SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement [ ]Confidential, for Use of the
[x]Definitive Proxy Statement Commission Only (as permitted
[ ]Definitive Additional Materials by Rule 14a-6(e)(2))
[ ]Soliciting Material Under Rule 14a-12
PVF CAPITAL CORP.
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(Name of Registrant as Specified in Its Charger)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials:___________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
[PVF CAPITAL CORP. LETTERHEAD]
September 18, 2000
Dear Stockholder:
We invite you to attend the Annual Meeting of Stockholders of PVF
Capital Corp. (the "Company") to be held at the Cleveland Marriott East, 3663
Park East Drive, Beachwood, Ohio on Monday, October 16, 2000 at 10:00 a.m.,
local time.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. During the meeting, we will
also report on the operations of the Company. Directors and officers of the
Company as well as representatives of KPMG LLP, the Company's independent
auditors, will be present to respond to any questions the stockholders may have.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO
ATTEND THE ANNUAL MEETING. Your vote is important, regardless of the number of
shares you own. This will not prevent you from voting in person but will assure
that your vote is counted if you are unable to attend the meeting.
Sincerely,
/s/ John R. Male
John R. Male
President
<PAGE>
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PVF CAPITAL CORP.
2618 N. MORELAND BOULEVARD
CLEVELAND, OHIO 44120
(216) 991-9600
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 16, 2000
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of PVF Capital Corp. (the "Company") will be held at the Cleveland
Marriott East, 3663 Park East Drive, Beachwood, Ohio at 10:00 a.m. on Monday,
October 16, 2000.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of four directors of the Company;
2. The Approval of the PVF Capital Corp. 2000 Stock Option Plan;
3. The ratification of the appointment of KPMG LLP as independent
certified public accountants of the Company for the fiscal year
ending June 30, 2001; and
4. The transaction of such other matters as may properly come before
the Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before
the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Stockholders of
record at the close of business on September 5, 2000, are the stockholders
entitled to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jeffrey N. Male
JEFFREY N. MALE
SECRETARY
Cleveland, Ohio
September 18, 2000
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
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<PAGE>
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PROXY STATEMENT
OF
PVF CAPITAL CORP.
2618 N. MORELAND BOULEVARD
CLEVELAND, OHIO 44120
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 16, 2000
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of PVF Capital Corp. (the "Company") to be
used at the Annual Meeting of Stockholders of the Company (the "Meeting") which
will be held at the Cleveland Marriott East, 3663 Park East Drive, Beachwood,
Ohio on Monday, October 16, 2000, at 10:00 a.m., local time. The accompanying
notice of meeting and this Proxy Statement are being first mailed to
stockholders on or about September 18, 2000.
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VOTING AND REVOCABILITY OF PROXIES
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Proxies solicited by the Board of Directors of the Company will be voted in
accordance with the directions given therein. WHERE NO INSTRUCTIONS ARE GIVEN,
PROPERLY EXECUTED PROXIES WHICH HAVE NOT BEEN REVOKED WILL BE VOTED FOR THE
NOMINEES FOR DIRECTOR SET FORTH BELOW AND IN FAVOR OF THE OTHER PROPOSALS SET
FORTH IN THIS PROXY STATEMENT FOR CONSIDERATION AT THE MEETING. The proxy
confers discretionary authority on the persons named therein to vote with
respect to the election of any person as a director where the nominee is unable
to serve or for good cause will not serve, and with respect to matters incident
to the conduct of the Meeting. If any other business is presented at the
Meeting, proxies will be voted by those named therein in accordance with the
determination of a majority of the Board of Directors. Proxies marked as
abstentions will not be counted as votes cast. In addition, shares held in
street name which have been designated by brokers on proxy cards as not voted
("broker no votes") will not be counted as votes cast. Proxies marked as
abstentions or as broker no votes, however, will be treated as shares present
for purposes of determining whether a quorum is present.
Stockholders who execute the form of proxy enclosed herewith retain the
right to revoke such proxies at any time prior to exercise. Unless so revoked,
the shares represented by properly executed proxies will be voted at the Meeting
and all adjournments thereof. Proxies may be revoked at any time prior to
exercise by written notice to the Secretary of the Company at the address above
or by filing of a properly executed, later dated proxy. A proxy will not be
voted if a stockholder attends the Meeting and votes in person. The presence of
a stockholder at the Meeting in itself will not revoke such stockholder's proxy.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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The securities which can be voted at the Meeting consist of shares of the
Company's common stock, $.01 par value per share (the "Common Stock").
Stockholders of record as of the close of business on September 5, 2000 (the
"Record Date") are entitled to one vote for each share of Common Stock then held
on all matters. As of the Record Date, 4,837,483 shares of the Common Stock were
issued and outstanding. The presence, in person or by proxy, of at least a
majority of the total number of shares of Common Stock outstanding and entitled
to vote will be necessary to constitute a quorum at the Meeting.
Persons and groups beneficially owning in excess of 5% of the Common Stock
are required to file certain reports with respect to such ownership pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Company is not aware of any persons or groups owning in excess of 5% of the
outstanding Common Stock. The following table sets forth, as of the Record Date,
certain information as to the Common Stock beneficially owned by the Company's
directors, by the non-director executive officers of the Company named in the
1
<PAGE>
Summary Compensation Table set forth under the caption "Proposal I -- Election
of Directors -- Executive Compensation -- Summary Compensation Table," and by
all executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF SHARES
NAME OF DIRECTORS NATURE OF OF COMMON STOCK
AND EXECUTIVE OFFICERS: BENEFICIAL OWNERSHIP (1) OUTSTANDING
---------------------- ------------------------ -----------
<S> <C> <C>
James W. Male 177,457 (2) 3.67%
Robert K. Healey 133,313 (3) 2.75
John R. Male 235,833 (4) 4.86
Robert F. Urban 73,836 1.53
Creighton E. Miller 36,519 (5) 0.75
Stuart D. Neidus 22,686 (6) 0.47
Stanley T. Jaros 4,990 (7) 0.10
C. Keith Swaney 152,928 (8) 3.10
Jeffrey N. Male 208,821 (9) 4.31
All Executive Officers and Directors 1,103,016 (10) 21.99
as a Group (11 persons)
<FN>
___________
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner, for purposes of this table, of any shares of
Common Stock if he or she has or shares voting or investment power with
respect to such Common Stock or has a right to acquire beneficial ownership
at any time within 60 days from the Record Date. As used herein, "voting
power" is the power to vote or direct the voting of shares and "investment
power" is the power to dispose or direct the disposition of shares. Except
as otherwise noted, ownership is direct, and the named individuals and
group exercise sole voting and investment power over the shares of the
Common Stock.
(2) The amount shown includes 93,219 shares held by a trust for the benefit of
Mr. James W. Male's wife of which Mr. James W. Male is trustee, 83,138
shares held by a trust for the benefit of James W. Male of which James W.
Male is trustee and 1,100 shares owned by a family limited partnership. Mr.
Male is retiring from the Board of Directors effective upon the completion
of this term as a director at the Annual Meeting.
(3) The amount shown includes 11,234 shares of Common Stock owned by Mr.
Healey's IRA account, 37,838 shares held in a revocable trust for the
benefit of Mr. Healey, 2,714 shares held in a revocable trust for the
benefit of Mr. Healey's wife and her family, 67,939 shares held in an
irrevocable trust for the benefit Mr. Healey's wife and 13,588 shares which
Mr. Healey has the right to acquire pursuant to options exercisable within
60 days of the Record Date.
(4) The amount shown includes 30,085 shares of Common Stock owned by Mr. John
R. Male's IRA account, 11,003 shares owned by the Company's 401(k) Plan
trust, 4,383 shares owned by John R. Male's wife, 28,441 shares owned by
Mr. John R. Male as custodian for his children under the Uniform Gifts to
Minors Act, 3,371 shares owned by Mr. John R. Male's daughter, 13,475
shares owned by a family limited partnership and 19,377 shares which Mr.
John R. Male has the right to acquire pursuant to options exercisable
within 60 days of the Record Date.
(5) The amount shown includes 13,588 shares which Mr. Miller has the right to
acquire pursuant to options exercisable within 60 days of the Record Date.
(6) The amount shown includes 6,787 owned by Mr. Neidus' IRA account and 94
shares owned by Mr. Neidus' wife.
(7) All shares are owned by Mr. Jaros' IRA account.
(8) The amount shown includes 5,432 shares of Common Stock owned by Mr.
Swaney's IRA account, 10,351 shares owned by the Company's 401(k) Plan
trust, 2,411 shares owned by Mr. Swaney as custodian for his children under
the Uniform Gifts to Minors Act, and 92,702 shares which Mr. Swaney has the
right to acquire pursuant to options exercisable within 60 days of the
Record Date.
(footnotes continued on following page)
2
<PAGE>
(9) The amount shown includes 22,567 shares of Common Stock owned by Mr.
Jeffrey N. Male's IRA account, 10,307 shares owned by the Company's 401(k)
Plan trust, 8,378 shares owned by Mr. Jeffrey N. Male's wife's IRA account,
85,549 shares owned by a trust for the benefit of Mr. Jeffrey N. Male of
which Mr. Jeffrey N. Male and his wife are co-trustees, 24,011 shares owned
by a trust for the benefit of Mr. Jeffrey N. Male's wife of which she and
Mr. Jeffrey N. Male are co-trustees, 8,461 shares owned by Mr. Jeffrey N.
Male as custodian for his minor children under the Uniform Gifts to Minors
Act, 14,495 shares owned by Mr. Jeffrey N. Male's wife as custodian for
their minor children under the Uniform Gifts to Minors Act, 8,661 shares
owned by Mr. Jeffrey N. Male's son, 13,475 shares owned by a family limited
partnership and 12,917 shares which Mr. Jeffrey N. Male has the right to
acquire pursuant to options exercisable within 60 days of the Record Date.
