SCHEDULE 14A INFORMATION
Proxy Statement pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party Other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission only (as permitted by Rule
14a-6(e)(2))
[X] 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):
[ ] $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.
[X] 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>
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:
1. To elect two directors of the Corporation for terms expiring in
1999;
2. To approve an amendment to the Corporation's 1990 Stock Option and
Incentive Plan (the "Plan") to increase the number of shares
available for issuance under the Plan by 50,000;
3. To ratify the selection of Grant Thornton LLP as the auditors of the
Corporation for the current fiscal year; and
4. 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
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<PAGE>
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 increase the
number of shares for issuance under the Plan by 50,000; 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 1,150,107 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.
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<PAGE>
VOTE REQUIRED
Election of Directors
Under Delaware law and Glenway's By-laws, 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 are 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 increase the number of shares available
for issuance under the Plan by 50,000. 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
such stockholder 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
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:
Amount and Nature of Percentage of
Name and Address Beneficial Ownership Shares Outstanding
- ---------------- -------------------- ------------------
PNC Bank, Ohio, N.A. 82,010(1) 7.13%
201 E. Fifth Street
Cincinnati, Ohio 45202
- -----------------------------
(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.
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<PAGE>
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:
Percent of
Amount and Nature of Shares
Name and Address(1) Beneficial Ownership(2) Outstanding(3)
- ------------------- ----------------------- --------------
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 as a group
(10 people) 177,842 15.27
- -----------------------------
(1) 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 1,150,107 shares of Common Stock
outstanding, plus the number of shares such person may acquire, pursuant
to the Plan, within 60 days, if any. For all directors and executive
officers as a group, assumes a total of 1,164,227 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 the 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.
(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.
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<PAGE>
BOARD OF DIRECTORS
Election of Directors
In accordance with the Corporation's Certificate of Incorporation and
By-laws, the number of directors of the Corporation is currently fixed at
eight, 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 three
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, who had been serving as Vice Chairman of the Board, was
named to replace Mr. Rust as Chairman. Fred E. Betz 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, Mr. Moeller
remained as a director of the Corporation and Milton L. Van Schoik was
appointed to serve as Vice Chairman of the Corporation.
The Board of Directors has established a Nominating Committee for
selecting nominees for election as directors. Mr. Moeller is the Chairman of
the Nominating Committee. Mr. Rust and 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.
The Board of Directors proposes the election of the following directors
to terms that will expire in 1999:
Director
Name Age(1) Position(s) Held Since(2)
---- ------ ---------------- --------
Albert W. Moeller 73 Director 1972
Robert R. Sudbrook 54 Director and President 1996
- -----------------------------
(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.
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<PAGE>
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.
Robert E. Holden has informed the Board that he intends to retire from
the Board after the Annual Meeting, prior to the expiration of his term in
1997. Upon his retirement, the Board intends to reduce the number of directors
of the Corporation to seven. The following directors will continue to serve
after the Annual Meeting for the terms indicated:
Director Term
Name Age(1) Position(s) Held Since(2) Expires
- ---- ------ ---------------- -------- -------
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
- ---------------------------
(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. John P. Torbeck
and Messrs. Goodfellow and Van Schoik became directors of the Corporation
on the effective date of the Merger-Conversion.
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 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 served as either Chairman or Vice Chairman of the Board
of the Corporation from its formation in 1990 until July 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.
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<PAGE>
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,
Inc., 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 Mr. Van Schoik and also consists of
Messrs. 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 is composed of Messrs. Geeding, Moeller, Torbeck and
Van Schoik. Mr. 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. James M. Hater and James W.
Schackmann, directors of Centennial, attend meetings of the Corporation's
Audit Committee. The Audit Committee met five times during the fiscal year
ended June 30, 1996.
