SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by
the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the
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Definitive Proxy Statement
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Commission Only (as permitted
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Definitive Additional Materials
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by Rule 14a-6(e)(2))
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Soliciting Material Pursuant to § 240.14a-12
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PVF CAPITAL CORP.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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October 17, 2008
Dear Stockholder:
We invite you to attend the Annual Meeting of Stockholders of PVF Capital Corp. (the
Company) to be held at the Marriott Cleveland East, 26300 Harvard Road, Beachwood, Ohio on
Tuesday, November 25, 2008 at 10:00 a.m., local time.
The attached Notice of Annual Meeting and Proxy Statement describe the formal business to be
transacted at the meeting. During the meeting, we will also report on the operations of the
Company. Directors and officers of the Company as well as representatives of Crowe Horwath LLP,
the Companys independent registered public accounting firm, will be present to respond to any
questions the stockholders may have.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING.
Your vote is
important, regardless of the number of shares you own. This will not prevent you from voting in
person but will assure that your vote is counted if you are unable to attend the meeting.
Sincerely,
C. Keith Swaney
President
TABLE OF CONTENTS
PVF CAPITAL CORP.
30000 AURORA ROAD
SOLON, OHIO 44139
(440) 248-7171
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 25, 2008
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the Meeting) of PVF Capital
Corp. (the Company) will be held at the Marriott Cleveland East, 26300 Harvard Road, Beachwood,
Ohio at 10:00 a.m., local time, on Tuesday, November 25, 2008.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the following purposes:
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To elect four (4) directors of the Company for three-year
terms;
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2.
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To ratify the appointment of Crowe Horwath LLP as independent
registered public accounting firm of the Company for the fiscal year ending
June 30, 2009;
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3.
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To approve the PVF Capital Corp. 2008 Equity Incentive Plan;
and
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4.
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To transact such other matters as may properly come before the
Meeting or any adjournments thereof.
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The Board of Directors is not aware of any other business to come before the Meeting.
Any action may be taken on any one of the foregoing proposals at the Meeting on the date
specified above or on any date or dates to which, by original or later adjournment, the Meeting may
be adjourned. Stockholders of record at the close of business on October 6, 2008, are the
stockholders entitled to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which is solicited by the
Board of Directors and to mail it promptly in the enclosed envelope. The proxy will not be used if
you attend and vote at the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
Jeffrey N. Male
Secretary
Solon, Ohio
October 17, 2008
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF FURTHER REQUESTS FOR
PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
PROXY STATEMENT
OF
PVF CAPITAL CORP.
30000 AURORA ROAD
SOLON, OHIO 44139
ANNUAL MEETING OF STOCKHOLDERS
November 25, 2008
GENERAL
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board
of Directors of PVF Capital Corp. (the Company) to be used at the Annual Meeting of Stockholders
of the Company (the Meeting) which will be held at the Marriott Cleveland East, 26300 Harvard
Road, Beachwood, Ohio at 10:00 a.m., local time, on Tuesday, November 25, 2008. The accompanying
notice of meeting and this Proxy Statement are being first mailed to stockholders on or about
October 17, 2008.
VOTING AND REVOCABILITY OF PROXIES
Proxies solicited by the Board of Directors of the Company will be voted in accordance with
the directions given therein.
Where no instructions are given, properly executed proxies which
have not been revoked will be voted as follows: FOR all of the nominees for director; FOR the
approval of the PVF Capital Corp. 2008 Equity Incentive Plan, and FOR the ratification of the
selection of Crowe Horwath LLP as independent registered public accounting firm of the Company for
the fiscal year ending June 30, 2009.
The proxy confers discretionary authority on the persons
named therein to vote with respect to the election of any person as a director where the nominee is
unable to serve or for good cause will not serve, and with respect to matters incident to the
conduct of the Meeting. If any other business is presented at the Meeting, proxies will be voted
by those named therein in accordance with the determination of a majority of the Board of
Directors. Proxies marked as abstentions will not be counted as votes cast. In addition, shares
held in street name which have been designated by brokers on proxy cards as not voted (broker no
votes) will not be counted as votes cast. Proxies marked as abstentions or as broker no votes,
however, will be treated as shares present for purposes of determining whether a quorum is present.
Stockholders who execute the form of proxy enclosed herewith retain the right to revoke such
proxies at any time prior to exercise. Unless so revoked, the shares represented by properly
executed proxies will be voted at the Meeting and all adjournments thereof. Proxies may be revoked
at any time prior to exercise by written notice to the Secretary of the Company at the address
above or by filing of a properly executed, later dated proxy. A proxy will not be voted if a
stockholder attends the Meeting and votes in person. The presence of a stockholder at the Meeting
in itself will not revoke such stockholders proxy.
PARTICIPANTS IN THE PARK VIEW FEDERAL SAVINGS BANK 401(k) PLAN
If you participate in the Park View Federal Savings Bank 401(k) Plan and invest in the PVF
Capital Corp. Stock Fund you will receive a vote authorization card that reflects the shares of PVF
Capital Corp. common stock credited to your account in the 401(k) Plan as of the Meeting record
date. You may direct the 401(k) Plan Trustee how to vote the shares of PVF Capital Corp. common
stock credited to your account. The Trustee will vote all shares for which it does not receive
timely instructions from participants as directed by the Company. The deadline for returning your
voting instructions to the 401(k) Plan Trustee is November 20, 2008.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The securities which can be voted at the Meeting consist of shares of the Companys common
stock, $0.01 par value per share (the Common Stock). Stockholders of record as of the close of
business on October 6, 2008 (the Record Date) are entitled to one vote for each share of Common
Stock then held on all matters. As of the Record Date, 7,773,823 shares of the Common Stock were
issued and outstanding. The presence, in person or by
1
proxy, of at least a majority of the total number of shares of Common Stock outstanding and
entitled to vote will be necessary to constitute a quorum at the Meeting.
Persons and groups beneficially owning in excess of 5% of the Common Stock are required to
file certain reports with respect to such ownership pursuant to the Securities Exchange Act of
1934, as amended (the Exchange Act). The following table sets forth, as of October 6, 2008,
certain information as to the Common Stock beneficially owned by the only persons known to the
Company to beneficially own more than 5% of the Common Stock, by each of the Companys directors,
by the non-director executive officer of the Company named in the Summary Compensation Table set
forth under the caption
Proposal I Election of Directors Executive Compensation Summary
Compensation Table,
and by all executive officers and directors of the Company as a group. All
executive officers and directors of the Company have the Companys address.
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Percent of Shares
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Name and Address
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Amount and Nature of
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of Common Stock
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of Beneficial Owner (1)
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Beneficial Ownership (2)
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Outstanding (3)
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Persons Owning Greater Than 5%:
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John R. Male
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564,859
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(4)
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7.25
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30000 Aurora Road
Solon, Ohio 44139
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Jeffrey L. Gendell
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589,523
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(5)
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7.58
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Tontine Financial Partners, L.P.
Tontine Management, L.L.C.
Tontine Overseas Associates, L.L.C.
55 Railroad Avenue, 3
rd
Floor
Greenwich, Connecticut 06830
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Richard A. Barone
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730,519
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(6)(7)
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9.40
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Ancora Capital, Inc.
Ancora Securities, Inc.
Ancora Advisors, LLC
One Chagrin Highlands
2000 Auburn Drive, Suite 300
Cleveland, Ohio 44122
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Umberto P. Fedeli
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496,000
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(7)(8)
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6.38
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5005 Rockside Road
Independence, Ohio 44131
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Directors:
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John R. Male
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564,859
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(4)
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7.25
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Robert K. Healey
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43,407
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(9)
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Gerald A. Fallon
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16,296
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Raymond J. Negrelli
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29,296
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Stuart D. Neidus
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61,148
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(10)
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Stanley T. Jaros
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31,316
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C. Keith Swaney
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245,088
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(11)
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3.13
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Ronald D. Holman, II
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14,360
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Steven A. Calabrese
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332,454
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(12)
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4.28
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Richard M. Osborne
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118,000
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1.52
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Percent of Shares
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Name and Address
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Amount and Nature of
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of Common Stock
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of Beneficial Owner (1)
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Beneficial Ownership (2)
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Outstanding (3)
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Executive Officer:
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Jeffrey N. Male
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300,641
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(13)
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3.86
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All Executive Officers and Directors
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1,756,527
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22.08
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as a Group (11 persons)
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Less than 1%.
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(1)
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All executive officers and directors of the Company have the Companys address: 30000 Aurora
Road, Solon, Ohio 44139.
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(2)
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In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial
owner, for purposes of this table, of any shares of Common Stock if he has or shares voting or
investment power with respect to such Common Stock or has a right to acquire beneficial
ownership at any time within 60 days from the Record Date. As used herein, voting power is
the power to vote or direct the voting of shares and investment power is the power to
dispose or direct the disposition of shares. Unless otherwise indicated, the beneficial owner
has sole voting and investment power with respect to the listed shares. The amounts shown
include 17,262, 17,191, 16,296, 14,296, 24,620, 20,620, 44,166, 14,360, 0, 0, 11,408 and
180,219 shares that Directors John R. Male, Robert K. Healey, Gerald A. Fallon, Raymond J.
Negrelli, Stuart D. Neidus, Stanley T. Jaros, C. Keith Swaney, Ronald D. Holman, II, Steven A.
Calabrese and Richard M. Osborne, Mr. Jeffrey N. Male and all executive officers and directors
as a group, respectively, have the right to acquire pursuant to options exercisable within 60
days of the Record Date.
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(3)
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Based on 7,773,823 shares outstanding.
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(4)
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Includes 36,438 shares held by the Banks 401(k) Plan, as to which shares Mr. John R. Male
has sole voting and shared investment power. Also includes 391,534 shares held by trusts of
which Mr. John R. Male serves as trustee and as such has sole voting and investment power over
such shares. 100,000 shares held in trust are pledged as collateral for a loan.
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(5)
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According to their statement on Schedule 13G, as amended, filed on February 8, 2008, Jeffrey
L. Gendell shares voting and dispositive power over the listed shares, Tontine Financial
Partners, L.P. and Tontine Management, L.L.C. share voting and dispositive power with respect
to 521,918 shares and Tontine Overseas Associates, L.L.C. shares voting and dispositive power
with respect to 67,605 shares.
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(6)
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According to their Amendment No. 6 to Schedule 13D, filed on May 16, 2008, Ancora Securities,
Inc. has sole voting and dispositive power with respect to 16,901 shares and shared
dispositive power with respect to 516,553 shares, Ancora Advisors, LLC has sole voting and
dispositive power with respect to 182,065 shares, and Richard A. Barone has sole voting and
dispositive power with respect to 15,000 shares. Ancora Capital, Inc., Ancora Securities,
Inc. and Ancora Advisors LLC are referred to herein as the Ancora Entities.
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(7)
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In their Schedule 13D filed on February 22, 2007, Mr. Barone and the Ancora Entities state
that Mr. Fedeli is a client. Accordingly, the Company believes that some of the shares
reported as beneficially owned by Mr. Fedeli are also reported as beneficially owned by Mr.
Barone and the Ancora Entities.
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(8)
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According to his Amendment No. 3 to Schedule 13D, filed on July 2, 2008, Mr. Fedeli has sole
voting and dispositive power with respect to 496,000 shares, which amount includes 10,000
shares owned by the Fedeli Family Charitable Foundation, of which Mr. Fedeli is the president,
and 1,000 shares owned by his wifes IRA. Mr. Fedeli disclaims beneficial ownership of the
shares owned by his wifes IRA.
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(9)
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Includes 26,216 shares held by a revocable trust for the benefit of Mr. Healey; Mr. Healey
does not have or share voting or investment power over such shares. Does not include 97,313
shares held by an irrevocable trust for the benefit of Mr. Healeys wife, as to which shares
Mr. Healey does not have or share voting or investment power.
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(10)
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Includes 149 shares as to which Mr. Neidus wife has voting and investment power.
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(11)
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Includes 30,740 shares held by the Banks 401(k) Plan, as to which shares Mr. Swaney has sole
voting and shared investment power.
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(12)
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Includes 15,930 shares owned by Mr. Calabreses minor children and 10,750 shares beneficially
owned by Mr. Calabreses wife.
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(13)
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Includes 28,420 shares held by the Banks 401(k) Plan, as to which shares Mr. Jeffrey N. Male
has sole voting and shared investment power. Includes 148,030 shares held by a revocable
trust for the benefit of Mr. Jeffrey N. Male and 33,423 shares held by a revocable trust for
the benefit of Mr. Jeffrey N. Males wife; Mr. Jeffrey N. Male is co-trustee of such trusts
and shares voting and investment power over such shares. Also includes 13,489 shares as to
which Mr. Jeffrey N. Males wife has voting and investment power.
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PROPOSAL I ELECTION OF DIRECTORS
The Companys Board of Directors is composed of ten members. The Companys First Amended and
Restated Articles of Incorporation (the Articles) provide that the members of each class of
directors shall be elected for a term of two years if the board of directors consists of six, seven
or eight members, or three years if the board of directors consists of nine or more members, and
until their successors are elected and qualified. The Articles further provide that if an increase
in the number of directors causes the number of directors to be nine or
3
more, the new and existing directorships may be reallocated as appropriate so as to create a third
class of directors. Accordingly, effective with the expansion of the Companys Board of Directors
to ten members and the appointment of Steven A. Calabrese and Richard M. Osborne as directors of
the Company effective October 1, 2008, the Board of Directors reallocated the new and existing
directorships to create a third class of directors, with each class of directors to serve for terms
of three years or until their successors are elected and qualified.