(10) The amount shown includes 183,695 shares which all executive officers and
directors as a group have the right to acquire pursuant to options
exercisable within 60 days of the Record Date.
</FN>
</TABLE>
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Company's Board of Directors is composed of seven members. The
Company's Articles of Incorporation require that, if the Board of Directors
consists of seven or eight members, directors be divided into two classes, as
nearly equal in number as possible, each class to serve for a two year period
and until their successors are elected and qualified, with approximately
one-half of the directors elected each year. The Board of Directors has
nominated Robert F. Urban, Robert K. Healey and Stuart D. Neidus, all of whom
are currently members of the Board, and C. Keith Swaney, who currently serves as
Vice President and Treasurer of the Company and Executive Vice President and
Chief Financial Officer of the Company's wholly owned subsidiary, Park View
Federal Savings Bank (the "Bank"), and who will be appointed President of the
Company and the Bank following the Annual Meeting, to serve as directors for a
two-year period and until their successors are elected and qualified. Under Ohio
law, directors are elected by a plurality of the votes cast at the Meeting,
i.e., the nominees receiving the highest number of votes will be elected
regardless of whether such votes constitute a majority of the shares represented
at the Meeting.
It is intended that the persons named in the proxies solicited by the Board
of Directors will vote for the election of the named nominees. If any nominee is
unable to serve, the shares represented by all valid proxies which have not been
revoked will be voted for the election of such substitute as the Board of
Directors may recommend or the size of the Board may be reduced to eliminate the
vacancy. At this time, the Board knows of no reason why any nominee might be
unavailable to serve.
The following table sets forth the names of the Board's nominees for
election as directors of the Company and of those directors who will continue to
serve as such after the Meeting. Also set forth is certain other information
with respect to each person's age, the year he first became a director of the
Company or the Bank, and the expiration of his term as a director. All of the
individuals were initially appointed as directors of the Company in 1994 in
connection with the Company's incorporation, except for Mr. Stuart D. Neidus,
who was appointed as a director of the Company and the Bank in 1996, Mr. Stanley
T. Jaros, who was appointed a director of the Company and the Bank in 1997, and
Mr. C. Keith Swaney, who is a nominee for election as a director at the Annual
Meeting. There are no arrangements or understandings between the Company and any
director pursuant to which such person has been elected a director of the
Company, and no director is related to any other director or executive officer
by blood, marriage or adoption, except that James W. Male, the Chairman of the
Board of the Company and the Bank, is the father of John R. Male, the President
and a director of the Company and the President and Chief Executive Officer and
a director of the Bank, and Jeffrey N. Male, the Vice President and Secretary of
the Company and the Senior Vice President in charge of residential lending
operations of the Bank. John R. Male is the brother of Jeffrey N. Male.
3
<PAGE>
<TABLE>
<CAPTION>
AGE YEAR FIRST ELECTED CURRENT
AS OF THE AS DIRECTOR OF THE TERM
NAME RECORD DATE COMPANY OR THE BANK TO EXPIRE
---- ----------- ------------------- ---------
BOARD NOMINEES FOR TERMS TO EXPIRE AT THE 2002 ANNUAL MEETING
<S> <C> <C> <C>
Robert F. Urban 78 1992 2000
Robert K. Healey 75 1973 2000
Stuart D. Neidus 49 1996 2000
C. Keith Swaney 57 N/A N/A
DIRECTORS CONTINUING IN OFFICE
Creighton E. Miller 77 1978 2001
John R. Male 52 1981 2001
Stanley T. Jaros 55 1997 2001
</TABLE>
Presented below is certain information concerning the directors of the
Company. Unless otherwise stated, all directors have held the positions
indicated for at least the past five years.
ROBERT F. URBAN. Mr. Urban is retired. He founded Mentor Products, Inc. in
1945 and served as Chairman and Chief Executive Officer until retirement in
1987. He was a founder of Production Machinery, Inc. and has served as a
director since 1956. He is a former director of Lake County National Bank, Lake
County Federal Savings and Loan Association, St. James Church, Painesville, Ohio
and Madison Country Club and a former member of the Board of Trustees of Lake
County Hospital Systems.
ROBERT K. HEALEY. Mr. Healey currently is retired. He had been employed
from 1961 to 1987 by Leaseway Transportation Corp. and most recently served as
Executive Vice President -- Managed Controlled Transportation. He formerly
served on the Boards of Trustees of St. Vincent Charity Hospital, New Direction,
Western Reserve Historical Society, the Woodruff Foundation and Glen Oak School.
STUART D. NEIDUS. Mr. Neidus currently holds the position of Chairman and
Chief Executive Officer of Anthony & Sylvan Pools Corporation, a publicly traded
company that is the nation's largest in-ground residential concrete swimming
pool installer. Prior to this position, he served as Executive Vice President
and Chief Financial Officer of Essef Corporation from September 1996 until
Anthony & Sylvan's split-off from Essef in August 1999. At Premier Industrial
Corporation he held various positions from 1992 until 1996, most recently as
Executive Vice President until the company was acquired by Farnell Electronics
plc. Prior to that, Mr. Neidus served as a partner with the international
accounting firm of KPMG Peat Marwick LLP from 1984 until 1992.
C. KEITH SWANEY. Mr. Swaney joined the Bank in 1962 and has been Executive
Vice President and Chief Financial Officer since 1986. He was named Vice
President and Treasurer of the Company upon its organization in 1994. He is
responsible for all internal operations of the Company and the Bank. The Boards
of Directors of the Company and the Bank have appointed Mr. Swaney as President
and Chief Operating Officer of the Company and the Bank effective immediately
after the Annual Meeting. Mr. Swaney has been nominated for election as a
director at the Annual Meeting. Over the years, Mr. Swaney has participated in
various charitable organizations. Mr. Swaney attended Youngstown State
University and California University in Pennsylvania.
4
<PAGE>
CREIGHTON E. MILLER. Mr. Miller is a partner in the Cleveland law firm of
Miller, Stillman & Bartel. He is a former Assistant Attorney General of the
State of Ohio and a former U.S. Government Attorney, Office of Price
Stabilization. Mr. Miller has served in various capacities with public service
and charitable organizations, including the Board of Directors of the American
Heart Association, Cleveland Chapter; Huron Road Hospital; President of the
Northern Ohio Golf Association; and the Sheriff's Office - Deputy for Real
Estate Appraisals. Mr. Miller is a graduate of the University of Notre Dame and
Yale Law School.
JOHN R. MALE. Mr. Male has been with the Bank since 1971, where he has held
various positions including branch manager, mortgage loan officer, manager of
construction lending, savings department administrator and chief lending
officer. Mr. Male was named President and Chief Executive Officer of the Bank in
1986 and was named President of the Company upon its organization in 1994.
Effective immediately following the Annual Meeting, Mr. Male will be named
Chairman of the Board of Directors to succeed James W. Male who is retiring at
the Annual Meeting. Mr. Male also will be named Chief Executive Officer and will
relinquish the title of President. Mr. Male serves in various public service and
charitable organizations. He currently serves on the Board of Trustees for
Heather Hill, a long-term care hospital in Chardon, Ohio. He has an
undergraduate degree from Tufts University and an MBA from Case Western Reserve
University. John R. Male is the son of James W. Male and the brother of Jeffrey
N. Male.
STANLEY T. JAROS. Mr. Jaros is a partner in the law firm of Moriarty &
Jaros, P.L.L.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following sets forth information with respect to executive officers
of the Company who do not serve on the Board of Directors.
<TABLE>
<CAPTION>
AGE
AS OF THE
NAME RECORD DATE TITLE
---- ----------- -----
<S> <C>
Jeffrey N. Male 51 Vice President and Secretary of the Company and
Senior Vice President of the Bank
Edward B. Debevec 41 Treasurer of the Bank
Carol S. Porter 47 Secretary of the Bank
</TABLE>
JEFFREY N. MALE. Mr. Male has served the Bank since 1973. He has served in
various capacities including supervisor of the construction loan department,
personnel director and manager of the collection, foreclosure and REO
departments. Since 1986, Mr. Male has been Senior Vice President in charge of
residential lending operations. He was named Vice President and Secretary of the
Company upon its organization in 1994. Effective immediately following the
Annual Meeting, Mr. Male will be named Executive Vice President of the Bank. Mr.
Male has served in various capacities with public service and charitable
organizations, including the Chagrin Valley Jaycees, the Chamber of Commerce and
the Neighborhood Housing Services Corporate Loan Committee. Mr. Male is a
graduate of Denison University. He is the son of James W. Male and the brother
of John R. Male.
EDWARD B. DEBEVEC. Mr. Debevec has served the Bank since 1984. He has
served in various capacities, including supervision of the construction loan
department and supervision of the student loan department. He was named
Treasurer in 1989. Mr. Debevec is a graduate of John Carroll University and has
an MBA from Cleveland State University.
CAROL S. PORTER. Ms. Porter has served the Bank in various capacities since
1972 and has been the Corporate Secretary since 1980. Since 1989, she also has
served as Marketing Director. She currently serves on the Board of Trustees for
The Fairhill Center, a campus of individual and shared resources to meet the
challenges of successful aging. Ms. Porter graduated from Sweet Briar College
and has an MBA from Case Western Reserve University.
5
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Boards of Directors of the Company and the Bank conduct their business
through meetings of the respective Boards and their committees. During the year
ended June 30, 2000, the Company's Board of Directors held eight meetings and
the Bank's Board of Directors held 13 meetings. No current director attended
fewer than 75% of the total aggregate meetings of the Board of Directors and
committees on which such Board member served during the year ended June 30,
2000.
The Board of Directors has an Audit Committee comprising directors Stuart
D. Neidus, Robert K. Healey and Stanley T. Jaros. The committee met periodically
to examine and approve the audit report prepared by the independent auditors of
the Company and its subsidiary, to review and recommend the independent auditors
to be engaged by the Company, to review the internal audit function and internal
accounting controls and to review and approve the conflict of interest policy.
