<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement pursuant to Section 14(a) 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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
GLENWAY FINANCIAL CORPORATION
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if
Other than the Registrant)
Payment of Filing Fee (Check appropriate box):
[X] $125 per Exchange Act rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14(a)-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) and O-11
(1) Title of each number of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule O-11.
[ ] Fee paid previously with preliminary materials
[ ] Check box is any part of the fee is offset as provided by Exchange Act
Rule O-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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
GLENWAY FINANCIAL CORPORATION
5535 GLENWAY AVENUE
CINCINNATI, OHIO 45238
(513) 922-5959
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the Annual Meeting of Stockholders of
Glenway Financial Corporation (the "Corporation") will be held at the
Corporation's headquarters at 5535 Glenway Avenue, Cincinnati, Ohio, on October
23, 1996, at 2:00 p.m., Eastern Daylight Time (the "Annual Meeting"), for the
following purposes, which are more completely set forth in the accompanying
Proxy Statement:
To elect two directors of the Corporation for terms expiring
in 1999;
To approve an amendment to the Corporation's 1990 Stock
Option and Incentive Plan (the "Plan") to reserve
50,000 shares under the Plan;
To ratify the selection of Grant Thornton LLP as the
auditors of the Corporation for the current fiscal
year; and
To transact such other business as may properly come
before the Annual Meeting and any adjournments
thereof. The Board of Directors is not aware of any
other business to come before the Annual Meeting.
Any action may be taken on the foregoing proposals at the Annual
Meeting on the date specified above or any date or dates to which the Annual
Meeting may be adjourned. Only stockholders of the Corporation of record at the
close of business on September 13, 1996, will be entitled to receive notice of
and to vote at the Annual Meeting and any adjournments thereof.
A complete list of stockholders entitled to vote at the meeting is
available for examination by any stockholder, for any purpose germane to the
Annual Meeting, between 9:00 a.m. and 4:00 p.m. at the main office of the
Corporation, 5535 Glenway Avenue, Cincinnati, Ohio, for a period of ten days
prior to the Annual Meeting.
Whether or not you expect to attend the Annual Meeting, we urge you to
consider the accompanying Proxy Statement carefully and to SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES MAY BE VOTED IN
ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A QUORUM MAY BE ASSURED. The
giving of a Proxy does not affect your right to vote in person in the event you
attend the Annual Meeting.
Cincinnati, Ohio By Order of the Board of Directors
September 24, 1996
Daniel W. Geeding
Secretary
<PAGE> 3
GLENWAY FINANCIAL CORPORATION
5535 GLENWAY AVENUE
CINCINNATI, OHIO 45238
(513) 922-5959
PROXY STATEMENT
PROXIES
The enclosed Proxy is being solicited by the Board of Directors of
Glenway Financial Corporation (the "Corporation") for use at the 1996 Annual
Meeting of Stockholders of the Corporation to be held at the Corporation's
headquarters at 5535 Glenway Avenue, Cincinnati, Ohio, on October 23, 1996, at
2:00 p.m., Eastern Daylight Time, and at any adjournments thereof (the "Annual
Meeting"). Stockholders who execute Proxies retain the right to revoke them at
any time before they are voted at the Annual Meeting. Proxies may be revoked by
written notice to the Secretary of the Corporation at the above address, by the
filing of a later-dated Proxy prior to a vote being taken on a particular
proposal at the Annual Meeting or by attending the Annual Meeting and voting in
person. Unless a stockholder revokes the Proxy, the shares represented by such
Proxies will be voted at the Annual Meeting and all adjournments thereof.
Each properly executed Proxy solicited by the Board of Directors, which
is received prior to the Annual Meeting and not revoked, will be voted as
specified thereon or, in the absence of specific instructions to the contrary,
will be voted:
FOR the election of Albert W. Moeller and Robert R. Sudbrook
as directors of the Corporation for terms expiring in 1999;
FOR the approval of an amendment to the Corporation's 1990
Stock Option and Incentive Plan (the "Plan") to reserve 50,000
shares for issuance under the Plan; and
FOR the ratification of the selection of Grant Thornton LLP as
the auditors of the Corporation for the current fiscal year.
The cost of solicitation of Proxies will be borne by the Corporation.
The Corporation will reimburse brokerage firms and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners. In addition to solicitation by mail,
directors, officers and regular employees of the Corporation may solicit Proxies
personally or by telegraph or telephone without additional compensation.
Only stockholders of record as of the close of business on September
13, 1996 (the "Voting Record Date"), are eligible to vote at the Annual Meeting
and will be entitled to cast one vote for each share of common stock of the
Corporation (the "Common Stock") owned. The Corporation's records disclose that,
as of the Voting Record Date, there were 1,149,339 shares of the Common Stock
outstanding and entitled to be cast at the Annual Meeting. The Corporation's
Certificate of Incorporation does not allow cumulative voting in the election of
directors.
This Proxy Statement is first being mailed to stockholders of the
Corporation on or about September 24, 1996.
<PAGE> 4
VOTE REQUIRED
ELECTION OF DIRECTORS
Under Delaware law and Glenway's Bylaws, the two nominees receiving the
greatest number of votes will be elected as directors. Shares as to which the
authority to vote is withheld and shares held by a nominee for a beneficial
owner which are represented in person or by proxy but not voted with respect to
the election of directors ("non-votes") are counted for purposes of a quorum but
are not counted toward the election of directors.
APPROVAL OF THE AMENDMENT TO THE PLAN
The affirmative vote of the holders of a majority of the shares
represented in person or by proxy at the Annual Meeting is necessary to approve
the amendment to the Plan to reserve 50,000 shares for issuance under the Plan.
Non-votes are counted as present for purposes of a quorum. The effect of an
abstention or a non-vote with respect to the amendment to the Plan is the same
as a "no" vote. If the accompanying Proxy is signed and dated by the stockholder
but no vote is specified thereon, the shares held by such stockholder will be
voted FOR the adoption of the amendment to the Plan and will not be considered
"non-votes."
RATIFICATION OF SELECTION OF AUDITORS
The affirmative vote of the holders of a majority of the shares
represented in person or by proxy at the Annual Meeting is necessary to ratify
the selection of Grant Thornton LLP as the auditors of Glenway for the current
fiscal year. Non-votes are counted for purposes of a quorum. The effect of an
abstention or a non-vote with respect to the ratification of the selection of
auditors is the same as a "no" vote. If the accompanying Proxy is signed and
dated by the stockholder but no vote is specified thereon, the shares held by
stockholders will be voted FOR the ratification of the selection of Grant
Thornton LLP as auditors and will not be considered "non-votes."
VOTING SECURITIES AND OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
[Share ownership information in preliminary filing is as of August 13th. It will
be updated to September 13th in final. No changes are expected.]
The following table sets forth certain information with respect to the
only person known to the Corporation to own beneficially more than five percent
of the outstanding Common Stock as of September 13, 1996:
<PAGE> 5
<TABLE>
<CAPTION>
Amount and Nature of Percentage of
Name and Address Beneficial Ownership Shares Outstanding
- ---------------- -------------------- ------------------
<S> <C> <C>
PNC Bank, Ohio, N.A. 82,010(1) 7.13%
201 E. Fifth Street
Cincinnati, Ohio 45202
- -----------------------------
<FN>
(1) PNC Bank, Ohio, N.A. ("PNC"), beneficially owns such shares as the
trustee for the Glenway Financial Corporation Employee Stock Ownership
Plan (the "ESOP"). Includes 69,254 shares allocated to ESOP
participants as to which such participants have sole voting power.
</TABLE>
The following table sets forth certain information with respect to the
Common Stock beneficially owned by each director of the Corporation and by all
directors and executive officers of the Corporation as a group as of September
13, 1996:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address(1) Beneficial Ownership(2) Shares
- ------------------- ----------------------- ------
Outstanding(3)
--------------
<S> <C> <C>
Daniel W. Geeding 16,078 1.39%
Ronald L. Goodfellow 13,620(4)(5) 1.18
Robert E. Holden 21,937(6) 1.90
Albert W. Moeller 12,675(7) 1.10
Edgar A. Rust 53,978(8) 4.69
Robert R. Sudbrook 1,050 .09
John P. Torbeck 17,656(4)(9) 1.53
Milton L. Van Schoik 12,453(4)(10) 1.07
All directors and executive officers 177,842(11) 15.28
as a group (10 people)
- -----------------------------
<FN>
Each of the persons listed in this table may be contacted at the address of
the Corporation, 5535 Glenway Avenue, Cincinnati, Ohio 45238.