The Nominating Committee of the Board of Directors has nominated Robert K. Healey, Stuart D.
Neidus, Stanley T. Jaros and Raymond J. Negrelli, all of whom are currently members of the Board,
to serve as directors for a three-year period and until their successors are elected and qualified.
Under Ohio law, directors are elected by a plurality of the votes cast at the Meeting,
i.e.
, the
nominees receiving the highest number of votes will be elected regardless of whether such votes
constitute a majority of the shares represented at the Meeting. Votes that are withheld and broker
no votes will have no effect on the outcome of the election.
Your Board of Directors recommends that you vote FOR the election of Robert K. Healey,
Stuart D. Neidus, Stanley T. Jaros and Raymond J. Negrelli as directors of the Company.
It is intended that the persons named in the proxies solicited by the Board of Directors will
vote for the election of the named nominees. If any nominee is unable to serve, the shares
represented by all valid proxies which have not been revoked will be voted for the election of such
substitute as the Board of Directors may recommend or the size of the Board may be reduced to
eliminate the vacancy. At this time, the Board knows of no reason why any nominee might be
unavailable to serve.
The following table sets forth the names of the Boards nominees for election as directors of
the Company and of those directors who will continue to serve as such after the Meeting. Also set
forth is certain other information with respect to each persons age, the year he first became a
director of the Company or the Bank, and the expiration of his term as a director. Messrs. Robert
K. Healey and John R. Male were initially appointed as directors of the Company in 1994 in
connection with the Companys incorporation. All other directors were appointed directors of the
Company and the Bank in the years indicated on the following table. Except as described below,
there are no arrangements or understandings between the Company and any director pursuant to which
such person has been elected a director of the Company. Directors Steven A. Calabrese and Richard
M. Osborne were appointed as directors of the Company pursuant to agreements with the Company and
the Bank dated September 30, 2008. Under these agreements, for a two-year period, Messrs.
Calabrese and Osborne agreed to vote for the Companys nominees for director and not to solicit
proxies, make stockholder proposals or offer certain transactions to the Companys stockholders.
No director is related to any other director or executive officer by blood, marriage or adoption,
except that John R. Male, the Chairman of the Board and Chief Executive Officer of the Company and
the Bank, is the brother of Jeffrey N. Male, the Vice President and Secretary of the Company and
the Executive Vice President and Chief Lending Officer of the Bank.
4
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Age
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Year First Elected
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Current
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as of the
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as Director of the
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Term
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Name
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Record Date
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Company or the Bank
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to Expire
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BOARD NOMINEES FOR TERMS TO EXPIRE AT THE 2011 ANNUAL MEETING
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Robert K. Healey
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83
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1973
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2008
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Stuart D. Neidus
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57
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1996
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2008
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Stanley T. Jaros
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63
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1997
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2008
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Raymond J. Negrelli
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56
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2002
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2008
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DIRECTORS CONTINUING IN OFFICE
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C. Keith Swaney
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65
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2000
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2009
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Gerald A. Fallon
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59
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2002
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2009
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Steven A. Calabrese
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48
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2008
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2009
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John R. Male
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60
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1981
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2010
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Ronald D. Holman, II
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48
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2003
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2010
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Richard M. Osborne
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63
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2008
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2010
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Presented below is certain information concerning the directors of the Company. Unless
otherwise stated, all directors have held the positions indicated for at least the past five years.
Robert K. Healey.
Mr. Healey currently is retired. He had been employed from 1961 to 1987 by
Leaseway Transportation Corp. and most recently served as Executive Vice President Managed
Controlled Transportation. He formerly served on the Boards of Trustees of St. Vincent Charity
Hospital, New Direction, Western Reserve Historical Society, the Woodruff Foundation and Glen Oak
School.
Stuart D. Neidus.
Mr. Neidus currently holds the position of Chairman and Chief Executive
Officer of Anthony & Sylvan Pools Corporation, a company that operates in the leisure industry and
is one of the nations largest in-ground residential concrete swimming pool installers. Prior to
this position, he served as Executive Vice President and Chief Financial Officer of Essef
Corporation from September 1996 until Anthony & Sylvans split-off from Essef in August 1999. At
Premier Industrial Corporation he held various positions from 1992 until 1996, most recently as
Executive Vice President until the company was acquired by Farnell Electronics plc. Prior to that,
Mr. Neidus spent 19 years with the international accounting firm of KPMG LLP, serving as an audit
partner from 1984 until 1992. He has served as a board member and on advisory committees of many
nonprofit and civic organizations over the years.
Stanley T. Jaros.
Mr. Jaros is a partner in the law firm of Moriarty & Jaros, P.L.L. He has
served as a trustee of a number of Cleveland area nonprofit organizations, and was a member of the
Cleveland Landmarks Commission. Mr. Jaros is a graduate of Brown University and Case Western
Reserve Law School and received an MBA from the University of Pennsylvania.
Raymond J. Negrelli.
Mr. Negrelli is an investor in and developer of real estate, primarily
retail and office properties, in northeast Ohio. He is the President of Raymond J. Negrelli, Inc.,
a General Partner in Bay Properties Co. and a General Partner of Landerbrook Co., all of which are
based in Euclid, Ohio. He is a former
5
member of the Community Leadership Council of Hillcrest Hospital, Mayfield Heights, Ohio, served on
the Civil Justice Reform Act Advisory Group for the United States District Court, and serves on
various local public service and charitable organizations.
C. Keith Swaney.
Mr. Swaney joined the Bank in 1962 and was named Executive Vice President
and Chief Financial Officer in 1986. He was named Vice President and Treasurer of the Company upon
its organization in 1994. Mr. Swaney was named President and Chief Operating Officer of the
Company and the Bank in October 2000. He continues to serve as Treasurer of the Company and as
Chief Financial Officer of the Bank. He is responsible for all internal operations of the Company
and the Bank. Over the years, he has participated in various charitable organizations and
currently serves on the Hiram House Board of Trustees. Mr. Swaney attended Youngstown State
University and California University in Pennsylvania.
Gerald A. Fallon.
Mr. Fallon served as Executive Vice President and Manager for KeyBank, NA
and Senior Managing Director for McDonald Investments Inc. and Director of Capital Markets from
November 1998 through March 2001. From December 1994 through November 1998, he was Chairman and
Chief Executive Officer of Key Capital Markets, Inc., a subsidiary of KeyCorp. Mr. Fallon is
currently a corporate director of Digital Lightwave, Inc. (a corporation with a class of securities
registered under Section 12 of the Securities Exchange Act of 1934) and an advisory director for
the following private companies: Lander North Asset Management LLC, Logos Communications Inc.,
Sierro Novo (Designer Furniture Warehouse) and Thomas F. McDonald & Partners. Additionally, he
serves on the Bratenahl (Ohio) Land Conservancy and Bratenahl Village Audit Committee. Mr. Fallon
graduated from Georgetown University in 1971 with an A.B. in economics and received an M.B.A. in
finance from Columbia University in 1973.
Steven A. Calabrese.
Mr. Calabrese is the managing partner of Calabrese, Racek and Markos,
Inc., which operates a number of commercial real estate companies in Cleveland, Ohio and Tampa,
Florida. The firms specialize in evaluation, market research and reporting, management,
construction and development services for commercial and industrial real estate. He is a director
of Energy West, Incorporated, a public utility company in Great Falls, Montana, and John D. Oil and
Gas Company, each of which companies has a class of securities registered under Section 12 of the
Exchange Act.
J
ohn R. Male.
Mr. Male has been with the Bank since 1971, where he has held various positions
including branch manager, mortgage loan officer, manager of construction lending, savings
department administrator and chief lending officer. Mr. Male was named President and Chief
Executive Officer of the Bank in 1986 and was named President of the Company upon its organization
in 1994. Mr. Male was named Chairman of the Board of Directors and Chief Executive Officer of the
Company and the Bank in October 2000. Mr. Male serves in various public service and charitable
organizations. He currently serves on the Board of Trustees for Heather Hill, a long-term care
hospital in Chardon, Ohio. He has an undergraduate degree from Tufts University and an MBA from
Case Western Reserve University.
Ronald D. Holman, II.
Mr. Holman is a partner in the law firm of Cavitch, Familo, Durkin &
Frutkin in Cleveland, Ohio. In addition, from 1989 to 2000 he served as a legal analyst on various
news shows for WEWS TV in Cleveland, Ohio. Mr. Holman serves on the Boards of Directors for the
following nonprofit institutions: Shaker Heights Alumni Association and North Coast Community
Homes. He has also served as Chair of the Center for Families and Children, and Treasurer of the
Dartmouth Club of Northeastern Ohio. In addition, he has served on the transition subcommittees
for Mayors Frank Jackson and Jane Campbell. Mr. Holman is a graduate of Dartmouth College and
Columbia University School of Law.
Richard M. Osborne.
Mr. Osborne is president and chief executive officer of OsAir, Inc., a
company he founded in 1963, which operates as a property developer and manufacturer of industrial
gases for pipeline delivery. Since September 1998, he has been chairman, chief executive officer
and a director of John D. Oil and Gas Company, a company that has a class of securities registered
under Section 12 of the Exchange Act. Mr. Osborne is also the chairman and chief executive officer
of Energy West Incorporated, a public utility company, and the chairman of Corning Natural Gas
Corporation, a public utility company in Corning, New York, each of which companies has a class of
securities registered under Section 12 of the Exchange Act.
6
CORPORATE GOVERNANCE
Independent Directors
The Companys Board of Directors currently consists of ten members. The Board of Directors
has determined that all of the directors are independent under the current listing standards of The
NASDAQ Capital Market, Inc., except for Messrs. Swaney and Male, who are employees of the Company
and the Bank, and Mr. Negrelli, who is a part owner of certain entities to which the Bank makes
payments of rent and operating cost reimbursement. In assessing the independence of directors, the
Board of Directors considered the business relationships between the Company and its directors or
their affiliated businesses, other than ordinary banking relationships. Where business
relationships other than ordinary banking relationships existed, the Board determined that, except
as set forth above, none of the relationships between the Company and their affiliated businesses
impair the directors independence because the amounts involved are immaterial to the directors or
to those businesses when compared to their annual income or gross revenues. The business
relationships between the Company and its directors or the directors affiliated companies that
were considered by the Board of Directors were: Mr. Jaros position as a partner in the law firm of
Moriarty & Jaros, P.L.L., which provides legal services to the Company and the Bank; and Mr.
Calabreses position as the managing partner of Calabrese, Racek and Markos, Inc., a firm that
performs appraisals on properties securing loans made by the Bank. All fees paid to Calabrese,
Racek and Markos, Inc. are paid by the customers of the Bank.
Meetings and Committees of the Board of Directors
During the year ended June 30, 2008, the Board of Directors of the Company met 24 times. No
director attended fewer than 75% of the total meetings of the Board of Directors and committees on
which such director served. The following table identifies our standing committees and their
members as of June 30, 2008. All members of each committee are independent in accordance with the
listing standards of the NASDAQ Capital Market, Inc.
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|
|
|
|
|
|
|
Audit
|
|
Compensation
|
|
Nominating
|
Director
|
|
Committee
|
|
Committee
|
|
Committee
|
Gerald A. Fallon
|
|
|
|
|
|
|
X
|
*
|
|
|
|
|
Robert K. Healey
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
Ronald D. Holman, II
|
|
|
X
|
|
|
|
|
|
|
|
X
|
|
Stanley T. Jaros
|
|
|
|
|
|
|
|
|
|
|
X
|
*
|
Raymond J. Negrelli
|
|
|
|
|
|
|
|
|
|
|
X
|
|
Stuart D. Neidus
|
|
|
X
|
*
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Meetings in 2008
|
|
|
9
|
|
|
|
3
|
|
|
|
1
|
|
Audit Committee.
The Company has a separately designated Audit Committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee met periodically to
examine and approve the audit report prepared by the independent registered public accounting firm
of the Company and its subsidiaries, to review and appoint the independent registered public
accounting firm to be engaged by the Company, to review the internal audit function and internal
accounting controls and to review and approve the conflict of interest policy. The Companys Board
of Directors has determined that one member of the Audit Committee, Stuart D. Neidus, qualifies as
an audit committee financial expert as defined in Section 407(d) of Regulation S-K promulgated by
the U.S. Securities and Exchange Commission. Director Neidus is independent, as independence for
audit committee members is defined under applicable Nasdaq listing standards. The Companys Board
of Directors has adopted a written charter for the Audit Committee, which was attached as Appendix
A to the Companys definitive proxy materials distributed in connection with the Companys 2006
annual meeting of stockholders.
7
Nominating Committee.
The Board of Directors Nominating Committee nominates directors to be
voted on at the Annual Meeting and recommends nominees to fill any vacancies on the Board of
Directors. The Companys Board of Directors has adopted a written charter for the Nominating
Committee, which was attached as Appendix A to the Companys definitive proxy materials distributed
in connection with the Companys 2007 annual meeting of stockholders.