During the year ended June 30, 2000, the Audit Committee met four times.
In accordance with the Company's Bylaws, the entire Board of Directors acts
as the Company's Nominating Committee. The Nominating Committee meets to
consider potential nominees. In its deliberations, the Nominating Committee
considers the candidate's knowledge of the banking business and involvement in
community, business and civic affairs, and also considers whether the candidate
would allow the Board to continue its geographic diversity that provides for
adequate representation of its market area. The Board of Directors of the
Company met once as the Nominating Committee during the year ended June 30,
2000. The Company's Articles of Incorporation set forth procedures that must be
followed by stockholders seeking to make nominations for directors. In order for
a stockholder of the Company to make any nominations, he or she must give
written notice thereof to the Secretary of the Company not less than thirty days
nor more than sixty days prior to the date of any such meeting; provided,
however, that if less than forty days' notice of the meeting is given to
stockholders, such written notice shall be delivered or mailed, as prescribed,
to the Secretary of the Company not later than the close of business on the
tenth day following the day on which notice of the meeting was mailed to
stockholders. Each such notice given by a stockholder with respect to
nominations for the election of directors must set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed in
such notice; (ii) the principal occupation or employment of each such nominee;
and (iii) the number of shares of stock of the Company which are beneficially
owned by each such nominee. In addition, the stockholder making such nomination
must promptly provide any other information reasonably requested by the Company.
The Compensation Committee consists of directors Stuart D. Neidus, Robert
F. Urban and Creighton E. Miller. The Committee evaluates the compensation and
fringe benefits of the directors, officers and employees, recommends changes and
monitors and evaluates employee morale. The Compensation Committee met two times
during the year ended June 30, 2000.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview and Philosophy. The Company's executive compensation policies are
established by the Compensation Committee of the Board of Directors (the
"Committee") composed of three outside directors. The Committee is responsible
for developing the Company's executive compensation policies. The Company's
President, under the direction of the Committee, implements the Company's
executive compensation policies. The Committee's objectives in designing and
administering the specific elements of the Company's executive compensation
program are as follows:
o To link executive compensation rewards to increases in
shareholder value, as measured by favorable long-term operating
results and continued strengthening of the Company's financial
condition.
o To provide incentives for executive officers to work towards
achieving successful annual results as a step in achieving the
Company's long-term operating results and strategic objectives.
6
<PAGE>
o To correlate, as closely as possible, executive officers' receipt
of compensation with the attainment of specified performance
objectives.
o To maintain a competitive mix of total executive compensation,
with particular emphasis on awards related to increases in
long-term shareholder value.
o To attract and retain top performing executive officers for the
long-term success of the Company.
o To facilitate stock ownership through the granting of stock
options.
In furtherance of these objectives, the Committee has determined that
there should be three specific components of executive compensation: base
salary, a cash bonus plan and a stock option plan designed to provide long-term
incentives through the facilitation of stock ownership in the Company.
Base Salary. The Committee makes recommendations to the Board
concerning executive compensation on the basis of surveys of salaries paid to
executive officers of other savings bank holding companies, non-diversified
banks and other financial institutions similar in size, market capitalization
and other characteristics. The Committee's objective is to provide for base
salaries that are competitive with those paid by the Company's peers.
Management Incentive Compensation Plan. The Company maintains a
formula-based bonus plan (the "Management Incentive Compensation Plan"), which
provides for annual cash incentive compensation based on achievement of a
combination of individual and Company and Bank performance objectives. Under the
Management Incentive Compensation Plan, at the beginning of the year, the
Committee establishes target returns on equity ("ROE") and return on assets
("ROA") for the Bank and a targeted appreciation in the market price for the
Common Stock. The bonuses that would be paid to each employee are determined
following the end of the year based on actual ROE and ROA and the Common Stock
market price appreciation achieved for the year. The Company's three most senior
executive officers can receive a maximum bonus equal to 150% of base salary. The
Company's other executive officers can receive a maximum bonus equal to 40% of
base salary. The actual bonus awarded is determined based on a rating given to
each employee reflecting the employee's success in achieving specific individual
performance goals established at the beginning of the year.
Stock Options. The Committee believes that stock options are an
important element of compensation because they provide executives with
incentives linked to the performance of the Common Stock. The Company awards
stock options as a means of providing employees the opportunity to acquire a
proprietary interest in the Company and to link their interests with those of
the Company's stockholders. Options are granted with an exercise price equal to
the market value of the Common Stock on the date of grant, and thus acquire
value only if the Company's stock price increases. Although there is no specific
formula, in determining the level of option awards, the Committee takes into
consideration the same Company, Bank and stock price performance criteria
considered under the Management Incentive Compensation Plan, as well as
individual performance.
In addition to the three primary components of executive compensation
described above, the Committee believed it fair and appropriate to provide for a
reasonable level of financial security for its long-standing senior executive
officer team consisting of John R. Male, the President and Chief Executive
Officer of the Company and the Bank, C. Keith Swaney, the Vice President and
Treasurer of the Company and the Executive Vice President and Chief Financial
Officer of the Bank, and Jeffrey N. Male, the Vice President and Secretary of
the Company and the Senior Vice President of the Bank. In consultation with an
outside consultant, the Compensation Committee determined to implement a
supplemental executive retirement plan, the only current participants in which
are John R. Male, C. Keith Swaney and Jeffrey N. Male, and to enter into
severance agreements with each of those three executive officers. A description
of the supplemental executive retirement plan and the severance agreements is
set forth below under " --Executive Compensation -- Severance Agreements" and "
--Supplemental Executive Retirement Plan." The severance agreements are intended
to provide the three executive officers with a reasonable level of financial
security in the event of a change in control of the Company or the Bank, and the
supplemental executive retirement plan is intended to provide the three
executive officers with retirement income that increases with each year of
service to the Bank with full vesting occurring upon the attainment of age 65.
7
<PAGE>
Compensation of the President. The Committee determines the President's
compensation on the basis of several factors. In determining Mr. John R. Male's
base salary, the Committee conducted surveys of compensation paid to chief
executive officers of similarly situated savings banks and non-diversified banks
and other financial institutions of similar size. The Committee believes that
Mr. Male's base salary is generally competitive with or below the average salary
paid to executives of similar rank and expertise at banking institutions which
the Committee considered to be comparable.
Mr. Male received bonus compensation under the Management Incentive
Compensation Plan in fiscal year 2000 based on the Bank's ROE and ROA and
increases in the market price of the Common Stock and Mr. Male's achievement of
individual performance goals based on the formula set forth above.
The Committee believes that the Company's executive compensation
program serves the Company and its shareholders by providing a direct link
between the interests of executive officers and those of shareholders generally
and by helping to attract and retain qualified executive officers who are
dedicated to the long-term success of the Company.
Members of the Compensation Committee
Creighton E. Miller
Stuart D. Neidus
Robert F. Urban
8
<PAGE>
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph and table which follow show the cumulative total return on
the Common Stock during the period from June 30, 1995 through June 30, 2000 with
(1) the total cumulative return of all companies whose equity securities are
traded on the Nasdaq market and (2) the total cumulative return of banking
companies traded on the Nasdaq market. The comparison assumes $100 was invested
on June 30, 1995 in the common stock of the Company's subsidiary, Park View
Federal Savings Bank (the "Bank"), and in each of the foregoing indices and
assumes reinvestment of dividends. The stockholder returns shown on the
performance graph are not necessarily indicative of the future performance of
the Common Stock or of any particular index.
CUMULATIVE TOTAL STOCKHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDEXES
June 30, 1995 through June 30, 2000
[Line graph appears here depicting the cumulative total stockholder return
of $100 invested in the Common Stock as compared to $100 invested in all
companies whose equity securities are traded on the Nasdaq market and banking
companies whose equity securities are traded on the Nasdaq market. Line graph
begins at June 30, 1995 and plots the cumulative total stockholder return at
June 30, 1996, 1997, 1998, 1999 and 2000. Plot points are provided below.]
<TABLE>
<CAPTION>
6/30/95 06/30/96 06/30/97 06/30/98 06/30/99 06/30/00
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY $100.00 $151.24 $225.28 $335.21 $289.84 $220.09
NASDAQ 100.00 128.39 156.15 205.58 296.02 437.30
NASDAQ BANKS 100.00 130.23 203.56 282.13 278.62 228.56
</TABLE>
9
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the cash and
noncash compensation for fiscal 2000 awarded to or earned by the Company's Chief
Executive Officer and other executive officers whose total salary and bonus for
fiscal 2000 exceeded $100,000. No other executive officer of the Company or the
Bank earned salary and bonus in fiscal 2000 exceeding $100,000 for services
rendered in all capacities to the Company and its subsidiaries.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------- ----------------------- --------
RESTRICTED SECURITIES ALL
NAME AND FISCAL OTHER ANNUAL STOCK UNDERLYING LTIP OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD(S) OPTIONS (2) PAYOUTS COMPENSATION
------------------ ---- ------ ----- ------------ -------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John R. Male 2000 $157,594 $79,335 $ -- $ -- 4,620 $ -- $23,030 (3)
President of the Company 1999 153,750 131,400 -- -- 4,620 -- 25,004
and President and Chief 1998 150,000 64,900 -- -- 6,930 -- 23,545
Executive Officer of the Bank
C. Keith Swaney 2000 $136,581 $57,297 $ -- $ -- 3,960 $ -- $17,530 (3)
Vice President and Treasurer 1999 133,250 94,900 -- -- 3,960 -- 21,209
of the Company and Executive 1998 130,000 56,785 -- -- 5,940 -- 20,439
Vice President and Chief
Financial Officer of the Bank
Jeffrey N. Male 2000 $110,316 $46,279 $ -- $ -- 3,080 $ -- $11,328 (3)
Vice President and Secretary 1999 107,625 76,650 -- -- 3,080 -- 12,241
of the Company and Senior 1998 105,000 45,970 -- -- 4,620 -- 11,508
Vice President of the Bank
James W. Male 2000 $85,227 $35,754 $ -- $ -- -- $ -- $9,000 (3)
Chairman of the Board of 1999 83,148 59,217 -- -- -- -- 9,500
Directors of the Company 1998 81,120 40,560 -- -- -- -- 9,000
and the Bank
<FN>
_____________
(1) Executive officers of the Company receive indirect compensation in the
form of certain perquisites and other personal benefits. The amount of
such benefits received by each named executive officer in fiscal 2000
did not exceed 10% of the executive officer's salary and bonus.
