and will also be
available at the Special Meeting itself.
By Order of the Board of Directors
/s/ Dominique Stoeber
Dominique Stoeber
Corporate Secretary
Warren, Ohio
May 19, 1999
<PAGE>
FIRST PLACE FINANCIAL CORP.
_______________________
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
JULY 2, 1999
_______________________
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to stockholders of First Place
Financial Corp. (the "Company") in connection with the solicitation by the Board
of Directors ("Board of Directors" or "Board") of proxies to be used at a
special meeting of stockholders (the "Special Meeting"), to be held on July 2,
1999 at 2:00 p.m., Eastern Time, at the Park Hotel, 136 North Park Avenue,
Warren, Ohio and at any adjournments thereof. This Proxy Statement is first
being mailed to recordholders on or about May 19, 1999.
Regardless of the number of shares of common stock owned, it is important
that recordholders of a majority of the shares be represented by proxy or
present in person at the Special Meeting. Stockholders are requested to vote by
completing the enclosed proxy card and returning it signed and dated in the
enclosed postage-paid envelope. Stockholders are urged to indicate their vote in
the spaces provided on the proxy card. Proxies solicited by the Board of
Directors of the Company will be voted in accordance with the directions given
therein. Where no instructions are indicated, signed proxy cards will be voted
FOR the approval of the First Place Financial Corp. 1999 Incentive Plan (the
"Incentive Plan").
Other than the matters set forth on the attached Notice of Special Meeting
of Stockholders, the Board of Directors knows of no additional matters that will
be presented for consideration at the Special Meeting. Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Special Meeting and at any adjournments
thereof, including whether or not to adjourn the Special Meeting.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Secretary of the Company, by delivering to
the Company a duly executed proxy bearing a later date, or by attending the
Special Meeting and voting in person. However, if you are a stockholder whose
shares are not registered in your own name, you will need appropriate
documentation from your recordholder to vote personally at the Special Meeting.
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Kissel-
Blake, Inc., a proxy solicitation firm, will assist the Company in soliciting
proxies for the Special Meeting and will be paid a fee of $4,500, plus out-of-
pocket expenses. Proxies may also be solicited personally or by telephone by
directors, officers and other employees of the Company and its subsidiary, First
Federal Savings and Loan
1
<PAGE>
Association of Warren (the "Association"), without additional compensation
therefor. The Company will also request persons, firms and corporations holding
shares in their names, or in the name of their nominees, which are beneficially
owned by others, to send proxy material to and obtain proxies from such
beneficial owners, and will reimburse such holders for their reasonable expenses
in doing so.
Voting Securities
The securities which may be voted at the Special Meeting consist of shares
of common stock of the Company ("Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Special Meeting, except
as described below.
The close of business on May 5, 1999 has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
stockholders of record entitled to notice of and to vote at the Special Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 11,241,250 shares.
As provided in the Company's Certificate of Incorporation, recordholders of
Common Stock who beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote in respect of the shares
held in excess of the Limit, and such shares held in excess of the Limit are
treated as not outstanding for voting purposes. A person or entity is deemed to
beneficially own shares owned by an affiliate of, as well as, by persons acting
in concert with, such person or entity. The Company's Certificate of
Incorporation authorizes the Board of Directors (i) to make all determinations
necessary to implement and apply the Limit, including determining whether
persons or entities are acting in concert, and (ii) to demand that any person
who is reasonably believed to beneficially own stock in excess of the Limit to
supply information to the Company to enable the Board of Directors to implement
and apply the Limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Special
Meeting. In the event there are not sufficient votes for a quorum or to approve
or ratify any proposal at the time of the Special Meeting, the Special Meeting
may be adjourned in order to permit the further solicitation of proxies.
As to the approval of the Incentive Plan submitted for shareholder action
set forth in the Proposal, the proxy card being provided by the Board of
Directors enables a stockholder to check the appropriate box on the proxy card
to (i) vote "FOR" the Proposal; (ii) vote "AGAINST" the Proposal; or (iii)
"ABSTAIN" from voting on the Proposal. Under Delaware law, an affirmative vote
of the holder of a majority of the shares of Common Stock present in person or
by proxy at the Special Meeting at which a quorum is present and entitled to
vote on the Proposal is required to constitute stockholder approval of the
Proposal. Shares as to which the "ABSTAIN" box has been selected on the proxy
card with respect to the Proposal will be counted as present and entitled to
vote and have the effect of a vote against the matter for which the "ABSTAIN"
box has been selected. In contrast, shares underlying broker non-votes are not
counted as present and entitled to vote on the
2
<PAGE>
Proposal and have no effect on the vote on the Proposal. For further information
on the vote required to implement the Proposal during the first year following
the mutual-to-stock conversion of the Association (the "Conversion"), see the
discussion under the Proposal herein.
Proxies solicited hereby are to be returned to the Company's transfer
agent, Registrar and Transfer Company, and will be tabulated by inspectors of
election designated by the Board of Directors, who will not be employed by, or
be a director of, the Company or any of its affiliates. After the final
adjournment of the Special Meeting, the proxies will be returned to the Company
for safekeeping.
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date or as disclosed in certain reports
received to date regarding such ownership filed by such persons with the Company
and with the Securities and Exchange Commission ("SEC"), in accordance with
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended
("Exchange Act"). Other than those persons listed below, the Company is not
aware of any person, as such term is defined in the Exchange Act, that owns more
than 5% of the Company's Common Stock as of the Record Date.
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Beneficial
Title of Class of Beneficial Owner Ownership Percent of Class
-------------- ------------------- --------- ----------------
<S> <C> <C> <C>
Common Stock First Federal Savings and Loan 899,300(1) 8.0%
Association of Warren Employee Stock
Ownership Plan ("ESOP")
185 East Market Street
Warren, Ohio 44482
Common Stock First Federal of Warren Community 802,625(2) 7.1%
Foundation
185 East Market Street
Warren, Ohio 44482
</TABLE>
(1) Shares of Common Stock were acquired by the ESOP in the Association's stock
conversion. The ESOP Committee administers the ESOP. The ESOP Trustee must
vote all allocated shares held in the ESOP in accordance with the
instructions of the participants. At May 5, 1999, no shares had been
allocated under the ESOP. Each participant, however, will be deemed to have
one share of Common Stock in the ESOP allocated to such participant's
account for the purpose of providing voting instructions to the ESOP
Trustee. Under the ESOP, unallocated shares and allocated shares as to
which voting instructions are not given by participants are to be voted by
the ESOP Trustee in a manner calculated to most accurately reflect the
instructions received from participants regarding the allocated stock so
long as such vote is in accordance with the fiduciary provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
(2) First Federal of Warren Community Foundation is a private foundation that
was funded with 802,625 shares of Common Stock of the Company in connection
with the Conversion. Pursuant to a regulatory condition imposed by the
Office of Thrift Supervision ("OTS") in approving the formation and funding
of the Foundation, unless the condition is waived by the OTS, all shares of
Common Stock held by the Foundation must be voted in the same ratio as all
other shares of Common Stock on all proposals considered by stockholders of
the Company.
3
<PAGE>
Security Ownership of Directors and Management
The following table sets forth information, as of the Record Date, as to
shares of Common Stock beneficially owned by directors individually and all
directors and executive officers as a group. Ownership information is based
upon information furnished by the respective individuals.
<TABLE>
<CAPTION>
Shares of
Common Stock
Beneficially Percent of
Name Title (1) Owned(2)(3) Class(4)
- ---- ----------- --------------- ---------
<S> <C> <C> <C>
DIRECTORS AND EXECUTIVE
OFFICERS
Paul A. Watson Chairman of the Boards of 52,500 *
Directors(5)
Steven R. Lewis President, Chief Executive 39,423 *
Officer and Director
George J. Gentithes Director 60,000 *
Robert P. Grace Director 25,000 *
Thomas M. Humphries Director 25,000 *
Robert S. McGeough Director 26,250 *
E. Jeffrey Rossi Director 39,518 *
William W. Watson Director 37,500 *
All Directors and Executive Officers as a ___ 342,783 3.05%
Group (13 persons)
</TABLE>
______________
* Does not exceed 1.0% of the Company's voting securities.
(1) Titles are for both the Company and the Association unless otherwise
indicated.
(2) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting or dispositive power as to shares reported
herein (except as noted).
(3) Does not include options or awards to be granted under the Incentive Plan,
which is subject to stockholder approval. For a discussion of the options
and awards that are intended to be granted under the Incentive Plan, see
"The Proposal."
(4) As of the Record Date, there were 11,241,250 shares of Common Stock
outstanding.
(5) The Chairman of the Board of Directors has been designated as an executive
officer of the Company and the Association.
4
<PAGE>
Interest in Certain Persons in Matters to be Acted Upon
Upon obtaining stockholder approval, the Company intends to grant directors
and selected officers and employees of the Association and the Company stock
options and awards in the form of shares of Common Stock under the Incentive
Plan, being presented for approval in the Proposal.
Directors' Compensation
Directors' Fees. Currently, all directors of the Association, with
exception of Mr. Lewis, receive an annual retainer of $6,000. In addition,
such directors receive a fee of $300 ($350 for the Chairman of the Board) for
each regular and special Board meeting which they attend. Such directors also
receive a fee of $90 ($150 in the case of the Audit Committee and the Asset
Classification Committee) for each committee meeting attended. Directors of the
Company receive no compensation for their services as such.
Incentive Plan. The Company is presenting to shareholders for approval the
Incentive Plan, under which all directors of the Company and the Association are
eligible to receive awards. See the Proposal for a summary of the material
terms of the Incentive Plan.
5
<PAGE>
Summary Compensation Table
The following shows, for the fiscal year ended June 30, 1998, the cash
compensation paid by the Company and the Association as well as certain other
compensation paid for that year, to the Chief Executive Officer of the Company
and the Association. No other executive officers earned in excess of $100,000 in
salary and bonus in fiscal 1998.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
--------------------------------------
Awards Payouts
--------------------- --------
Annual Compensation (1)
----------------------------
Other Restricted Securities All
Annual Stock Underlying LTIP Other
Name and Compensation Awards(3) Options/SARs Payouts Compensation
Principal Position Year Salary ($) Bonus ($) ($)(2) ($) (#)(3) ($) ($)(4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Steven R. Lewis 1998 $120,162 $12,480 $ -- -- -- -- $2,603
President, Chief
Executive
Officer and
Director
</TABLE>
_____________________________
(1) Under Annual Compensation, the column titled "Salary" includes amounts
deferred by the Chief Executive Officer under the Association's 401(k) Plan.
