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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
Filed by the Registrant[X]
Filed by a Party other than the Registrant[ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
FOUNDATION BANCORP, INC.
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(Name of Registrant as Specified In Its Charter)
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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)(4) and O-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
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O-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
O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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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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FOUNDATION BANCORP, INC.
25 GARFIELD PLACE
CINCINNATI, OHIO 45202
(513) 721-0120
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 1997 Annual Meeting of Shareholders of
Foundation Bancorp, Inc. (the "Company") will be held at Parlor F/G, The
Cincinnati Club Building, 30 Garfield Place, Cincinnati, Ohio 45202, on October
23, 1997, at 1:00 p.m., local time (the "Annual Meeting"), for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:
1. To elect four directors of the Company for terms
expiring in 1999;
2. To approve the Foundation Bancorp, Inc. 1997 Stock
Option and Incentive Plan, a copy of which is
attached hereto as Exhibit A;
3. To approve the Foundation Savings Bank Recognition
and Retention Plan and Trust Agreement, a copy of
which is attached hereto as Exhibit B;
4. To ratify the selection of Clark, Schaefer, Hackett &
Co. as the auditors of the Company for the current
fiscal year; and
5. To transact such other business as may properly come
before the Annual Meeting or any adjournments
thereof.
Only shareholders of the Company of record at the close of business on
August 29, 1997, will be entitled to receive notice of and to vote at the Annual
Meeting and at any adjournments thereof. Whether or not you expect to attend the
Annual Meeting, we urge you to consider the accompanying Proxy Statement
carefully and to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT YOUR
SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A QUORUM
MAY BE ASSURED. The giving of a proxy does not affect your right to vote in
person in the event you attend the Annual Meeting.
By Order of the Board of Directors
Cincinnati, Ohio Laird L. Lazelle
September 17, 1997
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FOUNDATION BANCORP, INC.
25 GARFIELD PLACE
CINCINNATI, OHIO 45202
(513) 721-0120
PROXY STATEMENT
PROXIES
The enclosed proxy (the "Proxy") is being solicited by the Board of
Directors of Foundation Bancorp, Inc. (the "Company") for use at the 1997 Annual
Meeting of Shareholders of the Company to be held at Parlor F/G, The Cincinnati
Club Building, 30 Garfield Place, Cincinnati, Ohio 45202, on October 23, 1997,
at 1:00 p.m., local time, and at any adjournments thereof (the "Annual
Meeting"). Without affecting any vote previously taken, the Proxy may be revoked
by executing a later dated proxy which is received by the Company before the
Proxy is exercised or by giving notice of revocation to the Company in writing
or in open meeting before the Proxy is exercised. Attendance at the Annual
Meeting will not, of itself, revoke the Proxy.
Each properly executed Proxy received prior to the Annual Meeting and
not revoked will be voted as specified thereon or, in the absence of specific
instructions to the contrary, will be voted:
FOR the reelection of Mardelle Dickhaut, Laird L. Lazelle,
Robert E. Levitch and Michael S. Schwartz as directors of the
Company for terms expiring in 1999;
FOR the approval of the Foundation Bancorp, Inc. 1997 Stock
Option and Incentive Plan (the "Stock Option Plan"), a copy of
which is attached hereto as Exhibit A;
FOR the approval of the Foundation Savings Bank Recognition
and Retention Plan and Trust Agreement (the "RRP"), a copy of
which is attached hereto as Exhibit B;
FOR the ratification of the selection of Clark, Schaefer,
Hackett & Co. as the auditors of the Company for the current
fiscal year.
The Proxies may be solicited by the directors, officers and other
employees of the Company and Foundation Savings Bank ("Foundation"), in person
or by telephone, telegraph or mail only for use at the Annual Meeting. The Proxy
will not be used for any other meeting. The cost of soliciting the Proxies will
be borne by the Company.
Only shareholders of record as of the close of business on August 29,
1997 (the "Voting Record Date"), are entitled to vote at the Annual Meeting.
Each such shareholder will be entitled to cast one vote for each share owned.
The Company's records disclose that, as of the Voting Record Date, there were
462,875 votes entitled to be cast at the Annual Meeting.
This Proxy Statement is first being mailed to shareholders of the
Company on or about September 17, 1997.
VOTE REQUIRED
ELECTION OF DIRECTORS
Under Ohio law and the Company's Code of Regulations (the
"Regulations"), the four nominees receiving the greatest number of votes will be
elected as directors. Shares held by a nominee for a beneficial owner which are
represented in person or by proxy but not voted with respect to the election of
directors and shares as to which the authority to vote is withheld are not
counted toward the election of directors or toward the election of the
individual nominees specified on the Proxy.
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APPROVAL OF THE STOCK OPTION PLAN AND THE RRP
The affirmative vote of the holders of a majority of the outstanding
common shares of the Company is necessary to approve the Stock Option Plan and
the RRP. The effect of an abstention is, therefore, the same as a vote against
the approval of the Stock Option Plan and the RRP. If the accompanying Proxy is
signed and dated by the shareholder but no vote or instruction to abstain is
specified thereon, however, the shares held by such shareholder will be voted
FOR the adoption of the Stock Option Plan and the RRP.
RATIFICATION OF SELECTION OF AUDITORS
The affirmative vote of the holders of a majority of the shares
represented in person or by proxy at the Annual Meeting is necessary to ratify
the selection of Clark, Schaefer, Hackett & Co. as the auditors of the Company
for the current fiscal year. The effect of an abstention is, therefore, the same
as a "no" vote. If the accompanying Proxy is signed and dated by the shareholder
but no vote or instruction to abstain is specified thereon, however, the shares
held by such shareholder will be voted FOR the ratification of the selection of
Clark, Schaefer, Hackett & Co. as the auditors of the Company for the current
fiscal year.
VOTING SECURITIES AND OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
only persons known to the Company to own beneficially more than five percent of
the outstanding common shares of the Company as of September 1, 1997:
Amount and Nature of Percent of
Name and Address Beneficial Ownership Shares Outstanding
- ---------------- -------------------- ------------------
First Bankers Trust Company, N.A.
1201 Broadway
Quincy, Illinois 62301 37,030 (1) 8.00%
Laird L. Lazelle
25 Garfield Place 24,666 (2) 5.32%
Cincinnati, Ohio 45202
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<FN>
(1) Consists of the shares held by First Bankers Trust Company, N.A., as
the Trustee for the Foundation Bancorp, Inc. Employee Stock Ownership
Plan (the "ESOP"). The Trustee has voting power over shares that have
not been allocated to an ESOP participant and shares that have been
allocated to an ESOP participant but as to which no voting
instructions are given by the recipient. The Trustee has limited
shared investment power over all ESOP shares.
(2) Includes 1,649 common shares allocated to Mr. Lazelle's ESOP
account. Mr. Lazelle has voting power but no investment power over
such shares. Also includes 11,517 shares owned by Mr. Lazelle's
spouse.
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The following table sets forth certain information with respect to the
number of common shares of the Company beneficially owned by each director and
by all directors and executive officers of the Company as a group as of
September 1, 1997:
Amount and Nature of Percent of
Name and Address (1) Beneficial Ownership (2) Shares Outstanding
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Mardelle Dickhaut 4,400 0.95%
Ruth C. Emden 5,000 1.08
Laird L. Lazelle 24,666 (3) 5.32
Robert E. Levitch 25 0.00
Michael S. Schwartz 16,517 (4) 3.56
Paul L. Silverglade 8,750 1.89
Ivan J. Silverman 11,571 (5) 2.49
All directors and executive officers of
the Company as a group (8 people) 75,079 16.22
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<FN>
(1) Each of the persons listed in this table may be contacted at the address of the Company.
(2) All shares are owned directly with sole voting or investment power unless otherwise indicated by footnote.
(3) Includes 11,517 shares owned by Mr. Lazelle's spouse.
(4) Includes 5,000 shares held by Mr. Schwartz as trustee and over which Mr. Schwartz shares voting power.
(5) Includes 6,571 shares owned by Mr. Silverman's spouse.
PROPOSAL ONE - ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
The Regulations provide for a Board of Directors consisting of seven
persons. In accordance with Section 2.03 of the Regulations, nominees for
election as directors may be proposed only by the directors or by a shareholder
entitled to vote for directors. A nomination by a shareholder with respect to
the election of directors at an annual meeting of shareholders must be submitted
in writing to the Secretary of the Company and received by the Secretary not
later than the sixtieth day before the first anniversary of the most recent
annual meeting of shareholders held for the election of directors. A nomination
by a shareholder with respect to the election of directors at a special meeting
of shareholders must be submitted in writing and received by the Secretary of
the Company not later than the close of business on the seventh day following
the day on which notice of such special meeting was mailed to shareholders. Each
written nomination must state the name, age, business or residence address of
the nominee, the principal occupation or employment of the nominee, the number
of common shares of the Company owned either beneficially or of record by each
such nominee and the length of time such shares have been so owned.