(2) Adjusted for a 50% stock dividend paid on the Company's Common Stock on
August 17, 1998, a 10% stock dividend paid on the Company's Common
Stock on September 7, 1999 and a 10% stock dividend paid on the
Company's Common Stock on September 1, 2000.
(3) Consists of $9,000 and $9,000 in directors' fees paid to John R. Male
and James W. Male, respectively, $2,610, $4,273 and $2,147 of premiums
on disability insurance policies paid for the benefit of John R. Male,
C. Keith Swaney and Jeffrey N. Male, respectively, $5,090, $9,095 and
$3,871 of premiums on life insurance policies paid for the benefit of
John R. Male, C. Keith Swaney and Jeffrey N. Male, respectively,
$3,299, $1,535 and $3,189 of matching contributions paid by the Company
pursuant to the Company's 401(k) plan for the benefit of John R. Male,
C. Keith Swaney and Jeffrey N. Male, respectively, and $3,031, $2,627
and $2,121 in payments made to John R. Male, C. Keith Swaney and
Jeffrey N. Male, respectively, pursuant to a plan under which all
employees receive annual compensation equal to one week's salary for
each year of service above 20 years of service.
</FN>
</TABLE>
10
<PAGE>
Option Grants in Last Fiscal Year. The following table contains
information concerning the grant of stock options during the year ended June 30,
2000 to the executive officers named in the Summary Compensation Table set forth
above.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS GRANTED ANNUAL RATES OF STOCK
UNDERLYING TO EMPLOYEES EXERCISE EXPIRATION PRICE APPRECIATION
NAME OPTIONS GRANTED(1) IN FISCAL YEAR PRICE(1) DATE FOR OPTION TERM (2)
---- ------------------ -------------- -------- ---------- ---------------------
5% 10%
--------- -------
<S> <C> <C> <C> <C> <C> <C>
John R. Male 4,620 7.9% $12.31 11/1/04 $15,708 $34,742
C. Keith Swaney 3,960 6.8 11.19 11/1/09 27,878 70,606
Jeffrey N. Male 3,080 5.3 12.31 11/1/04 10,472 23,161
James W. Male -- -- N/A N/A N/A N/A
<FN>
________________
(1) Amounts are adjusted to reflect the 10% stock dividend paid on the
Common Stock on September 1, 2000. All options become exercisable at
the rate of 20% per year, with the first 20% having become exercisable
on November 1, 1999, the date of grant, and an additional 20% becoming
exercisable on each anniversary thereafter.
(2) Represents the difference between the aggregate exercise price of the
options and the aggregate value of the underlying Common Stock at the
expiration date assuming the indicated annual rate of appreciation in
the value of the Common Stock as of the date of grant, November 1,
1999, based on the closing sale price of the Common Stock as quoted on
the Nasdaq Small-Cap Market adjusted for the 10% dividend paid on the
Common Stock on September 1, 2000.
</FN>
</TABLE>
During the past ten full fiscal years, the Company has not adjusted or
amended the exercise price of stock options previously awarded to a named
executive officer, whether through amendment, cancellation or replacement
grants, except as necessary to adjust the exercise price upon the Company's
payment of stock dividends so as not to change the economic benefit of
previously granted options.
Option Exercises in Last Fiscal Year and Year-End Option Values. The
following table sets forth information concerning option exercises during fiscal
year 2000 and the value of options held at the end of fiscal year 2000 by the
Company's Chief Executive Officer and other officers named in the Summary
Compensation Table set forth above.
<TABLE>
<CAPTION>
NAME NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END (1) AT FISCAL YEAR-END (2)
ACQUIRED VALUE ------------------------ -------------------------
NAME ON EXERCISE REALIZE EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
John R. Male -- $ -- 14,236/11,474 $ 4,025/$1,006
C. Keith Swaney -- -- 88,294/ 9,837 541,940/ 1,943
Jeffrey N. Male -- -- 9,490/ 7,650 2,683/ 671
James W. Male -- -- -- / -- -- / --
<FN>
_____________
(1) Adjusted for a 10% stock dividend paid on the Bank's common stock on
February 18, 1994, a three-for-two exchange of the Bank's common stock
for the Company's Common Stock on October 31, 1994 in connection with
the reorganization of the Bank into the holding company form of
organization, a 10% stock dividend paid on the Common Stock on August
18, 1995, a 50% stock dividend paid on the Common Stock on August 16,
1996, a 10% stock dividend paid on the Common Stock on September 1,
1997, a 50% stock dividend paid on the Common Stock on August 17, 1998,
a 10% stock dividend paid on the Common Stock on September 7, 1999 and
a 10% stock dividend paid on the Company's Common Stock on September 1,
2000.
(2) Calculated based on the product of: (a) the number of shares subject to
options and (b) the difference between the fair market value of
underlying Common Stock at June 30, 2000, determined based on $9.75,
the last closing bid price prior to June 30, 2000 of the Common Stock
on the Nasdaq System Small-Cap Market, adjusted to $8.86 to reflect the
effect of the 10% stock dividend paid on the Common Stock on September
1, 2000, and the exercise price of the options.
</FN>
</TABLE>
11
<PAGE>
Severance Agreements. The Company and the Bank have entered into
severance agreements (the "Severance Agreements") with John R. Male, C. Keith
Swaney and Jeffrey N. Male (each of whom is referred to as an "Executive"). The
Severance Agreements are for terms of three years. On each anniversary date from
the date of commencement of the Severance Agreements, the term of the Agreements
will be extended for an additional one-year period beyond the then effective
expiration date upon a determination by the Board of Directors that the
performance of each Employee has met the required performance standards.
The Severance Agreements provide that in the event of an Executive's
involuntary termination of employment, or voluntary termination for "good
reason," within one year following a "change in control" of the Bank or the
Company other than for "cause," the Executive will receive the following
benefits: (i) a payment equal to two times the Executive's annual compensation
(base salary plus annual incentive compensation) for the year preceding the year
in which termination occurred, payable in a lump sum within 30 days following
termination; (ii) the Bank or the Company shall cause the Executive to become
fully vested in any benefit plans, programs or arrangements in which the
Executive participated, and the Bank will contribute to the Executive's 401(k)
plan account the Bank's matching and/or profit sharing which would have been
paid had the Executive remained in the employ of the Bank throughout the
remainder of the 401(k) plan year; and (iii) the Executive will receive
continued life, health and disability insurance coverage substantially identical
to the coverage maintained by the Bank or the Company for the Executive prior to
termination until the earlier of the Executive's employment with another
employer or 12 months following termination. Notwithstanding the above, if the
compensation and benefits provided to the Executive pursuant to the Severance
Agreement would constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code (the "Code"), then the compensation and
benefits payable under the Severance Agreement will be reduced to the extent
necessary so that no portion will be subject to any excise tax imposed by
Section 4999 of the Code. "Change in control" is defined generally in the
Severance Agreements as (i) the acquisition, by any person or persons acting in
concert of the power to vote more than 25% of the Company's voting securities or
the acquisition by a person of the power to direct the Company's management or
policies, (ii) the merger of the Company with another corporation on a basis
whereby less than 50% of the total voting power of the surviving corporation is
represented by shares held by former shareholders of the Company prior to the
merger, or (iii) the sale by the Company of the Bank or substantially all its
assets to another person or entity. In addition, a change in control occurs
when, during any consecutive two-year period, directors of the Company or the
Bank at the beginning of such period cease to constitute a majority of the Board
of Directors of the Company or the Bank, unless the election of replacement
directors was approved by a two-thirds vote of the initial directors then in
office. "Good reason" is defined in the Severance Agreements as any of the
following events: (i) a change in the Executive's status, title, position or
responsibilities which, in the Executive's reasonable judgment, does not
represent a promotion, the assignment to the executive of any duties or
responsibilities which, in the Executive's reasonable judgment, are inconsistent
with his status, title, position or responsibilities, or the removal of the
Executive from or failure to reappoint him to any of such positions other than
for cause; (ii) materially reducing the Executive's base compensation as then in
effect; (iii) the relocation of the Executive's principal place of employment to
a location that is more than 35 miles from the location where the Executive
previously was principally employed; (iv) the failure to provide the Executive
with benefits substantially similar to those provided to him under existing
employee benefit plans, or materially reducing any benefits or depriving the
Executive an any material fringe benefit; (v) death; or (vi) disability prior to
retirement. In the event that an Executive prevails over the Company or the Bank
in a legal dispute as to the Severance Agreement, he will be reimbursed for his
legal and other expenses.
Supplemental Executive Retirement Plan. Effective July 1, 1998, the
Bank adopted a Supplemental Executive Retirement Plan (the "SERP"), which is
designed to pay retirement benefits from the general assets of the Bank to
eligible employees of the Bank. Eligibility to participate in the SERP is
limited to employees of the Bank who are designated by the Compensation
Committee of the Bank's Board of Directors. Currently, the employees designated
to participate in the SERP are John R. Male, C. Keith Swaney and Jeffrey N. Male
(the "Participants").