(2) A person is the beneficial owner of shares of Common Stock if such
person directly or indirectly has sole or shared voting or investment
power over such shares or has the right to acquire such voting or
investment power within 60 days. All shares are owned directly with
sole voting or investment power, unless otherwise indicated by
footnote. All stock options granted under the Plan are exercisable upon
the date of grant and expire if not exercised within ten years of
grant.
(3) For each individual, assumes a total of 1,149,339 shares of Common
Stock outstanding, plus the number of shares such person may acquire,
pursuant to the Option Plan, within 60 days, if any. For all directors
and executive officers as a group, assumes a total of 1,163,459
outstanding shares of Common Stock, which includes an aggregate of
14,120 shares which may be acquired by directors and executive
officers, under the Plan, within 60 days.
(4) Includes 3,858 shares that may be acquired upon exercise of options.
(5) Includes 1,967 shares as to which Mr. Goodfellow has shared voting and
investment power.
(6) Includes 3,155 shares as to which Mr. Holden has shared voting and
investment power.
</TABLE>
<PAGE> 6
(7) Includes 551 shares as to which Mr. Moeller has shared voting and
investment power.
(8) Includes 18,896 shares as to which Mr. Rust has shared voting and
investment power; and 5,058 shares allocated to Mr. Rust under the
ESOP.
(9) Includes 576 shares as to which Mr. Torbeck has shared voting and
investment power and 786 shares held by Mr. Torbeck as custodian for
others.
(10) Includes 4,138 shares as to which Mr. Van Schoik has shared voting and
investment power.
(11) Includes 14,120 shares that may be acquired upon the exercise of
options.
BOARD OF DIRECTORS
ELECTION OF DIRECTORS
Pursuant to the Corporation's Certificate of Incorporation, the number
of directors of the Corporation is fixed at nine, divided into three classes as
nearly equal in number as possible. One class is elected annually, and each
class serves a term of three years.
Since the 1995 annual meeting of stockholders, there have been changes
in the membership of the Board of Directors. Dennis E. Betz, the former
President and Chief Executive Officer of the Corporation, was killed in a plane
crash in December 1995. Immediately thereafter, Edgar A. Rust was appointed to
serve as President and Chief Executive Officer of the Corporation and Albert W.
Moeller was named to replace Mr. Rust as Chairman. Fred E. Betz, Dennis E.
Betz's father, resigned from the Board in March 1996.
In July 1996, Robert R. Sudbrook was appointed to serve as President
and Chief Executive Officer of the Corporation and was appointed as a director
to fill the vacancy created by the resignation of Mr. Fred Betz. Mr. Rust was
reappointed to serve as Chairman of the Corporation, and Milton L. Van Schoik
was appointed to serve as Vice Chairman of the Corporation. Effective at the
adjournment of the Annual Meeting, Robert E. Holden will retire from the Board,
prior to the expiration of his term in 1997. Therefore, after the Annual
Meeting, there will be seven directors and two vacancies on the Board of the
Corporation.
The Board of Directors has established a Nominating Committee for
selecting nominees for election as directors. Albert W. Moeller is the Chairman
of the Nominating Committee. Messrs. Rust and Sudbrook and Mr. Ronald L.
Goodfellow also serve on the Committee. The Nominating Committee considers
stockholder recommendations in selecting nominees. Any stockholder entitled to
vote for the election of directors may nominate persons for election as
directors by following the procedure set out in the Corporation's By-Laws. Such
procedure provides, in general, that a stockholder wishing to make a nomination
must deliver to the Secretary of the Corporation, not less than 30 days prior to
the Annual Meeting, a written notice setting forth certain information regarding
both the nominee and the stockholder making such nomination.
Directors shall be elected by a plurality of the votes present in
person or by Proxy at the Annual Meeting, and the nominees receiving the
greatest number of votes shall be elected. Shares of Common Stock as to which
the authority to vote is withheld and shares of Common Stock represented in
person or by Proxy at the Annual Meeting, which are not voted with respect to
the election of directors, are not counted toward the election of directors or
toward the election of the individual nominees specified on the form of Proxy.
<PAGE> 7
The Board of Directors proposes the election of the following directors
to terms that will expire in 1999:
<TABLE>
<CAPTION>
Director
Name Age(1) Position(s) Held Since(2)
---- ------ ---------------- --------
<S> <C> <C>
Albert W. Moeller 73 Director 1972
Robert R. Sudbrook 54 Director and President 1996
- -----------------------------
<FN>
(1) As of September 13, 1996.
(2) Indicates the year that the individual became a director of the
Corporation's subsidiary, Centennial Savings Bank ("Centennial") or The
Glenway Loan and Deposit Company ("Glenway Loan and Deposit"), which
converted to stock form and merged into Centennial on August 24, 1993
(the "Merger-Conversion"). Mr. Moeller became a director of the
Corporation when it was formed in 1990. Mr. Sudbrook was appointed to
the Board in July 1996.
</TABLE>
If any nominee is unable to serve, the shares represented by all valid
Proxies will be voted for the election of such substitute as the Board of
Directors may recommend. At this time, the Board of Directors knows of no reason
why any nominee would be unable to serve if elected. Unless otherwise directed,
Proxies received pursuant to this solicitation will be voted for the foregoing
nominees.
The following directors will continue to serve after the Annual Meeting
for the terms indicated:
<TABLE>
<CAPTION>
Director Term
Name Age(1) Position(s) Held Since(2) Expires
- ---- ------ ---------------- -------- -------
<S> <C> <C> <C> <C>
Daniel W. Geeding 53 Director 1988 1997
Ronald L. Goodfellow 64 Director 1970 1997
Edgar A. Rust 53 Chairman of the Board 1975 1998
and Director
John P. Torbeck 67 Director 1984 1998
Milton L. Van Schoik 67 Director 1971 1998
- -----------------------------
<FN>
(1) As of September 13, 1996
(2) Indicates the year that the individual became a director of Centennial
or Glenway Loan and Deposit. Messrs. Geeding and Rust became directors
of the Corporation when the Corporation was formed in 1990. Mr. John P.
Torbeck and Messrs. Goodfellow and Van Schoik became directors of the
Corporation on the effective date of the Merger-Conversion.
</TABLE>
DANIEL W. GEEDING is the Dean of the College of Business Administration
at Xavier University, a position he has held since 1988, and he has been
employed by Xavier University since 1969. Mr. Geeding also serves as a director
of Choice Care, Frisch's Restaurants, Inc. and Zaring Homes, Inc.
RONALD L. GOODFELLOW became Chairman of the board of directors of
Centennial in September 1995. Prior to that, he served as Vice-Chairman of the
board of Centennial. In 1988, Mr. Goodfellow
<PAGE> 8
retired from Cincinnati Milacron, Inc., as the Manager of Marketing
Administration and Distributor Sales, where he had been employed for 32 years.
ROBERT E. HOLDEN is currently retired. Prior to his retirement, he was
the owner and President of E.C. Decker Co., a specialty contracting firm located
in Cincinnati, for 28 years.
ALBERT W. MOELLER has served as either Chairman or Vice Chairman of the
Board of the Corporation from 1990 to 1996. Mr. Moeller retired from Procter &
Gamble as Assistant Treasurer in 1983, where he had been employed for 42 years.
EDGAR A. RUST is Chairman of the Board of the Corporation and a
director of Centennial. He served as President and Chief Executive Officer of
the Corporation and Centennial from December 1995 through July 1996. Prior to
that appointment, he served as Chairman of the Board of the Corporation from
September 1995 and as the Executive Vice President of Centennial since the
Merger-Conversion. Prior to September 1995, Mr. Rust had served as Vice Chairman
of the Board of the Corporation, and prior to the Merger-Conversion, he had
served as President and Chief Executive Officer of Centennial since 1975. Since
January 1995, Mr. Rust has served as Housing Director of Bethany House Services.
He also serves as Chairman of the Board of the Cincinnati Development Fund.
ROBERT R. SUDBROOK has served as the President and Chief Executive
Officer of the Corporation and Centennial since July 1996. Prior to that, he
served as the President and Chief Executive Officer of The North Side Bank &
Trust Company, a $215 million asset bank in Cincinnati, for six years. Prior to
that, Mr. Sudbrook had over 20 years of experience in the banking industry.
JOHN P. TORBECK is the Vice President and Secretary of Torbeck Homes, a
residential construction company located in Cincinnati, a position he has held
since the establishment of that company in 1984.
MILTON L. VAN SCHOIK became Vice Chairman of the Corporation in 1996.
Mr. Van Schoik is currently retired and at the time of his retirement, he held
the position of Senior Vice President-Information and General Services at the
Cincinnati Gas and Electric Company, where he had been employed since 1957.