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The Board of Directors proposes the reelection at the Annual Meeting of
the following persons to terms which will expire in 1999:
Director of Director of
the Company Foundation
Name Age (1) Position(s) Held Since (2) Since
- ---- ------- ---------------- ---------- -----------
Mardelle Dickhaut 64 Director 1996 1989
Laird L. Lazelle 58 Director, President and 1996 1994
Chief Executive Officer
Robert E. Levitch 63 Director 1996 1964
Michael S. Schwartz 53 Director 1996 1967
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<FN>
(1) As of September 1, 1997.
(2) Each director of the Company is also a director of Foundation. Each
nominee became a director of the Company in connection with the
conversion of Foundation from mutual to stock form (the "Conversion")
and the formation of the Company as the holding company for Foundation.
If any nominee is unable to stand for election, any Proxies granting
authority to vote for such nominee will be voted for such substitute as the
Board of Directors recommends.
The following directors will continue to serve after the Annual Meeting
for the terms indicated:
Director of Director of
the Company Foundation
Name Age (1) Positions Held Since (2) Since Term Expires
- ---- --------- -------------- --------- ----------- ------------
Ruth C. Emden 70 Director 1996 1994 1998
Paul L. Silverglade 72 Director 1996 1988 1998
Ivan J. Silverman 56 Director 1996 1992 1998
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<FN>
(1) As of September 1, 1997.
(2) Each director of the Company is also a director of Foundation. Each director became a director of the Company in
connection with the Conversion.
MARDELLE DICKHAUT has served as Secretary of Foundation since 1979 and
as a director since 1989. Mrs. Dickhaut was employed at Foundation for 23 years
prior to her retirement in 1995.
RUTH C. EMDEN has served as a director of Foundation since 1994. Mrs.
Emden is the widow of Narvin I. Emden, who served Foundation as President,
Managing Officer and Director for over 46 years. Mrs. Emden is active in
community service.
LAIRD L. LAZELLE is President and Chief Executive Officer of both the
Company and Foundation and is the designated Managing Officer of Foundation. Mr.
Lazelle served as President and Chief Executive Officer of The TriState Bancorp
from February 1988 until joining Foundation in January 1994.
ROBERT E. LEVITCH has served as a director of Foundation since 1964.
Mr. Levitch has been a corrections officer with the Hamilton County Sheriff's
Department since 1980.
MICHAEL S. SCHWARTZ is an attorney at law practicing in Cincinnati,
Ohio and operates a title insurance agency. Mr. Schwartz is legal counsel to
Foundation and also provides title services for loans granted by Foundation. Mr.
Schwartz has served as a director of Foundation since 1967 and succeeded his
father as Chairman of the Board in 1993.
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PAUL L. SILVERGLADE retired as the Corporate Office Personnel Director
for Federated Department Stores in 1981, after serving for 33 years. Mr.
Silverglade has been a director of Foundation since 1988 and serves as Chairman
of the Compensation Committee.
IVAN J. SILVERMAN is an investment consultant and Associate Vice
President with Gradison Division of McDonald & Company Securities, Inc. Mr.
Silverman is also the Mayor of the City of Montgomery, Ohio. Mr. Silverman has
served as a director of Foundation since 1992 and serves as Chairman of the
Audit Committee.
MEETINGS OF DIRECTORS
The Board of Directors of the Company met nine times for regularly
scheduled and special meetings during the fiscal year ended June 30, 1997. Due
to illness, Mrs. Emden attended fewer than 75% of the regularly scheduled and
special meetings of the Board of Directors during fiscal 1997.
COMMITTEES OF DIRECTORS
The Board of Directors of the Company has an Audit Committee. The
Company has no Executive Committee and the entire board serves as a Nominating
Committee.
The Board of Directors of Foundation has an Audit Committee and a
Compensation Committee.
The Audit Committee of both the Company and Foundation is comprised of
Mr. Silverman, who serves as chairman of the Audit Committee, Ms. Dickhaut and
Mr. Silverglade. The Audit Committee reviews and monitors the process of
auditing the Company and Foundation. The final audit is presented to the full
board of directors by the auditors. The Audit Committee met one time during the
fiscal year ended June 30, 1997.
Mr. Silverglade serves as chairman of the Compensation Committee. Mr.
Schwartz and Mr. Silverman also serve on the Compensation Committee. The
function of the Compensation Committee is to determine compensation for
Foundation's employees and to make recommendations to the Board of Directors
regarding employee benefits and related matters. The Compensation Committee met
two times during the fiscal year ended June 30, 1997.
EXECUTIVE OFFICERS
Mr. Lazelle is the President and Chief Executive Officer of the
Company. Dianne K. Rabe serves as Secretary and Treasurer of the Company. Mrs.
Rabe, a Certified Public Accountant, is Vice President and Chief Operating
Officer of Foundation. Mrs. Rabe came to Foundation in 1992 from another thrift
institution located in Cincinnati, Ohio.
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COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by Foundation to
Laird L. Lazelle, the President and Chief Executive Officer of the Company and
Foundation, for the fiscal years ended June 30, 1997, 1996 and 1995. No
executive officer of the Company earned salary and bonus in excess of $100,000
during fiscal 1997.
Summary Compensation Table
--------------------------
Annual Compensation All Other Compensation (1)
- --------------------------------------------------------------- --------------------------
Name and Principal Year Salary ($) Bonus ($)
Position
- ---------------------------------------------------------------
Laird L. Lazelle 1997 $80,000 $15,000 $24,998
President and Chief 1996 65,000 9,800 6,000
Executive Officer 1995 69,488 5,200 6,000
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<FN>
(1) Consists of director's fees and for 1997 also includes director fees of
$1,500 and the $23,498 aggregate value of the 1,649 shares of the
Company allocated to Mr. Lazelle's account pursuant to the ESOP, based
on the price of shares of the Company in the most recent trade quoted
on the National Daily Quotation Service ("NDQS"), as of September 1,
1997. Does not include amounts attributable to other miscellaneous
benefits, the cost of which was less than 10% of Mr. Lazelle's cash
compensation.
DIRECTOR COMPENSATION
Each director who is not an employee of the Company or Foundation
currently receives directors' fees of $7,500 per year. Effective September 1996,
directors who are employees of the Company or Foundation receive no directors'
fees.
EMPLOYMENT AGREEMENT
Foundation has entered into an employment agreement with Mr. Lazelle
(the "Employment Agreement"), effective September 25, 1996. The Employment
Agreement provides for a term of three years and salary and performance review
by the Board of Directors not less often than annually. The Employment Agreement
provides for inclusion of Mr. Lazelle in any formally established employee
benefit, bonus, pension and profit-sharing plans for which senior management
personnel are eligible. The Employment Agreement also provides for vacation and
sick leave in accordance with Foundation's prevailing policies.
The Employment Agreement is terminable by Foundation at any time. In
the event of termination by Foundation for "just cause," as defined in the
Employment Agreement, Mr. Lazelle will have no right to receive any compensation
or other benefits for any period after such termination. In the event of
termination by Foundation other than (i) for just cause, (ii) at the end of the
term of the Employment Agreement or (iii) in connection with a "change of
control," as defined in the Employment Agreement, the Employment Agreement
entitles Mr. Lazelle to a continuation of salary payments for the remainder of
the term of the Employment Agreement and a continuation of benefits
substantially equal to those being provided at the date of termination of
employment until the earliest to occur of the end of the term of the Employment
Agreement or the date Mr. Lazelle becomes employed full-time by another
employer.
The Employment Agreement also contains provisions with respect to the
occurrence within six months prior to or one year following a "change of
control" of (i) the termination of employment of Mr. Lazelle for any reason
other than just cause, retirement or termination at the end of the term of the
agreement, or (ii) a constructive termination resulting from change in the
capacity or circumstances in which Mr. Lazelle is employed or a material
reduction in his responsibilities, authority,
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compensation or other benefits provided under the Employment Agreement without
his written consent. In the event of any such occurrence, Mr. Lazelle will be
entitled to payment of an amount equal to three times his then current annual
salary. In addition, Mr. Lazelle would be entitled to continued coverage under
all benefit plans until the earliest of the end of the term of the Employment
Agreement or the date on which he is included in another employer's benefit
plans as a full-time employee. The maximum which Mr. Lazelle may receive,
however, is limited to an amount which will not result in the imposition of a
penalty tax pursuant to Section 280G(b)(3) of Internal Revenue Code of 1986, as
amended (the "Code"). A "change of control," as defined in the Employment
Agreement, generally refers to the acquisition by any person or entity of the
ownership or power to vote 25% or more of the voting stock of Foundation or the
Company, the control of the election of a majority of the directors of
Foundation or the Company or the acquisition of control, as defined in the
regulations of the OTS, of Foundation or the Company. For purposes of
illustration, the payment that would have been made to Mr. Lazelle under the
Employment Agreement, had his employment been terminated at June 30, 1997,
following a change of control, totals approximately $240,000.
CERTAIN TRANSACTIONS WITH FOUNDATION
Foundation has extended loans to certain of its and the Company's
directors and executive officers, their affiliates and members of their
families. All such loans were made in the ordinary course of business on
substantially the same terms, including interest rates and collateral
requirements, as those prevailing at the time for comparable transactions with
other persons and did not present more than the normal risk of collectibility or
other unfavorable features.
PROPOSAL TWO - APPROVAL OF THE FOUNDATION BANCORP, INC.