It is the policy of the Nominating Committee to consider director candidates recommended by
security holders who appear to be qualified to serve on the Companys Board of Directors. Any
stockholder wishing to recommend a candidate for consideration by the Nominating Committee as a
possible director nominee for election at an upcoming annual meeting of stockholders must provide
written notice to the Nominating Committee of such stockholders recommendation of a director
nominee no later than July 1 preceding the annual meeting of stockholders. Notice should be
provided to: Jeffrey N. Male, Secretary, PVF Capital Corp., 30000 Aurora Road, Solon, Ohio 44139.
Such notice must contain the following information:
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The name of the person recommended as a director candidate;
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|
All information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended;
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|
The written consent of the person being recommended as a director candidate to being
named in the proxy statement as a nominee and to serving as a director if elected;
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As to the stockholder making the recommendation, the name and address, as he or she
appears on the Companys books, of such stockholder; provided, however, that if the
stockholder is not a registered holder of the Companys common stock, the stockholder
should submit his or her name and address, along with a current written statement from
the record holder of the shares that reflects ownership of the Companys common stock;
and
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A statement disclosing whether such stockholder is acting with or on behalf of any
other person and, if applicable, the identity of such person.
|
In its deliberations, the Nominating Committee considers a candidates personal and
professional integrity, knowledge of the banking business and involvement in community, business
and civic affairs, and also considers whether the candidate would provide for adequate
representation of the Banks market area. Any nominee for director made by the Nominating
Committee must be highly qualified with regard to some or all the attributes listed in the
preceding sentence. In searching for qualified director candidates to fill vacancies in the Board,
the Nominating Committee solicits the Companys then current directors for the names of potential
qualified candidates. Moreover, the Nominating Committee may ask its directors to pursue their own
business contacts for the names of potentially qualified candidates. The Nominating Committee
would then consider the potential pool of director candidates, select a candidate based on the
candidates qualifications and the Boards needs, and conduct a thorough investigation of the
proposed candidates background to ensure there is no past history that would cause the candidate
not to be qualified to serve as a director of the Company. In the event a stockholder has
submitted a proposed nominee, the Nominating Committee would consider the proposed nominee in the
same manner in which the Nominating Committee would evaluate nominees for director recommended by
directors.
With respect to nominating an existing director for re-election to the Board of Directors, the
Nominating Committee will consider and review an existing directors Board and committee attendance
and performance; length of Board service; experience, skills and contributions that the existing
director brings to the Board; and independence.
Compensation Committee.
The Compensation Committee is responsible for establishing and
administering policies governing the compensation for the Companys named executive officers. The
Compensation Committee operates under a written charter that establishes the Committees
responsibilities. The
8
Compensation Committee and the Board of Directors review the charter periodically to ensure the
scope of the charter is consistent with the Compensation Committees expected role. The
Compensation Committee Charter was attached as Appendix B to the Companys definitive proxy
materials distributed in connection with the Companys 2007 annual meeting of stockholders.
The Compensation Committee meets outside the presence of all executive officers, including the
named executive officers, to consider appropriate compensation for the chief executive officer.
The Compensation Committee analyzes the chief executive officers performance annually and
determines his base salary, annual performance bonus payments and any stock option grants based on
its assessment of his performance. The Compensation Committee also takes into consideration the
recommendations of the chief executive officer when determining the payments to be made to the
other named executive officers under the Companys discretionary bonus plan and stock option plan.
The chief executive officer reviews, annually, each other named executive officers
performance and based upon guidelines established by the Compensation Committee determines the
appropriate base salary for each named executive officer. The chief executive officer also makes
recommendations to the Compensation Committee with respect to annual discretionary bonus payments
and the grants of stock-based compensation awards for each named executive officer, excluding
himself.
During the 2008 fiscal year, the Compensation Committee met three times, including one
executive session attended by Compensation Committee members only. The members of the Compensation
Committee are: Gerald A. Fallon, Stuart D. Neidus and Robert K. Healey.
Board Policies Regarding Communications with the Board of Directors and Attendance at Annual Meetings
The Board of Directors maintains a process for stockholders to communicate with the Board of
Directors. Stockholders wishing to communicate with the Board of Directors should send any
communication to Jeffrey N. Male, Secretary, PVF Capital Corp., 30000 Aurora Road, Solon, Ohio
44139. All communications that relate to matters that are within the scope of the responsibilities
of the Board and its Committees are to be presented to the Board no later than its next regularly
scheduled meeting. Communications that relate to matters that are within the responsibility of one
of the Board Committees are also to be forwarded to the Chair of the appropriate Committee.
Communications that relate to ordinary business matters that are not within the scope of the
Boards responsibilities, such as customer complaints, are to be sent to the appropriate officer.
Solicitations, junk mail and obviously frivolous or inappropriate communications are not to be
forwarded, but will be made available to any director who wishes to review them.
Directors are expected to prepare themselves for and to attend all Board meetings, the Annual
Meeting of Stockholders and the meetings of the Committees on which they serve, with the
understanding that on occasion a director may be unable to attend a meeting. Seven of the eight
members then comprising the Board of Directors attended the Companys previous annual meeting of
stockholders.
9
DIRECTOR COMPENSATION
The following table provides the compensation received by individuals who served as
non-employee directors of the Company during the 2008 fiscal year.
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Fees Earned or
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Option Awards
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Name
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Paid in Cash ($)
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|
($)(1)
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Total ($)
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Gerald A. Fallon
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$
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30,200
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|
$
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|
|
$
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30,200
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Robert K. Healey
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|
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30,200
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|
|
|
|
|
|
|
30,200
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|
Ronald D. Holman, II
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|
|
30,200
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|
|
|
|
|
|
|
30,200
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|
Stanley T. Jaros
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|
|
30,200
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|
|
|
|
|
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30,200
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|
Raymond J. Negrelli
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|
|
30,200
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|
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|
|
30,200
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|
Stuart D. Neidus
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|
|
30,200
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|
|
|
|
|
|
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30,200
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|
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|
|
(1)
|
|
As of June 30, 2008, the non-employee directors had the following number of non-incentive
stock options outstanding:
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Non-Incentive
|
|
|
Stock Options
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Name
|
|
Outstanding
|
Gerald A. Fallon
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|
|
16,296
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|
Robert K. Healey
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|
|
17,191
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Ronald D. Holman, II
|
|
|
14,360
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|
Stanley T. Jaros
|
|
|
20,620
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|
Raymond J. Negrelli
|
|
|
14,296
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|
Stuart D. Neidus
|
|
|
24,620
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|
Cash Retainer and Meeting Fees for Directors.
The following table sets forth the applicable
retainers and fees that are paid to our non-employee directors for their service on the Banks
Board of Directors.
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|
|
Annual retainer
|
|
$
|
25,200
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|
Daily fee per special board event or retreat
|
|
|
2,500
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|
10
EXECUTIVE COMPENSATION
Summary Compensation Table
The following information is furnished for the individuals who served as the principal
executive officer or principal financial officer of the Company during the year ended June 30,
2008, and for the other executive officer of the Company who received a salary of $100,000 or more
during the year ended June 30, 2008.
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Name and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
All Other
|
|
|
Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Awards (1)
|
|
Compensation (2)
|
|
Total
|
John R. Male
|
|
|
2008
|
|
|
$
|
226,021
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|
|
$
|
|
|
|
$
|
9,038
|
|
|
$
|
65,397
|
|
|
$
|
300,456
|
|
Chairman of the Board
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|
|
2007
|
|
|
|
226,021
|
|
|
|
67,807
|
|
|
|
12,036
|
|
|
|
54,688
|
|
|
|
360,552
|
|
Chief Executive Officer of
the Company and the Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Keith Swaney
|
|
|
2008
|
|
|
$
|
200,000
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|
|
$
|
|
|
|
$
|
11,410
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|
|
$
|
47,900
|
|
|
$
|
259,310
|
|
President and Chief Operating
|
|
|
2007
|
|
|
|
200,000
|
|
|
|
50,000
|
|
|
|
15,687
|
|
|
|
45,950
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|
|
|
311,637
|
|
Officer of the Company and
the Bank, Treasurer of the
Company and Chief Financial
Officer of the Bank
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|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey N. Male
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|
|
2008
|
|
|
$
|
145,000
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|
|
$
|
|
|
|
$
|
5,972
|
|
|
$
|
26,888
|
|
|
$
|
177,860
|
|
Vice President and Secretary
|
|
|
2007
|
|
|
|
145,000
|
|
|
|
36,250
|
|
|
|
7,935
|
|
|
|
27,156
|
|
|
|
216,341
|
|
of the Company and Executive
Vice President of the Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects the dollar amount recognized for financial statement reporting purposes in
accordance with FAS 123(R) during the year ended June 30, 2008, based upon a fair value of
$3.73, $3.60, $1.99 and $1.61 for options granted in 2003, 2004, 2005 and 2006, respectively,
to Messrs. John R. Male and Jeffrey N. Male, and $4.13, $4.00, $3.79 and $3.08 for options
granted to Mr. C. Keith Swaney in 2003, 2004, 2005 and 2006, respectively, using the
Black-Scholes option pricing model. For further information regarding the assumptions used to
compute fair value, see Note 15 to the Notes to the Consolidated Financial Statements
contained in Item 8 to the Companys Annual Report on Form 10-K for the year ended June 30,
2008.
|
|
(2)
|
|
Details of the amounts reported in the All Other Compensation column for 2008 are provided
in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Male
|
|
C. Keith Swaney
|
|
Jeffrey Male
|
Director Compensation
|
|
$
|
25,200
|
|
|
$
|
25,200
|
|
|
$
|
|
|
Employer Contributions to 401(k) Plan
|
|
|
4,520
|
|
|
|
|
|
|
|
3,123
|
|
Disability Insurance Premiums
|
|
|
2,979
|
|
|
|
3,532
|
|
|
|
2,713
|
|
Life Insurance Premiums
|
|
|
6,900
|
|
|
|
11,340
|
|
|
|
5,470
|
|
Perquisites
|
|
|
21,451
|
(a)
|
|
|
3,982
|
(b)
|
|
|
12,794
|
(c)
|
|
|
|
(a)
|
|
Consists of an automobile allowance of $5,680, tax consulting fees of $1,675 and country club
dues of $14,096.
|
|
(b)
|
|
Mr. Swaneys aggregate perquisite amount was less than $10,000.
|
|
(c)
|
|
Consists of an automobile allowance of $4,130, tax consulting fees of $1,625 and country club
dues of $7,039.
|
Severance Agreements
The Company and the Bank maintain severance agreements (the Severance Agreements) with John
R. Male, the Chairman of the Board and Chief Executive Officer of the Company and the Bank, and
Jeffrey N. Male, the Vice President and Secretary of the Company and the Executive Vice President
of the Bank (each of whom is referred to as an Executive). The Severance Agreements are for
terms of three years. On each anniversary date from the date of commencement of the Severance
Agreements, the term of the agreements may be extended for an additional one-year period beyond the
then effective expiration date upon a determination by the Board of Directors that the performance
of each Executive has met the required performance standards.
11
Under the Severance Agreements, in the event of a named executive officers involuntary
termination of employment, or voluntary termination for good reason, within one year following a
change in control of the
Bank or the Company other than for cause, the executive will receive the following benefits
under his Severance Agreement: (i) a payment equal to three (3) times the Executives annual
compensation (current base salary plus annual incentive compensation for the calendar year
immediately preceding the change in control), payable in a lump sum within 30 days following
termination; (ii) the Bank or the Company shall cause the Executive to become fully vested in any
benefit plans, programs or arrangements in which the Executive participated, and the Bank will
contribute to the Executives 401(k) plan account the Banks matching and/or profit sharing which
would have been paid had the Executive remained in the employ of the Bank throughout the remainder
of the 401(k) plan year; and (iii) the Executive will receive continued life, health and disability
insurance coverage substantially identical to the coverage maintained by the Bank or the Company
for the Executive prior to termination until the earlier of the Executives employment with another
employer or 12 months following termination. In addition, under the terms of the Severance
Agreements, John Male and Jeffrey Male would also be entitled to receive additional tax
indemnification payments if the payments and benefits under their Severance Agreements or any other
payments triggered liability under the Internal Revenue Code of 1986, as amended, as an excise tax
constituting excess parachute payments. Under applicable law, the excise tax is triggered by
change in control-related payments which equal or exceed three times an executives base amount.
The excise tax equals 20% of the amount of the payment in excess of one times the executives base
amount.
Change in control is defined generally in the Severance Agreements as: (i) the acquisition,
by any person or persons acting in concert of the power to vote more than 25% of the Companys
voting securities or the acquisition by a person of the power to direct the Companys management or
policies; (ii) the merger of the Company with another corporation on a basis whereby less than 50%
of the total voting power of the surviving corporation is represented by shares held by former
shareholders of the Company prior to the merger; or (iii) the sale by the Company of the Bank or
substantially all its assets to another person or entity. In addition, a change in control occurs
when, during any consecutive two-year period, directors of the Company or the Bank at the beginning
of such period cease to constitute a majority of the Board of Directors of the Company or the Bank,
unless the election of replacement directors was approved by a two-thirds vote of the initial
directors then in office. Good reason is defined in the Severance Agreements as any of the
following events: (i) a change in the Executives status, title, position or responsibilities
which, in the Executives reasonable judgment, does not represent a promotion, the assignment to
the Executive of any duties or responsibilities which, in the Executives reasonable judgment, are
inconsistent with his status, title, position or responsibilities, or the removal of the Executive
from or failure to reappoint him to any of such positions other than for cause; (ii) materially
reducing the Executives base compensation as then in effect; (iii) the relocation of the
Executives principal place of employment to a location that is more than 35 miles from the
location where the Executive previously was principally employed; (iv) the failure to provide the
Executive with benefits substantially similar to those provided to him under existing employee
benefit plans, or materially reducing any benefits or depriving the Executive of any material
fringe benefit; (v) death; or (vi) disability prior to retirement.