Under the SERP, commencing upon a Participant's retirement after
reaching age 65, or earlier if approved by the Compensation Committee, he will
receive a benefit equal to 60% of "final pay" reduced by any benefits payable
under the Bank's qualified retirement plans. "Final pay" is defined as the
Participant's highest year's combined salary and target bonus (under the
Management Incentive Compensation Plan) during the Participant's
12
<PAGE>
last five years of employment with the Bank. The Participant will vest in the
SERP plan benefits each year, on a pro rata basis, beginning with the one year
anniversary date of the effective date that the Participant becomes eligible to
participate in the SERP and continuing with each succeeding annual anniversary
date until attainment of age 65. Upon attainment of age 65 and provided the he
has remained continuously in the employ of the Bank, the Participant will be
fully vested. A Participant becomes fully vested prior to age 65 upon death or
disability or upon a "change in control," as defined above under "-- Severance
Agreements." Payments under the SERP continue for the lifetime of the
Participant or for the joint lives of the Participant and his spouse if
actuarially converted to the "actuarial equivalent" joint and survivor annuity.
In addition, benefits are paid in the form of a single life annuity or, upon the
request of the Participant and approval of the Compensation Committee, converted
to the "actuarial equivalent" single lump sum distribution. "Actuarial
equivalent" is defined as a payment or payments equal in the aggregate to the
value at the applicable date of the benefit determined actuarially on the basis
of the current Pension Benefit Guarantee Corporation ("PBGC") interest rate and
the mortality table then in use by the PBGC. The Participant loses all benefits
under the SERP in the event his employment with the Bank is terminated for
cause.
DIRECTORS' COMPENSATION
The Bank pays each member of the Board of Directors an annual retainer
of $25,200. The Chairman of the Board receives an additional annual retainer of
$2,520. In addition, directors may receive a fee of $2,500 per day for
attendance at day-long special Board events such as Board retreats. No
additional fees are paid by the Company for attendance at Board of Directors
meetings.
INDEBTEDNESS OF MANAGEMENT
Under applicable law, the Bank's loans to directors and executive
officers must be made on substantially the same terms, including interest rates,
as those prevailing for comparable transactions with non-affiliated persons, and
must not involve more than the normal risk of repayment or present other
unfavorable features. Furthermore, loans above the greater of $25,000 or 5% of
the Bank's capital and surplus (i.e, up to $2.2 million at June 30, 2000) to
such persons must be approved in advance by a disinterested majority of the
Bank's Board of Directors.
The Bank has a policy of offering loans to officers and directors and
employees in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons. These loans do not involve more than
the normal risk of collectibility or present other unfavorable features.
CERTAIN BUSINESS RELATIONSHIPS
Mr. Stanley T. Jaros, a director of the Company, is a partner with the
law firm of Moriarty & Jaros, P.L.L., which performed services for the Company
and the Bank during the fiscal year ended June 30, 2000 and proposes to perform
services during the fiscal year ending June 30, 2001. Fees paid by the Company
and the Bank to Moriarty & Jaros, P.L.L. during the fiscal year ended June 30,
2000 totaled approximately $43,075.
--------------------------------------------------------------------------------
PROPOSAL II -- APPROVAL OF THE PVF CAPITAL CORP.
2000 INCENTIVE STOCK OPTION PLAN
--------------------------------------------------------------------------------
GENERAL
The Board of Directors of the Company has adopted the PVF Capital Corp.
2000 Incentive Stock Option Plan (the "Option Plan"), subject to its approval by
the Company's stockholders. No grant of stock options ("Options") under the
Option Plan will occur until receipt of stockholder approval of the Option Plan
is obtained. The Option Plan is attached hereto as Exhibit A and should be
consulted for additional information. All statements made herein regarding the
Option Plan, which are only intended to summarize the Option Plan, are qualified
in their entirety by reference to the Option Plan.
13
<PAGE>
PURPOSE OF THE OPTION PLAN
The purpose of the Option Plan is to promote the interest of the
Company and its stockholders by providing a method whereby key executives and
directors of the Company and its subsidiaries may be encouraged to invest in the
Company's Common Stock, thereby increasing their proprietary interest in its
business, providing them with additional incentive to remain in the employ of
the Company and increasing their personal interest in its continued success and
progress.
DESCRIPTION OF THE OPTION PLAN
Effective Date. The Option Plan is expected to become operative and in
effect on September 26, 2000 (the "Effective Date"), which is the date the
Option Plan is expected to be approved by a vote of a majority of the members of
the Board of Directors, provided, however, that if approval of the Option Plan
by the Company's stockholders is not obtained by September 26, 2001 by a vote of
the holders of a majority of the total outstanding capital stock of the Company
entitled to vote, voting as a single class, the Option Plan shall be null and
void and all Options, if any, granted thereunder shall automatically be
cancelled.
Administration. The Option Plan is administered by a committee (the
"Committee"), appointed by the Board of Directors, consisting of at least two
directors of the Company who are "Non-employee Directors" within the meaning of
the federal securities laws. The Committee has discretionary authority to select
participants and grant awards, to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, to determine the terms and
conditions of the respective Options (which terms and conditions need not be the
same in each case), to impose restrictions on any shares issued upon the
exercise of an Option and to determine the manner in which such restrictions may
be removed, and to make all other determinations deemed necessary or advisable
in administering the Plan. The Committee currently consists of Directors Urban,
Miller and Neidus.
Eligible Persons. Under the Option Plan, the Committee may grant
Options only to directors of the Company or one of its subsidiary corporations
(including members of the Committee) and to key executives (which term is deemed
to include among others, the president, any vice president, the secretary, the
treasurer or any manager 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 Company or any of its subsidiaries) and who on
the granting date are in the employ of the Company or one of its then subsidiary
corporations (the "subsidiaries"), as defined in the Internal Revenue Code of
1986, as amended ("Code"). As of the Record Date, the Company and its
subsidiaries had five non-employee directors and approximately 13 employees whom
it considered to be key executives eligible to participate in the Option Plan.
Shares Available for Grant. The Option Plan reserves 250,000 shares of
Common Stock for issuance upon the exercise of Options. Such shares may be (i)
authorized but unissued shares or (ii) shares held in treasury. The aggregate
number of shares of Common Stock on which Options may be granted under the
Option Plan, the number of shares covered by each outstanding Option, the
maximum number of Options that my be awarded in any calendar year and the
exercise price per share in each such Option will all be appropriately adjusted
for any increase or decrease in the number of shares of stock of the Company
resulting from a subdivision or consolidation of shares whether through
reorganization, recapitalization, stock split-up or combination of shares, or
the payment of a stock dividend or other increase or decrease in such shares
effected without receipt of consideration by the Company. In the event that any
Option under the Option Plan expires unexercised or is terminated, surrendered
or cancelled, the shares subject to such Option, or the unexercised portion
thereof, shall again become available for grant under the Option Plan.
Options. Options may be either incentive stock options ("ISOs") as
defined in Section 422 of the Code, or options that are not ISOs (Non-ISOs").
The exercise price as to any Option may not be less than the fair market value
(determined under Section 422A of the Code) the Option Plan) of the optioned
shares on the date of grant. In the case of a participant who owns more than 10%
of the combined voting power of all classes of stock of the Company on the date
of grant, such exercise price for an ISO may not be less than 110% of fair
market value of the
14
<PAGE>
shares. As required by federal tax laws, if the aggregate fair market value
(determined when an Option is granted) of the Common Stock with respect to which
ISOs are exercisable by an optionee for the first time during any calendar year
(under all plans of the Company and of any subsidiary) exceeds $100,000, the
Options granted in excess of $100,000 will be treated as Options that are not
ISOs. Under the Option Plan, the maximum number of shares for which Options may
be awarded during any calendar year is 10,000, subject to adjustment as
described under "--Shares Available for Grant."
Exercise of Options. The exercise of Options will be subject to such terms
and conditions as are established by the Committee in a written agreement
between the Committee and the optionee. In the absence of Committee action to
the contrary, an otherwise unexpired Option shall cease to be exercisable upon
(i) an optionee's termination of employment for "cause" (as defined in the
Option Plan), (ii) the date three months after an optionee terminates service
for a reason other than cause, death, or disability, or earlier if the Option
expires in accordance with its terms, (iii) in the case of an optionee who
becomes disabled, the earlier of the date the Option expires in accordance with
its terms or the date one year after an optionee terminates service due to
disability, or (iv) for Options granted to employees, the date one year after an
optionee's death in the event of death of the optionee during employment.
An optionee may exercise Options, subject to provisions relative to their
termination and limitations on their exercise, only by (i) written notice to the
President of the Company of intent to exercise the Option with respect to a
specified number of shares of Common Stock, and (ii) payment to the Company
(contemporaneously with delivery of such notice) with a cashier's check,
certified check or existing holdings of Common Stock held for more than six
months of the amount of the exercise price for the number of shares with respect
to which the Option is then being exercised. Common Stock utilized in full or
partial payment of the exercise price for Options shall be valued at its market
value at the date of exercise.
Conditions on Issuance of Shares. The Committee will have the discretionary
authority to impose, in agreements, such restrictions on shares of Common Stock
issued pursuant to the Option Plan as it may deem appropriate or desirable. In
addition, the Committee may not issue shares unless the issuance complies with
applicable securities laws, and to that end may require that a participant make
certain representations or warranties.
Transferability. Options granted under the Option Plan are not transferable
otherwise than by will or by the laws of descent and distribution. During the
optionee's lifetime, an Option granted under the Option Plan can be exercised
only by him or her.