1997 STOCK OPTION AND INCENTIVE PLAN
STOCK OPTION PLAN
The following is a summary of the terms of the Stock Option Plan and is
qualified in its entirety by reference to the full text of the Stock Option
Plan, a copy of which is attached hereto as Exhibit A.
PURPOSE. The purposes of the Stock Option Plan include retaining and
providing incentives to the directors, managerial and other key employees of the
Company and Foundation by facilitating their purchase of a stock interest in the
Company. Pursuant to the Stock Option Plan, 46,288 common shares have been
reserved for issuance by the Company upon the exercise of options to be granted
to certain directors, officers and employees of Foundation and the Company from
time to time under the Stock Option Plan.
ADMINISTRATION AND ELIGIBILITY. The Stock Option Plan will be
administered by a committee composed of at least three directors of the Company
(the "Stock Option Committee"). The Stock Option Committee may grant options
under the Stock Option Plan at such times as it deems most beneficial to
Foundation and the Company on the basis of the individual participant's
responsibility, tenure and future potential to Foundation and the Company.
Pursuant to the terms of the Stock Option Plan, no employee may receive options
to purchase more than 25% of the shares which may be subject to options pursuant
to the Stock Option Plan, and directors who are not employees of the Company or
Foundation may not receive options to purchase more than 5% of such shares
individually or 30% in the aggregate.
Without further approval of the shareholders, the Board of Directors
may at any time terminate the Stock Option Plan or may amend it from time to
time in such respects as the Board of Directors may deem advisable, except that
the Board of Directors may not, without the approval of the shareholders, make
any amendment which would (a) increase the aggregate number of common shares
which may be issued under the Stock Option Plan (except for adjustments to
reflect certain changes in the capitalization of the Company), (b) materially
modify the requirements as to eligibility for participation in the Stock Option
Plan, or (c) materially increase the benefits accruing to participants under the
Stock Option Plan. Notwithstanding the foregoing, the Board of Directors may
amend the Stock Option Plan to take into account changes in applicable
securities, federal income tax and other applicable laws.
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No determination of which directors and employees of Foundation will
receive options has been made. If the shareholders approve the Stock Option
Plan, the Stock Option Committee will be appointed and will determine which
directors and employees will receive options and the number of options to be
granted.
OPTION TERMS. Options granted to the officers and employees under the
Stock Option Plan may be "incentive stock options" ("ISOs") within the meaning
of Section 422 of the Code, or may be options which do not qualify under Section
422 of the Code ("Non-Qualified Stock Options"). Options granted under the Stock
Option Plan to directors who are not employees of the Company or Foundation will
not qualify under the Code and thus will be Non-Qualified Stock Options. No
determination has been made regarding the extent to which options granted to
employees of Foundation will be ISOs.
The option exercise price of each option granted under the Stock Option
Plan will be determined by the Stock Option Committee at the time the option is
granted; provided, however, that the exercise price of an ISO may not be less
than 100% of the fair market value of the shares on the date of the grant, and
the exercise price of an ISO may not be less than 110% of the fair market value
of the shares on the date of the grant if the recipient owns more than 10% of
the Company's outstanding common shares. The option exercise price of
Non-Qualified Stock Options may be less than the fair market value of the shares
on the date of grant. The Stock Option Committee will fix the term of each
option, except that an ISO will not be exercisable after the expiration of ten
years from the date it is granted; provided, however, that if a recipient of an
ISO owns a number of shares representing more than 10% of the Company shares
outstanding at the time the ISO is granted, the term of the ISO will not exceed
five years. If the fair market value of shares awarded pursuant to ISOs
exercisable for the first time by a participant under the Stock Option Plan
during any calendar year exceeds $100,000, however, the ISOs will be considered
Non-Qualified Stock Options to the extent of such excess.
An option recipient cannot transfer or assign an option other than by
will or in accordance with the laws of descent and distribution. Termination of
an option recipient's employment for cause, as defined in the Stock Option Plan,
will result in the annulment of any outstanding exercisable options. Any options
which have not yet become exercisable will terminate upon the resignation or
removal of a director of the Company or Foundation, or upon the termination of
employment of an officer or employee of the Company or Foundation, except in the
case of death, disability or retirement of the recipient or a change of control
of the Company or Foundation.
The Company will receive no monetary consideration for the granting of
options under the Stock Option Plan. Upon the exercise of options, the Company
will receive payment of cash or, if acceptable to the Stock Option Committee,
common shares of the Company or outstanding awarded stock options. The market
value of the common shares underlying the options reserved for the Stock Option
Plan is $659,604, based upon the number of shares reserved, multiplied by the
price of shares of the Company on September 1, 1997, as quoted on the NDQS.
TAX TREATMENT OF INCENTIVE STOCK OPTIONS. An optionee who is granted an
ISO will not recognize taxable income either on the date of grant or on the date
of exercise, although the alternative minimum tax may apply. Upon disposition of
shares acquired from the exercise of an ISO, long-term capital gain or loss is
generally recognized in an amount equal to the difference between the amount
realized on the sale or disposition and the exercise price. If the optionee
disposes of the shares within two years of the date of grant or within one year
from the date of the transfer of the shares to the optionee (a "Disqualifying
Disposition"), however, then the optionee will recognize ordinary income, as
opposed to capital gain, at the time of disposition in an amount generally equal
to the lesser of (i) the amount of gain realized on the disposition, or (ii) the
difference between the fair market value of the shares received on the date of
exercise and the exercise price. Any remaining gain or loss is treated as a
short-term or long-term capital gain or loss, depending upon the period of time
the shares have been held.
The Company will not be entitled to a tax deduction upon either the
exercise of an ISO or the disposition of shares acquired pursuant to such
exercise, except to the extent that the optionee recognizes ordinary income in a
Disqualifying Disposition. Ordinary income from a Disqualifying Disposition will
constitute compensation but will not be subject to tax withholding, nor will it
be considered wages for payroll tax purposes.
If the holder of an ISO pays the exercise price, in whole or in part,
with previously acquired shares, the exchange should not affect the ISO tax
treatment of the exercise. Upon such exchange, and except as otherwise described
herein, no gain or loss is recognized by the optionee upon delivering previously
acquired shares to the Company, and shares received
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by the optionee equal in number to the previously acquired common shares
exchanged therefor will have the same basis and holding period for long-term
capital gain purposes as the previously acquired shares. (The optionee, however,
will not be able to utilize the prior holding period for the purpose of
satisfying the ISO statutory holding period requirements for avoidance of a
Disqualifying Disposition.) Shares received by the optionee in excess of the
number of shares previously acquired will have a basis of zero and a holding
period which commences as of the date the shares are transferred to the optionee
upon exercise of the ISO. If the exercise of an ISO is effected using shares
previously acquired through the exercise of an ISO, the exchange of such
previously acquired shares will be considered a disposition of such shares for
the purpose of determining whether a Disqualifying Disposition has occurred.
TAX TREATMENT OF NON-QUALIFIED STOCK OPTIONS. An optionee receiving a
Non-Qualified Stock Option generally does not recognize taxable income on the
date of grant of the option, provided that the option does not have a readily
ascertainable fair market value at the time it is granted. The optionee must
recognize ordinary income generally at the time of exercise of a Non-Qualified
Stock Option in the amount of the difference between the fair market value of
the shares on the date of exercise and the option price. The amount of ordinary
income recognized by an optionee will be deductible by the Company in the year
that the optionee recognizes the income if the Company complies with the
applicable withholding requirement.
Shares acquired upon the exercise of a Non-Qualified Stock Option will
have a tax basis equal to their fair market value on the exercise date or other
relevant date on which ordinary income is recognized, and the holding period for
the shares generally will begin on the date of exercise or such other relevant
date. Upon subsequent disposition of the shares, the optionee will recognize
long-term capital gain or loss if the optionee has held the shares for more than
one year prior to disposition, or short-term capital gain or loss if the
optionee has held the shares for one year or less prior to disposition.
If a holder of a Non-Qualified Stock Option pays the exercise price, in
whole or in part, with previously acquired shares, the optionee will recognize
ordinary income in the amount by which the fair market value of the shares
received exceeds the exercise price. The optionee will not recognize gain or
loss upon delivering such previously acquired shares to the Company. Shares
received by an optionee equal in number to the previously acquired shares
exchanged therefor will have the same basis and holding period as such
previously acquired shares. Shares received by an optionee in excess of the
number of such previously acquired shares will have a basis equal to the fair
market value of such additional shares as of the date ordinary income is
recognized. The holding period for such additional shares will commence as of
the date of exercise or such other relevant date.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS
OF THE COMPANY APPROVE THE STOCK OPTION PLAN.
PROPOSAL THREE - APPROVAL OF THE FOUNDATION SAVINGS BANK
MANAGEMENT RECOGNITION AND RETENTION PLAN AND TRUST
RECOGNITION AND RETENTION PLAN
The following is a summary of the terms of the RRP and is qualified in
its entirety by reference to the full text of the RRP, a copy of which is
attached hereto as Exhibit B.