Supplemental Executive Retirement Plan
Under the SERP, commencing upon a Participants retirement after reaching age 65, or earlier
if approved by the Compensation Committee, a participant will receive a benefit equal to 60% of
final pay reduced by any benefits payable under the Banks qualified retirement plans. Final
pay is defined as the Participants highest years combined salary and bonus during the
Participants last five years of employment with the Bank. The Participant will vest in the SERP
plan benefits each year, on a pro rata basis, beginning with the one year anniversary date of the
effective date that the Participant becomes eligible to participate in the SERP and continuing with
each succeeding annual anniversary date until attainment of age 65. Upon attainment of age 65 and
provided that he has remained continuously in the employ of the Bank, the Participant will be fully
vested. A Participant becomes fully vested prior to age 65 upon death or disability or upon a
change in control, as defined above under
Severance Agreements
. Plan participants may elect
to receive their SERP benefit in either a lump sum distribution, single life annuity or converted
Actuarial Equivalent joint and survivor annuity. Actuarial Equivalent is defined as a payment or
payments equal in the aggregate to the value at the applicable date of the benefit determined
actuarially on the basis of the current Pension Benefit Guarantee Corporation (PBGC) interest
rate and the mortality table then in use by the PBGC. SERP benefits are payable within 30 days
upon the occurrence of
12
normal retirement, disability, death, early retirement or a change in
control. The Participant loses all benefits under the SERP in the event his employment with the
Bank is terminated for cause.
Outstanding Equity Awards at Fiscal Year End
The following table provides certain information with respect to the number of shares of
Company common stock represented by outstanding stock options held by the named executive officers
as of June 30, 2008.
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Option Awards
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Number of
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Securities
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Underlying
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Number of Securities
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Unexercised
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Option
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Underlying Unexercised
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Options (#)
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Exercise Price
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Option Expiration
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Options (#) Exercisable
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Unexercisable
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($)
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Date
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John R. Male
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5,082
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$
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13.55
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11/1/2008
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3,696
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924
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(1)
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13.64
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11/1/2009
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2,520
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1,680
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(2)
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12.21
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11/1/2010
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2,800
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4,200
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(3)
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11.70
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11/1/2011
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C. Keith Swaney
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7,015
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5.78
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11/1/2008
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6,377
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6.96
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11/1/2009
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5,797
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6.12
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11/1/2010
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5,270
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7.07
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11/1/2011
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4,791
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8.32
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11/1/2012
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4,356
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12.32
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11/1/2013
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3,168
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792
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(1)
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12.40
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11/1/2014
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2,160
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1,440
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(2)
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11.10
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11/1/2015
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2,480
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3,720
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(3)
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10.64
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11/1/2016
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Jeffrey N. Male
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3,388
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13.55
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11/1/2008
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2,464
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616
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(1)
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13.64
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11/1/2009
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1,680
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1,120
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(2)
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12.21
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11/1/2010
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1,800
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2,700
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(3)
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11.70
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11/1/2011
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(1)
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These options vest on November 1, 2008.
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(2)
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50% of these options vest on each of November 1, 2008 and 2009.
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(3)
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33.3% of these options vest on each of November 1, 2008, 2009 and 2010.
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OTHER INFORMATION RELATING TO DIRECTORS AND EXECUTIVE OFFICERS
Indebtedness of Management
Under applicable law, the Banks loans to directors and executive officers must be made on
substantially the same terms, including interest rates, as those prevailing for comparable
transactions with non-affiliated persons, and must not involve more than the normal risk of
repayment or present other unfavorable features. Furthermore, loans above the greater of $25,000
or 5% of the Banks capital and surplus (
i.e.
, up to $4.5 million at June 30, 2008) to such persons
must be approved in advance by a disinterested majority of the Banks Board of Directors.
At June 30, 2008, the aggregate amount of loans by the Bank to executive officers and
directors was $5.3 million, representing 7.6% of stockholders equity. These loans were performing
according to their original terms at June 30, 2008. All loans made by the Bank to its directors
and executive officers and members of their immediate families were made in the ordinary course of
business, were made on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons not related to the
Bank, and did not involve more than the normal risk of collectibility or present other unfavorable
features.
13
Certain Business Relationships
The Company does not have a comprehensive written policy for the review, approval or
ratification of certain transactions with related persons. However, in accordance with banking
regulations, the Board of Directors reviews all loans made to a director or executive officer in an
amount that, when aggregated with the amount of all other loans to such person and his or her
related interests, exceed the greater of $25,000 or 5% of the Banks capital and surplus (up to a
maximum of $500,000) and such loan must be approved in advance by a majority of the disinterested
members of the Board of Directors. Additionally, pursuant to the Companys Audit Committee
Charter, it is the responsibility of the Companys Audit Committee to review all related party
transactions (
i.e.
, transactions required to be disclosed under SEC Regulation S-K, Item 404) for
potential conflict of interest situations on an ongoing basis and to determine whether to approve
such transactions. The Companys Code of Ethics also provides that all executive officers and
directors must disclose any private interest that presents the possibility of conflicts of interest
with the Company or the Bank.
Mr. Raymond J. Negrelli, a director of the Company, is a 50% owner of Bay Properties Co., an
Ohio general partnership. Bay Properties Co. is a 50% owner and general partner of Park View
Plaza, Ltd. (PVP), an Ohio limited partnership formed to develop and operate a 10,000 square foot
retail plaza located in Cleveland, Ohio. PVF Service Corporation, a wholly owned subsidiary of the
Company, is a 25% owner and limited partner of PVP. The Bank maintains a branch office in the
retail plaza owned and operated by PVP, and during the year ended June 30, 2008, the Bank paid a
total of $65,000 in rent and operating cost reimbursements to PVP. For the fiscal year ending
June 30, 2009, the Company estimates that it will pay a total of $65,000 in rent and operating cost
reimbursements to PVP. Bay Properties Co. is also a 50% owner of Park View Center, LLC (PVC), an
Ohio limited liability company formed to develop and operate an 8,200 square foot office building
located in Mayfield Heights, Ohio. The Bank is a tenant of the office building and leases a 3,000
square foot unit with an automated teller machine in the office building owned and operated by PVC.
During the year ended June 30, 2008, the Bank paid a total of $79,500 in rent and operating cost
reimbursement to PVC. For the fiscal year ending June 30, 2009, the Company estimates that it will
pay a total of $79,500 in rent and operating cost reimbursements to PVC. Bay Properties Co. is
also a 50% owner of Avon Limited, LLC, an Ohio limited liability company formed to develop and
operate a 3,375 square foot office building located in Avon, Ohio. The Bank is a tenant of the
office building and leases the office building owned and operated by Avon Limited, LLC. During the
year ended June 30, 2008, the Bank paid a total of $74,000 in rent and operating cost reimbursement
to Avon Limited, LLC. For the fiscal year ending June 30, 2009, the Company estimates that it will
pay a total of $74,000 in rent and operating cost reimbursements to Avon Limited, LLC.
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed the audited financial statements of the Company
with management and has discussed with Crowe Horwath LLP (Crowe Horwath), the Companys
independent registered public accounting firm, the matters required to be discussed under
Statements on Auditing Standards No. 61 (SAS 61). In addition, the Audit Committee has received
from Crowe Horwath the written disclosures and the letter required to be delivered by Crowe Horwath
under Independence Standards Board Standard No. 1 (ISB Standard No. 1) and has met with
representatives of Crowe Horwath to discuss the independence of the independent registered public
accounting firm.
The Audit Committee has reviewed the non-audit services currently provided by the Companys
independent registered public accounting firm and has considered whether the provision of such
services is compatible with maintaining the independence of the Companys independent registered
public accounting firm.
Based on the Audit Committees review of the financial statements, its discussion with Crowe
Horwath regarding SAS 61, and the written materials provided by Crowe Horwath under ISB Standard
No. 1 and the related discussion with Crowe Horwath of their independence, the Audit Committee has
recommended to the Board of
14
Directors that the audited financial statements of the Company be included in its Annual Report on
Form 10-K for the year ended June 30, 2008 for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF
PVF CAPITAL CORP.
Stuart D. Neidus
Robert K. Healey
Ronald D. Holman, II
PROPOSAL II RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has renewed the Companys arrangements with
Crowe Horwath LLP, independent public accountants, to be its independent registered public
accounting firm for the 2009 fiscal year, subject to ratification by the Companys stockholders. A
representative of Crowe Horwath LLP will be present at the Meeting to respond to stockholders
questions and will have the opportunity to make a statement if he or she so desires.
The appointment of the independent registered public accounting firm must be approved by a
majority of the votes cast by the stockholders of the Company at the Meeting. The Board of
Directors recommends that stockholders vote FOR the approval of the appointment of the
independent registered public accounting firm.
PROPOSAL III APPROVAL OF THE PVF CAPITAL CORP.
2008 EQUITY INCENTIVE PLAN
The Companys Board of Directors has adopted, subject to shareholder approval at the annual
meeting, the PVF Capital Corp. 2008 Equity Incentive Plan (the 2008 Plan). The 2008 Plan will
become effective as of the date of approval by the Companys shareholders.
The Board of Directors has reserved a total of 650,000 shares of common stock for issuance
upon the grant or exercise of awards made pursuant to the 2008 Plan. All of the Companys
employees, officers, and directors are eligible to participate in the 2008 Plan. A summary of the
2008 Plan follows. This summary is qualified in its entirety by the full text of the 2008 Plan,
which is attached to this proxy statement as
Appendix A
.
The approval of the 2008 Plan requires the affirmative vote of a majority of the votes cast by
the stockholders at the Meeting. The Board of Directors recommends that shareholders vote FOR
the approval of the PVF Capital Corp. 2008 Equity Incentive Plan.
Summary of the 2008 Plan
Purpose.
The 2008 Plan promotes the Companys success by linking the personal interests of
its employees, officers and directors to the interests of the Companys shareholders, and by
providing participants with an incentive for outstanding performance.
Permissible Awards.
The 2008 Plan authorizes awards in any of the following forms:
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options to purchase shares of Company common stock, which may be non-statutory stock
options or incentive stock options under Section 422 of the U.S. Internal Revenue Code
(the Code);
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restricted stock grants, which are subject to restrictions on transferability and
forfeiture; and
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stock appreciation rights.
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15
Shares Available for Awards.
Subject to adjustment as provided in the 2008 Plan, the
aggregate number of shares of common stock reserved and available for issuance pursuant to awards
granted under the 2008 Plan is 650,000.
Limitations on Awards.
The maximum number of shares of Company common stock that may be
covered by options granted under the 2008 Plan to any one person during any one calendar year is
100,000.
Administration.
A committee appointed by the Board of Directors (which committee shall
consist of at least two disinterested directors) (the Committee) will administer the 2008 Plan.
The Committee will designate participants; determine the type or types of awards to be granted to
each participant and the number, terms and conditions of awards; establish, adopt or revise any
rules and regulations as it may deem advisable to administer the 2008 Plan; and make all other
decisions and determinations that may be required under the 2008 Plan.
Limitations on Transfer; Beneficiaries.
Generally, participants may not assign or transfer
awards, other than by will or the laws of descent and distribution or, except in the case of an
incentive stock option, pursuant to a qualified domestic relations order. The Committee may permit
other transfers, however, where it concludes that a transfer will not result in accelerated
taxation, will not cause any option intended to be an incentive stock option to fail to qualify as
such, and that a transfer is otherwise appropriate and desirable, taking into account any factors
deemed relevant, including, without limitation, applicable state or federal tax or securities laws
or regulations. A participant may, in the manner determined by the Committee, designate a
beneficiary to exercise the rights of the participant and receive any distribution with respect to
any award upon the participants death.
Acceleration Upon Certain Events.
Unless an award agreement provides otherwise, if a
participants service terminates by reason of death or disability, all of the participants
outstanding options and restricted stock awards will become fully vested and exercisable and all
time-based vesting restrictions on the outstanding awards will lapse. The vesting of awards will
also accelerate upon a change in control of the Company, as defined in the 2008 Plan. All awards
will also vest and become immediately exercisable upon a change in control.
Adjustments.
In the event of a stock split, a dividend payable in shares of Company common
stock, or a combination or consolidation of the Companys common stock into a lesser number of
shares, the 2008 Plan provides for the automatic proportionate adjustment of the share
authorization limits, and the shares then subject to each award under the 2008 Plan, without any
change in the aggregate purchase price for each award. If the Company is involved in another
corporate transaction or event that affects its common stock, such as an extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination
or exchange of shares, the share authorization limits under the 2008 Plan will be adjusted
proportionately and the Committee will adjust the 2008 Plan and outstanding awards as necessary to
preserve the benefits or potential benefits of the awards.
