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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
FIRST FEDERAL AMERICAN
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
FIRST FEDERAL AMERICAN
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
KMKJMD97 Proxy Stmt - Annual Mtg
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FIRSTFED AMERICA BANCORP, INC.
ONE FIRSTFED PARK
Swansea, Massachusetts 02777
(508) 679-8181
June 17, 1999
Fellow Shareholders:
You are cordially invited to attend the 1999 annual meeting of shareholders
(the "Annual Meeting") of FIRSTFED AMERICA BANCORP, INC. (the "Company"), the
holding company for First Federal Savings Bank of America (the "Bank"), Swansea,
Massachusetts, which will be held on July 29, 1999 at 2:00 p.m., Eastern Time,
at The Westin Hotel, One West Exchange Street, Providence, Rhode Island 02903.
The attached Notice of the Annual Meeting and the Proxy Statement describe
the business to be transacted at the Annual Meeting. Directors and officers of
the Company as well as a representative of KPMG LLP, the Company's independent
auditors, will be present at the Annual Meeting to respond to any questions that
our shareholders may have regarding the business to be transacted.
The Board of Directors of the Company has determined that matters to be
considered at the Annual Meeting are in the best interests of the Company and
its shareholders. For the reasons set forth in the Proxy Statement, the Board
of Directors unanimously recommends that you vote "FOR" each of the nominees as
directors specified under Proposal 1 and that you vote "FOR" Proposal 2.
Please sign and return the enclosed proxy card promptly. Your cooperation
is appreciated since a majority of the common stock must be represented, either
in person or by proxy, to constitute a quorum for the conduct of business at the
Annual Meeting.
On behalf of the Board of Directors and all of the employees of the Company
and the Bank, I thank you for your continued interest and support.
Sincerely yours,
Robert F. Stoico
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
FIRSTFED AMERICA BANCORP, INC.
ONE FIRSTFED PARK
Swansea, Massachusetts 02777
__________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on July 29, 1999
__________________________________
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the "Annual
Meeting") of FIRSTFED AMERICA BANCORP, INC. (the "Company"), the holding company
for First Federal Savings Bank of America (the "Bank"), will be held on July 29,
1999 at 2:00 p.m., Eastern Time, at The Westin Hotel, One West Exchange Street,
Providence, Rhode Island 02903.
The purpose of the Annual Meeting is to consider and vote upon the
following matters:
1. The election of three directors to a three-year term of office;
2. The ratification of the appointment of KPMG LLP as independent
auditors of the Company for the fiscal year ending March 31, 2000; and
3. Such other matters as may properly come before the meeting and at any
adjournments thereof, including whether or not to adjourn the meeting.
The Board of Directors has established June 4, 1999, as the record date for
the determination of shareholders entitled to receive notice of and to vote at
the Annual Meeting and at any adjournments thereof. Only record holders of the
common stock of the Company as of the close of business on such record date will
be entitled to vote at the Annual Meeting or any adjournments thereof. In the
event there are not sufficient votes for a quorum or to approve the foregoing
proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned
in order to permit further solicitation of proxies by the Company. A list of
shareholders entitled to vote at the Annual Meeting will be available at
FIRSTFED AMERICA BANCORP, INC., ONE FIRSTFED PARK, Swansea, Massachusetts 02777,
for a period of ten days prior to the Annual Meeting and will also be available
at the Annual Meeting itself.
By Order of the Board of Directors
Cecilia R. Viveiros
Corporate Secretary
Swansea, Massachusetts
June 17, 1999
<PAGE>
FIRSTFED AMERICA BANCORP, INC.
_______________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
July 29, 1999
_______________________
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to shareholders of FIRSTFED AMERICA
BANCORP, INC. (the "Company") in connection with the solicitation by the Board
of Directors ("Board of Directors" or "Board") of proxies to be used at the
annual meeting of shareholders (the "Annual Meeting"), to be held on July 29,
1999, at 2:00 p.m., Eastern Time, at The Westin Hotel, One West Exchange
Street, Providence, Rhode Island 02903, and at any adjournments thereof. The
1999 Annual Report to Stockholders, including the consolidated financial
statements of the Company for the fiscal year ended March 31, 1999, accompanies
this Proxy Statement which is first being mailed to record holders on or about
June 17, 1999.