MEETINGS AND COMMITTEES OF DIRECTORS
The Board of Directors of the Corporation met 13 times for regularly
scheduled and special meetings during the fiscal year ended June 30, 1996. Each
director, except Mr. Geeding, attended at least 75% of the aggregate of (1) the
total meetings of such Board held during such fiscal year and (2) the total
number of meetings held by all committees of that Board of Directors on which he
served. Mr. Geeding attended 69% of the aggregate of such meetings.
The Board of Directors of the Corporation has established two
committees in addition to the Nominating Committee, consisting of the Executive
Committee and the Audit Committee.
The Executive Committee is chaired by Director Van Schoik and also
consists of Directors Moeller and Rust. The Executive Committee meets as needed
to consider matters of general concern to the Corporation. All decisions of the
Executive Committee are ratified by the Board of Directors. The Executive
Committee met four times during the fiscal year ended June 30, 1996.
The Audit Committee, which is a joint committee of the Corporation and
Centennial, is composed of Directors Geeding, Moeller, Torbeck and Van Schoik
and James M. Hater and James W. Schackman, directors of Centennial. Director
Geeding is the Chairman of the Audit Committee, which reviews audit reports and
related matters to ensure effective compliance with regulatory and internal
policies and procedures. The Audit Committee met five times during the fiscal
year ended June 30, 1996.
<PAGE> 9
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
current executive officers of the Corporation, as of September 13, 1996:
<TABLE>
<CAPTION>
Name Age Position(s) Held
- ---- --- ----------------
<S> <C> <C>
Edgar A. Rust 53 Chairman of the Board
Milton L. Van Schoik 67 Vice Chairman of the Board
Robert R. Sudbrook 53 President and Chief Executive Officer
Daniel W. Geeding 53 Secretary
Joseph V. Bunke 43 Vice President/Internal Control
David R. Kent 46 Vice President and Chief Financial Officer
</TABLE>
JOSEPH V. BUNKE is the Vice President/Internal Control of the
Corporation, a position he has held since October 1993. Prior to the
Merger-Conversion, Mr. Bunke was the Treasurer of Glenway Loan and Deposit, a
position he had held since 1986.
DAVID R. KENT is the Vice President and Chief Financial Officer of the
Corporation. Prior to the Merger-Conversion, Mr. Kent had served as the Vice
President and Controller of Centennial since 1983.
For biographical information regarding the other executive officers of
the Corporation, see "BOARD OF DIRECTORS - Election of Directors".
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth certain information
with respect to the compensation paid by the Bank to certain executive officers
of the Corporation:
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
-------------------------------
Long Term Compensation
- ----------------------------------------------------------------------------------------------------------------------------
Annual Compensation Awards
--------------------------------------------------------
Fiscal Restricted Options/ All other
Name and Principal Position Year Salary($) Bonus($) Stock Awards($) SARs(#) compensation
(1) ($)(2)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dennis E. Betz, 1996 123,000 9,000 -
former President (3) 1995 150,000 35,750 - - -
1994 143,000 17,500 - 7,000
Edgar A. Rust, 1996 90,200 - - - 7,700
former President (4) 1995 20,000 14,062 - - 15,000
1994 97,880 40,900 - - 8,000
- -----------------------------
</TABLE>
<PAGE> 10
(1) As a result of a 5% stock dividend in August 1995, outstanding options
increased by 5%, but such increase is not considered a grant of options
by the Corporation. "SARs" stands for "stock appreciation rights." The
Corporation does not have a plan that provides for the grant of SARs.
(2) Reflects directors fees paid to Mr. Rust during months he did not serve
as President of the Corporation.
(3) Mr. Betz was killed in a plane crash in December 1995.
(4) Mr. Rust served as President of the Corporation and Centennial from
December 1995 to July 1996. Prior to that he served as Executive Vice
President of Centennial.
OPTION PLAN
No options were granted under the Option Plan to the person listed in
the foregoing Summary Compensation Table during the fiscal year ended June 30,
1996. However, Mr. Rust's total number of outstanding options increased by 5% in
August 1996 as a result of a 5% stock dividend granted by the Corporation on
that date.
The following table sets forth information regarding the number and
value of unexercised options held by the person listed in the Summary
Compensation Table:
Aggregated Option/SAR Exercises In Last Fiscal Year And
-------------------------------------------------------
6/30/96 Option/SAR Values
-------------------------
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options/SARs at Options/SARs at
6/30/96 (#) 6/30/96 ($)(1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dennis E. Betz - N/A (2) (2)
Edgar A. Rust - N/A 1031/0 16,042/0
- ---------------------------
<FN>
(1) An option is "in-the-money" if the fair market value of the underlying
stock exceeds the exercise price of the option. The figure represents
the value of such unexercised options, determined by multiplying the
number of unexercised options by the difference between the exercise
prices of such options and the closing bid price for the Common Stock
reported by The Nasdaq National Market on June 30, 1996.
(2) Mr. Betz is deceased. His estate has until December 1996 to exercise
the 7,350 unexercised options held by Mr. Betz at his death.
</TABLE>
DIRECTOR COMPENSATION
Each director of the Corporation receives a monthly fee of $1,050 and
$200 per each Board or committee meeting of the Corporation attended. In
addition, Messrs. Goodfellow, Rust (except for the time he served as President)
and Van Schoik received $200 per each meeting of the board or a committee of
Centennial attended in their capacity as directors of Centennial.
<PAGE> 11
EMPLOYMENT AGREEMENT
In connection with the Merger-Conversion, the Bank had entered into an
employment agreement with Mr. Dennis Betz, retaining him as President. The
employment agreement has a term of three years and provides for an annual salary
of not less than $143,000. Under that agreement, if Mr. Betz had been terminated
at any time during such three-year term for any reason other than "just cause",
as defined in the employment agreement, he would have been entitled to receive
an amount equal to his annual compensation for thirty six months, subject to
reduction to the extent necessary to comply with certain provisions of the
Internal Revenue Code of 1986, as amended. Assuming a termination of the
employment contract, based on an annual salary of $150,000, the payment to Mr.
Betz would have been $450,000. At Mr. Betz's death, the agreement terminated and
all amounts owed to date under the agreement were paid.
The Bank entered into an employment agreement with Mr. Robert R.
Sudbrook, retaining him as President effective in July 1996. The employment
agreement has a term of three years and provides for an annual salary of not
less than $160,000. If Mr. Sudbrook is terminated at any time during such
three-year term for any reason other than "just cause", as defined in the
employment agreement, he will be entitled to receive an amount equal to his
annual compensation for 36 months, subject to reduction to the extent necessary
to comply with certain provisions of the Internal Revenue Code of 1986, as
amended. Assuming a termination of the employment contract, based on an annual
salary of $160,000, the payment to Mr. Sudbrook would be $480,000.
APPROVAL OF AMENDMENT TO THE
STOCK OPTION AND INCENTIVE PLAN
GENERAL
The Plan, as adopted by the Board of Directors of the Corporation, was
ratified by stockholders at a meeting held October 23, 1991. Subsequently, in
July 1993, additional shares were reserved under the Plan for awards in
connection with the Merger-Conversion. As a result of prior awards under the
Plan, no shares remain available under the Plan for future awards. The Plan
permits the granting of a variety of long-term incentive awards to those
directors, officers and key employees as a means of enhancing and encouraging
the recruitment and retention of those individuals on whom the continued success
of the Corporation most depends.
THE AMENDMENT
The Board intends to issue 10,500 stock options to Mr. Sudbrook and to
have additional shares available for issuance of options and other awards under
the Plan to other officers and directors. The Corporation is seeking stockholder
approval to amend the Plan to reserve 50,000 shares thereunder. Awards under the
Plan are made based on an individual's position, duties and responsibilities,
the value of the individual's service to Glenway and its subsidiaries and any
other factors deemed relevant.
On August 29, 1996, Mr. Sudbrook was granted incentive stock options to
purchase 10,500 shares of the Corporation, subject to stockholder approval of
the proposed amendment to the Plan. See "-Awards Under the Plan." After the
issuance of these options to Mr. Sudbrook and the approval of the proposed
amendment to increase the number of shares reserved for awards under the Plan by
50,000, there will be 40,002 shares available for future awards under the Plan.
There are no current plans to make any additional awards under the Plan.
<PAGE> 12
The principal features of the Plan are summarized below. The complete
text of the proposed amendment to the Plan is as follows:
Section 5 of the Plan is amended in its entirety to read as follows:
5. SHARES SUBJECT TO PLAN. Subject to adjustment by the operation of
Section 12 hereof, the maximum number of Shares with respect to which
Awards may be made under the Plan, as of October 23, 1996, is 50,002.