New Plan Benefits.
No grants have been made with respect to the shares to be reserved for
issuance under the 2008 Plan. The number of shares that may be granted to any director, executive
officer named in the Summary Compensation Table above or any other employee is not determinable at
this time, as such grants are subject to the discretion of the Committee.
Termination and Amendment
The Board of Directors may, at any time and from time to time, terminate or amend the 2008
Plan. Shareholders must approve amendments to the 2008 Plan that will materially increase the
number of shares of stock issuable under the 2008 Plan, expand the types of awards provided under
the 2008 Plan, materially expand the class of participants eligible to participate in the 2008
Plan, materially extend the term of the 2008 Plan, or otherwise constitute a material amendment
requiring shareholder approval under applicable stock market or stock exchange listing
requirements, laws, policies or regulations. In addition, the Board of Directors may condition any
amendment on the approval of the shareholders for any other reason. No termination or amendment of
the 2008 Plan may adversely affect any award previously granted under the 2008 Plan without the
written consent of the participant.
The Committee may amend or terminate outstanding awards; however, such actions may require the
consent of the participant and, unless approved by the shareholders or otherwise permitted by the
anti-dilution
16
provisions of the 2008 Plan, the exercise price of an outstanding option may not be reduced,
directly or indirectly, and the original term of an option may not be extended.
Prohibition on Repricing
As discussed above under
Termination and Amendment,
outstanding stock options cannot be
repriced, directly or indirectly, without the prior consent of the Companys shareholders. The
exchange of an underwater option (
i.e.
, an option having an exercise price in excess of the
current market value of the underlying stock) for another award would be considered an indirect
repricing and would, therefore, require the prior consent of the Companys shareholders.
Certain Federal Income Tax Effects
Non-statutory Stock Options.
There will be no federal income tax consequences to the optionee
or to the Company upon the grant of a non-statutory stock option under the 2008 Plan. When the
optionee exercises a non-statutory option, however, he or she will recognize ordinary income equal
to the excess of the fair market value of the common stock received upon exercise of the option at
the time of exercise over the exercise price, and the Company will be allowed a corresponding
deduction, subject to any applicable limitations under Code Section 162(m). Any gain that the
optionee realizes when he or she later sells or disposes of the option shares will be short-term or
long-term capital gain, depending on how long the optionee held the shares.
Incentive Stock Options.
There typically will be no federal income tax consequences to the
optionee or to the Company upon the grant or exercise of an incentive stock option. If the
optionee holds the option shares for at least two years after the date the option was granted or
for one year after exercise, the difference between the exercise price and the amount realized upon
sale or disposition of the option shares will be long-term capital gain or loss, and the Company
will not be entitled to a federal income tax deduction. If the optionee disposes of the option
shares in a sale, exchange, or other disqualifying disposition before the required holding period
ends, he or she will recognize taxable ordinary income in an amount equal to the excess of the fair
market value of the option shares at the time of exercise over the exercise price, and the Company
will be allowed a federal income tax deduction equal to such amount. While the exercise of an
incentive stock option does not result in current taxable income, the excess of the fair market
value of the option shares at the time of exercise over the exercise price will be an item of
adjustment for purposes of determining the optionees alternative minimum taxable income.
Restricted Stock.
Unless a participant makes an election to accelerate recognition of income
to the date of grant as described below, a participant will not recognize income, and the Company
will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that
the award is subject to restrictions on transfer and is subject to a substantial risk of
forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to
the fair market value of the common stock as of that date (less any amount he or she paid for the
stock), and the Company will be allowed a corresponding federal income tax deduction at that time,
subject to any applicable limitations under Code Section 162(m). If the participant files an
election under Code Section 83(b) within 30 days after the date of grant of the restricted stock,
he or she will recognize ordinary income as of the date of grant equal to the fair market value of
the stock on that date (less any amount paid for the stock), and the Company will be allowed a
corresponding federal income tax deduction at that time, subject to any applicable limitations
under Code Section 162(m). Any future appreciation in the stock will be taxable to the participant
at capital gains rates. However, if the participant later forfeits the stock, the participant will
not be able to recover the tax previously paid pursuant to the Code Section 83(b) election.
Stock Appreciation Rights (SAR).
A participant recognizes no taxable income upon the grant of
an SAR. Upon the exercise of the SAR, the participant will recognize ordinary income in an amount
equal to the excess of the fair market value of the shares received over the grant price of such
shares under the SAR. The Company will be entitled to deduct for federal income tax purposes the
same amount as the ordinary income recognized by the participant at the time of the exercise.
17
FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Crowe Horwath LLP served as the Companys independent registered public accounting firm for
the 2008 and 2007 fiscal years. For the years ended June 30, 2008 and 2007, the fees billed to the
Company by Crowe Horwath LLP totaled $269,000 and $239,400, respectively. Such fees were comprised
of the following:
Audit Fees
During the fiscal years ended June 30, 2008 and 2007, the aggregate fees billed for
professional services rendered for the audit of the Companys annual financial statements and the
reviews of the financial statements included in the Companys Quarterly Reports on Form 10-Q filed
during the fiscal years ended June 30, 2008 and 2007 were $259,500 and $237,000, respectively.
Audit-Related Fees
The aggregate fees billed for audit-related services for the fiscal years ended June 30, 2008
and 2007 were $9,500 and $1,325, respectively. The fees for the year ended June 30, 2008 were for
the review of a Registration Statement on Form S-4. The fees for the year ended June 30, 2007 were
for consultation services in connection with SAB 108.
Tax Fees
No fees were billed to the Company by the Companys independent registered public accounting
firm for tax services for the fiscal years ended June 30, 2008 and 2007.
All Other Fees
The aggregate fees billed by the Companys independent registered public accounting firm for
services not included above were $1,077 and $1,075, respectively, for the fiscal years ended
June 30, 2008 and 2007. The fees for the fiscal years ended June 30, 2008 and 2007 were for
license renewal for an automated work papers internal auditing software application.
Pre-Approval of Services by the Independent Registered Public Accounting Firm
The Audit Committee does not have a policy for the pre-approval of non-audit services to be
provided by the Companys independent registered public accounting firm. Any such services would
be considered on a case-by-case basis. All non-audit services provided by the independent
registered public accounting firm in fiscal years 2008 and 2007 were pre-approved by the Audit
Committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to regulations promulgated under the Exchange Act, the Companys officers, directors
and persons who own more than 10% of the outstanding Common Stock (Reporting Persons) are
required to file reports detailing their ownership and changes of ownership in such Common Stock
(collectively, Reports), and to furnish the Company with copies of all such Reports. Based
solely on its review of the copies of such Reports or written representations that no such Reports
were necessary that the Company received during the past fiscal year or with respect to the last
fiscal year, management believes that during the fiscal year ended June 30, 2008, all of the
Reporting Persons complied with these reporting requirements.
18
OTHER MATTERS
The Board of Directors is not aware of any business to come before the Meeting other than
those matters described above in this Proxy Statement and matters incident to the conduct of the
Meeting. However, if any other matters should properly come before the Meeting, it is intended
that proxies in the accompanying form will be voted in respect thereof in accordance with the
determination of a majority of the Board of Directors.
MISCELLANEOUS
The cost of soliciting proxies will be borne by the Company. The Company will reimburse
brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by
them in sending proxy materials to the beneficial owners of Common Stock. In addition to
solicitations by mail, directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation. The Company has retained
Georgeson Shareholder, a proxy soliciting firm, to assist in the solicitation of proxies, for which
they will receive a fee of $10,000.
STOCKHOLDER PROPOSALS
Under the Companys Articles of Incorporation, stockholder proposals must be submitted in
writing to the Secretary of the Company at the address stated later in this paragraph no less than
thirty days nor more than sixty days prior to the date of such meeting; provided, however, that if
less than 40 days notice of the meeting is given to stockholders, such written notice shall be
delivered or mailed, as prescribed, to the Secretary of the Company not later than the close of
business on the tenth day following the day on which notice of the meeting was mailed to
stockholders. For consideration at the Annual Meeting, a stockholder proposal must be delivered or
mailed to the Companys Secretary no later than October 27, 2008. In order to be eligible for
inclusion in the Companys proxy materials for next years Annual Meeting of Stockholders, any
stockholder proposal to take action at such meeting must be received at the Companys executive
office at 30000 Aurora Road, Solon, Ohio 44139, no later than June 19, 2009. Any such proposal
shall be subject to the requirements of the proxy rules adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
Jeffrey N. Male
Secretary
Solon, Ohio
October 17, 2008
ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANYS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 2008 AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS
AS OF THE RECORD DATE UPON WRITTEN REQUEST TO: CORPORATE SECRETARY, PVF CAPITAL CORP., 30000 AURORA
ROAD, SOLON, OHIO 44139.
19
APPENDIX A
PVF CAPITAL CORP.
2008 EQUITY INCENTIVE PLAN
ARTICLE 1
PURPOSE
The purpose of the PVF Capital Corp. 2008 Equity Incentive Plan (the Plan) is to promote the
success, and enhance the value, of PVF Capital Corp. (the Company), by linking the personal
financial and economic interests of employees, officers and directors of the Company or any
Affiliate (as defined below) to those of Company shareholders and by providing such persons with an
incentive for outstanding performance. The Plan is further intended to provide flexibility to the
Company in its ability to motivate, attract and retain the services of employees, officers and
directors upon whose judgment, interest and special effort the successful conduct of the Companys
operation largely depends. Accordingly, the Plan permits the grant of equity incentive awards from
time to time to selected employees, officers and directors of the Company and its Affiliates.
ARTICLE 2
DEFINITIONS
When a word or phrase appears in this Plan with the initial letter capitalized, and the word
or phrase does not commence a sentence, the word or phrase shall generally be given the meaning
ascribed to it in this Article 2 unless the context clearly requires a different meaning. The
following words and phrases shall have the following meanings:
Affiliate
means an entity that directly or through one or more intermediaries controls, is
controlled by or is under common control with, the Company, as determined by the Committee.
Award
means any Option, Restricted Stock Award, Performance Award or SAR granted to a
Participant under the Plan.
Award Agreement
means a written document, in such form as the Committee prescribes from time
to time, setting forth the terms and conditions of an Award.
Board of Directors
means the Board of Directors of the Company.
Change in Control
means the occurrence of any one of the following events:
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(1)
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Merger
:
The Company merges into or consolidates with another
corporation, or merges another corporation into the Company, and, as a result, less
than a majority of the combined voting power of the resulting corporation immediately
after the merger or consolidation is held by persons who were stockholders of the
Company immediately before the merger or consolidation;
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(2)
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Acquisition of Significant Share Ownership
:
A report on Schedule 13D or
another form or schedule (other than Schedule 13G) is filed or is required to be filed
under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if the schedule
discloses that the filing person or persons acting in concert has or have become the
beneficial owner of 25% or more of a class of the Companys voting securities, but this
clause (2) shall not apply to beneficial ownership of Company voting shares held in a
fiduciary
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capacity by an entity of which the Company directly or indirectly beneficially owns
fifty percent (50%) or more of its outstanding voting securities;
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(3)
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Change in Board Composition
:
During any period of two consecutive
years, individuals who constitute the Companys Board of Directors at the beginning of
the two-year period cease for any reason to constitute at least a majority of the
Companys Board of Directors; provided, however, that for purposes of this clause (3),
each director who is first elected by the board (or first nominated by the board for
election by the stockholders) by a vote of at least two-thirds (?) of the directors who
were directors at the beginning of the two-year period shall be deemed to have also
been a director at the beginning of such period; or
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(4)
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Sale of Assets
:
The Company sells to a third party all or substantially all of
its assets.
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Change in Control Price
means the highest price per share of Shares offered in conjunction
with any transaction resulting in a Change in Control (as determined in good faith by the Committee
if any part of the offered price is payable other than in cash) or, in the case of a Change in
Control occurring solely by reason of a change in the composition of the Board of Directors, the
highest Fair Market Value of the Shares on any of the thirty (30) trading days immediately
preceding the date on which a Change in Control occurs.
Code
means the Internal Revenue Code of 1986, as amended from time to time.
Committee
means the committee of the Board of Directors described in Article 4 of the Plan.
Company
means PVF Capital Corp., or any successor corporation.
Continuous Status as a Participant
means the absence of any interruption or termination of
service as an employee, officer or director of the Company or any Affiliate, as applicable.
Continuous service shall not be considered interrupted in the case of sick leave, military leave or
any other absence approved by the Company or an Affiliate, in the case of transfers between payroll
locations or between the Company, an Affiliate or a successor, or performance of services in an
emeritus advisory or consulting capacity, provided, however, that for purposes of an Incentive
Stock Option, Continuous Status as a Participant means the absence of any interruption or
termination of service as an employee of the Company or any Affiliate, as applicable.
Covered Employee
means a covered employee as defined in Section 162(m)(3) of the Code.
Disability
shall mean any illness or other physical or mental condition of a Participant that
renders the Participant incapable of performing his or her customary and usual duties for the
Company or an Affiliate, or any medically determinable illness or other physical or mental
condition resulting from a bodily injury, disease or mental disorder which, in the judgment of the
Committee, is permanent and continuous in nature. The Committee may require such medical or other
evidence as it deems necessary to judge the nature and permanency of the Participants condition.