(2) For 1998, there were no (a) perquisites over the lesser of $50,000 or 10% of
the individual's total salary and bonus for the year; (b) payments of above-
market preferential earnings on deferred compensation; (c) payments of
earnings with respect to long-term incentive plans prior to settlement or
maturation; (d) tax payments reimbursements; or (e) preferential discounts
on stock.
(3) For 1998, the Association had no restricted stock or stock-related plans in
existence.
(4) Other compensation includes the Association's matching contribution under
the Association's 401(k) Plan.
6
<PAGE>
Employment and Change in Control Agreements
The Association and the Company have entered into employment agreements
with Steven R. Lewis, the President and Chief Executive Officer of the Company
and the Association (the "Executive") (collectively, the "Employment
Agreements"). These Employment Agreements are intended to ensure that the
Association and the Company will be able to maintain a stable and competent
management base. The continued success of the Association and the Company
depends to a significant degree on the skills and competence of the Executive.
The Employment Agreements provide for a three-year term. The Employment
Agreements provide that, on or before the third anniversary date and continuing
each third anniversary date thereafter, the Board of Directors will review the
agreement and the Executive's performance for purposes of determining whether to
extend the agreement for an additional three years so that the remaining term
shall be three years, unless written notice of non-renewal is given by the Board
of Directors after conducting a performance evaluation of the Executive. The
agreements provide that the Executive's base salary will be reviewed annually.
The current base salary under the Employment Agreements for Mr. Lewis is
$150,000. In addition to the base salary, the Employment Agreements provide for,
among other things, participation in stock benefit plans and other fringe
benefits applicable to executive personnel. The agreements provide for
termination by the Association or the Company for cause as defined in the
Employment Agreements, at any time. In the event the Association or the Company
chooses to terminate the Executive's employment for any reasons other than for
cause, or in the event of the Executive's resignation from the Association and
the Company upon: (i) failure to re-elect the Executive to his current offices;
(ii) a material change in the Executive's functions, duties or responsibilities;
(iii) a relocation of the Executive's principal place of employment by more than
50 miles; (iv) a material reduction in the benefits and perquisites to the
Executive from those being provided as of the effective date of the Employment
Agreements, unless consented to by the Executive; (v) liquidation or dissolution
of the Association or the Company; or (vi) a breach of the agreement by the
Association or the Company, the Executive or, in the event of death, the
Executive's beneficiary, would be entitled to receive an amount equal to the
remaining base salary payments due to the Executive and the contributions that
would have been made on the Executive's behalf to any employee benefit plans of
the Association or the Company during the remaining term of the Employment
Agreements. The Association and the Company would also continue and pay for the
Executive's life, health and dental coverage for the remaining term of the
Employment Agreements. Upon any termination of the Executive, the Executive is
subject to a one-year non-competition agreement.
Under the Employment Agreements, if involuntary termination or under
certain circumstances, voluntary termination follows a change in control of the
Association or the Company as defined in the Employment Agreements, the
Executive, or, in the event of the Executive's death, his beneficiary, would be
entitled to a severance payment equal to the greater of: (i) the payments due
for the remaining terms of the agreement; or (ii) three times the average of the
five preceding taxable years' annual compensation. The Association and the
Company would also continue the Executive's life, health and dental coverage for
36 months. Notwithstanding that both the Association and Company Employment
Agreements provide for a severance payment in the event of a change in control,
the Executive would only be entitled to receive a severance payment under
7
<PAGE>
one agreement. For the purposes of determining the term of the Association
Agreement and the benefits to be paid as described in this paragraph, the Board
of Directors of the Association shall annually review the agreement and the
Executive's performance for the purpose of determining whether to deem the
Agreement extended for an additional year such that the remaining term for these
purposes shall be three years. The Company Employment Agreement shall be deemed
extended for these purposes on a daily basis unless written notice of non-
renewal is given by the Board of Directors.
Payments to the Executive under the Association's Employment Agreement will
be guaranteed by the Company in the event that payments or benefits are not paid
by the Association. Payment under the Company's Employment Agreement would be
made by the Company. All reasonable costs and legal fees paid or incurred by the
Executive pursuant to any dispute or question of interpretation relating to the
Employment Agreements shall be paid by the Association or Company, respectively,
if the Executive is successful on the merits pursuant to a legal judgment,
arbitration or settlement. The Employment Agreements also provide that the
Association and Company shall indemnify the Executive to the fullest extent
allowable under federal and Delaware law, respectively. In the event of a change
in control of the Association or the Company, the total amount of payments due
under the Employment Agreements, based solely on the current base salary to be
paid to Mr. Lewis excluding any benefits under any employee benefit plan which
may be payable, would be approximately $450,000.
The Association and the Company have entered into two-year change in
control agreements ("CIC Agreements") with certain other executive officers (the
"Officers") of the Company and the Association, none of whom will be covered by
employment contracts. The CIC Agreements provide that commencing on the first
anniversary date and continuing on each anniversary thereafter, the
Association's CIC Agreements may be renewed by the Board of Directors for an
additional year. The Company's CIC Agreements are similar to the Association's
CIC Agreements except that the term of the Company's CIC Agreements shall be
extended on a daily basis. The CIC Agreements provide that in the event
involuntary termination or, in certain circumstances, voluntary termination
follows a change in control of the Association or the Company, the Officer would
be entitled to receive a severance payment equal to two times the Officer's
average annual compensation for the five years preceding the termination. The
Association would also continue, and pay for, the Officer's life and health
insurance coverage for 24 months following termination. Payments to the Officer
under the Association's CIC Agreements are guaranteed by the Company in the
event that payments of benefits are not paid by the Association.
In the event of a change in control, total payments to the Officers under
the CIC Agreements, based solely on current base salary and excluding any
benefits under any employee benefit plan which may be payable, would be
approximately $750,000.
Insurance Plans
All full-time employees of the Association, upon completion of the
applicable introductory period, are covered as a group for comprehensive
hospitalization, including major medical and long-term disability insurance.
Life insurance is also provided to employees and directors.
8
<PAGE>
Benefit Plans
Retirement Plan. The Association sponsors a defined benefit pension plan
known as the First Federal Savings and Loan Association of Warren Defined
Benefit Pension Plan ("Retirement Plan"). The Retirement Plan is intended to
satisfy the tax qualification requirements of Section 401(a) of the Code. The
Board of Directors has voted to terminate the Retirement Plan effective June 30,
1999. The anticipated cost to the Association of terminating the Retirement Plan
is currently estimated to be approximately $750,000; however, as the cost to
terminate the Retirement Plan is dependent on circumstances on the effective
date of termination, there can be no assurances that the actual cost to the
Association will not exceed that amount.
Employees are eligible to participate in the Retirement Plan on the April 1
or October 1 coincident with or otherwise next following the later of an
employee's 21st birthday and the one year anniversary of the employee's date of
employment, regardless of the number of hours of service credited. The
Retirement Plan defines "Employee" as any individual employed by the Association
or its affiliates or any leased employee who is deemed to be an employee under
Section 414(n) of the Code but excludes any person who is an independent
contractor.
The Retirement Plan provides for a normal retirement benefit to
participants upon retirement at or after the later of (i) attainment of age 65
or (ii) the fifth anniversary of initial participation in the plan. The annual
normal retirement benefit for a participant under the Retirement Plan equals 45%
of a participant's "Average Monthly Compensation" (as defined in the plan) plus
16% of the participant's "Average Monthly Compensation" in excess of one-twelfth
"Covered Compensation" (as defined in the plan). However, if projected years of
service to normal retirement age are less than twenty-five, the percentage of
Average Monthly Compensation and the excess percentage will be reduced by one-
twenty-fifth for each year of service less than twenty-five.
A participant may also become eligible to receive an early retirement
benefit upon the (i) attainment of age 60; and (ii) completion of 15 years of
service. Early retirement benefits are generally calculated in the same manner
as a participant's normal retirement benefits but may be actuarially reduced if
paid prior to the participant's "Normal Retirement Date" (as defined by the
plan). Participants generally become vested in their benefits under the
Retirement Plan upon completing at least five years of Service.
The plan generally pays benefits in the form of a straight life annuity
with respect to unmarried participants and in the form of a joint and 50%
survivor annuity (with the spouse as designated beneficiary) for married
participants. Other forms of benefit payments, including a lump sum, are
available under the Retirement Plan.
The following table sets forth the estimated annual benefits payable under
the Retirement Plan upon a participant's retirement at age 65 under the most
advantageous plan provisions available at various levels of compensation and
years of service. Covered compensation under the Retirement Plan basically
includes the base salary for participants, and does not consider any cash
9
<PAGE>
bonus amounts. The benefits listed in the table below for the Retirement Plan
are not subject to a deduction for social security benefits or any other offset
amount.
<TABLE>
<CAPTION>
Years of Service
Final Average --------------------------------------------------------------------------------------------
Compensation 15 20 25 30 35 40
- ----------------------- ------------ ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 20,000 $ 5,400 $ 7,200 $ 9,000 $ 9,000 $ 9,000 $ 9,000
30,000 8,100 10,800 13,500 13,500 13,500 13,500
50,000 13,500 18,000 22,500 22,500 22,500 22,500
75,000 21,102 28,137 35,171 35,171 35,171 35,171
100,000 30,252 40,337 50,421 50,421 50,421 50,421
150,000 48,552 64,737 80,921 80,921 80,921 80,921
200,000 52,212 69,617 87,021 87,021 87,021 87,021
250,000 52,212 69,617 87,021 87,021 87,021 87,021
300,000 52,212 69,617 87,021 87,021 87,021 87,021
and over(1)
</TABLE>
___________
(1) Under current law, the final average compensation for computing benefits
under the Retirement Plan cannot exceed $160,000 (indexed for inflation).
