<PAGE> 1
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
-------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _______________
Commission File No. 0-18993
-------
WINTON FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-1303854
- ------------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5511 Cheviot Road
Cincinnati, Ohio 45247
- ------------------------------------- -------------------------------------
(Address of principal (Zip Code)
executive office)
Registrant's telephone number, including area code: (513) 385-3880
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of July 31, 1997, the latest practicable date, 1,986,152 shares of the
registrant's common stock, no par value, were issued and outstanding.
Page 1 of 18 pages
<PAGE> 2
WINTON FINANCIAL CORPORATION AND SUBSIDIARY
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II - OTHER INFORMATION 17
SIGNATURES 18
<PAGE> 3
WINTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
<TABLE>
<CAPTION>
June 30, September 30,
ASSETS 1997 1996
<S> <C> <C>
Cash and due from banks $ 1,502 $ 1,504
Interest-bearing deposits in other
financial institutions 1,061 -
-------- --------
Cash and cash equivalents 2,563 1,504
Investment securities available
for sale - at market 2,773 2,581
Investment securities - at cost
(approximate market value of $13,129
and $9,623 at June 30, 1997 and
September 30, 1996) 13,086 9,593
Mortgage-backed securities available
for sale - at market 845 2,942
Mortgage-backed securities - at cost
(approximate market value of $14,709
and $15,983 at June 30, 1997 and
September 30, 1996) 14,976 16,414
Loans receivable - net 273,666 247,755
Loans held for sale -
at lower of cost or market - 2,735
Office premises and equipment - net 2,549 2,667
Real estate acquired through foreclosure 518 561
Federal Home Loan Bank stock - at cost 2,944 2,359
Accrued interest receivable on loans 2,129 1,908
Accrued interest receivable on
mortgage-backed securities 112 126
Accrued interest receivable on investments 223 163
Prepaid expenses and other assets 530 409
Intangible assets - net 478 524
-------- --------
Total assets $317,392 $292,241
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $234,140 $221,533
Advances from the Federal Home Loan Bank 57,897 46,376
Accounts payable on mortgage loans serviced
for others 765 686
Advance payments by borrowers for taxes
and insurance 138 312
Other liabilities 930 2,273
Accrued federal income taxes 20 116
Deferred federal income taxes 945 114
-------- --------
Total liabilities 294,835 271,410
Shareholders' equity
Preferred stock - 2,000,000 shares without
par value authorized; no shares issued
and outstanding - -
Common stock - 5,000,000 shares of no par
value authorized; 1,986,152 shares
outstanding at June 30, 1997 and
September 30, 1996 - -
Additional paid-in capital 6,501 6,501
Retained earnings - substantially restricted 15,824 14,142
Unrealized gains on securities designated
as available for sale, net of related
tax effects 232 188
-------- --------
Total shareholders' equity 22,557 20,831
-------- --------
Total liabilities and
shareholders' equity $317,392 $292,241
======== ========
</TABLE>
3
<PAGE> 4
WINTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share data)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest income
Loans $16,507 $13,780 $5,709 $4,800
Mortgage-backed securities 824 892 262 296
Investments and interest-bearing deposits 768 774 283 246
------- ------- ------ ------
Total interest income 18,099 15,446 6,254 5,342
Interest expense
Deposits 8,836 7,861 3,051 2,684
Borrowings 2,194 1,359 796 508
------- ------- ------ ------
Total interest expense 11,030 9,220 3,847 3,192
------- ------- ------ ------
Net interest income 7,069 6,226 2,407 2,150
Provision for losses on loans - 253 - -
------- ------- ------ ------
Net interest income after
provision for losses
on loans 7,069 5,973 2,407 2,150
Other income
Gain on sale of mortgage loans 469 499 197 10
Gain on sale of investment and
mortgage-backed securities
designated as available for sale 36 9 - -
Gain on sale of real estate acquired
through foreclosure 32 - - -
Other 285 289 104 108
------- ------- ------ ------
Total other income 822 797 301 118
General, administrative and other expense
Employee compensation and benefits 2,129 1,955 768 640
Occupancy and equipment 905 874 312 292
Franchise taxes 197 190 66 66
Federal deposit insurance premiums 170 351 36 118
Amortization of intangible assets 46 46 15 15
Advertising 114 103 36 33
Other 764 651 259 208
Merger related expenses - 615 - -
------- ------- ------ ------
Total general, administrative
and other expense 4,325 4,785 1,492 1,372
------- ------- ------ ------
Earnings before income taxes 3,566 1,985 1,216 896
Federal income taxes
Current 412 650 289 223
Deferred 807 77 131 81
------- ------- ------ ------
Total federal income taxes 1,219 727 420 304
------- ------- ------ ------
NET EARNINGS $ 2,347 $ 1,258 $ 796 $ 592
======= ======= ====== ======
Earnings per share $ 1.18 $ .63 $ .40 $ .30
======= ======= ====== ======
Dividends per share $ .335 $ .31 $ .115 $ .105
======= ======= ====== ======
</TABLE>
4
<PAGE> 5
WINTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended June 30,
(In thousands)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net earnings for the period $ 2,347 $ 1,258
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities:
Amortization of premiums on investments
and mortgage-backed securities 9 9
Amortization of deferred loan origination fees (182) (195)
Depreciation 290 275
Amortization of intangible assets 46 46
Gain on sale of mortgage loans (259) (271)
Gain on sale of investment and mortgage-backed
securities designated as available for sale (36) (9)
Provision for losses on loans - 253
Loans disbursed for sale in the secondary market (21,603) (22,860)
Proceeds from sale of loans in the secondary market 24,597 24,012
Gain on sale of real estate acquired through
foreclosure (32) -
Federal Home Loan Bank stock dividends (134) (114)
Increase (decrease) in cash due to changes in:
Accrued interest receivable on loans (221) (277)
Accrued interest receivable on
mortgage-backed securities 14 5
Accrued interest receivable on investments (60) (18)
Prepaid expenses and other assets (121) (199)
Accounts payable on mortgage loans
serviced for others 79 43
Other liabilities (1,343) 112
Federal income taxes
Current (96) 27
Deferred 807 77
-------- --------
Net cash provided by
operating activities 4,102 2,174
Cash flows from investing activities:
Principal repayments on mortgage-backed
securities 2,218 1,605
Proceeds from maturity of mortgage-backed
securities 1,335 -
Purchase of mortgage-backed securities
available for sale - (3,077)
Purchase of mortgage-backed securities
held to maturity - (293)
Proceeds from sale of mortgage-backed
securities designated as available for sale - 1,406
Proceeds from maturity of investment securities 3,000 1,922
Proceeds from sale of investment securities
designated as available for sale 122 -
Purchase of investment securities designated
held to maturity (4,988) (1,302)
Purchase of investment securities designated
as available for sale (1,742) -
Loan principal repayments 47,881 37,556
Loan disbursements (80,765) (71,882)
Sale of loan participations 7,135 -
Proceeds from the sale of real estate
acquired through foreclosure 94 -
Purchase of office premises and equipment (158) (198)
Additions to real estate acquired
through foreclosure (13) (186)
Purchase of Federal Home Loan Bank stock (451) -
-------- --------
Net cash used in
investing activities (26,332) (34,449)
-------- --------
Net cash used in operating
and investing activities
(balance carried forward) (22,230) (32,275)
-------- --------
</TABLE>
5
<PAGE> 6
WINTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the nine months ended June 30,
(In thousands)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Net cash used in operating and investing
activities (balance brought forward) $(22,230) $(32,275)
Cash flows from financing activities:
Net increase in deposit accounts 12,607 17,346
Proceeds from Federal Home Loan Bank advances 26,064 32,250
Repayment of Federal Home Loan Bank advances (14,543) (17,690)
Advances by borrowers for taxes and insurance (174) (213)
Proceeds from exercise of stock options - 8
Dividends paid on common stock (665) (606)
-------- --------
Net cash provided by financing activities 23,289 31,095
-------- --------
Net increase (decrease) in cash and cash equivalents 1,059 (1,180)
Cash and cash equivalents at beginning of period 1,504 3,518
-------- --------
Cash and cash equivalents at end of period $ 2,563 $ 2,338
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Federal income taxes $ 507 $ 546
======== ========
Interest on deposits and borrowings $ 10,960 $ 9,220
======== ========
Supplemental disclosure of noncash investing activities:
Transfers from loans to real estate acquired
through foreclosure $ 200 $ 176
======== ========
Unrealized gains on securities designated
as available for sale, net of related
tax effects $ 44 $ 26
======== ========
Recognition of mortgage servicing rights in
accordance with SFAS No. 122 $ 210 $ 228
======== ========
</TABLE>
6
<PAGE> 7
WINTON FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine month periods ended June 30, 1997 and 1996
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements were prepared in
accordance with instructions for Form 10-QSB and, therefore, do not include
information or footnotes necessary for a complete presentation of financial
position, results of operations, and cash flows in conformity with generally
accepted accounting principles. Accordingly, these financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto of Winton Financial Corporation (the "Corporation" or "Winton")
included in Winton's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1996. However, all adjustments (consisting of only normal
recurring accruals) which in the opinion of management are necessary for a
fair presentation of the consolidated financial statements have been
included. The results of operations for the three and nine month periods
ended June 30, 1997 and 1996 are not necessarily indicative of the results
which may be expected for the entire fiscal year.
2. PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Winton and The Winton Savings and Loan Co. ("Winton Savings"). All
significant intercompany items have been eliminated.
3. EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS
In March 1995, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". SFAS No. 121 requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. In performing the review for
recoverability, the entity should estimate the future cash flows expected to
result from the use of the asset and its eventual disposition. If the sum of
the expected future cash flows (undiscounted and without interest charges) is
less than the carrying amount of the asset, an impairment loss is recognized.
Measurement of an impairment loss for long-lived assets and identifiable
intangibles that an entity expects to hold and use should be based on the
fair value of the asset. SFAS No. 121 is effective for financial statements
for fiscal years beginning after December 15, 1995 (fiscal 1997 as to the
Corporation). Earlier application is encouraged. Management adopted SFAS No.
121 on October 1, 1996, as required, without material effect on the
Corporation's consolidated financial position or results of operations.
7
<PAGE> 8
WINTON FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the three and nine month periods ended June 30, 1997 and 1996
3. EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS (continued)
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," establishing financial accounting and reporting standards for
stock-based compensation plans. SFAS No. 123 encourages all entities to adopt
a new method of accounting to measure compensation cost of all stock
compensation plans based on the estimated fair value of the award at the date
it is granted. Companies are, however, allowed to continue to measure
compensation cost for those plans using the intrinsic value based method of
accounting, which generally does not result in compensation expense
recognition for most plans. Companies that elect to remain with the existing
accounting are required to disclose in a footnote to the financial statements
pro forma net earnings and, if presented, earnings per share, as if SFAS No.
123 had been adopted. The accounting requirements of SFAS No. 123 are
effective for transactions entered into during fiscal years that begin after
December 15, 1995; however, companies are required to disclose information
for awards granted in their first fiscal year beginning after December 15,
1994. Management has determined that the Corporation will continue to account
for stock-based compensation pursuant to Accounting Principles Board Opinion
No. 25, and therefore the provisions of SFAS No. 123 will have no effect on
its consolidated financial condition or results of operations.
In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers of
Financial Assets, Servicing Rights, and Extinguishment of Liabilities," that
provides accounting guidance on transfers of financial assets, servicing of
financial assets, and extinguishment of liabilities. SFAS No. 125 introduces
an approach to accounting for transfers of financial assets that provides a
means of dealing with more complex transactions in which the seller disposes
of only a partial interest in the assets, retains rights or obligations,
makes use of special purpose entities in the transaction, or otherwise has
continuing involvement with the transferred assets. The new accounting
method, referred to as the financial components approach, provides that the
carrying amount of the financial assets transferred be allocated to
components of the transaction based on their relative fair values. SFAS No.
125 provides criteria for determining whether control of assets has been
relinquished and whether a sale has occurred. If the transfer does not
qualify as a sale, it is accounted for as a secured borrowing. Transactions
subject to the provisions of SFAS No. 125 include, among others, transfers
involving repurchase agreements, securitizations of financial assets, loan
participations, factoring arrangements, and transfers of receivables with
recourse.
An entity that undertakes an obligation to service financial assets
recognizes either a servicing asset or liability for the servicing contract
(unless related to a securitization of assets, and all the securitized assets
are retained and classified as held-to-maturity). A servicing asset or
liability that is purchased or assumed is initially recognized at its fair
value. Servicing assets and liabilities are amortized in proportion to and
over the period of estimated net servicing income or net servicing loss and
are subject to subsequent assessments for impairment based on fair value.
8
<PAGE> 9
WINTON FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the three and nine month periods ended June 30, 1997 and 1996
3. EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS (continued)
SFAS No. 125 provides that a liability is removed from the balance sheet only
if the debtor either pays the creditor and is relieved of its obligation for
the liability or is legally released from being the primary obligor.
SFAS No. 125 is effective for transfers and servicing of financial assets and
extinguishment of liabilities occurring after December 31, 1997, and is to be
applied prospectively. Earlier or retroactive application is not permitted.
Management does not believe that adoption of SFAS No. 125 will have a
material adverse effect on the Corporation's consolidated financial position
or results of operations.
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share," which
requires companies to present basic earnings per share and, if applicable,
diluted earnings per share, instead of primary and fully diluted earnings per
share, respectively. Basic earnings per share is computed without including
potential common shares, i.e., no dilutive effect. Diluted earnings per share
is computed taking into consideration common shares outstanding and dilutive
potential common shares, including options, warrants, convertible securities
and contingent stock agreements. SFAS No. 128 is effective for periods ending
after December 15, 1997. Early application is not permitted. Based upon the
provisions of SFAS No. 128, the Corporation's basic and diluted earnings per
share for the three months ended June 30, 1997, would have been $1.18 and
$1.17, respectively. Basic and dilutive earnings per share for the nine
months ended June 30, 1997, would each have been $.40.
4. CHARTER UNIFICATION LEGISLATION
The deposit accounts of Winton Savings and other savings associations are
insured up to applicable limits by the Federal Deposit Insurance Corporation
("FDIC") through the Savings Association Insurance Fund ("SAIF"). Legislation
to recapitalize the SAIF was enacted on September 30, 1996. Such legislation
provided that the SAIF will be merged into the Bank Insurance Fund in 1998 if
there are no more savings associations. Such legislation also requires the
Department of Treasury to submit a report to Congress on the development of a
common charter for all financial institutions. In addition, in January 1997,
two bills were introduced to address this charter unification by eliminating
the federal thrift charter and the separate federal regulation of savings and
loan associations.
Pursuant to such legislation, Congress may eliminate the Office of Thrift
Supervision ("OTS"), and Winton Savings may be regulated under federal law as
a bank or may be required to change its charter. Such change in regulation or
charter would likely change the range of activities in which Winton Savings
may engage and would probably subject Winton Savings to more regulation by
the FDIC. In addition, Winton might become
9
<PAGE> 10
WINTON FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the three and nine month periods ended June 30, 1997 and 1996
4. CHARTER UNIFICATION LEGISLATION (continued)
subject to a different form of holding company regulation, which may limit
the activities in which Winton may engage, and subject Winton to other
additional regulatory requirements, including separate capital requirements.
At this time, Winton cannot predict when or whether Congress may actually
pass legislation regarding Winton and Winton Savings' regulatory requirements
or charter. Although such legislation may change the activities in which
either Winton and Winton Savings may engage, it is not anticipated that the
current activities of both Winton and Winton Savings will be materially
affected by those activity limits.
5. EARNINGS PER SHARE
Earnings per share for the three and nine month periods ended June 30, 1997
and 1996 is computed based on 1,986,152 weighted-average shares outstanding
during the respective periods. Fully diluted earnings per share has not been
presented as there is no dilutive effect attendant to Winton's Stock Option
Plan during the respective periods.
10
<PAGE> 11
WINTON FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
In the following pages, management presents an analysis of Winton's financial
condition as of June 30, 1997, and the results of operations for the three and
nine month periods ended June 30, 1997, as compared to the same periods in 1996.
In addition to this historical information, the following discussion contains
forward-looking statements that involve risks and uncertainties. Economic
circumstances, Winton's operations and Winton's actual results could differ
significantly from those discussed in the forward-looking statements. Some of
the factors that could cause or contribute to such differences are discussed
herein but also include changes in the economy and interest rates in the nation
and in Winton's general market area.
Without limiting the foregoing, some of the forward-looking statements included
herein include the following:
- Management's belief that adoption of SFAS No. 125 will not have a
material adverse effect on the Corporation.
- Legislative changes that may change the regulatory requirements of Winton
and Winton Savings.
- Management's establishment of an allowance for loan losses, and its
statements regarding the adequacy of such allowance for loan losses.
- Management's belief that Winton and Winton Savings' activities will not
be materially affected by proposed changes in the regulation of all
savings associations and their holding companies.
DISCUSSION OF FINANCIAL CONDITION CHANGES FROM SEPTEMBER 30, 1996 TO JUNE 30,
1997
At June 30, 1997, the Corporation had total assets of $317.4 million, an
increase of approximately $25.2 million, or 8.6%, over September 30, 1996. The
growth in assets was funded primarily by an increase in deposits of $12.6
million, an increase in advances from the Federal Home Loan Bank of $11.5
million and undistributed net earnings of $1.7 million.
Cash and due from banks, interest-bearing deposits, and investment securities
totaled approximately $18.4 million, an increase of approximately $4.7 million,
or 34.7%, over September 30, 1996 levels. During the nine months ended June 30,
1997, investment securities totaling $6.7 million were purchased, which were
partially offset by maturities of $3.0 million and sales of $122,000.