The Shares with respect to which Awards may be made under the Plan may
be either authorized and unissued shares or issued shares heretofore or
hereafter reacquired and held as treasury shares. Shares which are
subject to Related Rights and Related Options shall be counted only
once in determining whether the maximum number of Shares with respect
to which Awards may be granted under the Plan has been exceeded. An
Award shall not be considered to have been made under the Plan with
respect to any Option or Right which terminates or with respect to
Restricted Stock which is forfeited, and new Awards may be granted
under the Plan with respect to the number of Shares as to which such
termination or forfeiture has occurred.
PRINCIPAL FEATURES OF THE PLAN.
The Plan provides for awards in the form of stock options, stock
appreciation rights ("SARs"), limited stock appreciation rights ("Limited SARs")
and restricted stock. Each award shall be on such terms and conditions,
consistent with the Plan, as the committee administering the Plan may determine.
Shares may be either authorized but unissued shares or reacquired shares held by
the Corporation in its treasury. Any shares subject to an award which expires or
is terminated unexercised will again be available for issuance under the Plan.
No award or any right or interest therein is assignable or transferable except
by will or the laws of descent and distribution or except for awards, other than
incentive stock options, pursuant to a qualified domestic relations order as
defined in the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
The Plan is administered by a Stock Option Committee consisting of two
or more members of the Board of Directors of the Corporation (the "Committee"),
none of whom shall be eligible to receive discretionary awards under the Plan.
Messrs. Rust and Geeding have been appointed as the present members of the
Committee.
The term of a stock option will not exceed ten years from the date of
grant. The Committee may grant either "Incentive Stock Options" as defined under
Section 422 of the Code or stock options not intended to qualify as such. In
general, stock options will not be exercisable after the expiration of their
terms. In the event that a participant ceases to serve as a director, senior
officer, ten percent beneficial owner of the Corporation's common stock (as
defined in the Plan) or employee of the Corporation, or one of its subsidiaries,
for any reason other than death or termination for cause, an exercisable stock
option will continue to be exercisable for three months but in no event after
the expiration date of the option. In the event of the death of a participant
during such service or within three months following termination other than for
cause, an exercisable option will continue to be exercisable for one year, to
the extent exercisable by the participant immediately prior to his death, but in
no event later than ten years after grant. Following the death of any
participant, the Committee may, as an alternative means of settlement of an
option, elect to pay to the holder an amount of cash equal to the amount by
which the market value of the shares covered by the option on the date of
exercise exceeds the exercise price. A stock option will
<PAGE> 13
automatically terminate and will no longer be exercisable as of the date a
participant ceases to serve as a director, officer or employee and was
terminated for cause.
Subject to certain limited exceptions, the exercise price for the
purchase of shares subject to a stock option at the date of grant may not be
less than 100 percent of the market value of the shares covered by the option on
that date. The exercise price must be paid in full in cash or shares of common
stock, or a combination of both, as determined by the Committee.
The Committee may grant SARs at any time, whether or not the
participant then holds stock options, granting the right to receive the excess
of the market value of the shares represented by the SARs on the date exercised
over the exercise price. SARs generally will be subject to the same terms and
conditions and exercisable to the same extent as stock options, as described
above. Upon the exercise of a SAR, the participant will receive the amount due
in cash or shares, or a combination of both, as determined by the Committee.
SARs may be related to stock options ("tandem SARs"), in which case the exercise
of one will reduce to that extent the number of shares represented by the other.
Limited SARs may be granted at the time of, and must be related to, the grant of
a stock option or SAR. The exercise of one will reduce to that extent the number
of shares represented by the other. Limited SARs will be exercisable only for a
limited period in the event of a tender or exchange offer. Limited SARs will be
exercisable only for the 45 days following the expiration of the tender or
exchange offer, during which period the related stock option or SAR will be
exercisable. Notwithstanding the foregoing, no SAR or Limited SAR may be
exercisable by a director, senior officer or ten percent beneficial owner (as
defined in the Plan) of the Corporation within six months of the date of its
grant.
The Committee may grant restricted stock, subject to forfeiture, if the
participant fails to remain in the continuous service of the Corporation, or one
of its subsidiaries, as a director, officer or employee for a stipulated period
which may not be less than six months from the date of grant. The holder of
restricted stock shall have all of the rights of a stockholder, including the
right to receive dividends (with payment deferred if the Committee so decides)
and the right to vote the shares. The participant may not, however, sell,
assign, transfer, pledge or otherwise encumber any of the restricted stock
during the restricted period.
The Committee may, in its discretion, accelerate the time at which any
or all restrictions will lapse, or may remove any or all of the restrictions. In
the event of termination for any other reason, all shares will be forfeited and
returned to the Corporation, unless the Committee provides otherwise. Shares as
to which awards may be granted under the Stock Option Plan, and shares then
subject to awards, will be adjusted by the Committee in the event of any merger,
consolidation, reorganization, recapitalization, stock dividend, stock split or
other change in the corporate structure of the Corporation.
In the case of any merger, consolidation or combination of the
Corporation with or into another thrift holding company or other entity, whereby
either the Corporation is not the continuing thrift holding company or its
outstanding shares are converted into or exchanged for securities, cash or
property, or any combination thereof, any participant to whom a stock option has
been granted will have the right upon exercise of the option to an amount equal
to the excess of fair market value on the date of exercise of the consideration
receivable in the merger, consolidation or combination with respect to the
shares covered or represented by the stock option over the exercise price of the
option multiplied by the number of shares with respect to which the options have
been exercised. The restricted period with respect to an award of restricted
stock will lapse, and the stock will become fully vested, if the service of a
participant is
<PAGE> 14
involuntarily terminated for any reason within 18 months after a change in
control (as defined in the Plan) of the Corporation.
In addition, in the event of a tender or exchange offer or approval by
the stockholders of the Corporation or the acquisition of the Corporation or
substantially all of its assets, all outstanding stock options and SARs not
fully exercisable will become exercisable in full and remain so for a period of
60 days, after which they will revert to being exercisable in accordance with
their terms. However, no stock option or SAR will be exercisable by any
director, senior officer or ten percent beneficial owner of the Corporation, or
one of its subsidiaries, within six months of the date of the grant of such
stock option or SAR.
The Board of Directors of the Corporation may at any time amend,
suspend or terminate the Plan or any portion thereof but may not, without the
prior approval of the stockholders, make any amendment which (i) materially
increases the total number of shares which may be subject to awards, (ii)
materially increases the benefits accruing to participants under the Stock
Option Plan, or (iii) change the class of persons eligible to participate in the
Plan. Unless previously terminated, the Plan shall continue in effect for a term
of ten years, after which no further awards may be granted under the Plan.
AWARDS UNDER THE PLAN.
No awards were made under the Plan from September 1993 until August
1996. There are currently 14,120 shares subject to immediately exercisable
options held by directors and executive officers of the Corporation. These
options expire in 2003 and have an average exercise price of $13.60. Effective
August 29, 1996, there were 10,500 shares subject to options not exercisable
until stockholder approval of the amendment of the Plan held by Mr. Sudbrook.
All the options issued to Mr. Sudbrook are Incentive Stock Options, expire in
2006 and have an exercise price of $19.25.
TAX TREATMENT OF AWARDS.
Under present federal income tax laws, awards under the Plan will have
the following consequences:
(1) The grant of an award will neither, by itself, result in the
recognition of taxable income to the participant nor entitle the Corporation to
a deduction at the time of such grant.
(2) The exercise of a stock option which is an "Incentive Stock Option"
within the meaning of Section 422 of the Code will generally not, by itself,
result in the recognition of taxable income to the participant nor entitle the
Corporation to a deduction at the time of such exercise. However, the difference
between the exercise price and the fair market value of the option shares on the
date of exercise is an item of tax preference which may, in certain situations,
trigger the alternative minimum tax. The alternative minimum tax is incurred
only when it exceeds the regular income tax. The alternative minimum tax will be
payable at the rate of 24% on "minimum taxable income" in excess of $30,000
(single person) or $40,000 (married filing jointly), but the $30,000 and $40,000
exemptions are reduced by an amount equal to 25% of the alternative minimum
taxable income over $112,500 for single persons and $150,000 for married persons
filing jointly. The gain recognized upon sale of the Incentive Stock Option will
generally be taxed at the ordinary income tax rates then in effect.
<PAGE> 15
(3) The exercise of a stock option which is not an Incentive Stock
Option will result in the recognition of ordinary income by the participant on
the date of exercise in an amount equal to the difference between the exercise
price and the fair market value on the date of exercise of the shares acquired
pursuant to the stock option.
(4) The exercise of a SAR will result in the recognition of ordinary
income by the participant on the date of exercise in an amount of cash, and/or
the fair market value on that date of the shares, acquired pursuant to the
exercise.