The approximate years of service, as of June 30, 1998, for the named
executive officer is as follows:
Named Executive Officer Years of Service
----------------------- ----------------
Steven R. Lewis 14
401(k) Plan. The Association also sponsors the First Federal Savings and
Loan Association of Warren 401(k) Savings Plan ("401(k) Plan"), a tax-qualified
profit sharing and salary reduction plan under Sections 401(a) and 401(k) of the
Code. Generally, employees other than employees who are collective bargaining
unit employees and employees who are non-resident aliens become eligible to
participate in the 401(k) Plan upon the attainment of age 21 and the completion
of one year of service. Under the 401(k) Plan, participants may make salary
reduction contributions equal to 2% to 12% of their compensation or the legally
permissible limit (currently $10,000). The Association matches of the
compensation deferred by a participant with respect to amounts deferred up to 6%
of annual compensation.
Participants are always 100% vested in their salary reduction
Contributions. Participants become 100% vested in Association matching
contributions after the completion of five years of service with the
Association. A participant who terminates employment due to death, disability,
or retirement immediately becomes fully vested in the Association's matching
contributions credited to his or her account regardless of the participant's
years of service. A participant's vested portion
10
<PAGE>
of his or her 401(k) Plan account is distributable from the 401(k) Plan upon the
termination of the participant's employment, death, disability or retirement. In
addition, a participant may be eligible for hardship withdrawals and loans under
the 401(k) Plan. Any distribution made to a participant prior to the
participant's attainment of age 59 is subject to a 10% excise tax in addition to
federal income taxes. The Board of Directors may at any time discontinue the
Association's contributions to employee accounts. For the years ended June 30,
1998, 1997 and 1996, the Association's matching contributions to the 401(k) Plan
were $56,000, $52,000 and $48,000, respectively.
The 401(k) Plan currently permits participants to invest their 401(k) Plan
account balances in several types of investment funds. In connection with the
Conversion, the Association amended the 401(k) Plan to permit plan participants
to invest their account balances in Company Common Stock through an employer
stock fund (the "Employer Stock Fund"). The Employer Stock Fund will be invested
primarily in shares of Common Stock. The trustee may follow the voting
directions of 401(k) Plan participants investing in the Employer Stock Fund;
provided that the trustee determines such voting is consistent with its
fiduciary duties.
ESOP. In connection with the Conversion, the Association also implemented
an employee stock ownership plan ("ESOP"). The ESOP is a tax-qualified
retirement plan designed to invest primarily in employer securities. The
Association will make contributions to the ESOP on behalf of all ESOP
participants. The ESOP will provide eligible employees with the opportunity to
receive a Association funded retirement benefit based on the value of the Common
Stock. The eligibility requirements for the ESOP are similar to those of the
401(k) Plan.
The ESOP purchased 8.0%, or 899,300 shares, of the Common Stock issued in
connection with the Conversion, including shares issued to the Foundation.
Shares of Common Stock purchased by the ESOP with funds borrowed from the
Company are pledged as collateral for the loan, and are held in a suspense
account until released for allocation among participants as the loan is repaid.
The trustee will release the pledged shares annually from the suspense account
in an amount proportional to the repayment of the ESOP loan for each plan year.
The released shares will then be allocated to the accounts of ESOP participants
as follows: First, for each eligible ESOP participant, a portion of the shares
released for the plan year will be allocated to a special "matching" account
under the ESOP equal in value to the amount of matching contribution, if any,
and/or if applicable, that such participant would be entitled to under the terms
of the 401(k) Plan for the plan year. Second, the remaining shares which have
been released for the plan year will be allocated to each eligible participant's
general ESOP account based on the ratio of each such participant's base
compensation to the total base compensation of all eligible ESOP participants.
Participants will vest in their ESOP account at a rate of 20% annually
commencing after the completion of two years of service, with 100% vesting upon
the completion of six years of service. Participants will also become fully
vested in their accounts if their service terminates due to death, retirement,
disability, or upon the occurrence of a change in control. The ESOP may
reallocate forfeitures among remaining participants, in the same proportion as
contributions. Benefits under the ESOP will become payable upon death,
retirement, early retirement, or separation from service. The annual
contributions to the ESOP are not fixed, so benefits payable under the ESOP
cannot be estimated.
11
<PAGE>
PROPOSAL: APPROVAL OF THE FIRST PLACE FINANCIAL CORP.
1999 INCENTIVE PLAN
The Board of Directors of the Company is presenting for stockholder
approval the Incentive Plan in the form attached hereto as Appendix A. The
purpose of the Incentive Plan is to attract and retain qualified personnel in
key positions, provide officers, employees and directors with a proprietary
interest in the Company as an incentive to contribute to the success of the
Company, promote the attention of management to other stockholder's concerns and
reward employees for outstanding performance. The following is a summary of the
material terms of the Incentive Plan which is qualified in its entirety by the
complete provisions of the Incentive Plan attached as Appendix A.
General
The Incentive Plan authorizes the granting of options to purchase Common
Stock and option-related awards and awards of Common Stock (collectively,
"Awards"). Subject to certain adjustments to prevent dilution of Awards to
participants, the maximum number of shares reserved for Awards under the
Incentive Plan is 1,573,775 shares, provided such number is not in excess of 14%
of the outstanding shares of the Common Stock as of the effective date of the
Incentive Plan. The maximum number of shares reserved for purchase pursuant to
the exercise of options and option-related Awards which may be granted under the
Incentive Plan is 1,124,125 shares, provided such number is not in excess of 10%
of the outstanding shares of Common Stock as of the effective date of the
Incentive Plan. The maximum number of the shares reserved for the award of
shares of Common Stock ("Stock Awards") is 449,650 shares, provided such number
is not in excess of 4% of the outstanding shares of Common Stock as of the
effective date of the Incentive Plan. All officers, other employees and
directors of the Company and its affiliates are eligible to receive Awards under
the Incentive Plan. The Incentive Plan will be administered by a committee (the
"Committee"). Authorized but unissued shares or shares previously issued and
reacquired by the Company may be used to satisfy Awards under the Incentive
Plan. The exercise of options granted under the Incentive Plan will result in
an increase in the number of shares outstanding, and will have a dilutive effect
on the holdings of existing stockholders. If shares awarded pursuant to the
grant of Stock Awards are granted from authorized but unissued shares, those
grants will also have a dilutive effect on the holdings of existing
stockholders. The Incentive Plan will be in effect for a period of ten years
from the date of approval by the shareholders.
Awards
Types of Awards. The Incentive Plan authorizes the grant of Awards to
officers, employees and directors in the form of: (i) options to purchase the
Company's Common Stock intended to qualify as incentive stock options under
Section 422 of the Code (options which afford tax benefits to the recipients
upon compliance with certain conditions and which do not result in tax
deductions to the Company), referred to as "Incentive Stock Options"; (ii)
options that do not so qualify (options which do not afford income tax benefits
to recipients, but which may provide tax deductions to the
12
<PAGE>
Company), referred to as "Non-statutory Stock Options"; (iii) limited rights
which are exercisable only upon a change in control of the Company (as defined
in the Incentive Plan) ("Limited Rights"); and (iv) Stock Awards, which provide
a grant of Common Stock that vests over time.
Options. Assuming the requisite stockholder approval is obtained for the
Incentive Plan, the Board of Directors intends to grant options to employees and
executive officers for 671,000 shares (with Limited Rights) and options to
directors who are not also executive officers for 336,600 shares (with Limited
Rights). Options for 116,525 shares will be reserved and available under the
Incentive Plan for future grants to directors, officers and employees. All
options granted to officers and employees will be qualified as Incentive Stock
Options to the extent permitted under Section 422 of the Code. Incentive Stock
Options, at the discretion of the Committee with the concurrence of the holder,
may be converted into Non-Statutory Stock Options. Pursuant to the Incentive
Plan, the Committee has the authority to determine the date or dates on which
each stock option shall become exercisable; provided, however, under the terms
of the Incentive Plan any stock option granted prior to December 31, 1999 may
not vest in annual installments of greater than 20% of the number of shares
underlying the options awarded, commencing at least one year from the date of
grant, and the vesting of such options may not be accelerated except in case of
death or disability. The Board of Directors intends to amend this feature in
the future. See "New Plan Benefits" below. The exercise price of all Incentive
Stock Options must be 100% of the fair market value of the underlying Common
Stock at the time of grant, except as provided below. The exercise price may be
paid in cash or in Common Stock at the discretion of the Committee. See "Payout
Alternative" and "Alternative Option Payments."
Incentive Stock Options may only be granted to officers and employees. In
order to qualify as Incentive Stock Options under Section 422 of the Code, the
exercise price must not be less than 100% of the fair market value on the date
of grant and the term of the option may not exceed ten years from the date of
grant. Incentive Stock Options granted to any person who is the beneficial
owner of more than 10% of the outstanding voting stock may be exercised only for
a period of five years from the date of grant and the exercise price must be at
least equal to 110% of the fair market value of the underlying Common Stock on
the date of grant.
Termination of Employment or Service. Unless otherwise determined by the
Committee, upon termination of an officer's or employee's services for any
reason other than death, disability or termination for cause, the Incentive
Stock Options shall be exercisable for a period of three months following
termination, except that in the event of termination of a participant's
employment due to retirement, the participant shall have up to one year
following the participant's cessation of employment to exercise any Incentive
Stock Options exercisable on that date and if exercised after three months
following termination due to retirement, the Incentive Stock Options shall be
redesignated by the Committee as Non-statutory Stock Options. If an officer or
employee continues to serve as a consultant to or on the Board of Directors of
the Company or the Association, the officer or employee will not be deemed to
have retired, and the stock options shall continue to vest. In the event of
termination for cause, all rights under any Incentive Stock Options granted
shall expire immediately upon termination. Notwithstanding the foregoing, in
the event of death or disability, options will become fully vested and shall be
exercisable for up to one year thereafter.