Regardless of the number of shares of common stock owned, it is important
that record holders of a majority of the shares be represented by proxy or in
person at the Annual Meeting. Shareholders are requested to vote by completing
the enclosed proxy card and returning it signed and dated in the enclosed
postage-paid envelope. Shareholders are urged to indicate their vote in the
spaces provided on the proxy card. Proxies solicited by the Board of Directors
of the Company will be voted by the Board of Directors in accordance with the
directions given therein. Where no instructions are indicated, signed proxy
cards will be voted "FOR" the election of the nominees for director named in
this Proxy Statement and "FOR" the ratification of KPMG LLP as independent
auditors of the Company for the fiscal year ending March 31, 2000.
Other than the matters listed on the attached Notice of Annual Meeting of
Shareholders, the Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting and at any adjournments
thereof, including whether or not to adjourn the Annual Meeting.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Corporate Secretary of the Company, by
delivering to the Company a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, if you are a
shareholder whose shares are not registered in your own name, you will need
appropriate documentation from your record holder to attend the Annual Meeting
and vote personally at the Annual Meeting.
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Kissel-
Blake Inc., a proxy solicitation firm, will assist the Company in soliciting
proxies for the Annual Meeting and will be paid a fee of $3,000, plus out-of-
pocket expenses. Proxies may also be solicited personally or by telephone by
directors, officers and other employees of the Company and its subsidiary, First
Federal Savings Bank of America (the "Bank"), without additional compensation
therefor. The Company will also request persons, firms and corporations holding
shares in their names, or in the name of their nominees, which are beneficially
owned by others, to send proxy material to, and obtain proxies from, such
beneficial owners, and will reimburse such holders for their reasonable expenses
in doing so.
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Voting Securities
The securities which may be voted at the Annual Meeting consist of shares
of common stock of the Company ("Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Annual Meeting, except as
described below.
The close of business on June 4, 1999, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
shareholders of record entitled to notice of and to vote at the Annual Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 7,092,030 shares.
As provided in the Company's Certificate of Incorporation, for voting
purposes, holders of Common Stock who beneficially own in excess of 10% of the
outstanding shares of Common Stock (the "Limit") are not entitled to any vote in
respect of the shares held in excess of the Limit and are not treated as
outstanding for voting purposes. A person or entity is deemed to beneficially
own shares owned by an affiliate of, as well as, by persons acting in concert
with, such person or entity. The Company's Certificate of Incorporation
authorizes the Board of Directors (i) to make all determinations necessary to
implement and apply the Limit, including determining whether persons or entities
are acting in concert, and (ii) to demand that any person who is reasonably
believed to beneficially own stock in excess of the Limit to supply information
to the Company to enable the Board of Directors to implement and apply the
Limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Annual
Meeting. In the event that there are not sufficient votes for a quorum or to
approve or ratify any proposal at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further solicitation of proxies.
As to the election of directors (Proposal 1), the proxy card being provided
by the Board of Directors enables a shareholder to vote "FOR" the election of
the nominees proposed by the Board, or to "WITHHOLD" authority to vote for one
or more of the nominees being proposed. Under Delaware law and the Company's
Bylaws, directors are elected by a plurality of votes cast, without regard to
either (i) broker non-votes or (ii) proxies as to which authority to vote for
one or more of the nominees being proposed is withheld.
As to the ratification of KPMG LLP as independent auditors of the Company
(Proposal 2) and all other matters that may properly come before the Annual
Meeting, by checking the appropriate box, a shareholder may (i) vote "FOR" the
item, (ii) vote "AGAINST" the item, or (iii) "ABSTAIN" from voting on such item.