11
<PAGE> 12
WINTON FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
DISCUSSION OF FINANCIAL CONDITION CHANGES FROM SEPTEMBER 30, 1996 TO JUNE 30,
1997 (continued)
Loans receivable, loans held for sale, and mortgage-backed securities increased
by approximately $19.6 million, or 7.3%, during the period to a total of $289.5
million. This increase resulted primarily from loan originations totaling $102.4
million, which exceeded loan sales of $24.3 million and principal repayments of
approximately $47.9 million. The Corporation's loan origination volume increased
during the current nine month period by approximately $7.6 million over the same
period in fiscal 1996. Similarly, sales volume increased during the same period
by $597,000. Mortgage-backed securities decreased by approximately $3.5 million,
or 18.3%, from September 30, 1996 as a result of normal principal repayments of
$2.2 million and maturities of $1.3 million.
At June 30, 1997, Winton Saving's allowance for loan losses totaled $872,000, an
increase of $15,000 over the level maintained at September 30, 1996. At June 30,
1997, the allowance represented approximately .32% of the total loan portfolio
and 146.0% of total non-performing loans. At June 30, 1997, the ratio of total
non-performing loans to total loans amounted to .22%, as compared to .35% at
September 30, 1996. Although management believes that its allowance for loan
losses at June 30, 1997, was adequate based on available facts and
circumstances, there can be no assurances that additions to such allowance will
not be necessary in future periods, which could adversely affect the
Corporation's results of operations.
Deposits increased by $12.6 million, or 5.7%, over September 30, 1996 levels, as
management has elected to increase deposits to fund the growth in the loan
portfolio through advertising, pricing strategies and brokered deposits. During
fiscal 1997, Winton Savings accumulated approximately $6.0 million of brokered
deposits, which had a weighted-average cost of 6.65% and terms to maturity
ranging from two to three years. Such funds were acquired as an alternative
source of funds to Federal Home Loan Bank advances, and were utilized to fund
growth in the loan portfolio.
Winton Savings is subject to capital standards which generally require the
maintenance of regulatory capital sufficient to meet each of three tests,
hereinafter described as the tangible capital requirement, the core capital
requirement and the risk-based capital requirement. At June 30, 1997, Winton
Savings' tangible capital of $21.6 million, or 6.8%, exceeded the minimum
requirement of $4.7 million by $16.9 million; Winton Savings' core capital of
$21.6 million, or 6.8%, exceeded the minimum requirement of $9.5 million by
$12.1 million; and Winton Savings' risk-based capital of $22.4 million, or
11.0%, exceeded the fully phased-in amount of 8.0% of risk-weighted assets by
approximately $6.1 million.
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTH PERIODS ENDED JUNE 30, 1997
AND 1996
GENERAL
Net earnings totaled $2.3 million for the nine months ended June 30, 1997, as
compared to $1.3 million for the same period in 1996, an increase of $1.1
million, or 86.6%. The increase in earnings resulted primarily from an $843,000
increase in net interest income, a $253,000 decrease in the provision for losses
on loans, a $460,000 decrease in general, administrative and other expense and
an increase of $25,000 in other income, which were partially offset by a
$492,000 increase in the provision for federal income taxes.
12
<PAGE> 13
WINTON FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTH PERIODS ENDED JUNE 30, 1997
AND 1996 (continued)
NET INTEREST INCOME
Interest on loans and mortgage-backed securities increased by $2.7 million, or
18.1%, for the nine months ended June 30, 1997, as compared to the same period
in 1996. The increase resulted primarily from a $41.0 million increase in
weighted-average portfolio balance outstanding year to year, coupled with an
increase in weighted-average yield year to year from 8.28% in fiscal 1996 to
8.33% in fiscal 1997.
Interest income on investments and interest-bearing deposits decreased by
$6,000, or .8%, for the nine months ended June 30, 1997. The decrease resulted
primarily from a $77,000 decrease in the weighted-average portfolio balance
outstanding year to year.
Interest expense on deposits increased by $975,000, or 12.4 %, for the nine
months ended June 30, 1997 compared to 1996. The increase was primarily due to a
$21.4 million increase in weighted-average deposits outstanding year to year,
coupled with an increase in weighted-average cost of deposits year to year, from
5.10% in 1996 to 5.20% in 1997.
Interest expense on borrowings increased by $835,000, or 61.4%, for the nine
months ended June 30, 1997. The increase was primarily due to a $18.0 million
increase in weighted-average Federal Home Loan Bank advances outstanding year to
year.
As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $843,000, or 13.5%, for the nine months ended
June 30, 1997, compared to 1996. The interest rate spread amounted to 2.91% in
the 1997 period, compared to 2.97% in 1996, while the net interest margin was
3.21% in 1997, compared to 3.29% in 1996.
PROVISION FOR LOSSES ON LOANS
A provision for losses on loans is charged to earnings to bring the total
allowance for losses on loans to a level considered appropriate by management
based on historical experience, the volume and type of lending conducted by the
Winton Savings, and the status of past due principal and interest payments,
general economic conditions, particularly as such conditions relate to the
Winton Savings' loan portfolio. As a result of such analysis, management
concluded that the allowance for losses on loans was adequate, and therefore did
not provide a provision for losses on loans during the nine-month period ended
June 30, 1997. Winton Savings recognized a $253,000 provision for losses on
loans during the nine-month period ended June 30, 1996. Such provision was
heavily influenced by management's desire to increase the allowance of Blue Chip
Savings Bank ("Blue Chip"), which had been acquired by Winton Savings, to a
level commensurate with Winton Savings. There can be no assurance that the
allowance for loan losses of the Winton Savings will be adequate to cover losses
on nonperforming assets in the future.
13
<PAGE> 14
WINTON FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTH PERIODS ENDED JUNE 30, 1997
AND 1996 (continued)
OTHER INCOME
Other income increased by $25,000 for the nine months ended June 30, 1997,
compared to the 1996 period, primarily due to an increase of $27,000, or 300.0%,
in gain on sale of investments and mortgage-backed securities, coupled with the
gain on sale of real estate acquired through foreclosure of $32,000, which were
partially offset by a decline in gain on sale of loans of $30,000, or 6.0%. The
decrease in other operating income was comprised primarily of decreases in
rental income and service fees.
GENERAL, ADMINISTRATIVE AND OTHER EXPENSE
General, administrative and other expense decreased by $460,000, or 9.6%, for
the nine months ended June 30, 1997, compared to 1996. The decrease resulted
primarily from a nonrecurring $615,000 charge for merger related expenses
incurred in the 1996 period in connection with the Blue Chip merger, coupled
with a decrease of $181,000, or 51.6%, for federal deposit insurance premiums as
a result of lower premium rates following the SAIF recapitalization. These
decreases were partially offset by a $174,000, or 8.9%, increase in employee
compensation and benefits, a $31,000, or 3.5%, increase in occupancy and
equipment, a $7,000, or 3.7%, increase in franchise taxes, an $11,000, or 10.7%,
increase in advertising and a $113,000, or 17.4%, increase in other expenses.
The increase in employee compensation and benefits resulted primarily from an
increase in staffing levels, normal merit increases, expense related to a new
employee incentive compensation program and a decline in deferred loan
origination costs, all of which were partially offset by a decrease in employee
health insurance costs resulting from a change in provider.
The increase in occupancy and equipment relates to an increase in repairs and
maintenance on office buildings and equipment. The increase in other operating
expense resulted primarily from an increase in supervisory assessments, costs
related to Winton's change to the American Stock Exchange listing and increased
loan processing and servicing costs.
FEDERAL INCOME TAXES
The provision for federal income taxes increased by $492,000, or 67.7%, for the
nine months ended June 30, 1997, as compared to the same period in 1996, due
primarily to a $1.6 million, or 79.6%, increase in pretax earnings. The
effective tax rates were 34.2% and 36.6% for the nine months ended June 30, 1997
and 1996, respectively.
14
<PAGE> 15
WINTON FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTH PERIODS ENDED JUNE 30, 1997
AND 1996
GENERAL
Net earnings totaled $796,000 for the three months ended June 30, 1997, compared
to $592,000 for the same period in 1996, an increase of $204,000, or 34.5%. The
increase in earnings resulted primarily from a $257,000 increase in net interest
income and a $183,000 increase in other income, which were partially offset by a
$120,000 increase in general, administrative and other expense and a $116,000
increase in the provision for federal income taxes.
NET INTEREST INCOME
Interest income on loans and mortgage-backed securities increased by $875,000,
or 17.2%, for the three months ended June 30, 1997 compared to the 1996 quarter.
The increase resulted primarily from a $33.8 million increase in
weighted-average portfolio balances outstanding year to year.
Interest income on investments and interest-bearing deposits increased by
$37,000, or 15.0%, for the three months ended June 30, 1997. The increase
resulted primarily from a $3.4 million increase in weighted-average portfolio
balances outstanding.
Interest expense on deposits increased by $367,000, or 13.7%, for the three
months ended June 30, 1997. The increase was primarily attributable to an
increase in the weighted-average cost of deposits, and a $19.1 million increase
in the average balance of deposits outstanding.