Effect of Dissolution and Related Transactions. Subject to any required
action by the stockholders, if the Company shall be the surviving corporation in
any merger or consolidation, any Option shall pertain to and apply to the
securities to which a holder of the number of shares of stock subject to the
Option would have been entitled. Upon a dissolution of the Company, a merger or
consolidation in which the Company is not the surviving corporation, or sale or
disposition of all or substantially all of the Company's assets (any of the
foregoing to be referred to as a "Transaction"), every outstanding Option
together with the exercise price thereof shall be equitably adjusted for any
changes or exchange of Common Stock for a different number or kind of shares or
other securities which results from the Transaction, provided, however, that in
the event of a Transaction, then during the period 30 days prior to the
effective date of such event, each holder of an Option shall have a right to
exercise the Option, in whole or in part.
Duration of the Option Plan and Grants. The Option Plan has a term of 10
years from the Effective Date, after which date no Options may be granted,
except that the Option Plan may be terminated at an earlier date by action of
the Board of Directors. The maximum term for an Option is 10 years from the date
of grant, except that the maximum term of an ISO may not exceed five years if
the optionee owns more than 10% of the Common Stock on the date of grant. The
expiration of the Option Plan, or its termination by the Board of Directors,
will not affect any Option then outstanding.
Amendment and Termination of the Option Plan. The Board of Directors shall
have complete power and authority to amend the Option Plan, provided, however,
that except as expressly permitted in the Option Plan, the
15
<PAGE>
Board of Directors shall not, without the affirmative vote of the holders of a
majority of the voting stock of the Company, make any amendment which would (a)
abolish the Committee without designating such other committee, change the
qualifications of its members, or withdraw the administration of the Option Plan
from its supervision, (b) increase the maximum number of shares for which
options may be granted under the Option Plan, (c) amend the formula for
determination of the purchase price of shares on which Options may be granted,
(d) extend the terms of the Option Plan or (e) amend the requirements as to the
employees eligible to receive Options.
Financial Effects of Awards. The Company will receive no monetary
consideration for the granting of Options under the Option Plan. It will receive
no monetary consideration other than the exercise price for shares of Common
Stock issued to optionees upon the exercise of their Options. Under applicable
accounting standards, recognition of compensation expense is not required when
Options are granted at an exercise price equal to or exceeding the fair market
value of the Common Stock on the date the Option is granted.
FEDERAL INCOME TAX CONSEQUENCES
ISOs. An optionee recognizes no taxable income upon the grant of ISOs. If
the optionee holds the shares purchased upon exercise of an ISO for at least two
years from the date the ISO is granted, and for at least one year from the date
the ISO is exercised, any gain realized on the sale of the shares received upon
exercise of the ISO is taxed as long-term capital gain. However, the difference
between the fair market value of the Common Stock on the date of exercise and
the exercise price of the ISO will be treated by the optionee as an item of tax
preference in the year of exercise for purposes of the alternative minimum tax.
If an optionee disposes of the shares before the expiration of either of the two
special holding periods noted above, the disposition is a "disqualifying
disposition." In this event, the optionee will be required, at the time of the
disposition of the Common Stock, to treat the lesser of the gain realized or the
difference between the exercise price and the fair market value of the Common
Stock at the date of exercise as ordinary income and the excess, if any, as
capital gain.
The Company will not be entitled to any deduction for federal income tax
purposes as the result of the grant or exercise of an ISO, regardless of whether
or not the exercise of the ISO results in liability to the optionee for
alternative minimum tax. However, if an optionee has ordinary income taxable as
compensation as a result of a disqualifying disposition, the Company will be
entitled to deduct an equivalent amount.
Non-ISOs. In the case of a non-ISO, an optionee will recognize ordinary
income upon the exercise of the non-ISO in an amount equal to the difference
between the fair market value of the shares on the date of exercise and the
option price (or, if the optionee is subject to certain restrictions imposed by
the federal securities laws, upon the lapse of those restrictions unless the
optionee makes a special tax election within 30 days after the date of exercise
to have the general rule apply). Upon a subsequent disposition of such shares,
any amount received by the optionee in excess of the fair market value of the
shares as of the exercise will be taxed as capital gain. The Company will be
entitled to a deduction for federal income tax purposes at the same time and in
the same amount as the ordinary income recognized by the optionee in connection
with the exercise of a non-ISO.
CURRENT ANTICIPATED STOCK OPTION GRANTS
Set forth below under "New Plan Benefits" is certain information relating
to the maximum amount of Options which are currently expected to be granted to
the specified individuals and groups of individuals. No determinations have been
made by the Committee as to the amounts of Options to be awarded to officers and
employees, but the Committee currently anticipates that in establishing the
number of Options ultimately awarded, it will take into consideration the
performance of the Company and the prospective optionee. All such Options will
be subject to the terms and conditions described above, and no awards will be
made until the Option Plan receives stockholder approval. All Options will
automatically expire ten years after the date of grant, except that ISO's
granted to John R. Male and Jeffrey N. Male will expire five years after the
date of grant. Each annual grant of Options to employees is expected to become
exercisable at the rate of 20% per year, with the first 20% becoming exercisable
on the date of grant. Options to be granted to non-employee directors are
expected to be exercisable immediately upon grant. The exercise price will equal
the fair market value of the Common Stock on the date of grant, except that
ISO's granted to John R. Male and Jeffrey N. Male will have an exercise price
equal to 110% of
16
<PAGE>
the fair market value of the Common Stock on the date of grant. The closing sale
price of the Common Stock on September 7, 2000, as reported on the Nasdaq
Small-Cap Market, was $9.718 per share.
RECOMMENDATION AND VOTE REQUIRED
The Board of Directors has determined that the Option Plan is desirable,
cost effective, and produces incentives which will benefit the Company and its
stockholders. The Board of Directors is seeking stockholder approval of the
Option Plan, in order to satisfy the requirements of the Code for favorable tax
treatment of ISOs, to comply with Nasdaq requirements and to exempt certain
option transactions from the short-swing trading rules of the Securities and
Exchange Commission ("SEC").
Stockholder approval of the Option Plan requires the affirmative vote of
the holders of a majority of the votes cast by stockholders of the Company at
the Meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
OPTION PLAN.
--------------------------------------------------------------------------------
NEW PLAN BENEFITS
--------------------------------------------------------------------------------
Option awards are discretionary, and no determinations have been made
as to the level of awards to be made under the Option Plan, except that a
determination has been made to award a total of 27,500 options to all directors
who are not executive officers as a group in November 2000. The Company expects
to grant options to employees during the fiscal year ending June 30, 2001, but
does not expect to grant options under the Option Plan being approved at the
Annual Meeting as it has sufficient shares available under its 1996 Incentive
Stock Option Plan. The following table sets forth certain information regarding
the number of Options currently expected to be granted under the Option Plan on
an annual basis during future fiscal years.
<TABLE>
<CAPTION>
DOLLAR NUMBER
NAME AND POSITION VALUE ($)(1) OF UNITS(2)
----------------- ------------ -----------
<S> <C> <C>
John R. Male, President of the Company and
President and Chief Executive Officer of the Bank $ -- 4,200
C. Keith Swaney, Vice President and Treasurer of the
Company and Executive Vice President and Chief
Financial Officer of the Bank -- 3,600
Jeffrey N. Male, Vice President and Secretary of the
Company and Senior Vice President of the Bank -- 2,800
James W. Male, Chairman of the Board of Directors
of the Company and the Bank -- --
All executive officers as a group (5 persons) -- 13,600
All directors who are not executive officers
as a group (5 persons) -- 5,000
All employees, including all current officers who are
not executive officers, as a group (9 persons) -- 14,500
<FN>
__________
(1) Based on the fair market value of the Common Stock on the date of grant
less the exercise price.
(2) All Options are expected to be granted at an exercise price equal to the
fair market value of the underlying shares of Common Stock on the date of
the grant or 110% of the fair market value of the Common Stock on the date
of grant. For the other anticipated terms of the Options currently expected
to be granted, see "Proposal II -- Approval of the PVF Capital Corp. 2000
Incentive Stock Option Plan -- Current Anticipated Stock Option Grants."
</FN>
</TABLE>
17
<PAGE>
--------------------------------------------------------------------------------
PROPOSAL III -- RATIFICATION OF APPOINTMENT OF AUDITORS
--------------------------------------------------------------------------------
The Board of Directors has renewed the Company's arrangements with KPMG
LLP, independent public accountants, to be its auditors for the 2001 fiscal
year, subject to ratification by the Company's stockholders. A representative of
KPMG LLP will be present at the Meeting to respond to stockholders' questions
and will have the opportunity to make a statement if he or she so desires.
THE APPOINTMENT OF THE AUDITORS MUST BE APPROVED BY A MAJORITY OF THE
VOTES CAST BY THE STOCKHOLDERS OF THE COMPANY AT THE MEETING. THE BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE
APPOINTMENT OF AUDITORS.
--------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
--------------------------------------------------------------------------------
Pursuant to regulations promulgated under the Exchange Act, the
Company's officers, directors and persons who own more than 10 percent of the
outstanding Common Stock ("Reporting Persons") are required to file reports
detailing their ownership and changes of ownership in such Common Stock
(collectively, "Reports"), and to furnish the Company with copies of all such
Reports. Based solely on its review of the copies of such Reports or written
representations that no such Reports were necessary that the Company received
during the past fiscal year or with respect to the last fiscal year, management
believes that during the fiscal year ended June 30, 2000, all of the Reporting
Persons complied with these reporting requirements.
--------------------------------------------------------------------------------
OTHER MATTERS
--------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement and
matters incident to the conduct of the Meeting. However, if any other matters
should properly come before the Meeting, it is intended that proxies in the
accompanying form will be voted in respect thereof in accordance with the
determination of a majority of the Board of Directors.
--------------------------------------------------------------------------------
MISCELLANEOUS
--------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation. The
Company has retained D.F. King & Co., Inc., a proxy soliciting firm, to assist
in the solicitation of proxies, for which they will receive a fee of $750.