13
<PAGE>
Unless otherwise determined by the Committee, upon termination of an
officer's, an employee's or a director's services for any reason other than
death, disability or termination for cause, the Non-statutory Stock Options
shall be exercisable for a period of three months following termination, except
that in the event of termination of a participant's employment or service due to
retirement, the participant shall have up to one year following the
participant's cessation of employment or service to exercise any Non-statutory
Stock Options. If an officer or employee continues to serve as a consultant to
or on the Board of Directors of the Company or the Association, the officer or
employee will not be deemed to have retired, and the Non-statutory Stock Options
will continue to vest according to their original schedule. All Non-statutory
Stock Options granted to a director shall continue to vest regardless of whether
the director resigns from the Board of Directors, provided the director is
elected as a director emeritus or serves as a consultant or advisory director to
the Association or Company.
Limited Rights. Limited Rights are related to specific options granted and
become exercisable in the event of a change in control of the Association or the
Company. Upon exercise, the option will be entitled to receive in lieu of
purchasing the stock underlying the option, a lump sum cash payment equal to the
difference between the exercise price of the related option and the fair market
value of the shares of Common Stock subject to the option on the date of
exercise of the right less any applicable tax withholding.
Option Grants. It is currently intended that the options proposed to be
granted will include Limited Rights and will vest and become exercisable on a
cumulative basis in equal installments over five (5) years commencing one year
from the date of grant; provided, however, that all options, whether or not then
exercisable, will be immediately exercisable in the event the optionee's
employment or service is terminated due to death or disability. The exercise
price of all such options will be 100% of the fair market value of the
underlying Common Stock at the time of grant, which is intended to be the date
of the Special Meeting. See "New Plan Benefits" below for information
concerning options intended to be granted under the Incentive Plan, assuming
stockholder approval.
As of May 10, 1999, the closing price per share of Common Stock, as
reported on the Nasdaq National Market, was $11 9/16.
Stock Awards. The Incentive Plan also authorizes the granting of Stock
Awards to officers, employees and directors. The Committee has the authority to
determine the dates on which Stock Awards granted to an officer, employee or
director will vest; provided, however, that any Stock Award granted prior to
December 31, 1999 may not vest at a rate greater than 20% per year, commencing
at least one year from the date of grant and the vesting of any Stock Award may
not be accelerated except in the case of death or disability. The Board of
Directors intends to amend this feature in the future. See "New Plan Benefits"
below. All Stock Award grants will immediately vest upon termination of
employment due to death or disability. If an officer or employee retires but
continues to serve as a consultant to or on the Board of Directors of the
Company or the Association, or if a director retires from the Board of Directors
but is elected as a director emeritus or serves as a consultant or advising
director, the officer, employee or director will not be deemed to have retired,
and the Stock Awards shall continue to vest. An agreement setting forth the
terms of the Stock
14
<PAGE>
Awards ("Stock Award Agreement") shall set forth the vesting period. A Stock
Award may only be granted from the shares reserved and available for grant under
the Incentive Plan.
Stock Awards are generally nontransferable and nonassignable as provided in
the Incentive Plan. The Committee has the power, under the Incentive Plan, to
permit transfers. When plan shares are distributed in accordance with the
Incentive Plan, the recipients will also receive amounts equal to accumulated
cash and stock dividends (if any) with respect thereto plus earnings thereon
minus any required tax withholding amounts. The trustee shall direct the voting
of shares of Common Stock held in the trust which have not vested or which have
not been allocated in a manner which reflects the best interests of the
participants.
Tax Treatment
Stock Options. An optionee will generally not be deemed to have recognized
taxable income upon grant or exercise of any Incentive Stock Option, provided
that shares transferred in connection with the exercise are not disposed of by
the optionee for at least one year after the date the shares are transferred in
connection with the exercise of the option and two years after the date of grant
of the option. If the holding periods are satisfied, upon disposal of the
shares, the aggregate difference between the per share option exercise price and
the fair market value of the Common Stock is recognized as income taxable at
long term capital gains rates. No compensation deduction may be taken by the
Company as a result of the grant or exercise of Incentive Stock Options,
assuming these holding periods are met.
In the case of the exercise of a Non-statutory Stock Option, an optionee
will be deemed to have received ordinary income upon exercise of the stock
option in an amount equal to the aggregate amount by which the per share
exercise price is exceeded by the fair market value of the Common Stock. In the
event shares received through the exercise of an Incentive Stock Option are
disposed of prior to the satisfaction of the holding periods (a "disqualifying
disposition"), the exercise of the option will be treated as the exercise of a
Non-statutory Stock Option, except that the optionee will recognize the ordinary
income for the year in which the disqualifying disposition occurs. The amount
of any ordinary income deemed to have been received by an optionee upon the
exercise of a Non-statutory Stock Option or due to a disqualifying disposition
will be a deductible expense of the Company for tax purposes.
In the case of Limited Rights, the option holder would have to include the
amount paid to him upon exercise in his gross income for federal income tax
purpose in the year in which the payment is made and the Company would be
entitled to a deduction for federal income tax purposes of the amount paid.
Stock Awards. When shares of Common Stock, as Stock Awards, are
distributed, the recipient is deemed to receive ordinary income equal to the
fair market value of such shares at the date of distribution plus any dividends
and earnings on such shares (provided such date is more than six months after
the date of grant) and the Company is permitted a commensurate compensation
expense deduction for income tax purposes.
15
<PAGE>
Payout Alternatives
The Committee has the sole discretion to determine what form of payment it
shall use in distributing payments for all Awards. If the Committee requests
any or all participants to make an election as to form of payment, it shall not
be considered bound by the election. Any shares of Common Stock tendered in
payment of an obligation arising under the Incentive Plan or applied to tax
withholding amounts shall be valued at the fair market value of the Common
Stock. The Committee may use treasury stock, authorized but unissued stock or
it may direct the market purchase of shares of Common Stock to satisfy its
obligations under the Incentive Plan. The Committee, in its discretion, may
permit a participant to elect to defer receipt of all or any part of any cash or
stock payment under the Incentive Plan, or the Committee may determine to defer
receipt by some or all participants, of all or part of any such payment. The
Committee shall determine the terms and conditions of any such deferral.
Alternate Option Payments
The Committee also has the sole discretion to determine the form of payment
for the exercise of an option. The Committee may indicate acceptable forms in
the Award Agreement covering such options or may reserve its decision to the
time of exercise. No option is to be considered exercised until payment in full
is accepted by the Committee. The Committee may permit the following forms of
payment for options: (a) in cash or by certified check; (b) through borrowed
funds, to the extent permitted by law; or (c) by tendering previously acquired
shares of Common Stock. Any shares of Common Stock tendered in payment of the
exercise price of an option shall be valued at the Fair Market Value of the
Common Stock on the date prior to the date of exercise.
Amendment
The Board of Directors may amend the Incentive Plan in any respect, at any
time, provided that no amendment may affect the rights of an Awardholder without
his or her permission. The Board of Directors intends to amend the Plan in the
future. See "New Plan Benefits" below.
Adjustments
In the event of any change in the outstanding shares of Common Stock of the
Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Company, or in the event a
capital distribution is made, the Committee may make such adjustments to
previously granted Awards, to prevent dilution, diminution or enlargement of the
rights of the Awardholder. All Awards under this Incentive Plan shall be
binding upon any successors or assigns of the Company.
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<PAGE>
Nontransferability
Unless determined otherwise by the Committee, no Award under the Incentive
Plan shall be transferable by the recipient other than by will or the laws of
intestate succession or pursuant to a qualified domestic relations order. With
the consent of the Committee, an employee or Outside Director may designate a
person or his or her estate as beneficiary of any award to which the recipient
would then be entitled, in the event of the death of the employee. The
Committee may, however, in its sole discretion, permit transferability or
assignment of a Non-statutory Stock Option if such transfer or assignment is, in
its sole determination, for valid estate planning purposes and such transfer or
assignment is permitted under the Code and Rule 16b-3 under the Exchange Act.
The transfer or assignment of any Non-statutory Stock Options shall be subject
to all of the terms and conditions applicable to such Non-statutory Stock
Options immediately prior to the transfer or assignment and shall be subject to
any other conditions proscribed by the Committee with respect to such Non-
statutory Stock Options.
Stockholder Approval
The Incentive Plan complies with the regulations of the Office of Thrift
Supervision ("OTS"). The OTS has not endorsed or approved the Incentive Plan.
Pursuant to OTS regulations, the Incentive Plan may not be implemented during
the first year after the Conversion unless the affirmative vote of the holders
of a majority of the total votes eligible to be cast at this Special Meeting is
received. If such approval is not obtained, but the Incentive Plan receives the
affirmative vote of a majority of the shares present at the Special Meeting and
eligible to be cast on the Proposal, the Incentive Plan will not become
effective at this time, but will become effective immediately following a period
of one year after the Conversion without further stockholder approval. The
Board of Directors also could determine to have the Incentive Plan become
effective (one year after the Conversion) even if the Incentive Plan does not
receive the requisite affirmative vote of stockholders at this Special Meeting.
In the absence of stockholder approval, the option awards under the Incentive
Plan would not qualify as incentive stock options under the Code, and the
Company's qualification to have its stock traded on the Nasdaq National Market
could be adversely affected.
Unless marked to the contrary, the shares represented by the enclosed proxy
card, if executed and returned, will be voted "FOR" the approval of the First
Place Financial Corp. 1999 Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
FIRST PLACE FINANCIAL CORP. 1999 INCENTIVE PLAN.
New Plan Benefits
The following table provides certain information with respect to all Awards
which are intended to be granted immediately after the Special Meeting, assuming
stockholder approval is obtained, under the Incentive Plan, specifying the
amounts to be granted to the Named Executive Officer individually, all current
executive officers as a group, all current directors who are not
17
<PAGE>
executive officers as a group, and all employees, including all current officers
who are not executive officers, as a group.