(5) Holders of restricted stock will recognize ordinary income on the
date that the shares of restricted stock are no longer subject to a substantial
risk of forfeiture, in an amount equal to the fair market value of the shares on
that date. In certain circumstances, a holder may elect to recognize ordinary
income and determine such fair market value on the date of the grant of the
restricted stock. Holders of restricted stock will also recognize ordinary
income equal to their dividend or dividend equivalent payments when such
payments are received.
(6) The Corporation will be allowed a deduction at the time, and in the
amount of, any ordinary income recognized by the participant under the various
circumstances described above, provided that the Corporation meets its federal
withholding tax obligations.
SELECTION OF AUDITOR
The Board of Directors has selected Grant Thornton LLP as the auditor
of the Corporation for the current fiscal year and recommends that the
stockholders ratify the selection. Such ratification must be by the affirmative
vote of the holders of a majority of the shares actually voted on such proposal.
Abstentions and non-votes mathematically will have the effect of a "no" vote.
Management expects that a representative of Grant Thornton LLP will be present
at the Annual Meeting, will have the opportunity to make a statement, if he or
she so desires, and will be available to respond to appropriate questions from
stockholders.
<PAGE> 16
PROPOSALS OF SECURITY HOLDERS AND OTHER MATTERS
Any proposals of security holders intended to be included in the
Corporation's Proxy Statement for the 1997 Annual Meeting of Stockholders should
be sent to the Corporation by certified mail and must be received by the
Corporation not later than June 6, 1997.
Management knows of no other business which will be brought before the
Annual Meeting, including matters incident to the conduct of the Annual Meeting.
It is the intention of the persons named in the enclosed Proxy to vote such
Proxy in accordance with their best judgment on any other matters which may be
brought before the Annual Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
Cincinnati, Ohio
September 24, 1996
<PAGE> 17
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
GLENWAY FINANCIAL CORPORATION
GLENWAY FINANCIAL CORPORATION ANNUAL MEETING OF STOCKHOLDERS
October 23, 1996
The undersigned stockholder of Glenway Financial Corporation
("Glenway") hereby constitutes and appoints Edgar A. Rust, John P. Torbeck and
Milton L. Van Schoik, or either one of them, as the proxies of the undersigned
with full power of substitution and resubstitution, to vote at the Annual
Meeting of Stockholders of Glenway to be held at Glenway's headquarters at 5535
Glenway Avenue, Cincinnati, Ohio on October 23, 1996, at 2:00 p.m. Eastern
Daylight Time (the "Annual Meeting"), all of the shares of Glenway common stock
which the undersigned is entitled to vote at the Annual Meeting, or at any
adjournment thereof, on each of the following proposals, all of which are
described in the accompanying Proxy Statement:
<TABLE>
<S> <C> <C>
1. The election of two directors:
/ / FOR all nominees / / WITHHOLD authority to
listed below vote for all nominees
(except as marked to the listed below:
contrary below):
Albert W. Moeller
Robert R. Sudbrook
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the following space:
- -----------------------------------------------------------------------
<S> <C> <C> <C>
2. The approval of an amendment to the Glenway Financial Corporation 1990
Stock Option and Incentive Plan to increase the number of shares
available for issuance thereunder by 50,000 to 50,002.
/ / FOR / / AGAINST / / ABSTAIN
3. The ratification of the selection of Grant Thornton LLP, certified public accountants, as the auditors
of Glenway for the current fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
<PAGE> 18
4. In their discretion, upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
The Board of Directors recommends a vote "FOR" the nominees and the proposal
listed above.
IMPORTANT: PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE. UNLESS
THIS PROXY IS REVOKED, THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL
BE VOTED AS DIRECTED. WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES SOLICITED BY
THE BOARD OF DIRECTORS WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR SET FORTH
ABOVE AND IN FAVOR OF THE PROPOSALS STATED ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY ON THE PERSONS NAMED ABOVE TO VOTE WITH RESPECT TO THE
ELECTION OF ANY PERSON AS A DIRECTOR IF A NOMINEE IS UNABLE TO SERVE OR FOR GOOD
CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE ANNUAL MEETING.
At the present time, the Board of Directors knows of no other business to be
presented at the Annual Meeting.
All Proxies previously given by the undersigned are hereby revoked.
Receipt of the Notice of the Annual Meeting of Stockholders of Glenway and of
the accompanying Proxy Statement is hereby acknowledged.
Please sign exactly as your name appears on your Stock Certificate(s).
Executors, Administrators, Trustees, Guardians, Attorneys and Agents should give
their full titles.
_____________________________________ _____________________________________
Signature Signature
_____________________________________ _____________________________________
Print or Type Name Print or Type Name
Dated: _____________________ Dated: _______________________
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED FOR MAILING IN THE U.S.A.
<PAGE> 19
[This is not an Exhibit to the Proxy Statement, but must be filed with the
preliminary copy.]
CENTENNIAL FINANCIAL CORP.
[Now Glenway Financial Corporation]
1990 Stock Option and Incentive Plan
A. PLAN PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, officers and employees of the Corporation
and its Affiliates. It is intended that designated Options granted pursuant to
the provisions of this Plan to persons employed on a full-time basis will
qualify as Incentive Stock Options. Options granted to persons who are not
full-time employees will be Non-Qualified Stock Options.
B. DEFINITIONS. The following definitions are applicable to the Plan:
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in Section 425(e) and
(f), respectively, of the Code.
"Association" - means Centennial Savings Bank, fsb [now
Centennial Savings Bank].
"Award" - means the grant of an Incentive Stock Option, a
Non-Qualified Stock Option, a Stock Appreciation Right, a Limited Stock
Appreciation Right, or of Restricted Stock, or any combination thereof, as
provided in the Plan.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 3
hereof.
"Continuous Service" - means the absence of any interruption
or termination of service as a director, officer or employee of the Corporation
or an Affiliate, except that when used with respect to persons granted an
Incentive Option means the absence of any interruption or termination of service
as a full-time employee of the Corporation or an Affiliate. Service shall not be
considered interrupted in the case of sick leave, military leave or any other
leave of absence approved by the Corporation or in the case of transfers between
payroll locations of the Corporation or between the Corporation, its parent, its
subsidiaries or its successor.
<PAGE> 20
"Corporation" - means Centennial Financial Corp. [now Glenway
Financial Corporation], a Delaware corporation.
"Disinterested Person" - means any member of the Board of
Directors of the Corporation who, at the time discretion under the Plan is
exercised has not at any time within one year prior thereto received grants or
awards under the Plan or any other plan of the Corporation or any of its
affiliates (as the term is used in the Exchange Act) except as provided in Rule
16b-3(c)(2)(i) under the Exchange Act and is not selected as a Participant in
the Plan; provided, however, that no recipient of a stock award granted pursuant
to Section 21 hereof shall be deemed not to be a disinterested Person solely by
reason of such grant.
"Employee" - means any person, including an officer or
director, who is employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" - means the Securities Exchange Act of 1934, as
amended.
"Exercise Price" - means (i) in the case of an Option, the
price per Share at which the Shares subject to such Option may be purchased upon
exercise of such Option and (ii) in the case of a Right, the price per Share
(other than the Market Value per Share on the date of exercise and the Offer
Price per Share as defined in Section 10 hereof) which, upon grant, the
Committee determines shall be utilized in calculating the aggregate value which
a Participant shall be entitled to receive pursuant to Sections 9, 10 or 13
hereof upon exercise of such Right.
"Incentive Stock Option" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422A of the Code.
<PAGE> 21
"Limited Stock Appreciation Right" - means a stock
appreciation right with respect to Shares granted by the Committee pursuant to
Sections 6 and 10 hereof.
"Market Value" means the average of the high and low quoted
sales price on the date in question (or, if there is no reported sale on such
date, on the last preceding date on which any reported sale occurred) of a Share
on the Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on
such date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the National Association of Securities
Dealers, Inc., Automated Quotations System, or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of a
Share as the Committee shall determine.
"Non-Qualified Stock Option" - means an option to purchase
Shares granted by the Committee pursuant to Section 6 hereof, which option is
not intended to qualify under Section 422A of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified
Stock Option.
"Participant" - means any officer or employee of the
Corporation or any Affiliate who is selected by the Committee to receive an
Award and any director of the Corporation who is granted an Award pursuant to
Section 21 hereof.
"Plan" - means the 1990 Stock Option and Incentive Plan of the
Corporation.
"Related" - means (i) in the case of a Right, a Right which is
granted in connection with, and to the extent exercisable, in whole or in part,
in lieu of, an Option or another Right and (ii) in the case of an Option, an
Option with
<PAGE> 22
respect to which and to the extent a Right is exercisable, in whole or in part,
in lieu thereof has been granted.