Notwithstanding the above, with respect to an Incentive Stock Option, Disability shall mean
Permanent and Total Disability as defined in Section 22(e)(3) of the Code.
Effective Date
has the meaning assigned such term in Section 3.1 of the Plan.
Eligible Participant
means an employee, officer or director of the Company or any Affiliate.
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Exchange
means any national securities exchange on which the Stock may from time to time be
listed or traded.
Fair Market Value
on any date, means (i) if the Stock is listed on an Exchange, the closing
sales price on such exchange or over such system on such date or, in the absence of reported sales
on such date, the closing sales price on the immediately preceding date on which sales were
reported, or (ii) if the Stock is not listed on a securities exchange, Fair Market Value shall mean
a price determined by the Committee in good faith on the basis of objective criteria.
Grant Date
means the date an Award is made by the Committee.
Incentive Stock Option
means an Option that is intended to be an incentive stock option and
meets the requirements of Section 422 of the Code or any successor provision thereto.
Non-Employee Director
means a director of the Company or an Affiliate who is not a common law
employee of the Company or an Affiliate.
Nonstatutory Stock Option
means an Option that is not an Incentive Stock Option.
Option
means a right granted to a Participant under Article 7 of the Plan to purchase Stock at
a specified price during specified time periods. An Option may be either an Incentive Stock Option
or a Nonstatutory Stock Option.
Parent or Subsidiary
means a parent or subsidiary as such terms are defined in Sections
424(e) and (f) of the Code.
Participant
means a person who, as an employee, officer or director of the Company or any
Affiliate, has been granted an Award under the Plan; provided, however, that in the case of the
death of a Participant, the term Participant refers to a beneficiary designated pursuant to
Article 9.4 of the Plan or the legal guardian or other legal representative acting in a fiduciary
capacity on behalf of the Participant under applicable state law and court supervision.
Plan
means the PVF Capital Corp. 2008 Equity Incentive Plan, as amended from time to time.
Restricted Stock Award
means Stock granted to a Participant under Article 8 of the Plan that
is subject to certain restrictions and to risk of forfeiture.
Shares
means shares of the Companys Stock. If there has been an adjustment or substitution
pursuant to Article 10 of the Plan, the term Shares shall also include any shares of stock or
other securities that are substituted for Shares or into which Shares are adjusted pursuant to
Article 10 of the Plan.
Stock
means the common stock of the Company, par value $0.01, and such other securities of the
Company as may be substituted for Stock pursuant to Article 10 of the Plan.
Stock Appreciation Right or SAR
means a right granted to a Participant under Article 8 to
receive a payment equal to the difference between the Fair Market Value of a share of Stock as of
the date of exercise of the SAR over the grant price of the SAR, as determined pursuant to Article
8.
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1933 Act
means the Securities Act of 1933, as amended from time to time.
1934 Act
means the Securities Exchange Act of 1934, as amended from time to time.
ARTICLE 3
EFFECTIVE TERM OF PLAN
3.1 EFFECTIVE DATE.
The Plan shall be effective as of the date it is approved by the
shareholders of the Company (the Effective Date).
3.2 TERMINATION OF PLAN.
The Plan shall terminate on the tenth anniversary of the Effective
Date. The termination of the Plan on such date shall not affect the validity of any Award
outstanding on the date of termination.
ARTICLE 4
ADMINISTRATION
4.1 COMMITTEE.
The Plan shall be administered by a Committee appointed by the Board of
Directors (which Committee shall consist of at least two disinterested directors) or, at the
discretion of the Board of Directors from time to time, the Plan may be administered by the Board
of Directors. It is intended that at least two of the directors appointed to serve on the Committee
shall be non-employee directors (within the meaning of Rule 16b-3 promulgated under the 1934 Act)
and outside directors (within the meaning of Code Section 162(m)(4)(c) and the regulations
thereunder) and that any such members of the Committee who do not so qualify shall abstain from
participating in any decision to make or administer Awards that are made to Eligible Participants
who, at the time of consideration for such Award, (i) are persons subject to the short-swing profit
rules of Section 16 of the 1934 Act, or (ii) are reasonably anticipated to become Covered Employees
during the term of the Award. However, the mere fact that a Committee member shall fail to qualify
under either of the foregoing requirements or shall fail to abstain from such action shall not
invalidate any Award made by the Committee which Award is otherwise validly made under the Plan.
The members of the Committee shall be appointed by, and may be changed at any time and from time to
time in the discretion of, the Board of Directors. The Board of Directors may reserve for itself
any or all of the authority and responsibility of the Committee under the Plan or may act as
administrator of the Plan for any and all purposes. To the extent the Board of Directors has
reserved any authority and responsibility or during any time that the Board of Directors is acting
as administrator of the Plan, it shall have all the powers of the Committee hereunder, and any
reference herein to the Committee (other than in this Section 4.1) shall include the Board of
Directors. To the extent any action of the Board of Directors under the Plan conflicts with actions
taken by the Committee, the actions of the Board of Directors shall control.
4.2 ACTION AND INTERPRETATIONS BY THE COMMITTEE.
For purposes of administering the Plan, the
Committee may from time to time adopt rules, regulations, guidelines and procedures for carrying
out the provisions and purposes of the Plan and make such other determinations, not inconsistent
with the Plan, as the Committee may deem appropriate. The Committees interpretation of the Plan,
any Awards granted under the Plan, any Award Agreement and all decisions and determinations by the
Committee with respect to the Plan are final, binding, and conclusive on all parties. Each member
of the Committee is entitled, in good faith, to rely or act upon any report or other information
furnished to that member by any officer or other employee of the Company or any Affiliate, the
Companys or an Affiliates independent certified public accountants, Company counsel or any
executive compensation consultant or other professional retained by the Company to assist in the
administration of the Plan.
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4.3 AUTHORITY OF COMMITTEE.
Except as provided below, the Committee has the exclusive power,
authority and discretion to:
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(a)
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Grant Awards;
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(b)
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Designate Participants;
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(c)
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Determine the type or types of Awards to be granted to each Participant;
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(d)
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Determine the number of Awards to be granted and the number of Shares to which
an Award will relate;
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(e)
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Determine the terms and conditions of any Award granted under the Plan,
including, but not limited to, the exercise price, any restrictions or limitations on
the Award, any schedule for lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers thereof, based in each case on
such considerations as the Committee in its sole discretion determines;
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(f)
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Accelerate the vesting, exercisability or lapse of restrictions of any
outstanding Award in accordance with Articles 9 and 10 of the Plan, based in each case
on such considerations as the Committee in its sole discretion determines;
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(g)
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Prescribe the form of each Award Agreement, which need not be identical for
each Participant;
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(h)
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Decide all other matters that must be determined in connection with an Award;
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(i)
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Establish, adopt or revise any rules, regulations, guidelines or procedures as
it may deem necessary or advisable to administer the Plan;
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(j)
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Make all other decisions and determinations that may be required under the Plan
or as the Committee deems necessary or advisable to administer the Plan; and
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(k)
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Amend the Plan or any Award Agreement as provided herein.
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Notwithstanding the above, the Board of Directors or the Committee may also delegate, to the
extent permitted by applicable law, to one or more officers of the Company, the Committees
authority under subsections (a) through (h) above, pursuant to a resolution that specifies the
total number of Awards that may be granted under the delegation, provided that no officer may be
delegated the power to designate himself or herself as a recipient of such Awards; and provided
further that no delegation of its duties and responsibilities may be made to officers of the
Company with respect to Awards to Eligible Participants who as of the Grant Date are persons
subject to the short-swing profit rules of Section 16 of the 1934 Act, or who as of the Grant Date
are reasonably anticipated to become Covered Employees during the term of the Award. The acts of
such delegates shall be treated hereunder as acts of the Committee and such delegates shall report
to the Committee regarding the delegated duties and responsibilities.
4.4 AWARD AGREEMENTS.
Each Award shall be evidenced by an Award Agreement. Each Award
Agreement shall include such provisions, not inconsistent with the Plan, as may be specified by the
Committee.
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ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1 NUMBER OF SHARES.
Subject to adjustment as provided in Article 10 of the Plan, the
aggregate number of Shares reserved and available for issuance pursuant to Awards granted under the
Plan shall be 650,000.
5.2 SHARE COUNTING.
To the extent that an Award is canceled, terminates, expires, is
forfeited or lapses for any reason, any unissued Shares subject to the Award will again be
available for issuance pursuant to Awards granted under the Plan.
5.3 STOCK DISTRIBUTED.
Any Stock distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.
ARTICLE 6
ELIGIBILITY
Awards may be granted only to Eligible Participants; except that Incentive Stock Options may
be granted only to Eligible Participants who are employees of the Company or a Parent or Subsidiary
of the Company.
ARTICLE 7
STOCK OPTIONS
7.1 GENERAL.
The Committee is authorized to grant Options to Participants on the following
terms and conditions:
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(a)
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Exercise Price.
The exercise price of an Option shall not be less than the Fair
Market Value as of the Grant Date.
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(b)
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Time and Conditions of Exercise.
The Committee shall determine the time or
times at which an Option may be exercised in whole or in part, subject to Section
7.1(d) of the Plan. The Committee shall also determine the conditions, if any, that
must be satisfied before all or part of an Option may be exercised or vested. The
Committee may waive any exercise or vesting provisions at any time in whole or in part
based upon factors as the Committee may determine in its sole discretion so that the
Option becomes exercisable or vested at an earlier date.
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(c)
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Payment.
The Committee shall determine the methods by which the exercise price
of an Option may be paid, the form of payment, including, without limitation, cash,
Shares, or other property (including cashless exercise arrangements), and the methods
by which Shares shall be delivered or deemed to be delivered to Participants.
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(d)
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Exercise Term.
In no event may any Option be exercisable for more than ten (10)
years from the Grant Date.
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7.2 INCENTIVE STOCK OPTIONS.
The terms of any Incentive Stock Options granted under the Plan
must comply with the following additional rules:
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(a)
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Lapse of Option.
Subject to any earlier termination provision contained in the
Award Agreement, an Incentive Stock Option shall lapse upon the earliest of the
following
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circumstances; provided, however, that the Committee may, prior to the lapse of the
Incentive Stock Option under the circumstances described in subsections (3), (4) or
(5) below, provide in writing that the Option will extend until a later date, but if
an Option is so extended and is exercised after the dates specified in subsections
(3) and (4) below, it will automatically become a Nonstatutory Stock Option:
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(1)
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The expiration date set forth in the Award Agreement.
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(2)
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The tenth anniversary of the Grant Date.
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(3)
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Three (3) months after termination of the Participants
Continuous Status as a Participant for any reason other than the Participants
Disability or death.
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(4)
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One (1) year after the Participants Continuous Status as a
Participant by reason of the Participants Disability.
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(5)
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One (1) year after the termination of the Participants death
if the Participant dies while employed, or during the three-month period
described in paragraph (3) or during the one-year period described in paragraph
(4), but before the Option otherwise lapses.
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Unless the exercisability of the Incentive Stock Option is accelerated as provided
in Articles 9 or 10 of the Plan, if a Participant exercises an Option after
termination of employment, the Option may be exercised only with respect to the
Shares that were otherwise vested on the Participants termination of employment.
Upon the Participants death, any exercisable Incentive Stock Options may be
exercised by the Participants beneficiary, determined in accordance with Section
9.4 of the Plan.
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(b)
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Individual Dollar Limitation.
The aggregate Fair Market Value (determined as of
the Grant Date) of all Shares with respect to which Incentive Stock Options are first
exercisable by a Participant in any calendar year may not exceed $100,000.00 (or any
higher value as may be permitted under Section 422 of the Code).
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(c)
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Ten Percent Owners.
No Incentive Stock Option shall be granted to any
individual who, at the Grant Date, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any Parent or
Subsidiary unless the exercise price per share of such Option is at least one hundred
and ten percent (110%) of the Fair Market Value per Share at the Grant Date and the
Option expires no later than five (5) years after the Grant Date.
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(d)
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Expiration of Authority to Grant Incentive Stock Options.
No Incentive Stock
Option may be granted pursuant to the Plan after the day immediately prior to the tenth
anniversary of the date the Plan was approved by shareholders, or the termination of
the Plan, if earlier.
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(e)
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Right to Exercise.
During a Participants lifetime, an Incentive Stock Option
may be exercised only by the Participant or, in the case of the Participants
Disability, by the Participants guardian or legal representative.
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(f)
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Eligible Grantees.
The Committee may not grant an Incentive Stock Option to a
person who is not at the Grant Date an employee of the Company or of an Affiliate.
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(g)
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Limitations of Option Grants for
Section 162(m)
of the Code.
The Committee may
not grant more than 100,000 Options to any individual in any single calendar year.
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ARTICLE 8
RESTRICTED STOCK/PERFORMANCE AWARDS/SARS
8.1 GRANT OF RESTRICTED STOCK.
The Committee is authorized to make Awards of Restricted Stock
to Participants in such amounts and subject to such terms and conditions as may be selected by the
Committee.