All awards granted to the officers, directors and employees of the Company
and the Association reflected in the table below become vested and exercisable
in equal annual installments of 20% each year commencing one year from the date
of grant. All such awards will immediately vest and become exercisable upon
termination of employment due to death or disability. Additionally, on or after
December 31, 1999, the Board of Directors intends to amend the Plan or the
awards reflected below to provide for acceleration of the vesting of such awards
upon a change in control of the Company or the Association (as defined in the
Incentive Plan). The Incentive Plan generally defines that a change in control
will be deemed to occur when a person or group of person acting in concert
acquires beneficial ownership of 25% or more of any class of equity security,
such as the Common Stock of the Company or the Association, or in the event of a
merger or other form of business combination, sale of assets or contested
election of directors which results in a change of a majority of the incumbent
Board of Directors of the Company or the Association. Stockholder approval
after one year following the Conversion may be required to satisfy the
requirements of the OTS for such an amendment.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
Stock Option Awards Stock Awards
------------------------------ --------------------------------
Dollar Number of Dollar Value Number of
Name and Position Value (1) Units (2) (3) Units
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Steven R. Lewis
President, Chief Executive Officer and Director of the
Company and the Association -- 224,000 $1,038,891 89,850
All current executive officers as a group (7 persons) -- 476,000 $2,585,953 223,650
All current directors of the Company and the Association as a
group who are not executive officers (6 persons) -- 336,600 $1,554,000 134,400
All employees, who are not executive officers, as a group (27
persons) -- 195,000 $1,059,125 91,600
</TABLE>
________________________
(1) The "dollar value" for options to be granted pursuant to the Incentive Plan
on the date of grant will be zero, as the exercise price for such options
will be the fair market value on the date of grant which is intended to be
the date stockholder approval is obtained.
(2) 116,525 Stock Option Awards remain unallocated under the Incentive Plan.
(3) Based upon $11 9/16, the closing price of the Common Stock, as reported on
the Nasdaq National Market on May 10, 1999.
18
<PAGE>
ADDITIONAL INFORMATION
Shareholder Proposals
Since no annual meeting of stockholders for which a proxy statement was
distributed has previously been held, to be considered for inclusion in the
Company's proxy statement and form of proxy relating to the 1999 Annual Meeting
of Stockholders, a stockholder proposal must be received by a reasonable time
before the proxy solicitation for such annual meeting is made. Any such
proposal will be subject to 17 C.F.R. (S) 240.14a-8 of the Rules and Regulations
under the Exchange Act.
Notice of Business to be Conducted at a Special or Annual Meeting
The bylaws of the Company provide an advance notice procedure for a
stockholder to properly bring business before meeting of stockholders. Pursuant
to the Bylaws, only business brought by or at the direction of the Board of
Directors may be conducted at a special meeting. The Bylaws of the Company
provide an advance notice procedure for a stockholder to properly bring business
before an annual meeting. The stockholder must give written advance notice to
the Secretary of the Company not less than ninety (90) days before the date
originally fixed for such meeting; provided, however, that in the event that
less than one hundred (100) days notice or prior public disclosure of the date
of the meeting is given or made to stockholders, notice by the stockholder to be
timely must be received not later than the close of business on the tenth day
following the date on which the Company's notice to stockholders of the annual
meeting date was mailed or such public disclosure was made. The advance notice
by stockholders must include the shareholder's name and address, as they appear
on the Company's record of stockholders, a brief description of the proposed
business, the reason for conducting such business at the Annual Meeting, the
class and number of shares of the Company's capital stock that are beneficially
owned by such stockholder and any material interest of such stockholder in the
proposed business. In the case of nominations to the Board of Directors,
certain information regarding the nominee must be provided.
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented for
consideration at the Special Meeting other than as stated in the Notice of
Special Meeting of Stockholders. If, however, other matters are properly
brought before the Special Meeting, it is the intention of the persons named in
the accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
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<PAGE>
Whether or not you intend to be present at the Special Meeting, you are
urged to return your proxy card promptly. If you are then present at the
Special Meeting and wish to vote your shares in person, your original proxy may
be revoked by voting at the Special Meeting. However, if you are a stockholder
whose shares are not registered in your own name, you will need appropriate
documentation from your recordholder to vote personally at the Special Meeting.
By Order of the Board of Directors
/s/ Dominique Stoeber
Dominique Stoeber
Corporate Secretary
Warren, Ohio
May 19, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND PROMPTLY
RETURN THE ACCOMPANYING PROXY CARD IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
20
<PAGE>
Appendix A
FIRST PLACE FINANCIAL CORP.
1999 INCENTIVE PLAN
1. DEFINITIONS.
-----------
(a) "Affiliate" means (i) a member of a controlled group of corporations of
which the Holding Company is a member or (ii) an unincorporated trade or
business which is under common control with the Holding Company as determined in
accordance with Section 414(c) of the Code and the regulations issued
thereunder. For purposes hereof, a "controlled group of corporations" shall mean
a controlled group of corporations as defined in Section 1563(a) of the Code
determined without regard to Section 1563(a)(4) and (e)(3)(C).
(b) "Alternate Option Payment Mechanism" refers to one of several methods
available to a Participant to fund the exercise of a stock option set out in
Section 11 hereof. These mechanisms include: broker assisted cashless exercise
and stock for stock exchange.
(c) "Association" means First Federal Savings and Loan Association of
Warren.
(d) "Award" means a grant of one or some combination of one or more Non-
statutory Stock Options, Incentive Stock Options and Stock Awards under the
provisions of this Plan.
(e) "Board of Directors" or "Board" means the board of directors of the
Holding Company or the Association and Directors Emeritus of the Holding Company
or the Association.
(f) "Change in Control" means a change in control of the Association or
Holding Company of a nature that; (i) would be required to be reported in
response to Item 1 of the current report on Form 8-K, as in effect on the date
hereof, pursuant to Section 13 or 15(d) of the Exchange Act; or (ii) results in
a Change in Control within the meaning of the Home Owners' Loan Act of 1933, as
amended ("HOLA") and the Rules and Regulations promulgated by the Office of
Thrift Supervision ("OTS") (or its predecessor agency), as in effect on the date
hereof (provided, that in applying the definition of change in control as set
forth under such rules and regulations the Board shall substitute its judgment
for that of the OTS); or (iii) without limitation such a Change in Control shall
be deemed to have occurred at such time as (A) any "person" (as the term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Association or the Holding Company representing
25% or more of the Association's or the Holding Company's outstanding securities
except for any securities of the Association purchased by the Holding Company
and any securities purchased by any tax qualified employee benefit plan of the
Association; or (B) individuals who constitute the Board of Directors of the
Holding Company on the date hereof (the "Incumbent Board") cease for any reason
to constitute at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election was approved by a vote of
<PAGE>
at least three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Holding Company's stockholders was approved
by a Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this clause (B), considered as though he were a member of the
Incumbent Board; or (C) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Association or the Holding Company or
similar transaction occurs in which the Association or Holding Company is not
the resulting entity.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means a committee consisting of the entire Board of
Directors or consisting solely of two or more members of the Board of Directors
who are defined as Non-Employee Directors as such term is defined under Rule
16b-3(b)(3)(i) under the Exchange Act as promulgated by the Securities and
Exchange Commission.
(i) "Common Stock" means the Common Stock of the Holding Company, par
value, $.01 per share or any stock exchanged for shares of Common Stock pursuant
to Section 15 hereof.
(j) "Date of Grant" means the effective date of an Award.
(k) "Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of a Participant to perform the work
customarily assigned to him or, in the case of a Director, to serve on the
Board. Additionally, a medical doctor selected or approved by the Board of
Directors must advise the Committee that it is either not possible to determine
when such Disability will terminate or that it appears probable that such
Disability will be permanent during the remainder of said Participant's
lifetime.
(l) "Effective Date" means ________________, the effective date of the
Plan.
(m) "Employee" means any person who is currently employed by the Holding
Company or an Affiliate, including officers, but such term shall not include
Outside Directors.
(n) "Employee Participant" means an Employee who holds an outstanding Award
under the terms of the Plan.
(o) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(p) "Exercise Price" means the purchase price per share of Common Stock
deliverable upon the exercise of each Option in order for the option to be
exchanged for shares of Common Stock.
(q) "Fair Market Value" means, when used in connection with the Common
Stock on a certain date, the last transaction price of the Common Stock quoted
for such date by the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or the closing price
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reported by the New York Stock Exchange ("NYSE") or any other stock exchange (as
published by the Wall Street Journal, if published) on such date or if the
Common Stock was not traded on such date, on the next preceding day on which the
Common Stock was traded thereon or the last previous date on which a sale is
reported. If the Common Stock is not traded on the NASDAQ, the NYSE or any other
stock exchange, the Fair Market Value of the Common Stock is the value so
determined by the Board in good faith.
(r) "Holding Company" means First Place Financial Corp.
(s) "Incentive Stock Option" means an Option granted by the Committee to a
Participant, which Option is designated by the Committee as an Incentive Stock
Option pursuant to Section 7 hereof and is intended to be such under Section 422
of the Code.
(t) "Limited Right" means the right to receive an amount of cash based
upon the terms set forth in Section 8 hereof.
(u) "Non-statutory Stock Option" means an Option to a Participant pursuant
to Section 6 hereof, which is not designated by the Committee as an Incentive
Stock Option or which is redesignated by the Committee as a Non-statutory Stock
Option or which is designated an Incentive Stock Option under Section 7 hereof,
but does not meet the requirements of such under Section 422 of the Code.
(v) "Option" means the right to buy a fixed amount of Common Stock at the
Exercise Price within a limited period of time designated as the term of the
option as granted under Section 6 or 7 hereof.
(w) "Outside Director" means a member of the Board of Directors or a
Director Emeritus of the Holding Company or its Affiliates, who is not also an
Employee.
(x) "Outside Director Participant" means an Outside Director who holds an
outstanding Award under the terms of the Plan.
(y) "Participant(s)" means collectively an Employee Participant and/or an
Outside Director Participant who hold(s) outstanding Awards under the terms of
the Plan.
(z) "Performance Goal" is a specific condition or goal which may be set by
the Committee as a prerequisite to the vesting of a Stock Award in accordance
with Section 9(b) hereof.
(aa) "Plan" means the First Place Financial Corp. 1999 Incentive Plan.
(bb) "Retirement" with respect to an Employee Participant means termination
of employment which constitutes retirement under any tax qualified plan
maintained by the Association. However, "Retirement" will not be deemed to have
occurred for purposes of this Plan
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if a Participant continues to serve as a consultant to or on the Board of
Directors of the Holding Company or its Affiliates even if such Participant is
receiving retirement benefits under any retirement plan of the Holding Company
or its Affiliates. With respect to an Outside Director Participant, "Retirement"
means the termination of service from the Board of Directors of the Holding
Company or its Affiliates following written notice to the Board as a whole of
such Outside Director's intention to retire, except that an Outside Director
Participant shall not be deemed to have "retired" for purposes of the Plan in
the event he continues to serve as a consultant to the Board or as an advisory
director or director emeritus, including pursuant to any retirement plan of the
Holding Company or the Association.