PURPOSE. Foundation has proposed the RRP to compensate its directors
and key employees for services to Foundation in a manner which will provide such
persons with an additional incentive to strive for the success of Foundation and
the Company. Foundation expects to contribute sufficient funds to enable the RRP
to purchase up to 18,515 common shares of the Company.
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ADMINISTRATION AND ELIGIBILITY. The RRP will be administered by a
committee of directors composed of at least three directors of Foundation (the
"RRP Committee"). The RRP Committee will determine which directors and employees
of Foundation will be awarded shares under the RRP and the number of shares
awarded; provided, however, that the terms of the RRP provide that the aggregate
number of shares covered by awards to any one employee may not exceed 25% of the
shares held pursuant to the RRP and directors who are not employees of
Foundation may not receive more than 5% of such shares individually or 30% in
the aggregate. The shares to be awarded pursuant to the RRP may be purchased by
the Company on the open market or may consist of authorized but unissued shares
of the Company. In the event that all 18,515 shares which may be awarded under
the RRP consist of authorized but unissued shares of the Company, the interests
of current shareholders will be diluted by approximately 3.85%.
No determination of which directors and key employees of Foundation
will awarded shares under the RRP has been made. If the shareholders approve the
RRP, the RRP Committee will be appointed and will determine which directors and
key employees will receive awards and the number of shares to be awarded.
TERMS. Unless the RRP Committee specifically states to the contrary at
the time of an award of shares, one-tenth of such shares will become earned and
non-forfeitable on each of the first ten anniversaries of the date of the award.
Until shares awarded are earned by the participant, such shares will be
forfeited in the event that the participant ceases to be either a director or an
employee of Foundation, except that in the event of the death, disability or
retirement of a participant or a change of control of the Company or Foundation
all of the participant's awarded shares will be deemed to be earned and
nonforfeitable.
The shares, together with any cash dividends or distributions paid
thereon, will be distributed as soon as practicable after they are earned. A
participant may direct the voting of all shares which have been earned but have
not yet been distributed to him or her. Shares that have been awarded, but not
earned, may not be transferred.
TAX TREATMENT OF SHARES AWARDED UNDER THE RRP. Persons receiving shares
under the RRP generally will not recognize income upon the award of such shares,
but will recognize ordinary income when and to the extent the restrictions on
such shares lapse, in an amount equal to the fair market value of the shares at
the time such restrictions lapse plus the amount of any dividends distributed to
the participant with respect to such shares. If applicable withholding
requirements are satisfied, the Company will be entitled to a deduction each
year in an amount equal to the income, if any, recognized by participants for
such year.
Under Section 83(b) of the Code, a participant may elect, within 30
days after the shares are awarded, to recognize ordinary income on the date the
shares are awarded based on the fair market value of the shares on such date. If
the election is made, Foundation would be entitled to a deduction for an
equivalent amount. A participant making such an election will have a tax basis
in the shares equal to the amount of ordinary income recognized, and the
participant's holding period for capital gains purposes for such shares will
commence on the date the shares are awarded. If a Section 83(b) election is
made, however, and the shares are subsequently forfeited, the participant will
not be entitled to either a deduction of the amount previously recognized as
income with respect to such shares or a refund of any tax paid thereon.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS
OF THE COMPANY APPROVE THE RRP.
PROPOSAL FOUR - RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected Clark, Schaefer, Hackett & Co. as
the auditors of the Company for the current fiscal year and recommends that the
shareholders ratify the selection. Management expects that a representative of
Clark, Schaefer, Hackett & Co. will be present at the Annual Meeting, will have
the opportunity to make a statement if he or she so desires and will be
available to respond to appropriate questions.
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PROPOSALS OF SHAREHOLDERS AND OTHER MATTERS
Any proposals of shareholders intended to be included in the Company's
proxy statement for the 1998 Annual Meeting of Shareholders should be sent to
the Company by certified mail and must be received by the Company not later than
May 20, 1998.
Management knows of no other business which may be brought before the
Annual Meeting. It is the intention of the persons named in the enclosed Proxy
to vote such Proxy in accordance with their best judgment on any other matters
which may be brought before the Annual Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
Cincinnati, Ohio Laird L. Lazelle, President
September 17, 1997
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FOUNDATION BANCORP, INC.
1997 STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE. The purpose of the Foundation Bancorp, Inc. 1997 Stock
Option and Incentive Plan (this "Plan") is to promote and advance the interests
of Foundation Bancorp, Inc. (the "Company") and its shareholders by enabling the
Company to attract, retain and reward directors, managerial and other key
employees of the Company and any Subsidiary (hereinafter defined), and to
strengthen the mutuality of interests between such directors and employees and
the Company's shareholders by providing such persons with a proprietary interest
in pursuing the long-term growth, profitability and financial success of the
Company.
2. DEFINITIONS. For purposes of this Plan, the following terms shall
have the meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended, or any successor thereto, together with the rules, regulations
and interpretations promulgated thereunder.
(c) "Committee" means the Committee of the Board constituted
as provided in Section 3 of this Plan.
(d) "Common Shares" means the common shares, without par
value, of the Company or any security of the Company issued in
substitution, in exchange or in lieu thereof.
(e) "Company" means Foundation Bancorp, Inc., an Ohio
corporation, or any successor corporation.
(f) "Employment" means regular employment with the Company or
a Subsidiary and does not include service as a director only.
(g) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any successor statute.
(h) "Fair Market Value" shall be determined as follows:
(i) If the Common Shares are traded on a national
securities exchange at the time of grant of the Stock Option,
then the Fair Market Value shall be the average of the highest
and the lowest selling price on such exchange on the date such
Stock Option is granted or, if there were no sales on such
date, then on the next prior business day on which there was a
sale.
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(ii) If the Common Shares are quoted on The Nasdaq
SmallCap Market at the time of the grant of the Stock Option,
then the Fair Market Value shall be the mean between the
closing high bid and low asked quotation with respect to a
Common Share on such date on The Nasdaq SmallCap Market.
(iii) If the Common Shares are not traded on a
national securities exchange or quoted on The Nasdaq SmallCap
Market, then the Fair Market Value shall be as determined by
the Committee.
(i) "Incentive Stock Option" means any Stock Option granted
pursuant to the provisions of Section 6 of this Plan that is intended
to be and is specifically designated as an "incentive stock option"
within the meaning of Section 422 of the Code.
(j) "Non-Qualified Stock Option" means any Stock Option
granted pursuant to the provisions of Section 6 of this Plan that is
not an Incentive Stock Option.
(k) "OTS" means the Office of Thrift Supervision, Department
of the Treasury.
(l) "Participant" means an employee or director of the Company
or a Subsidiary who is granted an Award under this Plan.
Notwithstanding the foregoing, for the purposes of the granting of any
Incentive Stock Option under this Plan, the term "Participant" shall
include only employees of the Company or a Subsidiary.
(m) "Plan" means the Foundation Bancorp, Inc. 1997 Stock
Option and Incentive Plan, as set forth herein and as it may be
hereafter amended from time to time.
(n) "Stock Option" means an option to purchase Common Shares
granted pursuant to the provisions of Section 6 of this Plan.
(o) "Subsidiary" means any corporation or entity of which the
Company directly or indirectly controls 50% or more of the total voting
power of all classes of its stock having voting power and includes,
without limitation, Foundation Savings Bank.
(p) "Terminated for Cause" means any removal of a director or
discharge of an employee for the personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of a
material provision of any law, rule or regulation (other than traffic
violations or similar offenses), a material violation of a final
cease-and-desist order or any other action of a director or employee
which results in a substantial financial loss to the Company or a
Subsidiary.
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3. ADMINISTRATION.
(a) This Plan shall be administered by the Committee, which
shall be comprised of not less than three members of the Board. The
members of the Committee shall be appointed from time to time by the
Board. Members of the Committee shall serve at the pleasure of the
Board and the Board may from time to time remove members from, or add
members to, the Committee. A majority of the members of the Committee
shall constitute a quorum for the transaction of business. An action
approved in writing by a majority of the members of the Committee then
serving shall be fully as effective as if the action had been taken by
unanimous vote at a meeting duly called and held.
(b) The Committee is authorized to construe and interpret this
Plan and to make all other determinations necessary or advisable for
the administration of this Plan. The Committee may designate persons
other than members of the Committee to carry out its responsibilities
under such conditions and limitations as it may prescribe. Any
determination, decision or action of the Committee in connection with
the construction, interpretation, administration, or application of
this Plan shall be final, conclusive and binding upon all persons
participating in this Plan and any person validly claiming under or
through persons participating in this Plan. The Company shall effect
the granting of Stock Options under this Plan in accordance with the
determinations made by the Committee, by execution of instruments in
writing in such form as approved by the Committee.
4. DURATION OF, AND COMMON SHARES SUBJECT TO, THIS PLAN.
(a) Term. This Plan shall terminate on the date which is ten
(10) years from the date on which this Plan is adopted by the Board,
except with respect to Stock Options then outstanding. Notwithstanding
the foregoing, no Incentive Stock Option may be granted under this Plan
after the date which is ten (10) years from the date on which this Plan
is adopted by the Board or the date on which this Plan is approved by
the shareholders of the Company, whichever is earlier.