Interest expense on borrowings increased by $288,000, or 56.7%, during the three
months ended June 30, 1997. The increase was primarily attributable to an
increase in the average balance of borrowings outstanding.
As a result of the foregoing changes in interest income and interest expense,
the Corporation's net interest income increased by $257,000, or 12.0%, for the
three months ended June 30, 1997, compared to the three months ended June 30,
1996. The interest rate spread amounted to 2.86% in the 1997 quarter, as
compared to 2.92% in 1996, while the net interest margin was 3.16% in 1997, as
compared to 3.21% in 1996.
OTHER INCOME
Other income increased by $183,000, or 155.1%, for the 1997 quarter primarily
due to an increase of $187,000 in gain on sale of mortgage loans, which was
partially offset by a decrease in other operating income of $4,000, or 3.7%.
15
<PAGE> 16
WINTON FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTH PERIODS ENDED JUNE 30, 1997
AND 1996 (continued)
GENERAL, ADMINISTRATIVE AND OTHER EXPENSE
General, administrative and other expense increased by $120,000, or 8.7%, for
the quarter ended June 30, 1997. The increase was comprised of a $128,000, or
20.0%, increase in employee compensation and benefits, a $20,000, or 6.8%,
increase in occupancy and equipment, a $3,000, or 9.1%, increase in advertising
and a $51,000, or 24.5%, increase in other expenses, which were partially offset
by an $82,000, or 69.5% decrease in federal deposit insurance premiums.
FEDERAL INCOME TAXES
The provision for federal income taxes increased by $116,000, or 38.2%, for the
three months ended June 30, 1997, compared to the same period in 1996, due
primarily to a $320,000, or 35.7%, increase in pretax earnings. The effective
tax rates were 34.5% and 33.9% for the three months ended June 30, 1997 and
1996, respectively.
16
<PAGE> 17
WINTON FINANCIAL CORPORATION
PART II
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER MATERIALLY IMPORTANT EVENTS
On July 23, 1997, the common shares of Winton commenced trading on the
American Stock Exchange, Inc., and ceased trading on the Nasdaq SmallCap
Market. In connection therewith, Winton filed a Form 8-A on July 17,
1997, with the Securities and Exchange Commission to register its common
shares under Section 12(b) of the Securities Exchange Act of 1934 and
the Form 8-A was declared effective on July 22, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 10.1 Employment Agreement with Robert L. Bollin, dated May 1,
1997
Exhibit 10.2 Employment Agreement with Gregory J. Bollin, dated May 1,
1997
Exhibit 27 Financial Data Schedule
Form 8-K None.
17
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 9, 1996 By:
---------------------- -------------------------------------
Robert L. Bollin
President
Date: August 9, 1996 By:
---------------------- -------------------------------------
Jill M. Burke
Chief Financial Officer
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 4, 1996 By: /s/ Robert L. Bollin
---------------------- -------------------------------------
Robert L. Bollin
President
Date: August 4, 1996 By: /s/ Jill M. Burke
---------------------- -------------------------------------
Jill M. Burke
Chief Financial Officer
18
<PAGE> 1
Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this
"AGREEMENT"), entered into this 1st day of May, 1997, by and among Winton
Financial Corporation, a savings and loan holding company incorporated under
Ohio law (hereinafter referred to as "WFC"), The Winton Savings and Loan Co., a
savings and loan association incorporated under Ohio law and a wholly-owned
subsidiary WFC (hereinafter referred to as "WINTON"), and Robert L. Bollin, an
individual (hereinafter referred to as the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is an employee of WFC and WINTON (hereinafter
collectively referred to as the "EMPLOYERS");
WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Boards of Directors of the EMPLOYERS desire to retain the
services of the EMPLOYEE as the President of each of the EMPLOYERS;
WHEREAS, the EMPLOYEE desires to continue to serve as the President of
each of the EMPLOYERS; and
WHEREAS, the EMPLOYEE and the EMPLOYERS desire to enter into this
Agreement to set forth the terms and conditions of the employment relationship
between the EMPLOYERS and the EMPLOYEE;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the EMPLOYERS and the EMPLOYEE hereby agree as follows:
Section l. EMPLOYMENT AND TERM. Upon the terms and subject to the
conditions of this AGREEMENT, the EMPLOYERS hereby employ the EMPLOYEE, and the
EMPLOYEE hereby accepts employment, as the President of each of the EMPLOYERS.
The term of this AGREEMENT shall commence on the date hereof and shall end on
April 30, 2000 (hereinafter referred to as the "TERM").
Section 2. DUTIES OF EMPLOYEE.
(a) GENERAL DUTIES AND RESPONSIBILITIES. As the President of each of
the EMPLOYERS, the EMPLOYEE shall perform the duties and responsibilities
customary for such office to the best of his ability and in accordance with the
policies established by the Boards of Directors of the EMPLOYERS and all
applicable laws and regulations. The EMPLOYEE shall perform such other duties
not inconsistent with his position as may be assigned to him from time
<PAGE> 2
to time by the Boards of Directors of the EMPLOYERS; provided, however, that
the EMPLOYERS shall employ the EMPLOYEE during the TERM in a senior executive
capacity without diminishment of the importance or prestige of his position.
(b) DEVOTION OF ENTIRE TIME TO THE BUSINESS OF THE EMPLOYERS. The
EMPLOYEE shall devote his entire productive time, ability and attention during
normal business hours throughout the TERM to the faithful performance of his
duties under this AGREEMENT. The EMPLOYEE shall not directly or indirectly
render any services of a business, commercial or professional nature to any
person or organization without the prior written consent of the Boards of
Directors of the EMPLOYERS; provided, however, that the EMPLOYEE shall not be
precluded from (i) vacations and other leave time in accordance with Section
3(e) hereof; (ii) reasonable participation in community, civic, charitable or
similar organizations; or (iii) the pursuit of personal investments which do
not interfere or conflict with the performance of the EMPLOYEE'S duties to the
EMPLOYERS.
Section 3. COMPENSATION, BENEFITS AND REIMBURSEMENTS.
(a) SALARY. The EMPLOYEE shall receive during the TERM an annual
salary payable in equal installments not less often than monthly. The amount of
such annual salary shall be $174,000 until changed by the Boards of Directors
of the EMPLOYER in accordance with Section 3(b) of this AGREEMENT.
(b) ANNUAL SALARY REVIEW. In December of each year throughout the
TERM, the annual salary of the EMPLOYEE shall be reviewed by the Boards of
Directors of the EMPLOYERS and shall be set, effective January l of the
following year, at an amount not less than $174,000, based upon the EMPLOYEE'S
individual performance and the overall profitability and financial condition of
the EMPLOYERS (hereinafter referred to as the "ANNUAL REVIEW"). The results of
the ANNUAL REVIEW shall be reflected in the minutes of the Boards of Directors
of the EMPLOYERS.
(c) EXPENSES. In addition to any compensation received under Section
3(a) or (b) of this AGREEMENT, the EMPLOYERS shall pay or reimburse the
EMPLOYEE for all reasonable travel, entertainment and miscellaneous expenses
incurred in connection with the performance of his duties under this AGREEMENT.
Such reimbursement shall be made in accordance with the existing policies and
procedures of the EMPLOYERS pertaining to reimbursement of expenses to senior
management officials.
(d) EMPLOYEE BENEFIT PROGRAM. (i) During the TERM, the EMPLOYEE shall
be entitled to participate in all formally established employee benefit, bonus,
pension and profit-sharing plans and similar programs that are maintained by
the EMPLOYERS from time to time, including programs in respect of group health,
disability or life insurance, reimbursement of membership fees in civic, social
and professional organizations and all employee benefit plans or programs
hereafter adopted in writing by the Boards of Directors of the EMPLOYERS, for
which senior management personnel are eligible, including any employee stock
ownership plan, stock option plan or other stock benefit plan (hereinafter
collectively referred to as the
-2-
<PAGE> 3
"BENEFIT PLANS"). Notwithstanding the foregoing sentence, the EMPLOYERS may
discontinue or terminate at any time any such BENEFIT PLANS, now existing or
hereafter adopted, to the extent permitted by the terms of such plans and shall
not be required to compensate the EMPLOYEE for such discontinuance or
termination.
(ii) After the expiration of the TERM or the termination of the
employment of the EMPLOYEE for any reason other than JUST CAUSE (as defined
hereinafter), the EMPLOYERS shall provide a group health insurance program in
which the EMPLOYEE and his spouse will be eligible to participate and which
shall provide substantially the same benefits as are available to retired
employees of the EMPLOYERS on the date of this AGREEMENT until both the
EMPLOYEE and his spouse become 65 years of age; provided, however that all
premiums for such program shall be paid by the EMPLOYEE and/or his spouse after
the EMPLOYEE's retirement; provided further, however, that the EMPLOYEE may
only participate in such program for as long as the EMPLOYERS make available an
employee group health insurance program which permits the EMPLOYERS to make
coverage available for retirees.