Under the Company's Bylaws and Delaware law, an affirmative vote of the
holders of a majority of the votes cast at the Annual Meeting on Proposal 2 is
required to constitute shareholder approval of such Proposal. Shares underlying
broker non-votes or in excess of the Limit will not be counted as present and
entitled to vote or as votes cast and will have no effect on the vote.
Proxies solicited hereby are to be returned to the Company's transfer
agent, Registrar and Transfer Company ("RTC"). The Board of Directors has
designated RTC to act as the inspector of election and tabulate
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the votes at the Annual Meeting. RTC is not otherwise employed by, or a director
of, the Company or any of its affiliates. After the final adjournment of the
Annual Meeting, the proxies will be returned to the Company.
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date or as disclosed in certain reports
received to date regarding such ownership filed by such persons with the Company
and with the SEC, in accordance with Sections 13(d) and 13(g) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"). Other than those persons
listed below, the Company is not aware of any person, as such term is defined in
the Exchange Act, that owns more than 5% of the Company's Common Stock as of the
Record Date.
3
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<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- -------------- ------------------- --------- --------
<S> <C> <C> <C>
Common Stock First Federal Savings 697,010(1) 9.83%
Bank of America
Employee Stock
Ownership Plan ("ESOP")
ONE FIRSTFED PARK
Swansea, Massachusetts 02777
Common Stock The FIRSTFED Charitable Foundation 645,380(2) 9.10%
ONE FIRSTFED PARK
Swansea, Massachusetts 02777
Common Stock Jeffrey L. Gendel 524,800(3) 7.40%
200 Park Avenue, Suite 3900
New York, NY 10166
Common Stock Brandes Investment Partners, LP 500,617(4) 7.06%
12750 High Bluff Drive
San Diego, California 92130
Common Stock Wellington Management Company, LLP 450,700(5) 6.36%
75 State Street
Boston, Massachusetts 02109
</TABLE>
____________________________
(1) Shares of Common Stock were acquired by the ESOP in the Bank's Conversion.
The ESOP Committee administers the ESOP. First Bankers Trust, N.A. has been
appointed as the trustee for the ESOP ("ESOP Trustee"). The ESOP Trustee
must vote all allocated shares held in the ESOP in accordance with the
instructions of the participants. At June 4, 1999, 232,335 shares had been
allocated under the ESOP and 464,675 shares remain unallocated. Under the
ESOP, unallocated shares and allocated shares as to which voting
instructions are not given by participants are to be voted by the ESOP
Trustee in a manner calculated to most accurately reflect the instructions
received from participants regarding the allocated stock so long as such
vote is in accordance with the fiduciary provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(2) The FIRSTFED Charitable Foundation (the "Foundation") was established and
funded by the Company in connection with the Bank's Conversion with an
amount of the Company's Common Stock equal to 8.0% of the total amount of
Common Stock issued in the Conversion. The Foundation is a Delaware non-
stock corporation and is dedicated to the promotion of charitable purposes
within the communities in which the Bank operates. The Foundation is
governed by a board of directors with 7 members, all of whom are directors
of the Company and the Bank. Pursuant to the terms of the contribution of
Common Stock, as mandated by the Office of Thrift Supervision ("OTS"), all
shares of Common Stock held by the Foundation must be voted in the same
ratio as all other shares of the Company's Common Stock on all proposals
considered by shareholders of the Company.
(3) Based on information in a Schedule 13D filed on July 24, 1998 and a Form 13F
filed in March 1999, Mr. Gendel may be deemed the beneficial owner and/or
have investment discretion of 524,800 shares.
(4) Based on information in a Schedule 13G filed on February 11, 1999, Brandes
Investment Partners, LP may be deemed the beneficial owner of 500,617
shares.
(5) Based on information in an amended Schedule 13G filed on February 9, 1999
and a Form 13F filed in March 1999, Wellington, Management Company, LLP, in
its capacity as an institutional investment manager may be deemed the
beneficial owner and/or have investment discretion of 450,700 shares.