(cc) "Stock Awards" are Awards of Common Stock which may vest immediately
or over a period of time. Vesting of Stock Awards under Section 9 hereof may be
contingent upon the occurrence of specified events or the attainment of
specified performance goals as determined by the Committee.
(dd) "Termination for Cause" shall mean, in the case of a Director, removal
from the Board of Directors, or, in the case of an Employee, termination of
employment, in both such cases as determined by the Board of Directors, because
of Participant's personal dishonesty, incompetence, willful misconduct, conduct
damaging the reputation of the Association or the Holding Company, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or in the case of an employee without a written
employment agreement with the Association or Holding Company, any other grounds
provided for under employment policies of the Association or Holding Company in
effect at the Effective Date or as amended from time to time.
(ee) "Trust" means a trust established by the Board in connection with this
Plan to hold Plan assets for the purposes set forth herein.
(ff) "Trustee" means that person or persons and entity or entities approved
by the Board to hold legal title to any of the Trust assets for the purposes set
forth herein.
2. ADMINISTRATION.
--------------
(a) The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to grant awards to Employees
and establish such rules and regulations as it deems necessary for the proper
administration of the Plan and to make whatever determinations and
interpretations in connection with the Plan it deems necessary or advisable.
All determinations and interpretations made by the Committee shall be binding
and conclusive on all Employee Participants and Outside Director Participants in
the Plan and on their legal representatives and beneficiaries.
(b) Awards to Outside Directors of the Holding Company or its Affiliates
shall be granted by the Board of Directors or the Committee, pursuant to the
terms of this Plan.
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(c) Actual transference of the Award requires no, nor allows any,
discretion by the Trustee.
3. TYPES OF AWARDS AND RELATED RIGHTS.
-----------------------------------
The following Awards and related rights as described below in Paragraphs 6
through 12 hereof may be granted under the Plan:
(a) Non-statutory Stock Options
(b) Incentive Stock Options
(c) Limited Rights
(d) Stock Awards
4. STOCK SUBJECT TO THE PLAN.
-------------------------
Subject to adjustment as provided in Section 15 hereof, the maximum number
of shares of Common Stock reserved for Awards under the Plan is 1,573,775 shares
which number may not be in excess of 14 % of the outstanding shares of the
Common Stock determined immediately as of the Effective Date. Subject to
adjustment as provided in Section 15 hereof, the maximum number of shares of
Common Stock reserved hereby for purchase pursuant to the exercise of Options
and Option-related Awards granted under the Plan is 1,124,125 shares, which
number may not be in excess of 10% of the outstanding shares of Common Stock as
of the Effective Date. The maximum number of the shares of Common Stock
reserved for award as Stock Awards is 449,650 shares, which number is not in
excess of 4% of the outstanding shares of Common Stock as of the Effective Date.
These shares of Common Stock may be either authorized but unissued shares or
authorized shares previously issued and acquired or reacquired by the Trustee or
the Holding Company, respectively. To the extent that Options and Stock Awards
are granted under the Plan, the shares underlying such Awards will be
unavailable for any other use including future grants under the Plan except
that, to the extent that Stock Awards or Options terminate, expire, or are
forfeited without having vested or without having been exercised (or in cases
where a Limited Right has been granted in connection with an option, the amount
of such Limited Right received in lieu of the exercise of such option), new
Awards may be made with respect to those shares underlying such terminated,
expired or forfeited Options or Stock Awards.
5. ELIGIBILITY.
-----------
Subject to the terms herein, all Employees and Outside Directors shall be
eligible to receive Awards under the Plan. In addition, the Committee may grant
eligibility to consultants and advisors of the Holding Company or an Affiliate,
as it sees fit.
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6. NON-STATUTORY STOCK OPTIONS.
---------------------------
The Committee may, subject to the limitations of the Plan and the
availability of shares reserved but unawarded under the Plan, from time to
time, grant Non-statutory Stock Options to Employees and Outside Directors, upon
such terms and conditions as the Committee may determine and grant Non-statutory
Stock Options in exchange for and upon surrender of previously granted Awards
under this Plan under such terms and conditions as the Committee may determine.
Non-statutory Stock Options granted under this Plan are subject to the following
terms and conditions:
(a) Exercise Price. The Exercise Price of each Non-statutory Stock Option
--------------
shall be determined by the Committee. Such Exercise Price shall not be less
than 100% of the Fair Market Value of the Holding Company's Common Stock on the
Date of Grant. Shares of Common Stock underlying a Non-statutory Stock Option
may be purchased only upon full payment of the Exercise Price or upon operation
of an Alternate Option Payment Mechanism set out in Section 11 hereof.
(b) Terms of Non-statutory Stock Options. The term during which each Non-
------------------------------------
statutory Stock Option may be exercised shall be determined by the Committee,
but in no event shall a Non-statutory Stock Option be exercisable in whole or in
part more than 10 years from the Date of Grant. The Committee shall determine
the date on which each Non-statutory Stock Option shall become exercisable. The
shares of Common Stock underlying each Non-statutory Stock Option installment
may be purchased in whole or in part by the Participant at any time during the
term of such Non-statutory Stock Option after such installment becomes
exercisable. Subject to OTS Regulations, the Committee may, in its sole
discretion, accelerate the time at which any Non-statutory Stock Option may be
exercised in whole or in part. The acceleration of any Non-statutory Stock
Option under the authority of this paragraph shall create no right, expectation
or reliance on the part of any other Participant or that certain Participant
regarding any other unaccelerated Non-statutory Stock Options. Unless
determined otherwise by the Committee and except in the event of the
Participant's death or pursuant to a domestic relations order, a Non-statutory
Stock Option is not transferable and may be exercisable in his lifetime only by
the Participant to whom it is granted. Upon the death of a Participant, a Non-
statutory Stock Option is transferable by will or the laws of descent and
distribution.
The Committee may, however, in its sole discretion, permit transferability
or assignment of a Non-statutory Stock Option if such transfer or assignment is,
in its sole determination, for valid estate planning purposes and such transfer
or assignment is permitted under the Code and Rule 16b-3 under the Exchange Act.
For purposes of this Section 6(b), a transfer for valid estate planning purposes
includes, but is not limited to: (a) a transfer to a revocable intervivos trust
as to which the Participant is both the settlor and trustee, (b) a transfer for
no consideration to: (i) any member of the Participant's Immediate Family, (ii)
any trust solely for the benefit of members of the Participant's Immediate
Family, (iii) any partnership whose only partners are members of the
Participant's Immediate Family, and (iv) any limited liability corporation or
corporate entity whose only members or equity owners are members of the
Participant's Immediate Family, or (c) a transfer
A-6
<PAGE>
to the First Federal of Warren Community Foundation. For purposes of this
Section 6(b), "Immediate Family" includes, but is not necessarily limited to, a
Participant's parents, grandparents, spouse, children, grandchildren, siblings
(including half brothers and sisters), and individuals who are family members by
adoption. Nothing contained in this Section 6(b) shall be construed to require
the Committee to give its approval to any transfer or assignment of any Non-
statutory Stock Option or portion thereof, and approval to transfer or assign
any Non-statutory Stock Option or portion thereof does not mean that such
approval will be given with respect to any other Non-statutory Stock Option or
portion thereof. The transferee or assignee of any Non-statutory Stock Option
shall be subject to all of the terms and conditions applicable to such Non-
statutory Stock Option immediately prior to the transfer or assignment and shall
be subject to any other conditions proscribed by the Committee with respect to
such Non-statutory Stock Option.
(c) NSO Agreement. The terms and conditions of any Non-statutory Stock
--------------
Option granted shall be evidenced by an agreement (the "NSO Agreement") which
shall be subject to the terms and conditions of the Plan.
(d) Termination of Employment or Service. Unless otherwise determined by
------------------------------------
the Committee, upon the termination of a Participant's employment or service for
any reason other than Disability, death or Termination for Cause, the
Participant's Non-statutory Stock Options shall be exercisable only as to those
shares that were immediately exercisable by the Participant at the date of
termination and only for a period of three months following termination, except
that in the event of termination upon Retirement, such Non-statutory Stock
Options shall be exercisable for a period of one year. Notwithstanding any
provisions set forth herein or contained in any NSO Agreement relating to an
award of a Non-statutory Stock Option, in the event of termination of the
Participant's employment or service for Disability or death, all Non-statutory
Stock Options held by such Participant shall immediately vest and be exercisable
for one year after such termination of service, and, in the event of a
Termination for Cause, all rights under the Participant's Non-statutory Stock
Options shall expire immediately upon such Termination for Cause.
7. INCENTIVE STOCK OPTIONS.
-----------------------
The Committee may, subject to the limitations of the Plan and the
availability of shares reserved but unawarded under the Plan, from time to time,
grant Incentive Stock Options to Employees upon such terms and conditions as the
Committee may determine. Incentive Stock Options granted pursuant to the Plan
shall be subject to the following terms and conditions:
(a) Exercise Price. The Exercise Price of each Incentive Stock Option
--------------
shall be not less than 100% of the Fair Market Value of the Common Stock on the
Date of Grant. However, if at the time an Incentive Stock Option is granted to
an Employee Participant, such Employee Participant owns Common Stock
representing more than 10% of the total combined voting securities of the
Holding Company (or, under Section 424(d) of the Code, is deemed to own Common
Stock representing more than 10% of the total combined voting power of all
classes of stock of the Holding Company, by reason of the ownership of such
classes of stock, directly or indirectly, by or for any
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<PAGE>
brother, sister, spouse, ancestor or lineal descendent of such Employee
Participant, or by or for any corporation, partnership, estate or trust of which
such Employee Participant is a shareholder, partner or beneficiary) ("10%
Owner"), the Exercise Price per share of Common Stock deliverable upon the
exercise of each Incentive Stock Option shall not be less than 110% of the Fair
Market Value of the Common Stock on the Date of Grant. Shares may be purchased
only upon payment of the full Exercise Price or upon operation of an Alternate
Option Payment Mechanism set out in Section 11 hereof.