(e) VACATION AND SICK LEAVE. The EMPLOYEE shall be entitled, without
loss of pay, to be absent voluntarily from the performance of his duties under
this AGREEMENT, subject to the following conditions:
(i) The EMPLOYEE shall be entitled to an annual vacation in
accordance with the policies periodically established by the Boards of
Directors of the EMPLOYERS for senior management officials of the
EMPLOYERS, the duration of which shall not be less than four weeks
each calendar year;
(ii) Vacation time shall be scheduled by the EMPLOYEE in a
reasonable manner and shall be subject to approval by the Boards of
Directors of the EMPLOYERS. The EMPLOYEE shall not be entitled to
receive any additional compensation from the EMPLOYERS in the event of
his failure to take the full allotment of vacation time in any
calendar year; provided, however, that a maximum of one week of unused
vacation time in any calendar year may be carried over into any
succeeding calendar year; and
(iii) The EMPLOYEE shall be entitled to annual sick leave as
established by the Boards of Directors of the EMPLOYERS for senior
management officials of the EMPLOYERS. In the event that any sick
leave time shall not have been used during any calendar year, such
leave shall accrue to subsequent calendar years, only to the extent
authorized by the Boards of Directors of the EMPLOYERS. Upon
termination of employment, the EMPLOYEE shall not be entitled to
receive any additional compensation from the EMPLOYERS for unused sick
leave.
Section 4. TERMINATION OF EMPLOYMENT.
(a) GENERAL. In addition to the termination of the employment of the
EMPLOYEE upon the expiration of the TERM, the employment of the EMPLOYEE shall
terminate at any other time during the TERM upon the delivery by the EMPLOYERS
of written notice of
-3-
<PAGE> 4
employment termination to the EMPLOYEE. Without limiting the generality of the
foregoing sentence, the following subparagraphs (i), (ii) and (iii) of this
Section 4(a) shall govern the obligations of the EMPLOYERS to the EMPLOYEE upon
the occurrence of the events described in such subparagraphs:
(i) TERMINATION FOR JUST CAUSE. In the event that the
EMPLOYERS terminate the employment of the EMPLOYEE during the TERM
because of the EMPLOYEE'S personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure or refusal to perform the duties and
responsibilities assigned in this AGREEMENT, willful violation of any
law, rule, regulation or final cease-and-desist order (other than
traffic violations or similar offenses), conviction of a felony or for
fraud or embezzlement, or material breach of any provision of this
AGREEMENT (hereinafter collectively referred to as "JUST CAUSE"), the
EMPLOYEE shall not receive, and shall have no right to receive, any
compensation or other benefits for any period after such termination.
(ii) TERMINATION AFTER CHANGE OF CONTROL. In the event that,
before the expiration of the TERM and in connection with or within one
year of a CHANGE OF CONTROL (as defined hereinafter) of either one of
the EMPLOYERS, (A) the employment of the EMPLOYEE is terminated for
any reason other than JUST CAUSE before the expiration of the TERM,
(B) the present capacity or circumstances in which the EMPLOYEE is
employed is changed before the expiration of the TERM, or (C) the
EMPLOYEE'S responsibilities, authority, compensation or other benefits
provided under this AGREEMENT are materially reduced, then the
following shall occur:
(I) The EMPLOYERS shall promptly pay to the EMPLOYEE
or to his beneficiaries, dependents or estate an amount equal
to the sum of (l) the amount of compensation to which the
EMPLOYEE would be entitled for the remainder of the TERM
under this AGREEMENT, plus (2) the difference between (x) the
product of three, multiplied by the greater of the annual
salary set forth in Section 3(a) of this AGREEMENT or the
annual salary payable to the EMPLOYEE as a result of any
ANNUAL REVIEW, less (xx) the amount paid to the EMPLOYEE
pursuant to clause (l) of this subparagraph (I);
(II) The EMPLOYEE, his dependents, beneficiaries and
estate shall continue to be covered under all BENEFIT PLANS
of the EMPLOYERS at the EMPLOYERS' expense as if the EMPLOYEE
were still employed under this AGREEMENT until the earliest
of the expiration of the TERM or the date on which the
EMPLOYEE is included in another employer's benefit plans as a
full-time employee; and
(III) The EMPLOYEE shall not be required to mitigate
the amount of any payment provided for in this AGREEMENT by
seeking other employment or otherwise, nor shall any amounts
received from other employment or otherwise by
-4-
<PAGE> 5
the EMPLOYEE offset in any manner the obligations of the
EMPLOYERS hereunder, except as specifically stated in
subparagraph (II).
In the event that payments pursuant to this subsection (ii) would
result in the imposition of a penalty tax pursuant to Section 280G(b)
(3) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder (hereinafter collectively referred
to as "SECTION 280G"), such payments shall be reduced to the maximum
amount which may be paid under SECTION 280G without exceeding such
limits.
(iii) TERMINATION WITHOUT CHANGE OF CONTROL. In the event
that the employment of the EMPLOYEE is terminated before the
expiration of the TERM for any reason other than JUST CAUSE or in
connection with or within one year of a CHANGE OF CONTROL, the
EMPLOYERS shall be obligated to continue (A) to pay on a monthly basis
to the EMPLOYEE, his designated beneficiaries or his estate, his
annual salary provided pursuant to Section 3(a) or (b) of this
AGREEMENT until the expiration of the TERM and (B) to provide to the
EMPLOYEE at the EMPLOYERS' expense, health, life, disability, and
other benefits substantially equal to those being provided to the
EMPLOYEE at the date of termination of his employment until the
earliest to occur of the expiration of the TERM or the date the
EMPLOYEE becomes employed full-time by another employer. In the event
that payments pursuant to this subsection (iii) would result in the
imposition of a penalty tax pursuant to SECTION 280G, such payments
shall be reduced to the maximum amount which may be paid under SECTION
280G without exceeding those limits.
(b) DEATH OF THE EMPLOYEE. The TERM automatically terminates upon the
death of the EMPLOYEE. In the event of such death, the EMPLOYEE'S estate shall
be entitled to receive the compensation due the EMPLOYEE through the last day
of the calendar month in which the death occurred, except as otherwise
specified herein.
(c) "GOLDEN PARACHUTE" PROVISION. Any payments made to the EMPLOYEE
pursuant to this AGREEMENT or otherwise are subject to and conditioned upon
their compliance with 12 U.S.C. ss.1828(k) and any regulations promulgated
thereunder.
(d) DEFINITION OF "CHANGE OF CONTROL". A "CHANGE OF CONTROL" shall be
deemed to have occurred in the event that, at any time during the TERM, either
any person or entity obtains "conclusive control" of the EMPLOYERS within the
meaning of 12 C.F.R. Section 574.4(a), or any person or entity obtains
"rebuttable control" within the meaning of 12 C.F.R. Section 574.4(b) and has
not rebutted control in accordance with 12 C.F.R. Section 574.4(c).
Section 5. SPECIAL REGULATORY EVENTS. Notwithstanding Section 4 of
this AGREEMENT, the obligations of the EMPLOYERS to the EMPLOYEE shall be as
follows in the event of the following circumstances:
(a) If the EMPLOYEE is suspended and/or temporarily prohibited from
participating in the conduct of the EMPLOYERS' affairs by a notice served under
section 8(e) (3) or (g) (1) of
-5-
<PAGE> 6
the Federal Deposit Insurance Act (hereinafter referred to as the "FDIA"), the
EMPLOYERS' obligations under this AGREEMENT shall be suspended as of the date
of service of such notice, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the EMPLOYERS may, in its discretion, pay
the EMPLOYEE all or part of the compensation withheld while the obligations in
this AGREEMENT were suspended and reinstate, in whole or in part, any of the
obligations that were suspended.
(b) If the EMPLOYEE is removed and/or permanently prohibited from
participating in the conduct of the EMPLOYERS' affairs by an order issued under
Section 8(e) (4) or (g) (l) of the FDIA, all obligations of the EMPLOYERS under
this AGREEMENT shall terminate as of the effective date of such order;
provided, however, that vested rights of the EMPLOYEE shall not be affected by
such termination.
(c) If the EMPLOYERS are in default, as defined in section 3(x) (1) of
the FDIA, all obligations under this AGREEMENT shall terminate as of the date
of default; provided, however, that vested rights of the EMPLOYEE shall not be
affected.
(d) All obligations under this AGREEMENT shall be terminated, except
to the extent of a determination that the continuation of this AGREEMENT is
necessary for the continued operation of the EMPLOYERS, (i) by the Director of
the Office of Thrift Supervision (hereinafter referred to as the "OTS"), or his
or her designee at the time that the Federal Deposit Insurance Corporation or
the Resolution Trust Corporation enters into an agreement to provide assistance
to or on behalf of the EMPLOYERS under the authority contained in Section 13(c)
of the FDIA or (ii) by the Director of the OTS, or his or her designee, at any
time the Director of the OTS, or his or her designee, approves a supervisory
merger to resolve problems related to the operation of the EMPLOYERS or when
the EMPLOYERS are determined by the Director of the OTS to be in an unsafe or
unsound condition. No vested rights of the EMPLOYEE shall be affected by any
such action.