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
current executive officers of the Corporation, as of September 13, 1996:
Name Age Position(s) Held
- ---- --- -----------------
Edgar A. Rust 53 Chairman of the Board
Milton L. Van Schoik 67 Vice Chairman of the Board
Robert R. Sudbrook 54 President and Chief Executive Officer
Daniel W. Geeding 53 Secretary
Joseph V. Bunke 43 Vice President/Internal Control
David R. Kent 45 Vice President and Chief Financial Officer
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<PAGE>
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:
<TABLE>
Summary Compensation Table
|--------------------------|
| Long Term Compensation |
- ------------------------------------|-----------------|--------------------------|--------------|
| Annual | | |
| Compensation | Awards | |
|-----------------|-----------|--------------| |
Fiscal |Restricted | Options/ | All other |
Name and Principal Year Salary($) Bonus($)| Stock | SARs(#) | compensation |
Position | Awards($) | (1) | ($)(2) |
- ------------------------------------------------------|-----------|--------------|--------------|
<S> <C> <C> <C> <C> <C> <C>
Dennis E. Betz, 1996 123,000 9,000 -
former President (3) 1995 150,000 35,750 - - -
1994 143,000 17,500 - 7,000
Edgar A. Rust, 1996 90,200 - - - 7,700
former President (4) 1995 20,000 14,062 - - 15,000
1994 97,880 40,900 - - 8,000
- -----------------------------
</TABLE>
(1) As a result of 5% stock dividends in August 1995 and 1996, outstanding
options increased by 5%, but such increase is not considered a grant of
options by the Corporation. "SARs" stands for "stock appreciation
rights." The Corporation does not have a plan that provides for the grant
of SARs.
(2) Reflects directors fees paid to Mr. Rust during the seven months he did
not serve as President of the Corporation.
(3) Mr. Betz was killed in a plane crash in December 1995.
(4) Mr. Rust served as President of the Corporation and Centennial from
December 1995 to July 1996. Prior to that he served as Executive Vice
President of Centennial.
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<PAGE>
Stock Option Plan
No options were granted under the Plan to the persons listed in the
foregoing Summary Compensation Table during the fiscal year ended June 30,
1996.
The following table sets forth information regarding the number and value
of unexercised options held by the person listed in the Summary Compensation
Table:
<TABLE>
Aggregated Option/SAR Exercises In Last Fiscal Year
And 6/30/96 Option/SAR Values
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
6/30/96 (#) 6/30/96 ($)(1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dennis E. Betz - N/A (2) (2)
Edgar A. Rust - N/A 1,031/0 16,042/0
- ---------------------------
</TABLE>
(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's estate has until December 1996 to exercise the 7,350
unexercised options held by him at his death.
Director Compensation
Each director of the Corporation, except Mr. Sudbrook, 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.
Employment Agreement
The Bank entered into an employment agreement with Mr. Robert R.
Sudbrook, retaining him as President and Chief Executive Officer of the
Corporation 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 (the "IRC").
Assuming a termination of the employment contract, based on an annual salary
of $160,000, the payment to Mr. Sudbrook would be $480,000.
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<PAGE>
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 had a term of three years and provided 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 36 months,
subject to reduction to the extent necessary to comply with certain provisions
of the IRC. 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.
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. 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
There are currently awards of exercisable options for 41,043 shares
outstanding under the Plan. As a result of prior awards under the Plan, no
shares remain available under the Plan for future awards. The Board proposes
to reserve additional shares available for issuance of options and other
awards under the Plan to its officers, employees and directors. The
Corporation is seeking stockholder approval to amend the Plan to reserve an
additional 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 the Corporation 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 outstanding awards of exercisable options for 51,543
shares outstanding under the Plan and 39,500 shares available for future
awards under the Plan. There are no current plans to make any additional
awards under the Plan.
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. As of October 23, 1996 and 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 91,043.
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
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<PAGE>
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 subject to an award may be 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 are 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 ("ISOs") 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 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
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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 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, and 26,923 shares
subject to immediately exercisable options held by other employees of the
Corporation and its subsidiaries or by Dennis Betz's estate. These options
expire in 2003 and have an average exercise price of $12.38. Effective August
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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 ISOs, 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 ISO 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 a share through the exercise of an ISO will generally
be taxed at the ordinary income tax rates then in effect.
(3) The exercise of a stock option which is not an ISO 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.
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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
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<PAGE>
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:
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:
- --------------------------------------------------------------------------------
2. The approval of an amendment to the Glenway Financial Corporation 1990
Stock Option and Incentive Plan (the "Plan") to to increase the number
of shares available for issuance under the Plan by 50,000.
______ 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
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.
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<PAGE>
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.
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