The Company's Annual Report to Stockholders, including financial
statements, is being mailed to all stockholders of record as of the close of
business on the Record Date. Any stockholder who has not received a copy of such
Annual Report may obtain a copy by writing to the Secretary of the Company. Such
Annual Report is not to be treated as a part of the proxy solicitation material
or as having been incorporated herein by reference.
--------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
--------------------------------------------------------------------------------
Under the Company's First Amended and Restated Articles of
Incorporation, stockholder proposals must be submitted in writing to the
Secretary of the Company at the address stated later in this paragraph no less
than 30 days nor more than 60 days prior to the date of such meeting; provided,
however, that if less than forty days' notice of the meeting is given to
stockholders, such written notice shall be delivered or mailed, as prescribed,
to the Secretary of the Company not later than the close of business on the
tenth day following the day on which notice of the meeting was mailed to
stockholders. For consideration at the Annual Meeting, a stockholder proposal
must be delivered or mailed to the Company's Secretary no later than September
28, 2000. In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive office at
2618 N. Moreland
18
<PAGE>
Boulevard, Cleveland, Ohio 44120, no later than May 21, 2001. Any such proposal
shall be subject to the requirements of the proxy rules adopted under the
Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jeffrey N. Male
JEFFREY N. MALE
SECRETARY
Cleveland, Ohio
September 18, 2000
--------------------------------------------------------------------------------
ANNUAL REPORT ON FORM 10-K
--------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JUNE 30, 2000 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE
FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN
REQUEST TO: CORPORATE SECRETARY, PVF CAPITAL CORP., 2618 N. MORELAND BOULEVARD,
CLEVELAND, OHIO 44120.
--------------------------------------------------------------------------------
19
<PAGE>
<PAGE>
Exhibit A
PVF CAPITAL CORP.
2000 INCENTIVE STOCK OPTION PLAN
SECTION I
PURPOSE
-------
The purpose of PVF Capital Corp. 2000 Incentive Stock Option Plan (the
"Plan") is to promote the interest of PVF Capital Corp. ("Company") and its
stockholders by providing a method whereby key executives (as determined by
the Committee in its sole discretion) and directors ("Optionees") of the
Company and its subsidiaries may be encouraged to invest in the Company's
Common Stock, thereby increasing their proprietary interest in its
business, providing them with additional incentive to remain in the employ
of the Company and increasing their personal interest in its continued
success and progress. These employees will be granted options ("Options")
to purchase shares of the common stock, $.01 par value, of the Company
("Common Stock"). It is intended that Options issued hereunder will
constitute Incentive Stock Options ("ISOs") within the meaning of Section
422A of the Internal Revenue Code of 1986, as amended from time to time
(the "Code"). Non-employee directors are not eligible for Incentive Stock
Options and therefore are granted nonqualified stock options ("non-ISOs").
SECTION II
ADMINISTRATION
--------------
2.1 The Committee. The Plan shall be administered by a Committee of the
--------------
Board of Directors of the Company (the "Committee"). The Committee
shall consist of not less than two non-employee directors within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, and shall be appointed by the Board of Directors. A majority
of the members of the Committee shall constitute a quorum. All
decisions of the Committee shall be made by not less than a majority of
its members. Any decision or determination reduced to writing and
signed by all the members of the Committee shall be fully as effective
as if it had been made by a majority vote at a meeting duly called and
held. The Committee may appoint a chairman from among the members and a
secretary (who need not be a member) and may make such rules and
regulations for the conduct of its business as it shall deem advisable.
No member of the Committee shall be liable, in the absence of bad
faith, for any act or omission with respect to his or her service on
the Committee. Service on the Committee shall constitute service as a
Director of the Company so that members of the committee shall be
entitled to indemnification and reimbursement as Directors of the
Company.
2.2 Authority of the Committee. Subject to the express provisions of the
---------------------------
Plan, the Committee shall have plenary authority to determine, in its
discretion, the employees and directors to whom, and the time or times
within which (during the term of the Option) all or a portion
A-1
<PAGE>
of such Options may be exercised. In making such determination, the
Committee may take into account the nature of the services rendered or
expected to be rendered by the respective employees and directors,
their present and potential contributions to the Company's success,
the anticipated number of years of effective service remaining and
such other factors as the Committee in its discretion shall deem
relevant. Subject to the express provisions of the Plan, Section 422A
of the Code and any regulations or rulings thereunder, the Committee
shall also have plenary authority to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it, to determine
the terms and conditions of the respective Options (which terms and
conditions need not be the same in each case), to impose restrictions
on any shares issued upon the exercise of an Option and to determine
the manner in which such restrictions may be removed, and to make all
other determinations deemed necessary or advisable in administering
the Plan. The Committee may specify in the original terms of any
Option, or, if not so specified, shall determine whether any
authorized leave of absence or absence on military or governmental
service or for any other reason shall constitute a termination of
employment for purposes of the Plan. The determination of the
Committee on the matters referred to in the Plan shall be conclusive;
provided that it shall be the Board of Directors of the Company which
shall determine whether un-issued or treasury shares shall be issued
upon the exercise of any Option.
2.3 Option Agreement. Each Option shall be evidenced by an option agreement
----------------
which shall contain such terms and conditions as may be approved by the
Committee, and the said agreement shall be signed by an officer of the
Company and the Optionee.
SECTION III
SHARES SUBJECT TO THE PLAN
--------------------------
An aggregate of 250,000 shares of Common Stock shall be subject to the
Plan, subject to adjustment in accordance with Section 8 hereof. Such shares may
be either authorized but un-issued shares or shares now or hereafter held in the
treasury of the Company.
In the event that any Option under the Plan expires unexercised or is
terminated, surrendered or cancelled, the shares subject to such Option, or the
unexercised portion thereof, shall again become available for Option under the
Plan, including to the former holder of such Option, upon such terms as the
Committee shall determine in accordance with the Plan and which terms may be
more or less favorable than those applicable to such former Option.
SECTION IV
GRANTING DATE
-------------
The action of the Committee with respect to the granting of an Option shall
take place on such date as a majority of the members of the Committee at a
meeting shall make a determination with respect to the granting of an
Option or, in the absence of a meeting, on
A-2
<PAGE>
such date as of which written designation covering such Option shall have
been executed by all members of the Committee. The effective date of the
grant of an Option (the "Granting Date") shall be the date specified by the
Committee in its determination or designation relating to the award of such
Option or, in the absence of such a specification, the date on which the
action of the Committee relating to the award of such Option took place.
However, the Granting Date shall not be later than the termination date of
Section 9.2.
SECTION V
ELIGIBILITY
-----------
Options may be granted to key executives (which term shall be deemed to
include among others, the president, any vice president, secretary, treasurer or
any manager 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 Company or any of its subsidiaries) and who on the Granting
Date are in the employ of the company or one of its then subsidiary
corporations, as defined in Section 425 of the Code (the "subsidiaries"). Also,
Options may be granted to any Director of the Company or of a subsidiary
corporation who is not also such an employee or officer of the Company or of one
of its subsidiary corporations on the Granting Date. Subject to adjustment as
set forth in Section VIII, the maximum number of shares for which Options may be
granted to any individual participant during any calendar year shall be 10,000
shares.
SECTION VI
TERMS AND CONDITIONS OF OPTIONS
-------------------------------
6.1 Option Price. Subject to the provision of Section 6.5 below, the
-------------
purchase price of the Common Stock under each option shall be
determined by the Committee as of the Granting Date, but shall not be
less than 100% of the fair market value of the stock on the Granting
Date. The fair market value of the stock shall be, for purposes of the
Plan, determined in accordance with the requirements of Section 422A of
the Code.
6.2 Terms. Subject to the provisions of Section 6.5 below, the term of each
-----
Option granted under the Plan shall be for a period not exceeding ten
years from the Granting Date. Each Option granted under the Plan may be
exercised by the Optionee as stated in his or her individual option
agreement, but in no event may any option be exercised before one year
of continued employment with the Company, or a subsidiary, immediately
following the Granting Date.
A-3
<PAGE>
6.3 Restrictions on Transfer and Exercise.
-------------------------------------
(a) Except as hereinafter provided, no Option granted pursuant to
the Plan may be exercised at any time unless the holder
thereof is then an employee or director of the Company or of a
subsidiary. Options granted under the Plan shall not be
affected by any change of employment so long as the Optionee
continues to be an employee or director of the Company or of a
subsidiary corporation.
(b) The Option of any Optionee whose employment is terminated for
any reason, other than for death, disability (as defined in
Section 22(e)(3) of the Code) or discharge for cause (as
defined in Section 6.3(d) below), shall be exercisable or
payable to the extent provided therein, through the earlier of
the date which is three months after termination of employment
or the date that such Option expires in accordance with its
terms, and shall expire thereafter.
(c) In the event of the death of an Optionee (1) while an employee
of the Company or a subsidiary corporation, or (2) within
three months after the termination of employment of the
Optionee for other than cause, or in the event of the
termination of employment by an Optionee for permanent
disability, the Option may be exercised as follows:
(i) In the event of the death of an Optionee during employment
or the death of the Optionee within three months after the
termination of employment for other than cause, each Option
granted to such Optionee shall be exercisable or payable to
the extent provided therein but not later than one year
after his or her death (but not beyond the stated duration
of the Option). Any such exercise or payment shall be made
only: (1) by or to the executor or administrator of the
estate of the deceased Optionee or person or persons to whom
the deceased Optionee's rights under the Option shall pass
by will or the laws of descent and distribution; and (2) to
the extent, if any, that the deceased Optionee was entitled
at the date of his or her death.
(ii) In the case of an Optionee who becomes disabled, the Option
shall be exercisable or payable to the extent provided
therein on the earlier of one year after termination of
employment or the date that such Option expires in
accordance with its terms. During such period, the Option
may be exercised by an Optionee who becomes disabled with
respect to the same number of shares. in the same manner and
to the same extent as if the Optionee had continued
employment during such period.