Section 6. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this
AGREEMENT shall preclude the EMPLOYERS from consolidating with, merging into,
or transferring all, or substantially all, of their assets to another
corporation that assumes all of the EMPLOYERS' obligations and undertakings
hereunder. Upon such a consolidation, merger or transfer of assets, the term
"EMPLOYERS" as used herein, shall mean such other corporation or entity, and
this AGREEMENT shall continue in full force and effect.
Section 7. CONFIDENTIAL INFORMATION. The EMPLOYEE acknowledges that
during his employment he will learn and have access to confidential information
regarding the EMPLOYERS and their customers and businesses. The EMPLOYEE agrees
and covenants not to disclose or use for his own benefit, or the benefit of any
other person or entity, any confidential information, unless or until the
EMPLOYERS consent to such disclosure or use or such information becomes common
knowledge in the industry or is otherwise legally in the public domain. The
EMPLOYEE shall not knowingly disclose or reveal to any unauthorized person any
confidential information relating to the EMPLOYERS, their subsidiaries or
affiliates, or to any of the businesses operated by them, and the EMPLOYEE
confirms that such
-6-
<PAGE> 7
information constitutes the exclusive property of the EMPLOYERS. The EMPLOYEE
shall not otherwise knowingly act or conduct himself (a) to the material
detriment of the EMPLOYERS, their subsidiaries, or affiliates, or (b) in a
manner which is inimical or contrary to the interests of the EMPLOYERS.
Section 8. NONASSIGNABILITV. Neither this AGREEMENT nor any right or
interest hereunder shall be assignable by the EMPLOYEE, his beneficiaries, or
legal representatives without the EMPLOYERS' prior written consent; provided,
however, that nothing in this Section 8 shall preclude (a) the EMPLOYEE from
designating a beneficiary to receive any benefits payable hereunder upon his
death, or (b) the executors, administrators, or other legal representatives of
the EMPLOYEE or his estate from assigning any rights hereunder to the person or
persons entitled thereto.
Section 9. NO ATTACHMENT. Except as required by law, no right to
receive payment under this AGREEMENT shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy, or similar process of
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
Section l0. BINDING AGREEMENT. This AGREEMENT shall be binding upon,
and inure to the benefit of, the EMPLOYEE and the EMPLOYERS and their
respective permitted successors and assigns.
Section 11. AMENDMENT OF AGREEMENT. This AGREEMENT may not be modified
or amended, except by an instrument in writing signed by the parties hereto.
Section 12. WAIVER. No term or condition of this AGREEMENT shall be
deemed to have been waived, nor shall there be an estoppel against the
enforcement of any provision of this AGREEMENT, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver, unless specifically stated therein, and each waiver
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than the act specifically waived.
Section 13. SEVERABILITY. If, for any reason, any provision of this
AGREEMENT is held invalid, such invalidity shall not affect the other
provisions of this AGREEMENT not held so invalid, and each such other provision
shall, to the full extent consistent with applicable law, continue in full
force and effect. If this AGREEMENT is held invalid or cannot be enforced, then
any prior AGREEMENT between the EMPLOYERS (or any predecessor thereof) and the
EMPLOYEE shall be deemed reinstated to the full extent permitted by law, as if
this AGREEMENT had not been executed.
Section 14. HEADINGS. The headings of the paragraphs herein are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this AGREEMENT.
-7-
<PAGE> 8
Section 15. GOVERNING LAW. This AGREEMENT has been executed and
delivered in the State of Ohio and its validity, interpretation, performance,
and enforcement shall be governed by the laws of this State of Ohio, except to
the extent that federal law is governing.
Section 16. EFFECT OF PRIOR AGREEMENTS. This AGREEMENT contains the
entire understanding between the parties hereto and supersedes any prior
employment agreement between the EMPLOYERS and the EMPLOYEE, each of which is
hereby terminated and is of no further force or effect.
Section 17. NOTICES. Any notice or other communication required or
permitted pursuant to this AGREEMENT shall be deemed delivered if such notice
or communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:
If to Winton Financial Corporation and/or The Winton Savings and Loan Co.:
Winton Financial Corporation
5511 Cheviot Road
Cincinnati, Ohio 45247-7095
With copies to:
John C. Vorys, Esq.
Vorys, Sater, Seymour and Pease
Atrium Two, Suite 2100
221 East Fourth Street
Cincinnati, Ohio 45201-0236
If to the EMPLOYEE to:
Robert L. Bollin
3358 Kuliga Park Drive
Cincinnati, Ohio 45248
-8-
<PAGE> 9
IN WITNESS WHEREOF, the EMPLOYERS have caused this AGREEMENT to be
executed by its duly authorized officer, and the EMPLOYEE has signed this
AGREEMENT, each as of the day and year first above written.
Attest: WINTON FINANCIAL CORPORATION
CHRISTOPHER G. BRAUNSTEIN By WILLIAM J. PARCHMAN
- ------------------------- -------------------------
its CHAIRMAN OF THE BOARD
-------------------------
Attest: THE WINTON SAVINGS AND LOAN CO.
By
- ------------------------------ ------------------------
its
------------------------
Attest:
CHRISTOPHER G. BRAUNSTEIN ROBERT L. BOLLIN
- ------------------------------ --------------------------
Robert L. Bollin
-9-
<PAGE> 1
Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this
"AGREEMENT"), entered into this 1st day of May, 1997, by and among Winton
Financial Corporation, a savings and loan holding company incorporated under
Ohio law (hereinafter referred to as "WFC"), The Winton Savings and Loan Co., a
savings and loan association incorporated under Ohio law and a wholly-owned
subsidiary WFC (hereinafter referred to as "WINTON"), and Gregory J. Bollin, an
individual (hereinafter referred to as the "EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is an employee of WFC and WINTON (hereinafter
collectively referred to as the "EMPLOYERS");
WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Boards of Directors of the EMPLOYERS desire to retain the
services of the EMPLOYEE as the Executive Vice President of WINTON and the Vice
President of WFC;
WHEREAS, the EMPLOYEE desires to continue to serve as the Executive
Vice President of WINTON and the Vice President of WFC; and
WHEREAS, the EMPLOYEE and the EMPLOYERS desire to enter into this
Agreement to set forth the terms and conditions of the employment relationship
between the EMPLOYERS and the EMPLOYEE;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the EMPLOYERS and the EMPLOYEE hereby agree as follows:
Section l. EMPLOYMENT AND TERM. Upon the terms and subject to the
conditions of this AGREEMENT, the EMPLOYERS hereby employ the EMPLOYEE, and the
EMPLOYEE hereby accepts employment, as the Executive Vice President of WINTON
and the Vice President of WFC. The term of this AGREEMENT shall commence on the
date hereof and shall end on April 30, 2000 (hereinafter referred to as the
"TERM").
Section 2. DUTIES OF EMPLOYEE.
(a) GENERAL DUTIES AND RESPONSIBILITIES. As an officer of each of the
EMPLOYERS, the EMPLOYEE shall perform the duties and responsibilities customary
for such office to the best of his ability and in accordance with the policies
established by the Boards of Directors of the EMPLOYERS and all applicable laws
and regulations. The EMPLOYEE shall perform such other duties not inconsistent
with his position as may be assigned to him from time to time by the
<PAGE> 2
Boards of Directors of the EMPLOYERS; provided, however, that the EMPLOYERS
shall employ the EMPLOYEE during the TERM in a senior executive capacity
without diminishment of the importance or prestige of his position.
(b) DEVOTION OF ENTIRE TIME TO THE BUSINESS OF THE EMPLOYERS. The
EMPLOYEE shall devote his entire productive time, ability and attention during
normal business hours throughout the TERM to the faithful performance of his
duties under this AGREEMENT. The EMPLOYEE shall not directly or indirectly
render any services of a business, commercial or professional nature to any
person or organization without the prior written consent of the Boards of
Directors of the EMPLOYERS; provided, however, that the EMPLOYEE shall not be
precluded from (i) vacations and other leave time in accordance with Section
3(e) hereof; (ii) reasonable participation in community, civic, charitable or
similar organizations; or (iii) the pursuit of personal investments which do
not interfere or conflict with the performance of the EMPLOYEE'S duties to the
EMPLOYERS.
Section 3. COMPENSATION, BENEFITS AND REIMBURSEMENTS.
(a) SALARY. The EMPLOYEE shall receive during the TERM an annual
salary payable in equal installments not less often than monthly. The amount of
such annual salary shall be $128,000 until changed by the Boards of Directors
of the EMPLOYER in accordance with Section 3(b) of this AGREEMENT.
(b) ANNUAL SALARY REVIEW. In December of each year throughout the
TERM, the annual salary of the EMPLOYEE shall be reviewed by the Boards of
Directors of the EMPLOYERS and shall be set, effective January l of the
following year, at an amount not less than $128,000, based upon the EMPLOYEE'S
individual performance and the overall profitability and financial condition of
the EMPLOYERS (hereinafter referred to as the "ANNUAL REVIEW"). The results of
the ANNUAL REVIEW shall be reflected in the minutes of the Boards of Directors
of the EMPLOYERS.