"Restricted Period" - means the period of time selected by the
Committee for the purpose of determining when restrictions are in effect under
Section 11 hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently
awarded to a Participant by the Committee subject to the restrictions referred
to in Section 11 hereof, so long as such restrictions are in effect.
"Right" - means a Limited Stock Appreciation Right or a Stock
Appreciation Right.
"Shares" - means the shares of common stock of the
Corporation.
"Senior Officer" - means the Corporation's president,
principal financial officer, or principal accounting officer, any vice president
of the Corporation in charge of a principal business unit, division or function
(such as sales, administration or finance), any other officer who performs a
policy-making function, or any other person who performs similar policy-making
functions for the Corporation. Officers of the Corporation's Affiliates shall be
deemed senior officers of the Corporation if they perform such policy-making
functions for the Corporation.
"Stock Appreciation Right" - means a stock appreciation right
with respect to Shares granted by the Committee pursuant to Sections 6 and 9
hereof.
"Ten Percent Beneficial Owner" - means the beneficial owner of
more than ten percent of any class of the Corporation's equity securities
registered pursuant to Section 12 of the Exchange Act.
C. ADMINISTRATION. The Plan shall be administered by a Committee
consisting of two or more members, each of whom shall be a Disinterested Person.
The members of the Committee shall be appointed by the Board of Directors of the
Corporation. Except
<PAGE> 23
as United by the express provisions of the Plan, the Committee shall have sole
and complete authority and discretion to (i) select Participants and grant
Awards; (ii) determine the number of Shares to be subject to types of Awards
generally, as well as to individual Awards granted under the Plan; (iii)
determine the terms and conditions upon which Awards shall be granted under the
Plan; (iv) prescribe the form and terms of instruments evidencing such grants;
and (v) establish from time to time regulations for the administration of the
Plan, interpret the Plan, and make all determinations deemed necessary or
advisable for the administration of the Plan. The Committee may maintain, and
update from time to time as appropriate, a list designating selected directors,
as Disinterested Persons. The purpose of such list shall be to evidence the
status of such individuals as Disinterested Persons, and the Board of Directors
may appoint to the Committee any individual actually qualifying as a
Disinterested Person, regardless of whether identified as such on said list.
A majority of the Committee shall constitute a quorum, and the acts of
a majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
D. PARTICIPATION IN COMMITTEE AWARDS. The Committee may select from
time to time Participants in the Plan from those officers and employees (other
than Disinterested Persons), of the Corporation or its Affiliates who, in the
opinion of the Committee, have the capacity for contributing to the successful
performance of the Corporation or its Affiliates.
E. SHARES SUBJECT TO PLAN. Subject to adjustment by the operation of
Section 12 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 10% of the total Shares issued in the Association's
conversion to the capital stock form. The Shares with respect to which Awards
may he made under the Plan may be either authorized and unissued shares or
issued shares heretofore or hereafter required and held as treasury shares.
Shares which are subject to Related Rights and Related Options shall be counted
only once in determining whether the maximum number of Shares with respect to
which Awards may be granted under the Plan has been exceeded. An Award shall
<PAGE> 24
not be considered to have been made under the Plan with respect to any Option or
Right which terminates or with respect to Restricted Stock which is forfeited,
and new Awards may be granted under the Plan with respect to the number of
Shares as to which such termination or forfeiture has occurred. [Amended July
26, 1993.]
F. GENERAL TERMS AND CONDITIONS OF OPTIONS AND RIGHTS. The Committee
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms and
conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than the
Market Value per Share at the date of grant of such Option or Right, (ii) the
number of Shares subject to, and the expiration date of, any Option or Right,
which expiration date shall not exceed ten years from the date of grant, (iii)
the manner, time and rate (cumulative or otherwise) of exercise of such Option
or Right, and (iv) the restrictions, if any, to be placed upon such Option or
Right or upon Shares which may be issued upon exercise of such Option or Right.
The Committee may, as a condition of granting any Option or Right, require that
a Participant agree not to thereafter exercise one or more Options or Rights
previously granted to such Participant.
G. EXERCISE OF OPTIONS OR RIGHTS.
(a) An Option or Right granted under the Plan shall be
exercisable during the lifetime of the Participant to whom such Option or Right
was granted only by such Participant and, except as provided in paragraphs (c)
and (d) of this Section 7, no such Option or Right may be exercised unless at
the time such Participant exercises such Option or Right, such Participant has
maintained Continuous Service since the date of grant of such Option or Right.
Cash settlements of Rights may be made only in accordance with any applicable
restrictions pursuant to Rule 16b-3(e) under the Securities Exchange Act of 1934
or any similar or successor provision.
(b) To exercise an Option or Right under the Plan, the
Participant to whom such Option or Right was granted shall give written notice
to the Corporation in form satisfactory to the
<PAGE> 25
Committee (and, if partial exercises have been permitted by the Committee, by
specifying the number of Shares with respect to which such Participant elects to
exercise such Option or Right) together with full payment of the Exercise Price,
if any and to the extent required. The date of exercise shall be the date on
which such notice is received by the Corporation. Payment, if any is required,
shall be made either (i) in cash (including check, bank draft or money order) or
(ii) if permitted by the Committee, by delivering (A) Shares already owned by
the Participant and having a fair market value equal to the applicable exercise
price, such fair market value to be determined in such appropriate manner as may
be provided by the Committee or as may be required in order to comply with or to
conform to requirements of any applicable laws or regulations, or (B) a
combination of cash and such Shares.
(c) Participant to whom an Option or Right was granted shall
cease to maintain Continuous Service for any reason (including total or partial
disability and normal or early retirement, but excluding death and termination
of employment by the Corporation or any Affiliate for cause), such Participant
may, but only within the period of three months immediately succeeding such
cessation of Continuous Service and in no event after the expiration date of
such Option or Right, exercise such Option or Right to the extent that such
Participant was entitled to exercise such Option or Right at the date of such
cessation, provided, however, that such right of exercise after cessation of
Continuous Service shall not be available to a Participant if the Committee
otherwise determines and so provides in the applicable instrument or instruments
evidencing the grant of such Option or Right. If the Continuous Service of a
Participant to whom an Option or Right was granted by the Corporation is
terminated for cause, all rights under any Option or Right of such Participant
shall expire immediately upon the giving to the Participant of notice of such
termination.
(d) In the event of the death of a Participant while in the
Continuous Service of the Corporation or an Affiliate or within the three month
period referred to in paragraph (c) of this Section 7, the person to whom any
Option or Right held by the Participant at the time of his death is transferred
by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined in the Code or
<PAGE> 26
Title I of ERISA or the rules thereunder may, but only to the extent such
Participant was entitled to exercise such Option or Right immediately prior to
his death, exercise such Option or Right at any time within a period of one year
succeeding the date of death of such Participant, but in no event later than ten
years from the date of grant of such Option or Right. Following the death of any
Participant to whom an Option was granted under the Plan, irrespective of
whether any Related Right shall have theretofore been granted to the Participant
or whether the person entitled to exercise such Related Right desires to do so,
the Committee may, as an alternative means of settlement of such Option, elect
to pay to the person to whom such Option is transferred by will or by the laws
of descent and distribution the amount by which the Market Value per Share on
the date of exercise of such Option shall exceed the Exercise Price of such
Option, multiplied by the number of Shares with respect to which such Option is
properly exercised. Any such settlement of an Option shall be considered an
exercise of such Option for all purposes of the Plan.
H. INCENTIVE STOCK OPTIONS. Incentive Stock Options may be granted only
to Participants who are Employees. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of Directors of the
Corporation and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (iii) any Incentive
Stock Option shall not be transferable by the Participant to whom such Incentive
Stock Option is granted other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of ERISA or the rules thereunder and shall be exercisable
during such Participant's lifetime only by such Participant, (iv) no Incentive
Stock Option shall be granted to any individual who, at the time such Incentive
Stock Option is granted, owns stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Corporation or any
Affiliate unless the Exercise Price of such Incentive Stock Option is at least
110 percent of the Market Value per Share at the date of grant and such
Incentive Stock Option is not exercisable after the
<PAGE> 27
expiration of five years from the date such Incentive Stock Option is granted,
and (v) the aggregate Market Value (determined as of the time any Incentive
Stock Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by a Participant in any calendar year
shall not exceed $100,000.