(d) Any unexercised Options shall lapse immediately upon termination
of employment of the Optionee through discharge for "cause".
"Cause" shall mean, in the good faith determination of the
Company's Board of Directors, the Optionee's personal dishonesty,
incompetence, willful misconduct, breach of
A-4
<PAGE>
fiduciary duty involving personal profit, intentional failure to
perform stated duties, or willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or
final cease-and-desist order. No act, or failure to act, on the
Optionee's part shall be considered "willful" unless he has
acted, or failed to act, with an absence of good faith and
without a reasonable belief that his action or failure to act was
in the best interest of the Company or its subsidiaries.
(e) Each Option granted under the Plan shall, by its terms, not be
transferable otherwise than by will or the laws of descent and
distribution. Notwithstanding the foregoing, or any other
provision of this Plan, an Optionee who holds Options may
transfer such Options (but not ISOs) to his or her spouse, lineal
ascendants, lineal descendants, or to a duly established trust
for the benefit of one or more of these individuals. Options so
transferred may thereafter be transferred only to the Optionee
who originally received the grant or to an individual or trust to
whom the Optionee could have initially transferred the Options
pursuant to this Section 6.3(e). Options which are transferred
pursuant to this Section 6.3(e) shall be exercisable by the
transferee according to the same terms and conditions as applied
to the Optionee.
(f) For the purposes of this Section, Options granted to directors
may be exercised at any time prior to the expiration date of the
Option. In the event of the death of the director, Options may be
exercised at any time prior to the expiration date of the option.
Any such exercise or payment shall be made only: (A) by or to the
executor or administrator of the estate of the deceased Director
or person or persons to whom the deceased Director's rights under
the Option shall pass by will or the laws of descent and
distribution; and (B) to the extent, if any, that the deceased
Director was entitled at the date of his or her death.
6.4 Manner of Exercise. An Option shall be exercised by giving a written
-------------------
notice to the President of the Company stating the number of shares of
stock with respect to which the Option is being exercised and
containing such other information as the President may request and by
tendering payment therefore with a cashier's check, certified check, or
with existing holdings of Common Stock held for more than six months.
6.5 Limitations on Options.
----------------------
(a) In the case of Options intended to qualify as ISO's,
notwithstanding the provision of Sections 6.1 and 6.2 above,
if an Optionee, at the time of Option is granted, owns (as
defined in Section 424(d) of the Code) Common Stock possessing
more than 10% of the total combined voting power of all
classes of stock of the Company, any subsidiary thereof or of
the Company's parent (if any), the option price for such
Option shall be at least 110% of the fair market value of the
stock subject to such Option, and such Option by its term
shall not be exercisable after the expiration of five years
from the date such Option is granted.
(b) In the case of Options intended to qualify as ISOs, if the
aggregate fair market value (determined as of the time the
Option is granted) with respect to which Options are
exercisable for the first time by Employee during any calendar
year
A-5
<PAGE>
(under this Plan or any other plan of the Company and its parent
and subsidiary corporations) exceeds $100,000, such Options in
excess of $100,000 shall be treated as Options which are not
Incentive Stock Options as defined in Section 422A of the Code.
(c) For the purposes of this Section, parts (a) and (b) shall not
apply to options granted to non-employee Directors.
SECTION VII
STOCKHOLDER AND EMPLOYMENT RIGHTS
---------------------------------
A holder of an Option shall have none of the rights of a stockholder
with respect to any of the shares subject to Option until such shares shall be
issued upon the exercise of the Option.
Nothing in the Plan or in any Option granted pursuant to the Plan
shall, in the absence of an express provision to the contrary, confer on any
individual any right to be or to continue in the employ of the Company or any of
its subsidiaries or shall interfere in any way with the right to the Company or
any of its subsidiaries to terminate the employment of any individual at any
time.
SECTION VIII
ADJUSTMENTS TO COMMON STOCK
---------------------------
The aggregate number of shares of Common Stock of the Company on which
Options may be granted hereunder, the number of shares thereof covered by each
outstanding Option, the maximum number of shares for which Options may be
granted to any individual during any calendar year and the price per share
thereof in each such Option will all be appropriately adjusted for any increase
or decrease in the number of shares of stock of the Company resulting from a
subdivision or consolidation of shares whether through reorganization,
recapitalization, stock split-up or combination of shares, or the payment of a
stock dividend or other increase or decrease in such shares effected without
receipt of consideration by the Company. No fractional shares of stock shall be
issued upon exercise of an Option by reason of a stock dividend or otherwise,
and the grantee holding such Option shall not be entitled to exercise it with
respect to such fractional share.
Subject to any required action by the stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, any Option
granted hereunder shall pertain to and apply to the securities to which a holder
of the number of shares of stock subject to the Option would have been entitled.
Upon a dissolution of the Company, a merger or consolidation in which the
Company is not the surviving corporation, or sale or disposition of all or
substantially all of the Company's assets (any of the foregoing to be referred
to herein as a "Transaction"), every Option outstanding hereunder together with
the exercise price thereof shall be equitably
A-6
<PAGE>
adjusted for any changes or exchange of Common Stock for a different number of
kind of shares or other securities which results from the Transaction.
SECTION IX
EFFECTIVE DATE AND TERMINATION EFFECTIVE DATE
---------------------------------------------
9.1 Effective Date. The Plan shall become operative and in effect on the
date the Plan is approved by a vote of a majority of all members of the
Board of Directors provided, however. that the Plan shall be submitted
to the stockholders of the Company for approval within twelve months of
the date of adoption of the Plan, and if such approval shall not be
obtained within that period by a vote of the holders of a majority of
the total outstanding capital stock of the Company entitled to vote,
voting as a single class, the Plan shall be null and void and all
Options, if any, granted thereunder shall automatically be cancelled.
9.2 Termination Effective Date. The Plan shall remain in effect until and
shall terminate within 10 years from the date the Plan is adopted or
the Plan was approved by the shareholders, whichever is earlier, but it
may be terminated at an earlier date by action of the Board of
Directors. Except as provided in paragraph 9.1 above, termination of
this Plan shall not affect the rights of grantees under Options
theretofore granted to purchase stock under the Plan, and, all such
Options shall continue in force and operation after termination of the
Plan. except as provided in subparagraph A above and except as may be
terminated through death or other termination of employment in
accordance with the terms of the Plan.
SECTION X
AMENDMENTS
----------
The Board of Directors shall have complete power and authority to amend
the Plan, provided, however, that except as expressly permitted in the Plan, the
Board of Directors shall not, without the affirmative vote of the holders of a
majority of the voting stock of the Company, make any amendment which would (a)
abolish the Committee without designating such other committee, change the
qualifications of its members, or withdraw the administration of the Plan from
its supervision, (b) increase the maximum number of shares for which options may
be granted under the Plan, (c) amend the formula for determination of the
purchase price of shares on which options may be granted, (d) extend the terms
of the Plan or (e) amend the requirements as to the employees eligible to
receive Options.
A-7
<PAGE>
SECTION XI
GOVERNMENT AND OTHER REGULATIONS
--------------------------------
The obligation of the Company to sell or deliver shares under Options
granted pursuant to the Plan shall be subject to all applicable laws, rules
and regulations, and to such approvals by and registrations with any
governmental agencies as may be required.
SECTION XII
LOAN AGREEMENTS
---------------
Each Option shall be subject to the condition that the Company shall
not be obliged to issue or transfer any of its stock to a holder of an Option,
in the exercise thereof, if at any time the Committee or the Board of Directors
shall determine that the issuance or transfer of such stock would be in
violation of any covenant in any of the Company's loan agreements or other
contracts.
The Company hereby agrees to the provisions of this Plan, and in Witness
Thereof, the Company causes this Agreement to be executed on this ________day of
____________, 2000.
PVF CAPITAL CORP
By: ______________________
President
ATTEST:
_____________________
Secretary
A-8
<PAGE>
REVOCABLE PROXY
PVF CAPITAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 16, 2000
The undersigned hereby appoints Stanley T. Jaros, John R. Male and
Creighton E. Miller, with full powers of substitution, to act as attorneys and
proxies for the undersigned, to vote all shares of common stock of PVF Capital
Corp. (the "Company") which the undersigned is entitled to vote at the Annual
Meeting of Stockholders (the "Meeting"), to be held at the Cleveland Marriott
East, 3663 Park East Drive, Beachwood, Ohio, on Monday, October 16, 2000 at
10:00 a.m., local time, and at any and all adjournments thereof, as follows:
VOTE
FOR WITHHELD
--- --------
1. The election as directors for two-year terms [ ] [ ]
of all nominees listed below (except as
marked to the contrary below)
Robert F. Urban
Robert K. Healey
Stuart D. Neidus
C. Keith Swaney
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE,
INSERT THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
__________________________________________
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C> <C>
2. Approval of the PVF Capital Corp.
2000 Incentive Stock Option Plan [ ] [ ] [ ]
FOR AGAINST ABSTAIN
--- ------- -------
3. Proposal to ratify the appointment of
KPMG LLP as independent
certified public accountants of the Company
for the fiscal year ending June 30, 2001 [ ] [ ] [ ]
</TABLE>
The Board of Directors recommends a vote "FOR" each of the nominees,
"FOR" approval of the PVF Capital Corp. 2000 Stock Option Plan and "FOR" the
ratification of the appointment of auditors.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED ABOVE AND FOR
THE OTHER PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN ACCORDANCE
WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS. AT THE PRESENT
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
ANNUAL MEETING. THIS PROXY CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS
THEREOF TO VOTE WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE
NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT
TO THE CONDUCT OF THE MEETING.
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<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or
at any adjournment thereof and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Meeting of Stockholders, a proxy
statement dated September 18, 2000 and an Annual Report to Stockholders.
Dated: ________________________, 2000
__________________________________ _________________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________________ _________________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