(b) Common Shares Subject to Plan. The maximum number of
Common Shares in respect of which Stock Options may be granted under
this Plan, subject to adjustment as provided in Section 9 of this Plan,
shall be ten percent of the total Common Shares sold by the Company in
connection with the conversion of Foundation Savings Bank from mutual
to stock form.
For the purpose of computing the total number of Common Shares
available for Stock Options under this Plan, there shall be counted against the
foregoing limitations the number of Common Shares subject to issuance upon the
exercise or settlement of Stock Options as of the dates on which such Stock
Options are granted. If any Stock Options are forfeited, terminated or exchanged
for other Stock Options, or expire unexercised, the Common Shares which were
theretofore subject to such Stock Options shall again be available for Stock
Options under this Plan to the extent of such forfeiture, termination or
expiration of such Stock Options.
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Common Shares which may be issued under this Plan may be either
authorized and unissued shares or issued shares which have been reacquired by
the Company. No fractional shares shall be issued under this Plan.
5. ELIGIBILITY AND GRANTS. Persons eligible for Stock Options under
this Plan shall consist of directors and managerial and other key employees of
the Company or a Subsidiary who hold positions with significant responsibilities
or whose performance or potential contribution, in the judgment of the
Committee, will benefit the future success of the Company or a Subsidiary. In
selecting the directors and employees to whom Stock Options will be awarded and
the number of shares subject to such Stock Options, the Committee shall consider
the position, duties and responsibilities of the eligible directors and
employees, the value of their services to the Company and the Subsidiaries and
any other factors the Committee may deem relevant.
6. STOCK OPTIONS. Stock Options granted under this Plan may be in the
form of Incentive Stock Options or Non-Qualified Stock Options, and such Stock
Options shall be subject to the following terms and conditions, as the Committee
shall deem desirable:
(a) Grant. Stock Options may be granted under this Plan on
terms and conditions not inconsistent with the provisions of this Plan
and in such form as the Committee may from time to time approve and
shall contain such additional terms and conditions, not inconsistent
with the express provisions of this Plan, as the Committee shall deem
desirable; provided, however, that no more than 25% of the shares
subject to Stock Options may be awarded to any individual who is an
employee of the Company or a Subsidiary, no more than 5% of such shares
may be awarded to any director who is not an employee of the Company or
a Subsidiary and no more than 30% of such shares may be awarded to
non-employee directors in the aggregate.
(b) Stock Option Price. The option exercise price per Common
Share purchasable under a Stock Option shall be determined by the
Committee at the time of grant; provided, however, that in no event
shall the exercise price of an Incentive Stock Option be less than 100%
of the Fair Market Value of the Common Shares on the date of the grant
of such Incentive Stock Option, and, in the case of a Participant who
owns Common Shares representing more than 10% of the outstanding Common
Shares at the time an Incentive Stock Option is granted, the option
exercise price shall in no event be less than 110% of the Fair Market
Value of the Common Shares at the time an Incentive Stock Option is
granted to such Participant.
(c) Stock Option Terms. Subject to the right of the Company to
provide for earlier termination in the event of any merger, acquisition
or consolidation involving the Company, the term of each Stock Option
shall be fixed by the Committee; except that the term of Incentive
Stock Options will not exceed ten (10) years after the date the
Incentive Stock Option is granted; provided, however, that in the case
of a Participant who owns a number of Common Shares representing more
than 10% of the Common Shares outstanding at the time an Incentive
Stock Option is granted, the term of the Incentive Stock Option granted
to such Participant shall not exceed five (5) years.
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(d) Exercisability. Except as set forth in Section 6(f) and
Section 7 of this Plan or as otherwise specified by the Committee,
Stock Options awarded under this Plan shall become exercisable on the
date of the grant of the Stock Option and shall be subject to such
other terms and conditions as shall be determined by the Committee at
the date of grant.
(e) Method of Exercise. A Stock Option may be exercised, in
whole or in part, by giving written notice of exercise to the Company
specifying the number of Common Shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price in cash
or, if acceptable to the Committee, in its sole discretion, in Common
Shares already owned by the Participant, or by surrendering outstanding
Stock Options. The Committee may also permit Participants, either on a
selective or aggregate basis, to simultaneously exercise Options and
sell Common Shares thereby acquired, pursuant to a brokerage or similar
arrangement, approved in advance by the Committee, and use the proceeds
from such sale as payment of the purchase price of such shares.
(f) Special Rule for Incentive Stock Options. With respect to
Incentive Stock Options granted under this Plan, to the extent the
aggregate Fair Market Value (determined as of the date the Incentive
Stock Option is granted) of the number of shares with respect to which
Incentive Stock Options are exercisable under all plans of the Company
or a Subsidiary for the first time by a Participant during any calendar
year exceeds $100,000, or such other limit as may be required by the
Code, such Stock Options shall be Non-Qualified Stock Options to the
extent of such excess.
7. TERMINATION OR CHANGE IN CONTROL.
(a) Except in the event of the death, disability or retirement
at or after age 65 of a Participant, or as otherwise permitted by the
Committee, upon the resignation or removal from the board of directors
of any Participant who is a director of the Company or a Subsidiary or
upon the termination of Employment of a Participant who is not a
director of the Company or a Subsidiary, any Stock Option which has not
yet become exercisable shall thereupon terminate and be of no further
force or effect and, subject to extension by the Committee, any Stock
Option which has become exercisable shall terminate if it is not
exercised within twelve (12) months of such resignation, removal or
retirement.
(b) Unless the Committee shall specifically state otherwise at
the time a Stock Option is granted, all Stock Options granted under
this Plan shall become exercisable in full on the date of termination
of a Participant's employment or directorship with the Company or a
Subsidiary because of his death, disability or retirement at or after
age 65, and, subject to extension by the Committee, all Stock Options
shall terminate if not exercised within 12 months of the Participant's
death or disability.
(c) In the event the Employment or the directorship of a
Participant is Terminated for Cause, any Stock Option which has not
been exercised shall terminate as of the date of such termination for
cause.
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(d) All outstanding Incentive Stock Options shall become
immediately exercisable in the event of a change in control or imminent
change in control of the Corporation or the Bank, as determined by the
Committee. For purposes of this Section 7, "change in control" shall
mean: (i) the execution of an agreement for the sale of all, or a
material portion, of the assets of the Corporation or the Bank; (ii)
the execution of an agreement for a merger or recapitalization of the
Corporation or the Bank or any merger or recapitalization whereby the
Corporation or the Bank is not the surviving entity; (iii) a change of
control of the Corporation or the Bank, as defined or determined by the
Office of Thrift Supervision (the "OTS"); or (iv) the acquisition,
directly or indirectly, of the beneficial ownership (within the meaning
of the term "beneficial ownership" as defined under Section 13(d) of
the Securities Exchange Act of 1934 and the rules promulgated
thereunder) of twenty-five percent (25%) or more of the outstanding
voting securities of the Corporation or the Bank by any person, trust,
entity or group. For purposes of this Section 7, "imminent change in
control" shall refer to any offer or announcement, oral or written, by
any person or any persons acting as a group, to acquire control of the
Corporation or the Bank as to which an application or notice has been
filed with the OTS and such application has been approved or such
notice has not been disapproved.
8. NON-TRANSFERABILITY OF STOCK OPTIONS. No Stock Option under this
Plan and no rights or interests therein shall be assignable or transferable by a
Participant except by will or pursuant to the laws of descent and distribution.
During the lifetime of a Participant, Stock Options are exercisable only by, and
payments in settlement of Stock Options will be payable only to, the Participant
or his or her legal representative.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) The existence of this Plan and the Stock Options granted
hereunder shall not affect or restrict in any way the right or power of
the Board or the shareholders of the Company to make or authorize the
following: any adjustment, recapitalization, reorganization or other
change in the Company's capital structure or its business; any merger,
acquisition or consolidation of the Company; any issuance of bonds,
debentures, preferred or prior preference stocks ahead of or affecting
the Company's capital stock or the rights thereof; the dissolution or
liquidation of the Company or any sale or transfer of all or any part
of its assets or business; or any other corporate act or proceeding,
including any merger or acquisition which would result in the exchange
of cash, stock of another company or options to purchase the stock of
another company for any Stock Option outstanding at the time of such
corporate transaction or which would involve the termination of all
Stock Options outstanding at the time of such corporate transaction.
(b) In the event of any change in capitalization affecting the
Common Shares of the Company, such as a stock dividend, stock split,
recapitalization, merger, consolidation, spin-off, split-up,
combination or exchange of shares or other form of reorganization, or
any other change affecting the Common Shares, such proportionate
adjustments, if any, as the Board in its discretion may deem
appropriate to reflect such change shall be made with respect to the
aggregate number of Common Shares for which Stock Options in respect
thereof may be granted under this Plan, the maximum number of Common
Shares which may be sold or awarded to any
A-6
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Participant, the number of Common Shares covered by each outstanding
Stock Option, and the exercise price per share in respect of
outstanding Stock Options.