(b) Amounts of Incentive Stock Options. Incentive Stock Options may be
----------------------------------
granted to any Employee in such amounts as determined by the Committee; provided
that the amount granted is consistent with the terms of Section 422 of the Code.
In the case of an Option intended to qualify as an Incentive Stock Option, the
aggregate Fair Market Value (determined as of the time the Option is granted) of
the Common Stock with respect to which Incentive Stock Options granted are
exercisable for the first time by the Employee Participant during any calendar
year (under all plans of the Employee Participant's employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000. The provisions
of this Section 7(b) shall be construed and applied in accordance with Section
422(d) of the Code and the regulations, if any, promulgated thereunder. To the
extent an Award of an Incentive Stock Option under this Section 7 exceeds this
$100,000 limit, the portion of the Award in excess of such limit shall be deemed
a Non-statutory Stock Option. The Committee shall have discretion to
redesignate Options granted as Incentive Stock Options as Non-Statutory Stock
Options. Such Non-statutory Stock Options shall be subject to Section 6 hereof.
(c) Terms of Incentive Stock Options. The term during which each Incentive
--------------------------------
Stock Option may be exercised shall be determined by the Committee, but in no
event shall an Incentive Stock Option be exercisable in whole or in part more
than 10 years from the Date of Grant. If at the time an Incentive Stock Option
is granted to an Employee Participant who is a 10% Owner, the Incentive Stock
Option granted to such Employee Participant shall not be exercisable after the
expiration of five years from the Date of Grant. No Incentive Stock Option is
transferable except by will or the laws of descent and distribution and is
exercisable in his or her lifetime only by the Employee Participant to whom it
is granted. The designation of a beneficiary does not constitute a transfer.
The Committee shall determine the date on which each Incentive Stock Option
shall become exercisable. The shares comprising each installment of the
Incentive Stock Option may be purchased in whole or in part at any time during
the term of such Option after such installment becomes exercisable. Subject to
OTS Regulations, the Committee may, in its sole discretion, accelerate the time
at which any Incentive Stock Option may be exercised in whole or in part. The
acceleration of any Incentive Stock Option under the authority of this paragraph
shall not create a right, expectation or reliance on the part of any other
Participant or that certain Participant regarding any other unaccelerated
Incentive Stock Options.
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<PAGE>
(d) ISO Agreement. The terms and conditions of any Incentive Stock Option
-------------
granted shall be evidenced by an agreement (the "ISO Agreement") which shall be
subject to the terms and conditions of the Plan.
(e) Termination of Employment. Unless otherwise determined by the
-------------------------
Committee, upon the termination of an Employee Participant's employment for any
reason other than Disability, death or Termination for Cause, the Employee
Participant's Incentive Stock Options shall be exercisable only as to those
shares that were immediately exercisable by the Participant at the date of
termination and only for a period of three months following termination, except
that in the event of termination upon Retirement, such Incentive Stock Options
shall be exercisable for a period of one year. Notwithstanding any provision
set forth herein or contained in any ISO Agreement relating to an award of an
Incentive Stock Option, in the event of termination of the Employee
Participant's employment for Disability or death, all Incentive Stock Options
held by such Employee Participant shall immediately vest and be exercisable for
one year after such termination, and, in the event of Termination for Cause, all
rights under the Employee Participant's Incentive Stock Options shall expire
immediately upon termination. No Incentive Stock Option shall be eligible for
treatment as an Incentive Stock Option in the event such Incentive Stock Option
is exercised more than three months following the date of Participant's
cessation of employment. In no event shall an Incentive Stock Option be
exercisable beyond the expiration of the Incentive Stock Option term.
(f) Compliance with Code. The Incentive Stock Options granted under this
--------------------
Section 7 are intended to qualify as "incentive stock options" within the
meaning of Section 422 of the Code, but the Holding Company makes no warranty as
to the qualification of any Option as an incentive stock option within the
meaning of Section 422 of the Code. All Options that do not so qualify shall be
treated as Non-statutory Stock Options.
8. LIMITED RIGHT.
-------------
Simultaneously with the grant of any Option to an Employee or Outside
Director, the Committee may grant a Limited Right with respect to all or some of
the shares covered by such Option. Limited Rights granted under this Plan are
subject to the following terms and conditions:
(a) Terms of Rights. In no event shall a Limited Right be
---------------
exercisable in whole or in part before the expiration of six months from the
Date of Grant of the Limited Right. A Limited Right may be exercised only in
the event of a Change in Control.
The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, and only when the Fair Market Value of the underlying
shares on the day of exercise is greater than the Exercise Price of the
underlying Option.
Upon exercise of a Limited Right, the underlying Option shall cease to
be exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the purchase price and
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<PAGE>
the Fair Market Value of the Common Stock subject to the underlying option. The
Limited Right is transferable only when the underlying option is transferable
and under the same conditions.
(b) Payment. Upon exercise of a Limited Right, the holder shall
-------
promptly receive from the Holding Company an amount of cash equal to the
difference between the Exercise Price of the underlying option and the Fair
Market Value of the Common Stock subject to the underlying Option on the date
the Limited Right is exercised, multiplied by the number of shares with respect
to which such Limited Right is exercised. Payments shall be less any applicable
tax withholding as set forth in Section 16 hereof.
9. STOCK AWARD.
-----------
The Committee may, subject to the limitations of the Plan, from time to
time, make an Award of shares of Common Stock to Employees and Outside Directors
("Stock Awards"). The Stock Awards shall be made subject to the following terms
and conditions:
(a) Payment of the Stock Award. The Stock Award may only be made in whole
--------------------------
shares of Common Stock. Stock Awards may only be granted from shares reserved
under the Plan but unawarded at the time the new Stock Award is made.
(b) Terms of the Stock Awards. The Committee shall determine the dates on
-------------------------
which Stock Awards granted to a Participant shall vest and any specific
conditions or performance goals which must be satisfied prior to the vesting of
any installment or portion of the Stock Award. Notwithstanding other paragraphs
in this Section 9, the Committee may, in its sole discretion, accelerate the
vesting of any Stock Award. The acceleration of any Stock Award under the
authority of this paragraph shall create no right, expectation or reliance on
the part of any other Participant or that certain Participant regarding any
other unaccelerated Stock Awards.
(c) Stock Award Agreement. The terms and conditions of any Stock Award
---------------------
shall be evidenced by an agreement (the "Stock Award Agreement") which such
Stock Award Agreement will be subject to the terms and conditions of the Plan.
Each Stock Award Agreement shall set forth:
(i) the period over which the Stock Award will vest; and
(ii) the performance goals, if any, which must be satisfied prior to
the vesting of any installment or portion of the Stock Award. The
performance goals may be set by the Committee on an individual level,
for all Participants, for all Awards made during a given period of
time, or for all Awards for indefinite periods.
(d) Certification of Attainment of the Performance Goal. No Stock Award or
---------------------------------------------------
portion thereof that is subject to a performance goal is to be distributed to an
Employee Participant until the Committee certifies that the underlying
performance goal has been achieved, or in the case of an
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<PAGE>
Outside Director Participant, until an independent third party presents a
certification to the Board of Directors that the underlying performance goal
associated with a Stock Award has been achieved.
(e) Termination of Employment or Service. Unless otherwise determined by
------------------------------------
the Committee, upon the termination of a Participant's employment or service for
any reason other than Disability, death or Termination for Cause, the
Participant's unvested Stock Awards as of the date of termination shall be
forfeited and any rights the Participant had to such unvested Stock Awards shall
become null and void. Notwithstanding any provisions set forth herein or
contained in any NSO Agreement relating to an award of a Non-statutory Stock
Option, in the event of termination of the Participant's service due to
Disability or death, all unvested Stock Awards held by such Participant,
including any portion of a Stock Award subject to a performance goal, shall
immediately vest and, in the event of the Participant's Termination for Cause,
the Participant's unvested Stock Awards as of the date of such termination shall
be forfeited and any rights the Participant had to such unvested Stock Awards
shall become null and void.
(f) Non-Transferability. Except to the extent permitted by the Code, the
-------------------
rules promulgated under Section 16(b) of the Exchange Act or any successor
statutes or rules:
(i) The recipient of a Stock Award shall not sell, transfer, assign,
pledge, or otherwise encumber shares subject to the Stock Award until full
vesting of such shares has occurred. For purposes of this section, the
separation of beneficial ownership and legal title through the use of any "swap"
transaction is deemed to be a prohibited encumbrance.
(ii) Unless determined otherwise by the Committee and except in the
event of the Participant's death or pursuant to a domestic relations order, a
Stock Award is not transferable and may be earned in his lifetime only by the
Participant to whom it is granted. Upon the death of a Participant, a Stock
Award is transferable by will or the laws of descent and distribution. The
designation of a beneficiary does not constitute a transfer.
(iii) If a recipient of a Stock Award is subject to the provisions of
Section 16 of the Exchange Act, shares of Common Stock subject to such Stock
Award may not, without the written consent of the Committee (which consent may
be given in the Stock Award Agreement), be sold or otherwise disposed of within
six months following the date of grant of the Stock Award.
(g) Accrual of Dividends. Whenever shares of Common Stock underlying a
--------------------
Stock Award are distributed to a Participant or beneficiary thereof under the
Plan, such Participant or beneficiary shall also be entitled to receive, with
respect to each such share distributed, a payment equal to any cash dividends or
distributions (other than distributions in shares of Common Stock) and the
number of shares of Common Stock equal to any stock dividends, declared and paid
with respect to a share of the Common Stock if the record date for determining
shareholders entitled to receive such dividends falls between the date the
relevant Stock Award was granted and the date the relevant Stock Award or
installment thereof is distributed. There shall also be distributed an
appropriate amount of net earnings, if any, of the Trust with respect to any
dividends paid out.
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(h) Voting of Stock Awards. All shares of Common Stock held by the Trust
-----------------------
which have not vested shall be voted by the Trustee, taking into account the
best interests of the recipients of Stock Awards.