(c) EXPENSES. In addition to any compensation received under Section
3(a) or (b) of this AGREEMENT, the EMPLOYERS shall pay or reimburse the
EMPLOYEE for all reasonable travel, entertainment and miscellaneous expenses
incurred in connection with the performance of his duties under this AGREEMENT.
Such reimbursement shall be made in accordance with the existing policies and
procedures of the EMPLOYERS pertaining to reimbursement of expenses to senior
management officials.
(d) EMPLOYEE BENEFIT PROGRAM. (i) During the TERM, the EMPLOYEE shall
be entitled to participate in all formally established employee benefit, bonus,
pension and profit-sharing plans and similar programs that are maintained by
the EMPLOYERS from time to time, including programs in respect of group health,
disability or life insurance, reimbursement of membership fees in civic, social
and professional organizations and all employee benefit plans or programs
hereafter adopted in writing by the Boards of Directors of the EMPLOYERS, for
which senior management personnel are eligible, including any employee stock
ownership plan, stock option plan or other stock benefit plan (hereinafter
collectively referred to as the
-2-
<PAGE> 3
"BENEFIT PLANS"). Notwithstanding the foregoing sentence, the EMPLOYERS may
discontinue or terminate at any time any such BENEFIT PLANS, now existing or
hereafter adopted, to the extent permitted by the terms of such plans and shall
not be required to compensate the EMPLOYEE for such discontinuance or
termination.
(ii) After the expiration of the TERM or the termination of the
employment of the EMPLOYEE for any reason other than JUST CAUSE (as defined
hereinafter), the EMPLOYERS shall provide a group health insurance program in
which the EMPLOYEE and his spouse will be eligible to participate and which
shall provide substantially the same benefits as are available to retired
employees of the EMPLOYERS on the date of this AGREEMENT until both the
EMPLOYEE and his spouse become 65 years of age; provided, however that all
premiums for such program shall be paid by the EMPLOYEE and/or his spouse after
the EMPLOYEE's retirement; provided further, however, that the EMPLOYEE may
only participate in such program for as long as the EMPLOYERS make available an
employee group health insurance program which permits the EMPLOYERS to make
coverage available for retirees.
(e) VACATION AND SICK LEAVE. The EMPLOYEE shall be entitled, without
loss of pay, to be absent voluntarily from the performance of his duties under
this AGREEMENT, subject to the following conditions:
(i) The EMPLOYEE shall be entitled to an annual vacation in
accordance with the policies periodically established by the Boards of
Directors of the EMPLOYERS for senior management officials of the
EMPLOYERS, the duration of which shall not be less than four weeks
each calendar year;
(ii) Vacation time shall be scheduled by the EMPLOYEE in a
reasonable manner and shall be subject to approval by the Boards of
Directors of the EMPLOYERS. The EMPLOYEE shall not be entitled to
receive any additional compensation from the EMPLOYERS in the event of
his failure to take the full allotment of vacation time in any
calendar year; provided, however, that a maximum of one week of unused
vacation time in any calendar year may be carried over into any
succeeding calendar year; and
(iii) The EMPLOYEE shall be entitled to annual sick leave as
established by the Boards of Directors of the EMPLOYERS for senior
management officials of the EMPLOYERS. In the event that any sick
leave time shall not have been used during any calendar year, such
leave shall accrue to subsequent calendar years, only to the extent
authorized by the Boards of Directors of the EMPLOYERS. Upon
termination of employment, the EMPLOYEE shall not be entitled to
receive any additional compensation from the EMPLOYERS for unused sick
leave.
Section 4. TERMINATION OF EMPLOYMENT.
(a) GENERAL. In addition to the termination of the employment of the
EMPLOYEE upon the expiration of the TERM, the employment of the EMPLOYEE shall
terminate at any other time during the TERM upon the delivery by the EMPLOYERS
of written notice of
-3-
<PAGE> 4
employment termination to the EMPLOYEE. Without limiting the generality of the
foregoing sentence, the following subparagraphs (i), (ii) and (iii) of this
Section 4(a) shall govern the obligations of the EMPLOYERS to the EMPLOYEE upon
the occurrence of the events described in such subparagraphs:
(i) TERMINATION FOR JUST CAUSE. In the event that the
EMPLOYERS terminate the employment of the EMPLOYEE during the TERM
because of the EMPLOYEE'S personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure or refusal to perform the duties and
responsibilities assigned in this AGREEMENT, willful violation of any
law, rule, regulation or final cease-and-desist order (other than
traffic violations or similar offenses), conviction of a felony or for
fraud or embezzlement, or material breach of any provision of this
AGREEMENT (hereinafter collectively referred to as "JUST CAUSE"), the
EMPLOYEE shall not receive, and shall have no right to receive, any
compensation or other benefits for any period after such termination.
(ii) TERMINATION AFTER CHANGE OF CONTROL. In the event that,
before the expiration of the TERM and in connection with or within one
year of a CHANGE OF CONTROL (as defined hereinafter) of either one of
the EMPLOYERS, (A) the employment of the EMPLOYEE is terminated for
any reason other than JUST CAUSE before the expiration of the TERM,
(B) the present capacity or circumstances in which the EMPLOYEE is
employed is changed before the expiration of the TERM, or (C) the
EMPLOYEE'S responsibilities, authority, compensation or other benefits
provided under this AGREEMENT are materially reduced, then the
following shall occur:
(I) The EMPLOYERS shall promptly pay to the EMPLOYEE
or to his beneficiaries, dependents or estate an amount equal
to the sum of (l) the amount of compensation to which the
EMPLOYEE would be entitled for the remainder of the TERM
under this AGREEMENT, plus (2) the difference between (x) the
product of three, multiplied by the greater of the annual
salary set forth in Section 3(a) of this AGREEMENT or the
annual salary payable to the EMPLOYEE as a result of any
ANNUAL REVIEW, less (xx) the amount paid to the EMPLOYEE
pursuant to clause (l) of this subparagraph (I);
(II) The EMPLOYEE, his dependents, beneficiaries and
estate shall continue to be covered under all BENEFIT PLANS
of the EMPLOYERS at the EMPLOYERS' expense as if the EMPLOYEE
were still employed under this AGREEMENT until the earliest
of the expiration of the TERM or the date on which the
EMPLOYEE is included in another employer's benefit plans as a
full-time employee; and
(III) The EMPLOYEE shall not be required to mitigate
the amount of any payment provided for in this AGREEMENT by
seeking other employment or otherwise, nor shall any amounts
received from other employment or otherwise by
-4-
<PAGE> 5
the EMPLOYEE offset in any manner the obligations of the
EMPLOYERS hereunder, except as specifically stated in
subparagraph (II).
In the event that payments pursuant to this subsection (ii) would
result in the imposition of a penalty tax pursuant to Section 280G(b)
(3) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder (hereinafter collectively referred
to as "SECTION 280G"), such payments shall be reduced to the maximum
amount which may be paid under SECTION 280G without exceeding such
limits.
(iii) TERMINATION WITHOUT CHANGE OF CONTROL. In the event
that the employment of the EMPLOYEE is terminated before the
expiration of the TERM for any reason other than JUST CAUSE or in
connection with or within one year of a CHANGE OF CONTROL, the
EMPLOYERS shall be obligated to continue (A) to pay on a monthly basis
to the EMPLOYEE, his designated beneficiaries or his estate, his
annual salary provided pursuant to Section 3(a) or (b) of this
AGREEMENT until the expiration of the TERM and (B) to provide to the
EMPLOYEE at the EMPLOYERS' expense, health, life, disability, and
other benefits substantially equal to those being provided to the
EMPLOYEE at the date of termination of his employment until the
earliest to occur of the expiration of the TERM or the date the
EMPLOYEE becomes employed full-time by another employer. In the event
that payments pursuant to this subsection (iii) would result in the
imposition of a penalty tax pursuant to SECTION 280G, such payments
shall be reduced to the maximum amount which may be paid under SECTION
280G without exceeding those limits.
(b) DEATH OF THE EMPLOYEE. The TERM automatically terminates upon the
death of the EMPLOYEE. In the event of such death, the EMPLOYEE'S estate shall
be entitled to receive the compensation due the EMPLOYEE through the last day
of the calendar month in which the death occurred, except as otherwise
specified herein.
(c) "GOLDEN PARACHUTE" PROVISION. Any payments made to the EMPLOYEE
pursuant to this AGREEMENT or otherwise are subject to and conditioned upon
their compliance with 12 U.S.C. ss.1828(k) and any regulations promulgated
thereunder.
(d) DEFINITION OF "CHANGE OF CONTROL". A "CHANGE OF CONTROL" shall be
deemed to have occurred in the event that, at any time during the TERM, either
any person or entity obtains "conclusive control" of the EMPLOYERS within the
meaning of 12 C.F.R. Section 574.4(a), or any person or entity obtains
"rebuttable control" within the meaning of 12 C.F.R. Section 574.4(b) and has
not rebutted control in accordance with 12 C.F.R. Section 574.4(c).