10. AMENDMENT AND TERMINATION OF THIS PLAN. Without further approval of
the shareholders, the Board may at any time terminate this Plan or may amend it
from time to time in such respects as the Board may deem advisable, except that
the Board may not, without approval of the shareholders, make any amendment
which would (a) increase the aggregate number of Common Shares which may be
issued under this Plan (except for adjustments pursuant to Section 9 of this
Plan), (b) materially modify the requirements as to eligibility for
participation in this Plan, or (c) materially increase the benefits accruing to
Participants under this Plan. The above notwithstanding, the Board may amend
this Plan to take into account changes in applicable securities, federal income
tax and other applicable laws.
11. MODIFICATION OF STOCK OPTIONS. The Board may authorize the
Committee to direct the execution of an instrument providing for the
modification of any outstanding Stock Option which the Board believes to be in
the best interests of the Company; provided, however, that no such modification,
extension or renewal shall reduce the exercise price or confer on the holder of
such Stock Option any right or benefit which could not be conferred on him by
the grant of a new Stock Option at such time and shall not materially decrease
the Participant's benefits under the Stock Option without the consent of the
holder of the Stock Option, except as otherwise permitted under this Plan.
12. MISCELLANEOUS.
(a) Tax Withholding. The Company shall have the right to
deduct from any settlement made under this Plan, including the delivery
or vesting of Common Shares, any federal, state or local taxes of any
kind required by law to be withheld with respect to such payments or to
take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes. If
Common Shares are used to satisfy tax withholding, such shares shall be
valued for such purpose based on the Fair Market Value when the tax
withholding is required to be made.
(b) No Right to Employment. Neither the adoption of this Plan
nor the granting of any Stock Option shall confer upon any employee of
the Company or a Subsidiary any right to continued Employment with the
Company or a Subsidiary, as the case may be, nor shall it interfere in
any way with the right of the Company or a Subsidiary to terminate the
Employment of any of its employees at any time, with or without cause.
(c) Annulment of Stock Options. The grant of any Stock Option
under this Plan payable in cash is provisional until cash is paid in
settlement thereof. The grant of any Stock Option payable in Common
Shares is provisional until the Participant becomes entitled to the
certificate in settlement thereof. In the event the Employment or the
directorship of a Participant is Terminated for Cause, any Stock Option
which is provisional shall be annulled as of the date of such
termination.
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(d) Other Company Benefit and Compensation Programs. Payments
and other benefits received by a Participant under a Stock Option
granted pursuant to this Plan shall not be deemed a part of a
Participant's regular, recurring compensation for purposes of the
termination indemnity or severance pay law of any country and shall not
be included in, nor have any effect on, the determination of benefits
under any other employee benefit plan or similar arrangement provided
by the Company or a Subsidiary unless expressly so provided by such
other plan or arrangement, or except where the Committee expressly
determines that a Stock Option or portion of a Stock Option should be
included to accurately reflect competitive compensation practices or to
recognize that a Stock Option has been made in lieu of a portion of
competitive annual cash compensation. Stock Options under this Plan may
be made in combination with or in tandem with, or as alternatives to,
grants, stock options or payments under any other plans of the Company
or a Subsidiary. This Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation programs and additional
compensation arrangements as it deems necessary to attract, retain and
reward directors and employees for their service with the Company and
its Subsidiaries.
(e) Securities Law Restrictions. No Common Shares shall be
issued under this Plan unless counsel for the Company shall be
satisfied that such issuance will be in compliance with applicable
federal and state securities laws. Certificates for Common Shares
delivered under this Plan may be subject to such stock-transfer orders
and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Common Shares
are then listed, and any applicable federal or state securities law.
The Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(f) Stock Option Agreement. Each Participant receiving a Stock
Option under this Plan shall enter into an agreement with the Company
in a form specified by the Committee agreeing to the terms and
conditions of the Stock Option and such related matters as the
Committee shall, in its sole discretion, determine.
(g) Cost of Plan. The costs and expenses of administering this
Plan shall be borne by the Company.
(h) Governing Law. This Plan and all actions taken hereunder
shall be governed by and construed in accordance with the laws of the
State of Ohio, except to the extent that federal law shall be deemed
applicable.
(i) Effective Date. This Plan shall be effective upon the
later of adoption by the Board and approval by the Company's
shareholders. This Plan shall be submitted to the shareholders of the
Company for approval at an annual or special meeting of shareholders to
be held no sooner than six months after the effective date of the
Conversion.
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FOUNDATION SAVINGS BANK
RECOGNITION AND RETENTION PLAN
AND TRUST AGREEMENT
ARTICLE I
DEFINITIONS
The following words and phrases when used in this Agreement with an
initial capital letter shall have the meanings set forth below. Wherever
appropriate, the masculine pronoun shall include the feminine pronoun and the
singular shall include the plural:
1.01 "Agreement" means the Foundation Savings Bank Recognition and
Retention Plan and Trust Agreement.
1.02 "Award" means a right granted to a Director or an Employee under
this Plan to receive Plan Shares.
1.03 "Bank" means Foundation Savings Bank, a savings and loan
association organized under the laws of the State of Ohio.
1.04 "Beneficiary" means the person or persons designated by a
Recipient to receive any benefits payable under this Plan in the event of such
Recipient's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's estate.
1.05 "Board" means the Board of Directors of the Bank.
1.06 "Committee" means the Recognition and Retention Plan Committee
appointed by the Board pursuant to Article IV hereof.
1.07 "Common Shares" means common shares of the Corporation.
1.08 "Conversion" means the conversion of the Bank from mutual to stock
form.
1.09 "Corporation" means Foundation Bancorp, Inc., a savings and loan
holding company incorporated under the laws of the State of Ohio for the purpose
of holding all of the common shares of the Bank issued in connection with the
Conversion.
1.10 "Director" means any person who is a member of the Board of
Directors of the Corporation, the Bank or a Subsidiary.
1.11 "Employee" means any person who is employed by the Corporation,
the Bank or a Subsidiary.
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1.12 "Person" means an individual, corporation, partnership, trust,
bank, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein.
1.13 "Plan" means the Recognition and Retention Plan established by
this Agreement.
1.14 "Plan Shares" means the Common Shares held pursuant to the Trust
and which are awarded or issuable to a Recipient pursuant to the Plan.
1.15 "Plan Share Reserve" means the Common Shares held by the Trustee
pursuant to Sections 5.02 and 5.03 of this Agreement.
1.16 "Recipient" means any Director or Employee who receives an Award
under the Plan.
1.17 "Subsidiaries" means subsidiaries of the Bank, if any, which, with
the consent of the Board, agree to participate in the Plan.
1.18 "Trust" means the trust established by this Agreement.
1.19 "Trustee" means the person or persons or entity approved by the
Board pursuant to Sections 4.01 and 4.02 to hold legal title to the Plan assets
for the purposes set forth herein.
ARTICLE II
ESTABLISHMENT OF THE PLAN AND TRUST
2.01 The Bank hereby establishes a Recognition and Retention Plan and
Trust upon the terms and subject to the conditions set forth in this Agreement.
2.02 The Trustee hereby accepts the Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions of this Agreement.
ARTICLE III
PURPOSE OF THE PLAN
3.01 The purpose of the Plan is to reward and retain the Directors and
Employees of the Corporation, the Bank and the Subsidiaries who are in key
positions of responsibility by providing such Directors and Employees with an
equity interest in the Corporation as reasonable compensation for their
contributions to the Corporation, the Bank and the Subsidiaries.
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ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, which shall consist of not less than three members
of the Board. The Committee shall have all of the powers set forth in this Plan.
The interpretation and construction by the Committee of any provisions of this
Agreement or of any Award granted hereunder shall be final, conclusive and
binding. The Committee shall act by the vote, or the written consent, of a
majority of its members. The Committee shall report actions and decisions with
respect to the Plan to the Board upon request by the Board.
4.02 ROLE OF THE BOARD. The members of the Committee and the Trustee
shall be appointed or approved by and shall serve at the pleasure of the Board.
The Board may in its discretion from time to time remove members from or add
members to the Committee and may remove, replace or add one or more Trustees.
The Board, in its absolute discretion, may take any action under or with respect
to the Plan which the Committee is authorized to take and may reverse or
override any action taken or decision made by the Committee under or with
respect to the Plan or take any other action reserved to the Board under this
Agreement; provided, however, that the Board may not revoke any Award already
granted under this Agreement. All decisions, determinations and interpretations
of the Board shall be final, conclusive and binding upon all parties having an
interest in the Plan.
4.03 LIMITATION ON LIABILITY. No member of the Board or the Committee,
nor any Trustee, shall be liable for any determination made in good faith with
respect to the Plan or any Plan Shares or Awards granted under the Plan. If a
member of the Board or of the Committee or any Trustee is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of anything done or not done by such member in such capacity under or
with respect to this Plan, the Bank shall indemnify such member against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such member in connection with such action,
suit or proceeding if such member acted in good faith and in a manner such
member reasonably believed to be in or not opposed to the best interests of the
Corporation, the Bank and the Subsidiaries and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such member's conduct
was unlawful.
ARTICLE V
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall determine the
amounts (or the method of computing the amounts) to be contributed by the Bank
to the Trust. Such amounts shall be paid to the Trustee at the time of
contribution. No contributions to the Trust by Directors or Employees shall be
permitted.