8.2 ISSUANCE AND RESTRICTIONS.
Restricted Stock shall be subject to such restrictions on
transferability and other restrictions as the Committee may impose (including, without limitation,
limitations on the right to vote Restricted Stock or the right to receive dividends on the
Restricted Stock). These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance goals or otherwise,
as the Committee determines at the time of the grant of the Award or thereafter. Except as
otherwise provided in an Award Agreement, the Participant shall have all of the rights of a
shareholder with respect to the Restricted Stock.
8.3 FORFEITURE.
Except as otherwise determined by the Committee at the time of the grant of
the Award or thereafter, upon termination of Continuous Status as a Participant during the
applicable restriction period, Restricted Stock that is at that time subject to restrictions shall
be forfeited; provided, however, that the Committee may provide in any Award Agreement that
restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in
part in the event of terminations resulting from death or disability or in connection with a Change
in Control, and the Committee may in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock.
8.4 DELIVERY OF RESTRICTED STOCK.
Unless otherwise held in a trust and registered in the name
of the trustee, reasonably promptly after the Grant Date with respect to shares of Restricted
Stock, the Company shall cause to be issued a stock certificate, registered in the name of the
Participant to whom the Restricted Stock was granted, evidencing such shares. Each such stock
certificate shall bear the following legend:
The transferability of this certificate and the shares of stock represented
hereby are subject to the restrictions, terms and conditions (including
forfeiture provisions and restrictions against transfer) contained in the
PVF Capital Corp. 2008 Equity Incentive Plan and in the Award Agreement
entered into between the registered owner of such shares and PVF Capital
Corp. or its Affiliates. A copy of the Plan and the Award Agreement is on
file in the office of the Corporate Secretary of PVF Capital Corp.
Such legend shall not be removed until the Participant vests in such shares pursuant to the
terms of the Plan and the Award Agreement. Each certificate issued pursuant to this Section 8.4,
in connection with a Restricted Stock Award, shall be held by the Company or its Affiliates, unless
the Committee determines otherwise.
8.5 VOTING RIGHTS.
Unless otherwise determined by the Committee at the time of grant, a
Participant holding Restricted Stock shall be entitled to exercise full voting rights with respect
to those Shares during the restriction period.
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8.6 DIVIDENDS AND OTHER DISTRIBUTIONS.
During the restriction period, a Participant holding
Restricted Stock may, if the Committee so determines, be credited with dividends paid with respect
to the underlying Shares. Such dividends shall be paid to the Participant at times determined by
the Committee in its sole discretion. The Committee may apply any restrictions to the dividends
that the Committee deems appropriate.
8.7 PERFORMANCE AWARDS.
Subject to the limitations of this Plan, the Committee may, in its
discretion, grant performance awards to eligible individuals upon such terms and conditions and at
such times as the Committee shall determine. Performance awards may be in the form of performance
shares. An award of a performance share is a grant of a right to receive shares of Common Stock
which is contingent upon the achievement of performance or other objectives during a specified
period and which has a value on the date of grant equal to the fair market value of a share of
Common Stock.
Subject to the terms of this Plan and the requirements of Section 409A of the Code, the
Committee has the authority to determine the nature, length and starting date of the period during
which a Participant may earn a performance award and will determine the conditions that must be met
in order for a performance award to be granted or to vest or be earned. These conditions may
include specific performance objectives, continued service or employment for a certain period of
time, or a combination of such conditions. Performance awards granted under the Plan may be based
on one or more of the following business criteria: basic earnings per common share, basic cash
earnings per common share, diluted earnings per common share, diluted cash earnings per common
share, net income, cash earnings, net interest income, non-interest income, general and
administrative expense to average assets ratio, cash general and administrative expense to average
assets ratio, efficiency ratio, cash efficiency ratio, return on average assets, cash return on
average assets, return on average stockholders equity, cash return on average stockholders
equity, return on average tangible stockholders equity, cash return on average tangible
stockholders equity, core earnings, operating income, operating efficiency ratio, net interest
rate spread, loan production volume, non-performing loans, cash flow, strategic business
objectives, consisting of one or more objectives based upon meeting specified cost targets,
business expansion goals, and goals relating to acquisitions or divestitures, or goals relating to
capital raising and capital management, or any combination of the foregoing. Each goal may be
expressed on an absolute and/or relative basis, may be based on or otherwise employ comparisons
based on internal targets, past performance of the Company or any subsidiary, operating unit or
division of the Company and/or the past or current performance of other companies, and in the case
of earnings-based measures, may use or employ comparisons relating to capital, shareholders equity
and/or shares of common stock outstanding, or to assets or net assets.
No later than 90 days following the commencement of a performance period (or such other time
as may be required by Section 162(m) of the Code), the Committee shall, in writing (i) select the
performance goal or goals applicable to the performance period, (ii) establish the various targets
and bonus amounts which may be earned for such performance period, and (iii) specify the
relationship between the performance goals and targets and the amounts to be earned by each
participant for the performance period.
8.8 GRANT OF SARS.
The Committee is authorized to grant SARs to Participants on the following
terms and conditions:
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(a)
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Right to Payment.
Upon the exercise of a Stock Appreciation Right, the
Participant to whom it is granted has the right to receive the excess, if any, of:
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(1)
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The Fair Market Value of a share of Stock on the date of
exercise; over
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(2)
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The grant price of the Stock Appreciation Right as determined
by the Committee, which shall not be less than the Fair Market Value of a share
of Stock on the date of grant in the case of any SAR related to any Incentive
Stock Option
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(b)
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Other Terms.
All such Awards shall be evidenced by an Award Agreement. The
terms, methods of exercise, methods of settlement, form of consideration payable in
settlement, and any other terms and conditions of any Stock Appreciation Right shall be
determined by the Committee at the time of the grant of the Award and shall be
reflected in the Award Agreement.
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ARTICLE 9
GENERAL PROVISIONS APPLICABLE TO AWARDS
9.1 STAND-ALONE AND TANDEM AWARDS.
Awards granted under the Plan may, in the sole discretion
of the Committee, be granted either alone or in addition to or, in tandem with, any other Award
granted under the Plan.
9.2 TERM OF AWARD.
The term of each Award shall be for the period as determined by the
Committee, provided that in no event shall the term of any Incentive Stock Option exceed a period
of ten (10) years from its Grant Date (or, if Section 7.2(c) applies, five (5) years from its Grant
Date).
9.3 LIMITS ON TRANSFER.
No right or interest of a Participant in any unexercised or restricted
Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the
Company or an Affiliate, or shall be subject to any lien, obligation, or liability of such
Participant to any other party other than the Company or an Affiliate. No unexercised or restricted
Award shall be assignable or transferable by a Participant other than by will or the laws of
descent and distribution or, except in the case of an Incentive Stock Option, pursuant to a
domestic relations order that would satisfy Section 414(p)(1)(A) of the Code if that Code section
applied to an Award under the Plan; provided, however, that the Committee may (but need not) permit
other transfers where the Committee concludes that such transferability (i) does not result in
accelerated taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to
fail to be an option described in Code Section 422(b), and (iii) is otherwise appropriate and
desirable, taking into account any factors deemed relevant, including without limitation, state or
federal tax or securities laws applicable to transferable Awards.
9.4 BENEFICIARIES.
Notwithstanding Section 9.3 of the Plan, a Participant may, in the manner
determined by the Committee, designate a beneficiary to exercise the rights of the Participant and
to receive any distribution with respect to any Award upon the Participants death. A beneficiary,
legal guardian, legal representative, or other person claiming any rights under the Plan is subject
to all terms and conditions of the Plan and any Award Agreement applicable to the Participant,
except to the extent the Plan and the Award Agreement otherwise provide, and to any additional
restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been
designated or survives the Participant, payment shall be made to the Participants estate. Subject
to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time
provided the change or revocation is filed with the Committee.
9.5 STOCK CERTIFICATES.
All Stock issuable under the Plan is subject to any stop-transfer
orders and other restrictions as the Committee deems necessary or advisable to comply with federal
or state securities laws, rules and regulations and the rules of any national securities exchange
or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may
place
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legends on any Stock certificate or issue instructions to the transfer agent to reference
restrictions applicable to the Stock.
9.6 ACCELERATION UPON DEATH OR DISABILITY.
Except as otherwise provided in the Award
Agreement, upon the Participants death or Disability during his or her Continuous Status as a
Participant, all of such Participants outstanding Options and other Awards in the nature of rights
that may be exercised shall become fully exercisable and all time-based vesting restrictions on the
Participants outstanding Awards shall lapse. Any Awards shall thereafter continue or lapse in
accordance with the other provisions of the Plan and the Award Agreement. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section
7.2(b) of the Plan, the excess Options shall be deemed to be Nonstatutory Stock Options.
9.7 TERMINATION OF EMPLOYMENT.
Whether military, government or other service or other leave of
absence shall constitute a termination of employment shall be determined in each case by the
Committee at its discretion and in accordance with the terms of the Plan, and any determination by
the Committee shall be final and conclusive. A Participants Continuous Status as a Participant
shall not be deemed to terminate in a circumstance in which a Participant transfers from the
Company to an Affiliate, transfers from an Affiliate to the Company, or transfers from one
Affiliate to another Affiliate. To the extent that this provision causes Incentive Stock Options to
extend beyond three months from the date a Participant is deemed to be an employee of the Company,
a Parent or Subsidiary for purposes of Sections 424(e) and 424(f) of the Code, the Options held by
such Participant shall be deemed to be Nonstatutory Stock Options.
ARTICLE 10
CHANGE IN CAPITAL STRUCTURE; CHANGE IN CONTROL
10.1 CHANGES IN CAPITAL STRUCTURE.
In the event of a corporate event or transaction involving
the Company (including, without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, merger, consolidation, split-up, spin-off, combination or exchange of
shares), the authorization limits under Article 5 shall be adjusted proportionately, and the
Committee shall adjust the Plan and Awards to preserve the benefits or potential benefits of the
Awards. Action by the Committee may include: (i) adjustment of the number and kind of shares which
may be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to
outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards or the measure to
be used to determine the amount of the benefit payable on an Award; and (iv) any other adjustments
that the Committee determines to be equitable. Without limiting the foregoing, in the event of a
subdivision of the outstanding stock (stock-split), a declaration of a dividend payable in Shares,
or a combination or consolidation of the outstanding stock unto a lesser number of Shares, the
authorization limits under Article 5 shall automatically be adjusted proportionately, and the
Shares then subject to each Award shall automatically be adjusted proportionately without any
change in the aggregate purchase price therefor.
10.2 ACCELERATED VESTING AND PAYMENT.
Subject to the provisions of Section 10.3 of the Plan or
as otherwise provided in the Award Agreement, in the event of a Change in Control, unless otherwise
specifically prohibited under law or by the rules and regulations of an Exchange:
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(a)
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Any and all Options granted hereunder shall become immediately exercisable;
additionally, if a Participants employment or service is involuntarily terminated or
constructively terminated for any reason except cause within twelve (12) months of such
Change in Control, the Participant shall have until the expiration of the term of the
Option to exercise such Options;
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(b)
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Any time-based and other restrictions imposed on Restricted Stock shall lapse;
and
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(c)
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The Committee shall have the ability to unilaterally determine that all
outstanding Awards are cancelled upon a Change in Control, and the value of such
Awards, as determined by the Committee in accordance with the terms of the Plan and the
Award Agreement, be paid out in cash in an amount based on the Change in Control Price
within a reasonable time subsequent to the Change in Control.
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10.3 ALTERNATIVE AWARDS.
Notwithstanding Section 10.2 of the Plan, no cash settlement or other
payment shall occur with respect to any Award if the Committee reasonably determines in good faith
prior to the occurrence of a Change in Control that such Award shall be honored or assumed, or new
rights substituted therefor (such honored, assumed or substituted Award hereinafter called an
Alternative Award) by any successor as described in Section 12.16 of the Plan; provided, however,
that any such Alternative Award must:
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(a)
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Be based on stock which is traded on an established U.S. securities market, or
that the Committee reasonably believes will be so traded within sixty (60) days after
the Change in Control;
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(b)
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Provide such Participant with rights and entitlements substantially equivalent
to or better than the rights, terms and conditions applicable under such Award;
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(c)
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Have substantially equivalent economic value to such Award (determined at the
time of the Change in Control); and
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(d)
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Have terms and conditions which provide that, in the event the Participants
employment is involuntarily terminated or constructively terminated, any conditions on
a Participants rights under, or any restrictions on transfer or exercisability
applicable to, each such Alternative Award shall be waived or shall lapse, as the case
may be.
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ARTICLE 11
AMENDMENT, MODIFICATION AND TERMINATION
11.1 AMENDMENT, MODIFICATION AND TERMINATION.
The Board of Directors or the Committee may, at
any time and from time to time, amend, modify or terminate the Plan without shareholder approval;
provided, however, that if an amendment to the Plan would, in the reasonable opinion of the Board
of Directors or the Committee, either (i) materially increase the number of Shares available under
the Plan, (ii) expand the types of awards under the Plan, (iii) materially expand the class of
participants eligible to participate in the Plan, (iv) materially extend the term of the Plan, or
(v) otherwise constitute a material change requiring shareholder approval under applicable laws,
policies or regulations or the applicable listing or other requirements of an Exchange, then such
amendment shall be subject to shareholder approval; and provided, further, that the Board of
Directors or Committee may condition any other amendment or modification on the approval of
shareholders of the Company for any reason, including by reason of such approval being necessary or
deemed advisable to (i) permit Awards made hereunder to be exempt from liability under Section
16(b) of the 1934 Act, (ii) comply with the listing or other requirements of an exchange, or (iii)
satisfy any other tax, securities or other applicable laws, policies or regulations.