10. PAYOUT ALTERNATIVES
-------------------
Payments due to a Participant upon the exercise or redemption of an Award,
may be made subject to the following terms and conditions:
(a) Discretion of the Committee. The Committee has the sole discretion to
---------------------------
determine what form of payment (whether monetary, Common Stock, a combination of
payout alternatives or otherwise) it shall use in making distributions of
payments for all Awards. If the Committee requests any or all Participants to
make an election as to form of distribution or payment, it shall not be
considered bound by the election.
(b) Payment in the form of Common Stock. Any shares of Common Stock
-----------------------------------
tendered in satisfaction of an obligation arising under this Plan shall be
valued at the Fair Market Value of the Common Stock on the day preceding the
date of the issuance of such stock to the Participant.
(c) Deferred Payments. The Committee, in its discretion, may permit a
-----------------
Participant to elect to defer receipt of all or any part of any cash or stock
payment under the Plan, or the Committee may determine to defer receipt by some
or all Participants, of all or part of any such payment. The Committee shall
determine the terms and conditions of any such deferral, including the period of
deferral, the manner of deferral, and the method for measuring appreciation on
deferred amounts until their payout.
11. ALTERNATE OPTION PAYMENT MECHANISM
----------------------------------
The Committee has sole discretion to determine what form of payment it will
accept for the exercise of an Option. The Committee may indicate acceptable
forms in the ISO or NSO Agreement covering such Options or may reserve its
decision to the time of exercise. No Option is to be considered exercised until
payment in full is accepted by the Committee or its agent.
(a) Cash Payment. The exercise price may be paid in cash or by certified
------------
check.
(b) Borrowed Funds. To the extent permitted by law, the Committee may
--------------
permit all or a portion of the exercise price of an Option to be paid through
borrowed funds.
(c) Exchange of Common Stock.
------------------------
(i) The Committee may permit payment by the tendering of previously
acquired shares of Common Stock. This includes the use of "pyramiding
transactions" whereby some number
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of Options are exercised; then the shares gained through the exercise are
tendered back to the Holding Company as payment for a greater number of Options.
This transaction may be repeated as needed to exercise all of the Options
available.
(ii) Any shares of Common Stock tendered in payment of the exercise
price of an Option shall be valued at the Fair Market Value of the Common Stock
on the date prior to the date of exercise.
12. RIGHTS OF A SHAREHOLDER: NONTRANSFERABILITY.
-------------------------------------------
No Participant shall have any rights as a shareholder with respect to any
shares of Common Stock covered by an Option until the date of issuance of a
stock certificate for such shares. Nothing in this Plan or in any Award granted
confers on any person any right to continue in the employ or service of the
Holding Company or its Affiliates or interferes in any way with the right of the
Holding Company or its Affiliates to terminate a Participant's services as an
officer or other employee at any time.
Except as permitted under the Code (with respect to Incentive Stock
Options) and the rules promulgated pursuant to Section 16(b) of the Exchange Act
or any successor statutes or rules, no Award under the Plan shall be
transferable by the Participant other than by will or the laws of intestate
succession or pursuant to a domestic relations order or unless determined
otherwise by the Committee.
13. AGREEMENT WITH GRANTEES.
-----------------------
Each Award will be evidenced by a written agreement(s) (whether
constituting an NSO Agreement, ISO Agreement, Stock Award Agreement or any
combination thereof), executed by the Participant and the Holding Company or its
Affiliates that describes the conditions for receiving the Awards including the
date of Award, the Exercise Price if any, the terms or other applicable periods,
and other terms and conditions as may be required or imposed by the Plan, the
Committee, or the Board of Directors, and may describe or specify tax law
considerations or applicable securities law considerations.
14. DESIGNATION OF BENEFICIARY.
--------------------------
A Participant may, with the consent of the Committee, designate a person or
persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by
and delivered to the Holding Company and may be revoked in writing. If a
Participant fails effectively to designate a beneficiary, then the Participant's
estate will be deemed to be the beneficiary.
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15. DILUTION AND OTHER ADJUSTMENTS.
------------------------------
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Holding Company, or in the event a capital
distribution is made, the Committee will make such adjustments to Awards to
prevent dilution, diminution or enlargement of the rights of the Participant, as
the Committee deems appropriate, including any or all of the following:
(a) adjustments in the aggregate number or kind of shares of Common Stock
or other securities that may underlie future Awards under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common Stock
or other securities underlying Awards already made under the Plan;
(c) adjustments in the exercise price of outstanding Incentive and/or Non-
statutory Stock Options, or any Limited Rights attached to such
Options.
Alternatively, the Committee could provide the participant with a cash
benefit for shares underlying vested, but unexercised options, in order to
achieve the aforementioned effect. All awards under this Plan shall be binding
upon any successors or assigns of the Holding Company.
16. TAX WITHHOLDING.
---------------
Awards under this Plan shall be subject to tax withholding to the extent
required by any governmental authority. Any withholding shall comply with Rule
16b-3 or any amendment or successive rule. Shares of Common Stock withheld to
pay for tax withholding amounts shall be valued at their Fair Market Value on
the date the Award is deemed taxable to the Participant.
17. AMENDMENT OF THE PLAN.
---------------------
The Board of Directors may at any time, and from time to time, subject to
applicable rules and regulations, modify or amend the Plan, or any Award granted
under the Plan, in any respect, prospectively or retroactively; provided
however, that provisions governing grants of Incentive Stock Options, unless
permitted by the rules and regulations or staff pronouncements promulgated under
the Code shall be submitted for shareholder approval to the extent required by
such law, regulation or interpretation.
Failure to ratify or approve amendments or modifications by shareholders
shall be effective only as to the specific amendment or modification requiring
such ratification. Other provisions, sections, and subsections of this Plan
will remain in full force and effect.
A-14
<PAGE>
No such termination, modification or amendment may adversely affect the
rights of a Participant under an outstanding Award without the written
permission of such Participant.
18. EFFECTIVE DATE OF PLAN.
----------------------
The Plan shall become effective upon being presented to shareholders for
ratification for purposes of: (i) obtaining preferential tax treatment for
Incentive Stock Options; and (ii) maintaining the listing of the Common Stock on
the Nasdaq National Market. The failure to obtain shareholder ratification for
such purposes will not affect the validity of the Plan and the Options
thereunder, provided, however, that if the Plan is not ratified, the Plan shall
remain in full force and effect, and any Incentive Stock Options granted under
the Plan shall be deemed to be Non-statutory Stock Options.
19. TERMINATION OF THE PLAN.
-----------------------
The right to grant Awards under the Plan will terminate upon the earlier
of: (i) ten (10) years after the Effective Date; (ii) the issuance of a number
of shares of Common Stock pursuant to the exercise of Options or the
distribution of Stock Awards which together with the exercise of Limited Rights
is equivalent to the maximum number of shares reserved under the Plan as set
forth in Section 4. The Board of Directors has the right to suspend or
terminate the Plan at any time, provided that no such action will, without the
consent of a Participant, adversely affect a Participant's vested rights under a
previously granted Award.
20. APPLICABLE LAW.
--------------
The Plan will be administered in accordance with the laws of the State of
Delaware and applicable federal law.
21. COMPLIANCE WITH OTS CONVERSION REGULATIONS
------------------------------------------
Notwithstanding any other provision contained in this Plan:
(a) unless the Plan is approved by a majority vote of the outstanding
shares of the total votes eligible to be cast at a duty called meeting
of stockholders to consider the Plan, as required by 12 CFR
(S)563b.3(g)(4)(vii), the Plan shall not become effective or
implemented prior to one year from the date of the Association's
mutual to stock conversion;
(b) no Award granted prior to one year from the date of the Association's
mutual to stock conversion shall become vested or exercisable at a
rate in excess of 20% per year of the total number of Stock Awards or
Options (whichever may be the case) granted to such Participant,
provided, that Awards shall become fully vested or immediately
A-15
<PAGE>
exercisable in the event of a Participant's termination of service due
to death or Disability;
(c) no Award granted to any individual employee prior to one year from the
date of the Association's mutual to stock conversion may exceed 25% of
the total amount of Awards which may be granted under the Plan;
(c) no Award granted to any individual Outside Director prior to one year
from the date of the Association's mutual to stock conversion may
exceed 5% of the total amount of Awards which may be granted under the
Plan; and
(d) the aggregate amount of Awards granted to all Outside Directors prior
to one year from the date of the Association's mutual to stock
conversion may not exceed 30% of the total amount of Awards which may
be granted under the Plan.
22. DELEGATION OF AUTHORITY
-----------------------
The Committee may delegate all authority for: the determination of forms of
payment to be made by or received by the Plan; the execution of Award
agreements; the determination of Fair Market Value; and the determination of all
other aspects of administration of the Plan to the executive officer(s) of the
Holding Company or the Association. The Committee may rely on the descriptions,
representations, reports and estimates provided to it by the management of the
Holding Company or the Association for determinations to be made pursuant to the
Plan, including the attainment of performance goals. However, only the
Committee or a portion of the Committee may certify the attainment of a
performance goal.
A-16
<PAGE>
[FRONT SIDE]
REVOCABLE PROXY
FIRST PLACE FINANCIAL CORP.
SPECIAL MEETING OF STOCKHOLDERS
July 2, 1999
2:00 p.m. Eastern Time
The undersigned hereby appoints the official proxy committee of the Board
of Directors of First Place Financial Corp. (the "Company"), each with full
power of substitution, to act as attorneys and proxies for the undersigned, and
to vote all shares of Common Stock of the Company which the undersigned is
entitled to vote only at the Special Meeting of Stockholders, to be held on July
2, 1999 at 2:00 p.m. Eastern Time, at the Park Hotel, 136 North Park Avenue,
Warren, Ohio, and at any and all adjournments thereof, as follows:
1. The approval of the First Place Financial Corp. 1999 Incentive Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE LISTED PROPOSAL.
<PAGE>
[BACK SIDE]
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
This proxy is revocable and will be voted as directed, but if no
instructions are specified, this proxy will be voted FOR the proposal listed.
If any other business is presented at the Special Meeting, including whether or
not to adjourn the meeting, this 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 Special Meeting.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Special Meeting of Stockholders and of a
Proxy Statement relating to this meeting.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
Dated: ______________________________
______________________________
SIGNATURE OF STOCKHOLDER
______________________________
SIGNATURE OF STOCKHOLDER
________________________________
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