Section 5. SPECIAL REGULATORY EVENTS. Notwithstanding Section 4 of
this AGREEMENT, the obligations of the EMPLOYERS to the EMPLOYEE shall be as
follows in the event of the following circumstances:
(a) If the EMPLOYEE is suspended and/or temporarily prohibited from
participating in the conduct of the EMPLOYERS' affairs by a notice served under
section 8(e) (3) or (g) (1) of
-5-
<PAGE> 6
the Federal Deposit Insurance Act (hereinafter referred to as the "FDIA"), the
EMPLOYERS' obligations under this AGREEMENT shall be suspended as of the date
of service of such notice, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the EMPLOYERS may, in its discretion, pay
the EMPLOYEE all or part of the compensation withheld while the obligations in
this AGREEMENT were suspended and reinstate, in whole or in part, any of the
obligations that were suspended.
(b) If the EMPLOYEE is removed and/or permanently prohibited from
participating in the conduct of the EMPLOYERS' affairs by an order issued under
Section 8(e) (4) or (g) (l) of the FDIA, all obligations of the EMPLOYERS under
this AGREEMENT shall terminate as of the effective date of such order;
provided, however, that vested rights of the EMPLOYEE shall not be affected by
such termination.
(c) If the EMPLOYERS are in default, as defined in section 3(x) (1) of
the FDIA, all obligations under this AGREEMENT shall terminate as of the date
of default; provided, however, that vested rights of the EMPLOYEE shall not be
affected.
(d) All obligations under this AGREEMENT shall be terminated, except
to the extent of a determination that the continuation of this AGREEMENT is
necessary for the continued operation of the EMPLOYERS, (i) by the Director of
the Office of Thrift Supervision (hereinafter referred to as the "OTS"), or his
or her designee at the time that the Federal Deposit Insurance Corporation or
the Resolution Trust Corporation enters into an agreement to provide assistance
to or on behalf of the EMPLOYERS under the authority contained in Section 13(c)
of the FDIA or (ii) by the Director of the OTS, or his or her designee, at any
time the Director of the OTS, or his or her designee, approves a supervisory
merger to resolve problems related to the operation of the EMPLOYERS or when
the EMPLOYERS are determined by the Director of the OTS to be in an unsafe or
unsound condition. No vested rights of the EMPLOYEE shall be affected by any
such action.
Section 6. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this
AGREEMENT shall preclude the EMPLOYERS from consolidating with, merging into,
or transferring all, or substantially all, of their assets to another
corporation that assumes all of the EMPLOYERS' obligations and undertakings
hereunder. Upon such a consolidation, merger or transfer of assets, the term
"EMPLOYERS" as used herein, shall mean such other corporation or entity, and
this AGREEMENT shall continue in full force and effect.
Section 7. CONFIDENTIAL INFORMATION. The EMPLOYEE acknowledges that
during his employment he will learn and have access to confidential information
regarding the EMPLOYERS and their customers and businesses. The EMPLOYEE agrees
and covenants not to disclose or use for his own benefit, or the benefit of any
other person or entity, any confidential information, unless or until the
EMPLOYERS consent to such disclosure or use or such information becomes common
knowledge in the industry or is otherwise legally in the public domain. The
EMPLOYEE shall not knowingly disclose or reveal to any unauthorized person any
confidential information relating to the EMPLOYERS, their subsidiaries or
affiliates, or to any of the businesses operated by them, and the EMPLOYEE
confirms that such
-6-
<PAGE> 7
information constitutes the exclusive property of the EMPLOYERS. The EMPLOYEE
shall not otherwise knowingly act or conduct himself (a) to the material
detriment of the EMPLOYERS, their subsidiaries, or affiliates, or (b) in a
manner which is inimical or contrary to the interests of the EMPLOYERS.
Section 8. NONASSIGNABILITV. Neither this AGREEMENT nor any right or
interest hereunder shall be assignable by the EMPLOYEE, his beneficiaries, or
legal representatives without the EMPLOYERS' prior written consent; provided,
however, that nothing in this Section 8 shall preclude (a) the EMPLOYEE from
designating a beneficiary to receive any benefits payable hereunder upon his
death, or (b) the executors, administrators, or other legal representatives of
the EMPLOYEE or his estate from assigning any rights hereunder to the person or
persons entitled thereto.
Section 9. NO ATTACHMENT. Except as required by law, no right to
receive payment under this AGREEMENT shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy, or similar process of
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
Section l0. BINDING AGREEMENT. This AGREEMENT shall be binding upon,
and inure to the benefit of, the EMPLOYEE and the EMPLOYERS and their
respective permitted successors and assigns.
Section 11. AMENDMENT OF AGREEMENT. This AGREEMENT may not be modified
or amended, except by an instrument in writing signed by the parties hereto.
Section 12. WAIVER. No term or condition of this AGREEMENT shall be
deemed to have been waived, nor shall there be an estoppel against the
enforcement of any provision of this AGREEMENT, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver, unless specifically stated therein, and each waiver
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than the act specifically waived.
Section 13. SEVERABILITY. If, for any reason, any provision of this
AGREEMENT is held invalid, such invalidity shall not affect the other
provisions of this AGREEMENT not held so invalid, and each such other provision
shall, to the full extent consistent with applicable law, continue in full
force and effect. If this AGREEMENT is held invalid or cannot be enforced, then
any prior AGREEMENT between the EMPLOYERS (or any predecessor thereof) and the
EMPLOYEE shall be deemed reinstated to the full extent permitted by law, as if
this AGREEMENT had not been executed.
Section 14. HEADINGS. The headings of the paragraphs herein are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this AGREEMENT.
-7-
<PAGE> 8
Section 15. GOVERNING LAW. This AGREEMENT has been executed and
delivered in the State of Ohio and its validity, interpretation, performance,
and enforcement shall be governed by the laws of this State of Ohio, except to
the extent that federal law is governing.
Section 16. EFFECT OF PRIOR AGREEMENTS. This AGREEMENT contains the
entire understanding between the parties hereto and supersedes any prior
employment agreement between the EMPLOYERS and the EMPLOYEE, each of which is
hereby terminated and is of no further force or effect.
Section 17. NOTICES. Any notice or other communication required or
permitted pursuant to this AGREEMENT shall be deemed delivered if such notice
or communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:
If to Winton Financial Corporation and/or The Winton Savings and Loan Co.:
Winton Financial Corporation
5511 Cheviot Road
Cincinnati, Ohio 45247-7095
With copies to:
John C. Vorys, Esq.
Vorys, Sater, Seymour and Pease
Atrium Two, Suite 2100
221 East Fourth Street
Cincinnati, Ohio 45201-0236
If to the EMPLOYEE to:
Gregory J. Bollin
4440 Hubble Road
Cincinnati, Ohio 45247
-8-
<PAGE> 9
IN WITNESS WHEREOF, the EMPLOYERS have caused this AGREEMENT to be
executed by its duly authorized officer, and the EMPLOYEE has signed this
AGREEMENT, each as of the day and year first above written.
Attest: WINTON FINANCIAL CORPORATION
CHRISTOPHER G. BRAUNSTEIN By WILLIAM J. PARCHMAN
- ------------------------------ ------------------------
its CHAIRMAN OF THE BOARD
-----------------------
Attest: THE WINTON SAVINGS AND LOAN CO.
CHRISTOPHER G. BRAUNSTEIN By ROBERT L. BOLLIN
- ------------------------------ -------------------------
its PRESIDENT
------------------------
Attest:
CHRISTOPHER G. BRAUNSTEIN GREGORY L. BOLLIN
- ------------------------------ --------------------------
Gregory J. Bollin
-9-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 1,502
<INT-BEARING-DEPOSITS> 1,061
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 3,618
<INVESTMENTS-CARRYING> 28,062
<INVESTMENTS-MARKET> 27,838
<LOANS> 273,666
<ALLOWANCE> 872
<TOTAL-ASSETS> 317,392
<DEPOSITS> 234,140
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,798
<LONG-TERM> 57,897
<COMMON> 0
0
0
<OTHER-SE> 22,557
<TOTAL-LIABILITIES-AND-EQUITY> 317,392
<INTEREST-LOAN> 16,507
<INTEREST-INVEST> 824
<INTEREST-OTHER> 768
<INTEREST-TOTAL> 18,099
<INTEREST-DEPOSIT> 8,836
<INTEREST-EXPENSE> 11,030
<INTEREST-INCOME-NET> 7,069
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 36
<EXPENSE-OTHER> 4,325
<INCOME-PRETAX> 3,566
<INCOME-PRE-EXTRAORDINARY> 2,347
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,347
<EPS-PRIMARY> 1.18
<EPS-DILUTED> 1.18
<YIELD-ACTUAL> 3.21
<LOANS-NON> 396
<LOANS-PAST> 201
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 385
<ALLOWANCE-OPEN> 857
<CHARGE-OFFS> 5
<RECOVERIES> 20
<ALLOWANCE-CLOSE> 872
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 872
</TABLE>