11.2 AWARDS PREVIOUSLY GRANTED.
At any time and from time to time, the Committee may amend,
modify or terminate any outstanding Award without approval of the Participant; provided, however:
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(a)
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Subject to the terms of the applicable Award Agreement, such amendment,
modification or termination shall not, without the Participants consent, reduce or
diminish the value of such Award determined as if the Award had been exercised, vested,
or otherwise settled on the date of such amendment or termination (with the per-share
value of an Option for this purpose being calculated as the excess, if any, of the Fair
Market Value as of the date of such amendment or termination over the exercise price of
such Award);
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(b)
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The original term of an Option may not be extended without the prior approval
of the shareholders of the Company;
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(c)
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Except as otherwise provided in Article 10 of the Plan, the exercise price of
an Option may not be reduced, directly or indirectly, without the prior approval of the
shareholders of the Company; and
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(d)
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No termination, amendment, or modification of the Plan shall adversely affect
any Award previously granted under the Plan, without the written consent of the
Participant affected thereby. An outstanding Award shall not be deemed to be adversely
affected by a Plan amendment if such amendment would not reduce or diminish the value
of such Award determined as if the Award had been exercised, vested, or otherwise
settled on the date of such amendment (with the per-share value of an Option for this
purpose being calculated as the excess, if any, of the Fair Market Value as of the date
of such amendment over the exercise or base price of such Award).
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ARTICLE 12
GENERAL PROVISIONS
12.1 NO RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS.
No Participant or any Eligible
Participant shall have any claim to be granted any Award under the Plan. Neither the Company, its
Affiliates nor the Committee is obligated to treat Participants or Eligible Participants uniformly,
and determinations made under the Plan may be made by the Committee selectively among Eligible
Participants who receive, or are eligible to receive, Awards (whether or not such Eligible
Participants are similarly situated).
12.2 NO SHAREHOLDER RIGHTS.
Except as otherwise provided in this Plan or in an Award
Agreement, no Award gives a Participant any of the rights of a shareholder of the Company unless
and until Shares are in fact issued to such person in connection with such Award.
12.3 WITHHOLDING.
The Company or any Affiliate shall have the authority and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes (including the Participants FICA obligation) required by
law to be withheld with respect to any exercise, lapse of restriction or other taxable event
arising as a result of the Plan. If Shares are surrendered to the Company to satisfy withholding
obligations in excess of the minimum withholding obligation, such Shares must have been held by the
Participant as fully vested shares for such period of time, if any, as necessary to avoid variable
accounting for the Option. With respect to withholding required upon any taxable event under the
Plan, the Committee may, at the time the Award is granted or thereafter, require or permit that any
such withholding requirement be satisfied, in whole or in part, by withholding from the Award
Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not
any greater amount) required to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes.
A-13
12.4 NO RIGHT TO CONTINUED SERVICE.
Nothing in the Plan, in any Award Agreement or in any
other document or statement made with respect to the Plan, shall interfere with or limit in any way
the right of the Company or any Affiliate to terminate any Participants employment or status as an
officer, director or consultant at any time, nor confer upon any Participant any right to continue
as an employee, officer, director or consultant of the Company or any Affiliate, whether for the
duration of a Participants Award or otherwise.
12.5 UNFUNDED STATUS OF AWARDS.
The Plan is intended to be an unfunded plan for incentive
and deferred compensation. With respect to any payments not yet made to a Participant pursuant to
an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any
rights that are greater than those of a general creditor of the Company or any Affiliate. The Plan
is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended
(ERISA).
12.6 RELATIONSHIP TO OTHER BENEFITS.
No payment under the Plan shall be taken into account in
determining any benefits under any pension, retirement, savings, profit sharing, group insurance,
welfare or benefit plan of the Company or any Affiliate unless provided otherwise in such other
plan.
12.7 EXPENSES.
The expenses of administering the Plan shall be borne by the Company and its
Affiliates.
12.8 TITLES AND HEADINGS.
The titles and headings of the Sections in the Plan are for
convenience of reference only, and in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.
12.9 GENDER AND NUMBER.
Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine; the plural shall include the singular and the singular
shall include the plural.
12.10 FRACTIONAL SHARES.
No fractional Shares shall be issued and the Committee shall
determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether
such fractional Shares shall be eliminated by rounding up or down.
12.11 GOVERNMENT AND OTHER REGULATIONS.
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(a)
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Notwithstanding any other provision of the Plan, no Participant who acquires
Shares pursuant to the Plan may, during any period of time that such Participant is an
affiliate of the Company (within the meaning of the rules and regulations of the
Securities and Exchange Commission under the 1933 Act), sell such Shares, unless such
offer and sale is made (i) pursuant to an effective registration statement under the
1933 Act, which is current and includes the Shares to be sold, or (ii) pursuant to an
appropriate exemption from the registration requirement of the 1933 Act, such as that
set forth in Rule 144 promulgated under the 1933 Act.
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(b)
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Notwithstanding any other provision of the Plan, if at any time the Committee
shall determine that the registration, listing or qualification of the Shares covered
by an Award upon any Exchange or under any federal, state or local law or practice, or
the consent or approval of any governmental regulatory body, is necessary or desirable
as a condition of, or in connection with, the granting of such Award or the purchase or
receipt of Shares thereunder, no Shares may be purchased, delivered or received
pursuant to such Award unless and until such registration, listing, qualification,
consent or approval shall have
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been effected or obtained free of any condition not acceptable to the Committee. Any
Participant receiving or purchasing Shares pursuant to an Award shall make such
representations and agreements and furnish such information as the Committee may
request to assure compliance with the foregoing or any other applicable legal
requirements. The Company shall not be required to issue or deliver any certificate
or certificates for Shares under the Plan prior to the Committees determination
that all related requirements have been fulfilled. The Company shall in no event be
obligated to register any securities pursuant to the 1933 Act or applicable state
law or to take any other action in order to cause the issuance and delivery of such
certificates to comply with any such law, regulation or requirement.
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12.12 GOVERNING LAW.
To the extent not governed by federal law, the Plan and all Award
Agreements shall be construed in accordance with and governed by the laws of Ohio.
12.13 ADDITIONAL PROVISIONS.
Each Award Agreement may contain such other terms and conditions
as the Committee may determine; provided, however, that such other terms and conditions are not
inconsistent with the provisions of the Plan.
12.14 INDEMNIFICATION.
To the extent allowable under applicable law, each member of the
Committee shall be indemnified and held harmless by the Company from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which such member may be a party or in
which he or she may be involved by reason of any action or failure to act under the Plan and
against and from any and all amounts paid by such member in satisfaction of judgment in such
action, suit, or proceeding against him or her provided he or she gives the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes to handle and defend
it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the Companys Charter
or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify or
hold them harmless.
12.15 NO LIMITATIONS ON RIGHTS OF COMPANY.
Subject to Section 12.16 of the Plan, the grant of
any Award shall not in any way affect the right or power of the Company to make adjustments,
reclassification or changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate, sell or transfer all or any part of its business or assets. The Plan shall not
restrict the authority of the Company, for proper corporate purposes, to draft or assume Awards,
other than under the Plan, to or with respect to any person. If the Committee so directs, the
Company may issue or transfer Shares to an Affiliate, for such lawful consideration as the
Committee may specify, upon the condition or understanding that the Affiliate will transfer such
Shares to a Participant in accordance with the terms of an Award granted to such Participant and
specified by the Committee pursuant to the provisions of the Plan.
12.16 SUCCESSORS.
Any obligations of the Company or an Affiliate under the Plan with respect
to Awards granted hereunder shall be binding on any successor to the Company or Affiliate,
respectively, whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or
assets of the Company or Affiliate, as applicable.
A-15
PVF CAPITAL CORP.
c/o National City Bank
Shareholder Services Operations
Locator 5352
P. O. Box 94509
Cleveland, OH 44101-4509
YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of Stockholders,
you can be sure your shares are represented at the meeting by promptly
returning your proxy in the enclosed envelope
.
ê
Please fold and detach card at
perforation before mailing.
ê
PVF CAPITAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Gerald A. Fallon, Ronald D. Holman, II and John R. Male with full
powers of substitution, to act as attorneys and proxies for the undersigned, to vote all shares of
common stock of PVF Capital Corp. (the Company) which the undersigned is entitled to vote at the
Annual Meeting of Stockholders (the Meeting), to be held at the Marriott Cleveland East, 26300
Harvard Road, Beachwood, Ohio, on Tuesday, November 25, 2008 at 10:00 a.m., local time, and at any
and all adjournments thereof.
Should the undersigned be present and elect to vote at the Meeting or at any adjournment thereof
and after notification to the Secretary of the Company at the Meeting of the stockholders decision
to terminate this proxy, then the power of said attorneys and proxies shall be deemed terminated
and of no further force and effect.
The undersigned acknowledges receipt from the Company prior to the execution of this proxy of a
Notice of Annual Meeting of Stockholders, a Proxy Statement dated October 17, 2008 and an Annual
Report to Stockholders on Form 10-K.
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Dated:
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, 2008
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Signature of stockholder
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Signature of stockholder if held
jointly.
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Please sign exactly as your name
appears hereon. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title. If shares are held
jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
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PVF CAPITAL CORP.
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REVOCABLE PROXY
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE
VOTED FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED BELOW AND FOR THE OTHER PROPOSITIONS STATED. IF
ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN
THIS PROXY IN ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL
MEETING. THIS PROXY CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO VOTE WITH RESPECT TO
THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL
NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL MEETING.
The Board of Directors recommends a vote FOR each of the nominees and FOR proposals #2 and #3.
1.
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The election as directors for three-year terms of all nominees listed below.
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Nominees: Robert K. Healey Stanley T. Jaros Stuart D. Neidus Raymond J. Negrelli
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FOR
(except as marked to the contrary below)
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VOTE WITHHELD
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INSTRUCTION: To withhold your vote for any individual nominee, write that nominees name on the line provided below.
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2.
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Proposal to ratify the appointment of Crowe Horwath LLP as independent registered public
accounting firm of the Company for the fiscal year ending June 30, 2009.
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FOR
o
AGAINST
o
ABSTAIN
3.
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Proposal to approve the PVF Capital Corp. 2008 Equity Incentive Plan.
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FOR
o
AGAINST
o
ABSTAIN
ê
Please fold and detach card at perforation before mailing.
ê
PVF CAPITAL CORP. c/o
National City Bank
Shareholder Services
Operations Locator 5352 P.
O. Box 94509 Cleveland, OH
44101-4509
D
Please fold and detach card at perforation before
mailing.
D
PVF CAPITAL CORP. VOTING INSTRUCTIONS
As a participant in the PVF Capital Corp. Retirement Savings Plan (Plan), I hereby direct Frontier
Trust Company FSB, as Trustee (Trustee) for the Plan, to vote all shares of PVF Capital Corp.
Common Stock that are credited to my account in the Plan at the PVF Capital Corp. Annual Meeting of
Stockholders to be held on Tuesday, November 25, 2008 at 10:00 a.m. local time, and at all
adjournments thereof, upon the matters set forth on the reverse side hereof and upon such other
matters as may properly come before the meeting.
Only the Trustee can vote your shares. Your shares cannot be voted in person at the Annual Meeting
of Stockholders. How you vote is confidential. The Trustee will not disclose how you instructed the
Trustee to vote, unless required by law.
Dated: , 2008 Signature NOTE: Please sign
exactly as your name appears to the left.
PLEASE DATE, SIGN AND RETURN THE VOTING INSTRUCTION CARD BY NOVEMBER 21, 2008 USING THE ENCLOSED
ENVELOPE.
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D
Please fold and detach card at perforation before
mailing.
D
PVF CAPITAL CORP. VOTING INSTRUCTIONS
THE TRUSTEE IS INSTRUCTED TO VOTE AS SPECIFIED BELOW. IF NO INSTRUCTIONS ARE GIVEN OR IF YOUR
VOTING INSTRUCTIONS ARE NOT RECEIVED ON OR BEFORE NOVEMBER 21, 2008, THE TRUSTEE WILL VOTE THE
UNINSTRUCTED SHARES IN THE SAME PROPORTION IN WHICH IT HAS RECEIVED INSTRUCTIONS.
The Board of Directors recommends a vote FOR each of the nominees and FOR proposals #2 and #3.
1. The election as directors for three-year terms of all nominees listed below.
Nominees: Robert K. Healey Stanley T. Jaros Raymond J. Negrelli Stuart D. Neidus
FOR (except as marked to the contrary below)
VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual nominee, write that nominees name on the
line provided below.
2. Proposal to ratify the appointment of Crowe Horwath LLP as independent registered public
accounting firm of the Company for the fiscal year ending June 30, 2009.
FOR
AGAINST
ABSTAIN
3. Proposal to approve the PVF Capital Corp. 2008 Equity Incentive Plan.
FOR
AGAINST
ABSTAIN
(Continued and to be signed on reverse side.)
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