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5.02 INVESTMENT OF TRUST ASSETS. Except as otherwise permitted by
Section 8.02 of this Agreement, the Trustee shall invest all of the Trust's
assets, after providing for any required withholding as needed for tax purposes,
exclusively in Common Shares; provided, however, that the Trust shall not
purchase a number of Common Shares equal to more than 3% of the number of Common
Shares issued in connection with the Conversion, except that if the Bank's
tangible capital exceeds 10%, the Trust may purchase a number of Common Shares
equal to up to 4% of the Common Shares issued in connection with the Conversion.
After such investment, the Common Shares shall be held by the Trustee in the
Plan Share Reserve until such Common Shares are subject to one or more Awards.
Any funds held by the Trust before purchasing Common Shares shall be invested by
the Trustee in such interest-bearing account or accounts at the Bank as the
Trustee shall determine to be appropriate.
5.03 EFFECT OF ALLOCATIONS, RETURNS AND FORFEITURES UPON PLAN SHARE
RESERVES. Upon the allocation of Awards under Section 6.02 of this Agreement, or
the decision of the Committee to return Plan Shares to the Corporation, the Plan
Share Reserve shall be reduced by the number of Plan Shares so allocated or
returned. Any Plan Shares subject to an Award which is subject to forfeiture by
the Recipient pursuant to Section 7.01 of this Agreement shall be retained in
the Plan Share Reserve.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 ELIGIBILITY. Directors and Employees are eligible to receive
Awards within the sole discretion of the Committee.
6.02 ALLOCATIONS. The Committee will determine which of the Directors
and Employees will be granted Awards and the number of Plan Shares covered by
each Award; provided, however, that: (a) the aggregate number of Plan Shares
covered by Awards to any one Employee shall not exceed 25% of the total number
of Plan Shares, (b) no more than 5% of the Plan Shares shall be awarded to any
Director who is not an Employee, and (c) no more than 30% of the Plan Shares
shall be awarded in the aggregate to Directors who are not Employees. In the
event Plan Shares are forfeited for any reason or additional Plan Shares are
purchased by the Trustee, the Committee may, from time to time, determine which
of the Employees will be granted additional Awards to be awarded from forfeited
or additional Plan Shares.
In selecting the Directors and Employees to whom Awards will be granted
and the number of shares covered by such Awards, the Committee shall consider
the position, duties and responsibilities of the eligible Directors and
Employees, the value of their services to the Corporation, the Bank and the
Subsidiaries and any other factors the Committee may deem relevant. All
allocations by the Committee shall be subject to review and approval or
rejection by the Board.
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6.03 FORM OF ALLOCATION. As promptly as practicable after a
determination is made pursuant to Section 6.02 of this Agreement that an Award
is to be made, the Committee shall notify the Recipient in writing of the grant
of the Award, the number of Plan Shares covered by the Award and the terms upon
which the Plan Shares subject to the Award may be earned. The date on which the
Committee determines that an Award is to be made or a later date designated by
the Committee shall be considered the date of grant of the Awards. The Committee
shall maintain records as to all grants of Awards under the Plan.
6.04 ALLOCATIONS NOT REQUIRED. None of the Directors or Employees,
either individually or as a group, shall have any right or entitlement to
receive an Award under the Plan. The Committee may, with the approval of the
Board, and shall, if so directed by the Board, return all Common Shares and
other assets in the Plan Share Reserve to the Corporation at any time and
thereafter cease issuing Awards.
6.05 SHAREHOLDER APPROVAL. This Agreement shall be submitted to the
shareholders of the Corporation at an annual or special meeting to be held no
sooner than six months after the effective date of the Conversion.
Notwithstanding anything to the contrary in this Agreement, no Awards shall be
granted hereunder until the shareholders of the Corporation approve this
Agreement.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) GENERAL RULES. Unless the Committee shall specifically
state a shorter period of time over which Awards shall be earned and
non-forfeitable at the time an Award is granted, Plan Shares covered by each
Award shall be earned and non-forfeitable by a Recipient over a period of up to
ten years at the rate of one-tenth per year commencing on the date which is one
year after the date of the grant of such Award. As Plan Shares become earned and
non-forfeitable, any cash dividends, returned capital and earnings thereon shall
also be earned and non-forfeitable.
(b) REVOCATION. Unless otherwise permitted by the Committee,
any Plan Shares and any cash dividends, returned capital and earnings thereon
that have not been earned and are not non-forfeitable in accordance with Section
7.01(a) of this Agreement shall be forfeited in the event that (i) a Recipient
who is a Director ceases to serve on the Board or (ii) a Recipient who is not a
Director of the Bank ceases to be an Employee of the Bank, except as otherwise
provided in subsection (c) or subsection (d) of this Section 7.01.
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(c) EXCEPTION FOR TERMINATIONS DUE TO DEATH, DISABILITY OR
RETIREMENT. All Plan Shares and cash dividends, returned capital and earnings
thereon subject to an Award held by a Recipient whose service as a Director or
Employee of the Corporation, the Bank or a Subsidiary terminates due to (i)
death, (ii) disability (as determined by the Committee) or (iii) retirement at
or after age 65 shall be deemed fully earned and non-forfeitable as of the later
of the Recipient's last day of service as a Director or as an Employee and shall
be distributed as soon as practicable thereafter.
(d) EXCEPTION FOR A CHANGE IN CONTROL. Notwithstanding any
other provision of this Agreement, all Plan Shares subject to an Award held by a
Recipient shall be deemed to be immediately 100% earned and non-forfeitable in
the event of a change in control or imminent change in control of the
Corporation or the Bank and shall be distributed as soon as practicable
thereafter. For purposes of this Section 7.01(d), "change in control" shall
mean: (i) the execution of an agreement for the sale of all, or a material
portion, of the assets of the Corporation or the Bank; (ii) the execution of an
agreement for a merger or recapitalization of the Corporation or the Bank or any
merger or recapitalization whereby the Corporation or the Bank is not the
surviving entity; (iii) a change of control of the Corporation or the Bank, as
defined or determined by the Office of Thrift Supervision (the "OTS"); or (iv)
the acquisition, directly or indirectly, of the beneficial ownership (within the
meaning of the term "beneficial ownership" as defined under Section 13(d) of the
Securities Exchange Act of 1934 and the rules promulgated thereunder) of
twenty-five percent (25%) or more of the outstanding voting securities of the
Corporation or the Bank by any person, trust, entity or group. For purposes of
this Section 7.01(d), "imminent change in control" shall refer to any offer or
announcement, oral or written, by any person or any persons acting as a group,
to acquire control of the Corporation or the Bank as to which an application or
notice has been filed with the OTS and such application has been approved or
such notice has not been disapproved.
7.02 DISTRIBUTION OF PLAN SHARES.
(a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Except as otherwise
provided in this Agreement, Plan Shares shall be distributed to the Recipient or
his or her Beneficiary, as the case may be, as soon as practicable after they
have been earned, together with any cash distributions, returned capital and
earnings thereon with respect to such Plan Shares that have been earned.
(b) FORM OF DISTRIBUTION. All distributions of Plan Shares,
together with any shares representing stock dividends, shall be distributed in
the form of Common Shares. No fractional shares shall be distributed. Payments
representing cash dividends, returned capital and earnings thereon shall be made
in cash.
(c) WITHHOLDING. The Trustee may withhold from any cash
payment made under this Plan sufficient amounts to cover any applicable
withholding and employment taxes and, if the amount of such cash payment is not
sufficient, the Trustee may require the Recipient or Beneficiary to pay to the
Trustee the amount required to be withheld as a condition of delivering the Plan
Shares. The Trustee shall pay over to the Bank or the Subsidiary which employs
or employed such Recipient or which the Recipient serves or served as a
Director, any such amount withheld from or paid by the Recipient or Beneficiary.
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(d) REGULATORY EXCEPTIONS. Notwithstanding anything to the
contrary in this Agreement, no Plan Shares, upon becoming fully earned and
non-forfeitable, shall be distributed unless and until all of the requirements
of all applicable laws and regulations shall have been met.
7.03 VOTING OF PLAN SHARES. All Common Shares held by the Trustee in
the Plan Share Reserve which have not yet been earned by a Recipient pursuant to
Section 7.01 of this Agreement shall be voted by the Trustee. A Recipient shall
be entitled to direct the voting of Plan Shares which have been earned pursuant
to Section 7.01 of this Agreement but have not yet been distributed to him.
ARTICLE VIII
TRUST
8.01 TRUST. The Trustee shall receive, hold, administer, invest and
make distributions and disbursements from the Trust in accordance with the
provisions of the Plan and the Trust and the applicable directions, rules,
regulations, procedures and policies established by the Committee pursuant to
this Agreement.