I. STOCK APPRECIATION RIGHTS. A Stock Appreciation Right shall, upon
its exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate value of which (i.e.,
the sum of the amount of cash and/or Market Value of such Shares on date of
exercise) shall equal (as nearly as possible, it being understood that the
Corporation shall not issue any fractional shares) the amount by which the
Market Value per Share on the date of such exercise shall exceed the Exercise
Price of such Stock Appreciation Right, multiplied by the number of Shares with
respect of which such Stock Appreciation Right shall have been exercised. A
Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. At the time of grant of an Option the Committee shall determine
whether and to what extent a Related Stock Appreciation Right shall be granted
with respect thereto; provided, however, and notwithstanding any other provision
of the Plan, that if the Related Option is an Incentive Stock Option, the
Related Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Stock Appreciation Right were
an Incentive Stock Option and as if other rights which are Related to Incentive
Stock Options were Incentive Stock Options. In the case of a Related Option,
such Related Option shall cease to be exercisable to the extent of the Shares
with respect to which the Related Stock Appreciation Right was exercised. Upon
the exercise or termination of a Related Option, any Related Stock Appreciation
Right shall terminate to the extent of the Shares with respect to which the
Related Option was exercised or terminated. Notwithstanding the foregoing, no
Stock Appreciation Right shall be exercisable by a Ten Percent Beneficial Owner,
director or Senior Officer of the Corporation within six months of the date of
its grant.
<PAGE> 28
J. LIMITED STOCK APPRECIATION RIGHTS. At the time of grant of an Option
or Stock Appreciation Right to any Participant, the Committee shall have full
and complete authority and discretion to also grant to such Participant a
Limited Stock Appreciation Right which is Related to such Option or Stock
Appreciation Right; provided, however and notwithstanding any other provision of
the Plan, that if the Related Option is an Incentive Stock Option, the Related
Limited Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Limited Stock Appreciation
Right were an Incentive Stock Option and as if all other Rights which are
Related to Incentive Stock Options were Incentive Stock Options. Notwithstanding
any other provision of the Plan, a Limited Stock Appreciation Right shall be
exercisable only during the period beginning on the first day following the date
of expiration of any "offer" (as such term is hereinafter defined) and ending on
the forty-fifth day following such date, provided, however, that no Limited
Stock Appreciation Right shall be exercisable by a Ten Percent Beneficial Owner,
director or Senior Officer of the Corporation within six months of the date of
its grant.
A Limited Stock Appreciation Right shall, upon its exercise, entitle
the Participant to whom such Limited Stock Appreciation Right was granted to
receive an amount of cash equal to the amount by which the "Offer Price per
Share" (as such term is herein after defined) or the Market Value on the date of
such exercise, as shall have been provided by the Committee in its discretion at
the time of grant, shall exceed the Exercise Price of such Limited Stock
Appreciation Right, multiplied by the number of Shares with respect to which
such Limited Stock Appreciation Right shall have been exercised. Upon the
exercise of a Limited Stock Appreciation Right, any Related Option and/or
Related Stock Appreciation Right shall cease to be exercisable to the extent of
the Shares with respect to which such Limited Stock Appreciation Right was
exercised. Upon the exercise or termination of a Related Option or Related Stock
Appreciation Right, any Related Limited Stock Appreciation Right shall terminate
to the extent of the Shares with respect to which such Related Option or Related
Stock Appreciation Right was exercised or terminated.
For the purposes of this Section 10, the term "Offer" shall mean any
tender offer or exchange offer for Shares other than one
<PAGE> 29
made by the Corporation, provided that the corporation, person or other entity
making the offer acquires pursuant to such offer either (i) 25% of the Shares
outstanding immediately prior to the commencement of such offer or (ii) a number
of Shares which, together with all other Shares acquired in any tender offer or
exchange offer (other than one made by the Corporation) which expired within
sixty days of the expiration date of the offer in question, equals 25% of the
Shares outstanding immediately prior to the commencement of the offer in
question. The term "Offer Price per Share" as used in this Section 10 shall mean
the highest price per Share paid in any Offer which Offer is in effect any time
during the period beginning on the sixtieth day prior to the date on which a
Limited Stock Appreciation Right is exercised and ending on the date on which
such Limited Stock Appreciation Right is exercised. Any securities or property
which are part or all of the consideration paid for Shares in the Offer shall be
valued in determining the Offer Price per Share at the higher of (A) the
valuation placed on such securities or property by the corporation, person or
other entity making such Offer or (B) the valuation placed on such securities or
property by the Committee.
K. TERMS AND CONDITIONS OF RESTRICTED STOCK. The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 11, to provide such
other terms and conditions (which need not be identical among Participants) in
respect of such Awards, and the vesting thereof, as the Committee shall
determine and provide in the agreement referred to in paragraph (d) of this
Section 11.
(a) At the time of an Award of Restricted Stock, the Committee
shall establish for each Participant a Restricted Period of not less than six
months during which or at the expiration of which, as the Committee shall
determine and provide in the agreement referred to in paragraph (d) of this
Section 11, the Shares awarded as Restricted Stock shall vest, and subject to
any such other terms and conditions as the Committee shall provide, shares of
Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, except as hereinafter provided, during the
Restricted Period. Except for such restrictions, and subject to paragraphs (c),
(d)
<PAGE> 30
and (e) of this Section 11 and Section 12 hereof, the Participant as owner of
such shares shall have all the rights of a stockholder, including but not
limited to the right to receive all dividends paid on such shares and the right
to vote such shares. The Committee shall have the authority, in its discretion,
to accelerate the time at which any or all of the restrictions shall lapse with
respect to any shares of Restricted Stock prior to the expiration of the
Restricted Period with respect thereto, or to remove any or all of such
restrictions, whenever it may determine that such action is appropriate by
reason of changes in applicable tax or other laws or other changes in
circumstances occurring after the commencement of such Restricted Period.
(b) Except as provided in Section 14 hereof, if a Participant
ceases to maintain Continuous Service for any reason (other than death, total or
partial disability or normal or early retirement) unless the Committee shall
otherwise determine and provide in the agreement referred to in paragraph (d) of
this Section 11, all shares of Restricted Stock theretofore awarded to such
Participant and which at the time of such termination of Continuous Service are
subject to the restrictions imposed by paragraph (a) of this Section 11 shall
upon such termination of Continuous Service be forfeited and returned to the
Corporation. Unless the Committee shall have provided in the agreement referred
to in paragraph (d) of this Section 11 for a ratable lapse of restrictions with
respect to an award of shares of Restricted Stock during the Restricted Period,
if a Participant ceases to maintain Continuous Service by reason of death, total
or partial disability or normal or early retirement, such portion of such shares
of Restricted Stock awarded to such Participant which at the time of such
termination of Continuous Service are subject to the restrictions imposed by
paragraph (a) of this Section 11 as shall be equal to the portion of the
Restricted Period with respect to such shares which shall have elapsed at the
time of such termination of Continuous Service shall be free of restrictions and
shall not be forfeited.
(c) Each certificate in respect of shares of Restricted Stock
awarded under the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in blank,
with the Corporation and shall bear the following (or a similar) legend:
<PAGE> 31
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) contained in the 1990 Stock
Option and Incentive Plan of Centennial Financial Corp. and an
Agreement entered into between the registered owner and
Centennial Financial Corp. Copies of such Plan and Agreement
are on file in the offices of the Secretary of Centennial
Financial Corp., 3916 Harrison Avenue, Cheviot, Ohio 45211."
(d) At the time of an award of shares of Restricted Stock, the
Participant shall enter into an Agreement with the Corporation in a form
specified by the Committee, agreeing to the terms and conditions of the award
and such other matters as the Committee shall in its sole discretion determine.
(e) At the time of an award of shares of Restricted Stock, the
Committee may, in its discretion, determine that the payment to the Participant
of dividends declared or paid on such shares, or specified portion thereof, by
the Corporation shall be deferred until the earlier to occur of (i) the lapsing
of the restrictions imposed under paragraph (a) of this Section 11 or (ii) the
forfeiture of such shares under paragraph (b) of this Section 11, and shall be
held by the Corporation for the account of the Participant until such time. In
the event of such deferral, there shall be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon as
aforesaid, shall be made upon the earlier to occur of the events specified in
(i) and (ii) of the immediately preceding sentence.
(f) At the expiration of the restrictions imposed by paragraph
(a) of this Section 11, the Corporation shall redeliver to the Participant (or
where the relevant provision of paragraph (b) of this Section 11 applies in the
case of a deceased Participant, to his legal representative, beneficiary or
heir) the certificate(s) and stock power deposited with it pursuant to paragraph
(c) of this Section 11 and the Shares represented by
<PAGE> 32
such certificate(s) shall be free of the restrictions referred to in paragraph
(a) of this Section 11.
L. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Corporation in the manner
provided in Section 11 hereof.