8.02 MANAGEMENT OF TRUST. The Trustee shall have complete authority and
discretion with respect to the management, control and investment of the Trust,
and the Trustee shall invest all assets of the Trust, except those attributable
to cash dividends paid with respect to Plan Shares not held in the Plan Share
Reserve, in Common Shares to the fullest extent practicable, and except to the
extent that the Trustee determines that the holding of monies in cash or cash
equivalents is necessary to meet the obligations of the Trust. The Trustee shall
have the power to do all things and execute such instruments as may be deemed
necessary or proper with respect to the duties of the Trustee hereunder,
including the following powers:
(a) To invest up to 100% of all Trust assets in Common
Shares without regard to any law now or hereafter in force limiting
investments for trustees or other fiduciaries. The investment
authorized herein may constitute the only investment of the Trust, and,
in making such investment, the Trustee is authorized to purchase Common
Shares from the Corporation or from any other source. Such Common
Shares so purchased may be outstanding, newly issued or treasury
shares;
(b) To invest any Trust assets not otherwise invested in
accordance with Section 8.02(a) of this Agreement in such deposit
accounts and certificates of deposit (including those issued by the
Bank), obligations of the United States government or its agencies or
such other investments as shall be considered the equivalent of cash;
(c) To sell, exchange or otherwise dispose of any property
at any time held or acquired by the Trust;
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(d) To cause stocks, bonds or other securities to be
registered in the name of a nominee, without the addition of words
indicating that such security is an asset of the Trust (but accurate
records shall be maintained showing that such security is an asset of
the Trust);
(e) To hold cash without interest in such amounts as may be
reasonable, in the opinion of the Trustee, for the proper operation of
the Plan and the Trust;
(f) To employ brokers, agents, custodians, consultants and
accountants;
(g) To hire counsel to render advice with respect to the
rights, duties and obligations of the Trustee hereunder, and such other
legal services or representation as the Trustee may deem desirable; and
(h) To hold funds and securities representing the amounts to
be distributed to a Recipient or his or her Beneficiary as a
consequence of a dispute as to the disposition thereof, whether in a
segregated account or held in common with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the Trustee shall not
be required to make any inventory, appraisal or settlement or report to any
court, or to secure any order of court for the exercise of any power herein
contained, or to give bond.
8.03 RECORDS AND ACCOUNTS. The Trustee shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Committee.
8.04 EARNINGS. All earnings, gains and losses with respect to Trust
assets shall be allocated, in accordance with a reasonable procedure adopted by
the Committee, to bookkeeping accounts for Recipients or to the general account
of the Trust, depending on the nature and allocation of the assets generating
such earnings, gains and losses. Without limiting the generality of the
foregoing, any earnings on cash dividends or returned capital received with
respect to Plan Shares shall be allocated (a) to accounts for Recipients, if
such shares which are the subject of outstanding Awards, and shall become earned
and distributed as specified in Article VII of this Agreement or (b) otherwise
to the Plan Share Reserve if such Plan Shares are not the subject of outstanding
awards.
8.05 EXPENSES. All costs and expenses incurred in the operation and
administration of the Plan shall be paid by the Bank.
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ARTICLE IX
MISCELLANEOUS
9.01 ADJUSTMENTS FOR CAPITAL CHANGES. The aggregate number of Plan
Shares available for issuance pursuant to the Awards and the number of Plan
Shares to which any Award relates shall be proportionately adjusted for any
increase or decrease in the total number of outstanding Common Shares issued
subsequent to the effective date of the Plan if such increase or decrease
resulted from any split, subdivision or consolidation of shares or other capital
adjustment, or other increase or decrease in such shares effected without
receipt or payment of consideration by the Corporation.
9.02 AMENDMENT AND TERMINATION OF PLAN. The Board may, by resolution,
at any time amend or terminate the Plan. The power to amend or terminate the
Plan shall include the power to direct the Trustee to return to the Corporation
or the Bank all or any part of the assets of the Trust, including Common Shares
held in the Plan Share Reserve, as well as Common Shares and other assets
subject to Awards which are not yet earned by the Directors or Employees to whom
they are allocated; provided, however, that the termination of the Trust shall
not affect a Recipient's right to earn Awards and to the distribution of Common
Shares relating thereto, including earnings thereon, in accordance with the
terms of this Agreement and the grant by the Committee or the Board.
9.03 NONTRANSFERABLE. Awards shall not be transferable by a Recipient.
During the lifetime of the Recipient, an Award may only be earned by and paid to
the Recipient who was notified in writing of the Award by the Committee pursuant
to Section 6.03 of this Agreement. No Recipient or Beneficiary shall have any
right in or claim to any assets of the Plan or the Trust, nor shall the
Corporation, the Bank or any Subsidiary be subject to any claim for benefits
hereunder.
9.04 DIRECTORSHIP RIGHTS. Neither this Agreement nor any grant of an
Award hereunder nor any action taken by the Trustee, the Committee or the Board
in connection with the Plan shall create any right, either express or implied,
on the part of any Director to continue to serve as a Director of the Bank or a
Subsidiary.
9.05 EMPLOYMENT RIGHTS. Neither this Agreement nor any grant of an
Award hereunder nor any action taken by the Trustee, the Committee or the Board
in connection with the Plan shall create any right, either express or implied,
on the part of any Employee to continue in the employ of the Corporation, the
Bank or a Subsidiary.
9.06 VOTING AND DIVIDEND RIGHTS. No Recipient shall have any voting or
dividend rights or other rights of a shareholder in respect of any Plan Shares
covered by an Award, except as expressly provided in Sections 7.01, 7.02 and
7.03 of this Agreement, prior to the time such Plan Shares are actually
distributed to such Recipient.
9.07 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Ohio, except to the extent that federal law shall
be deemed applicable.
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9.08 EFFECTIVE DATE. Subject to Section 6.05 of this Agreement, this
Agreement shall be effective as of the 26th day of August, 1997.
9.09 TERM OF PLAN. The Plan shall remain in effect until the earlier of
(a) the termination of the Plan by the Board or (b) the distribution of all
assets from the Trust. The termination of the Plan shall not affect any Awards
previously granted and such Awards shall remain valid and in effect until they
have been earned and paid or by their terms expire or are forfeited.
9.10 TAX STATUS OF TRUST. It is intended that the trust established
hereby be treated as a grantor trust of the Bank under the provisions of Section
671, et seq., of the Internal Revenue Code of 1986, as amended (26 U.S.C. ss.
671 et seq.).
IN WITNESS WHEREOF, the following Trustees execute this Agreement,
accepting and binding themselves to undertake and perform the obligations and
duties of the Trustee hereunder and consenting to the foregoing Agreement
effective the ___ day of _________________, 1997.
By: (Trustee)
-----------------------------
By: (Trustee)
-----------------------------
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed
by its duly authorized officer and duly attested, all as of the ___ day of
_________________, 1997.
FOUNDATION SAVINGS BANK
By:
-------------------------
Laird L. Lazelle
its President
ATTEST:
- ---------------------------------
Dianne K. Rabe
its Vice President
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32
REVOCABLE PROXY
FOUNDATION BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF FOUNDATION BANCORP, INC.
The undersigned shareholder of Foundation Bancorp, Inc. (the
"Company") hereby constitutes and appoints Paul L. Silverglade and Ivan J.
Silverman, or either one of them, the Proxy or Proxies of the undersigned with
full power of substitution and resubstitution, to vote at the 1997 Annual
Meeting of Shareholders of the Company to be held at Parlor F/G, The Cincinnati
Club Building, 30 Garfield Place, Cincinnati, Ohio 45202, on October 23, 1997,
at 1:00 p.m., local time (the "Annual Meeting"), all of the shares of the
Company which the undersigned is entitled to vote at the Annual Meeting, or at
any adjournment thereof, on each of the following proposals, all of which are
described in the accompanying Proxy Statement:
1. The election of four directors:
FOR all nominees listed WITHHOLD authority to
below (except as marked to vote for all nominees
the contrary below) listed below
Mardelle Dickhaut
Laird L. Lazelle
Robert E. Levitch
Michael S. Schwartz
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below).
- -------------------------------------------------------------------------------
2. The approval of the Foundation Bancorp, Inc. 1997 Stock Option and Incentive
Plan.
FOR AGAINST ABSTAIN
3. The approval of the Foundation Savings Bank Recognition and Retention Plan
and Trust.
FOR AGAINST ABSTAIN
IMPORTANT: PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE.
33
4. The approval of the selection of Clark, Schaefer, Hackett & Co. as the
auditors of the Company for the current fiscal year.
FOR AGAINST ABSTAIN
This Revocable Proxy will be voted as directed by the undersigned
member. IF NO DIRECTION IS GIVEN, THIS REVOCABLE PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED AND FOR PROPOSALS 2, 3 AND 4.
All Proxies previously given by the undersigned are hereby revoked.
Receipt of the Notice of Annual Meeting of Shareholders of the Company and of
the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign your name exactly as it appears on this Proxy. Joint
accounts require only one signature. If you are signing this Proxy as an
attorney, administrator, agent, corporation, officer, executor, trustee or
guardian, etc., please add your full title to your signature.
- -------------------------------- ------------------------------------
Signature Signature
- -------------------------------- ------------------------------------
Print or Type Name Print or Type Name
Dated: __________________________ Dated:______________________________
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
PLEASE DATE, SIGN AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE
IS REQUIRED FOR MAILING IN THE U.S.A.
IMPORTANT: IF YOU RECEIVE MORE THAN ONE CARD, PLEASE SIGN AND RETURN ALL CARDS
IN THE ACCOMPANYING ENVELOPE.