M. EFFECT OF MERGER ON OPTIONS OR RIGHTS. In the event of any merger or
consolidation of the Corporation (other than a merger or consolidation in which
the Corporation is the continuing entity and which does not result in the
outstanding Shares being converted into or exchanged for different securities,
cash or other property, or any combination thereof) pursuant to a plan or
agreement the terms of which are binding upon all stockholders of the
Corporation (except to the extent that dissenting stockholders may be entitled,
under statutory provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of their holdings), any
Participant to whom an Option or Right has been granted at least 6 months prior
to such event shall have the right (subject to the provisions of the Plan and
any limitation applicable to such Option or Right), thereafter and during the
term of each such Option or Right, to receive upon exercise of any such Option
or Right an amount equal to the excess of the fair market value on the date of
such exercise of the securities, cash or other property, or combination thereof,
receivable upon such merger, consolidation or combination in respect of a Share
over the Exercise Price of such Right or Option, multiplied by the number of
Shares with respect to which such Option or Right
<PAGE> 33
shall have been exercised. Such amount may be payable fully in cash, fully in
one or more of the kind or kinds of property payable in such merger,
consolidation or combination, or partly in cash and partly in one or more of
such kind or kinds of property, all in the discretion of the Committee.
N. EFFECT OF CHANGE IN CONTROL. Each of the events specified in the
following clauses (i) through (iii) of this Section 14 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d) (3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation with respect to which 25% or more of the
total number of votes for the election of the Board of Directors of the
Corporation may be cast, (ii) as a result of, or in connection with, any cash
tender offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of the
Corporation shall cease to constitute a majority of the Board of Directors of
the Corporation or (iii) the shareholders of the Corporation shall approve an
agreement providing either for a transaction in which the Corporation will cease
to be an independent publicly owned entity or for a sale or other disposition of
all or substantially all the assets of the Corporation; provided, however, that
the occurrence of any such events shall not be deemed a "change in control" if,
prior to such occurrence, a resolution specifically approving such occurrence
shall have been adopted by at least a majority of the Board of Directors of the
Corporation. If the Continuous Service of any Participant of the Corporation or
any Affiliate is involuntarily terminated for whatever reason, at any time
within eighteen months after a change in control, unless the Committee shall
have otherwise provided in the agreement referred to in paragraph (d) of Section
11 hereof, any Restricted Period with respect to Restricted Stock theretofore
awarded to such Participant shall lapse upon such termination and all Shares
awarded as Restricted Stock shall become fully vested in the Participant to whom
such Shares were awarded. If a tender offer or exchange offer for Shares (other
than such an offer by the Corporation) is commenced, or if the event specified
in clause (iii) above shall occur, unless the Committee shall have otherwise
provided in the instrument evidencing the grant of an Option or Stock
Appreciation Right, all Options and Stock Appreciation Rights theretofore
granted and not fully exercisable
<PAGE> 34
shall become exercisable in full upon the happening of such event and shall
remain so exercisable for a period of sixty days following such date, after
which they shall revert to being exercisable in accordance with their terms;
provided, however, that no Option or Stock Appreciation Right shall be
exercisable by a Ten Percent Beneficial Owner, a director or Senior Officer of
the Corporation within six months of the date of grant of such Option or Stock
Appreciation Right and no Option or Stock Appreciation Right which has
previously been exercised or otherwise terminated shall become exercisable.
O. ASSIGNMENTS AND TRANSFERS. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the Code or Title I of ERISA or
the rules thereunder.
P. EMPLOYEE RIGHTS UNDER THE PLAN. No director, officer or employee
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and no director, officer, employee or
other person shall have any claim or right to be granted an Award under the Plan
or under any other incentive or similar plan of the Corporation or any
Affiliate. Neither the Plan nor any action taken thereunder shall be construed
as giving any employee any right to be retained in the employ of the Corporation
or any Affiliate.
Q. DELIVERY AND REGISTRATION OF STOCK. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other Federal, state or local
securities legislation or regulation. It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares or other
action eliminating the necessity of such representation under such Securities
Act or other securities legislation. The Corporation shall not be required to
deliver any Shares under the Plan prior to (i) the admission of such shares to
listing on any stock
<PAGE> 35
exchange on which Shares may then be listed, and (ii) the completion of such
registration or other qualification of such Shares under any state or Federal
law, rule or regulation, as the Committee shall determine to be necessary or
advisable.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative and shall not
affect the validity of the remaining provisions of the Plan.
R. WITHHOLDING TAX. Upon the termination of the Restricted Period with
respect to any shares of Restricted Stock (or at any such earlier time, if any,
that an election is made by the Participant under Section 83(b) of the Code, or
any successor provision there to, to include the value of such shares in taxable
income), the Corporation shall, have the right to require the Participant or
other person receiving such shares to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such shares,
or, in lieu thereof, to retain or sell without notice, a sufficient number of
shares held by it to cover the amount required to be withheld. The Corporation
shall have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments.
The Corporation shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Right under the Plan any taxes required
by law to be withheld with respect to such cash payments. Where a Participant or
other person is entitled to receive Shares pursuant to the exercise of an Option
or Right pursuant to the Plan, the Corporation shall have the right to require
the Participant or such other person to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such Shares.
S. AMENDMENT OR TERMINATION. The Board of Directors of the Corporation
may amend, suspend or terminate the Plan or any portion thereof at any time, but
(except as provided in Section 12 hereof) no amendment shall be made without
approval of the stockholders of the Corporation which shall (i) materially
increase the aggregate number of Shares with respect to which
<PAGE> 36
Awards may be made under the Plan, (ii) materially increase the aggregate number
of Shares which may be subject to Awards to Participants who are not Employees
or (iii) change the class of persons eligible to participate in the Plan;
provided, however, that no such amendment, suspension or termination shall
impair the rights of any Participant, without his consent, in any Award
theretofore made pursuant to the Plan.
T. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective
upon its adoption by the Board of Directors of the Corporation, subject to the
Association converting to a stock institution and, if required In order to
qualify the Plan for an exemption from Section 16 of the Securities Exchange Act
of 1934, approval of the Plan by vote of the holders of a majority of the
outstanding shares of the Corporation entitled to vote on the adoption of the
Plan. It shall continue in effect for a term of ten years unless sooner
terminated under Section 19 hereof.
U. INITIAL GRANT. By, and simultaneously with, the adoption of this
Plan, each member of the Board of Directors of the Corporation at the time of
the Association's conversion to stock form who is not a full-time Employee is
hereby granted Restricted Stock, effective as of the date of the Association's
conversion to stock form, equal to 6.0% of the total number of Shares reserved
for issuance under the Plan. Each Share of Restricted Stock shall be evidenced
by a Restricted Stock Agreement in a form approved by the Board of Directors and
shall be subject in all respects to the terms and conditions of this Plan, which
are controlling. All Shares of Restricted Stock granted pursuant to this Section
21 shall be rounded down to the nearest whole share to the extent necessary to
ensure that no options to purchase or restricted stock representing fractional
shares are issued. The Restricted Stock granted hereby shall be restricted for a
period of 4 years and the restrictions on such shares of Restricted Stock shall
lapse at a rate of 25% per year of Continuous Service completed following the
date of issue, provided however, that in the event of a "change in control", as
defined in Section 14 hereof, all shares of Restricted Stock awarded pursuant to
this Section 21 shall become fully vested in the Participant. Dividends paid, if
any, with respect to Restricted Stock granted pursuant to Section 21 shall be
distributed to the Participants immediately following the payment date.
<PAGE> 37
V. FORMULA AWARDS. Notwithstanding anything else in this Plan to the
contrary, to the extent that the Plan provides for formula awards, as defined in
Rule 16b-3(c) (2) (ii) under the Exchange Act, such provisions may not be
amended more than once every six months, other than to comport with changes in
the Code, ERISA or the rules thereunder.
AMENDMENTS
July 26, 1993:
Section 5 of the Plan is amended in its entirety to read as follows:
5. SHARES SUBJECT TO PLAN. Subject to adjustment by the operation of
Section 12 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 10% of the total Shares issued in the Association's
conversion to the capital stock and 10% of the total shares, if any, issued in
connection with the merger conversion of The Glenway Loan and Deposit Company.
The Shares with respect to which Awards may be made under the Plan may be either
authorized and unissued shares or issued shares heretofore or hereafter
reacquired and held as treasury shares. Shares which are subject to Related
Rights and Related Options shall be counted only once in determining whether the
maximum number of Shares with respect to which Awards may be granted under the
Plan has been exceeded. An Award shall not be considered to have been made under
the Plan with respect to any Option or Right which terminates or with respect to
Restricted Stock which is forfeited, and new Awards may be granted under the
Plan with respect to the number of Shares as to which such termination or
forfeiture has occurred.