4
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PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors of the Company consists of seven (7) directors and
is divided into three classes. Each of the seven members of the Board of
Directors also presently serves as a director of the Bank. Directors are elected
for staggered terms of three years each, with the term of office of only one of
the three classes of directors expiring each year. Directors serve until their
successors are elected and qualified.
The three nominees proposed for election at the Annual Meeting are Richard
W. Cederberg, Gilbert C. Oliveira, and Paul A. Raymond, DDS. No person being
nominated as a director is being proposed for election pursuant to any agreement
or understanding between any such person and the Company.
In the event that any such nominee is unable to serve or declines to serve
for any reason, it is intended that proxies will be voted for the election of
the balance of those nominees named and for such other persons as may be
designated by the present Board of Directors. The Board of Directors has no
reason to believe that any of the persons named will be unable or unwilling to
serve. Unless authority to vote for the directors is withheld, it is intended
that the shares represented by the enclosed proxy card will be voted "FOR" the
election of all nominees proposed by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES
NAMED IN THIS PROXY STATEMENT.
Information with Respect to Nominees, Continuing Directors and Certain Executive
Officers
The following table sets forth, as of the Record Date, the names of
nominees and continuing directors and the Named Executive Officers (as defined
below), their ages, a brief description of their recent business experience,
including present occupations and employment, the year in which each became a
director of the Bank and the year in which their terms (or, in the case of
nominees, their proposed terms) as director of the Company expire. This table
also sets forth the amount of Common Stock and the percent thereof beneficially
owned by each director, each Named Executive Officer and all directors and
executive officers as a group as of the Record Date.
5
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<TABLE>
<CAPTION>
Amount and
Expiration Nature of Ownership
Name and Principal Occupation at Director of Term as Beneficial as a Percent
Present and for Past Five Years Age Since(1) Director Ownership(2) of Class
- -------------------------------- --- -------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
NOMINEES
Richard W. Cederberg 70 1982 2002 28,897(3)(4) *
Retired, former Chairman of
Larson Tool and Stamping Company
Gilbert C. Oliveira 74 1960 2002 52,897(3)(4) *
Chairman of the Board of the Bank
and President and Treasurer of
Gilbert C. Oliveira Insurance
Agency, Inc.
Paul A. Raymond, DDS 55 1981 2002 26,367(3)(4) *
Dentist in town of Swansea,
Massachusetts
CONTINUING DIRECTORS
Robert F. Stoico 58 1980 2001 247,936(5)(6) 3.5%
Chairman of the Board of the
Company and President and
Chief Executive Officer of the
Company and the Bank
John S. Holden, Jr. 69 1982 2001 26,697(3)(4) *
President and Treasurer of
Automatic Machine Products Co.
Thomas A. Rodgers, Jr. 85 1963 2000 63,897(3)(4) *
Chairman of Globe
Manufacturing Co., Inc.
Anthony L. Sylvia 67 1984 2000 30,897(3)(4) *
President and Treasurer of The
Baker Manufacturing Co., Inc.
NAMED EXECUTIVE OFFICERS
(who are not also directors)
Edward A. Hjerpe, III 40 -- -- 59,705(5)(6) *
Executive Vice President,
Treasurer, Chief Operating
Officer, and Chief Financial
Officer of the Company and the Bank
Kevin J. McGillicuddy 59 -- -- 46,088(5)(6) *
Senior Vice President of the Company
and the Bank
Frederick R. Sullivan 57 -- -- 48,412(5)(6) *
Senior Vice President of the
Company and the Bank
Terrence M. Tyrrell 49 -- -- 52,536(5)(6) *
Senior Vice President of the
Company and the Bank
All directors and executive officers as a -- -- -- 684,329(7) 9.65%
group (11 persons)
</TABLE>
__________________________
* Does not exceed 1.0% of the Company's voting securities.
(1) Includes years of service as a director of the Bank.
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(2) Each person effectively exercises sole (or shares with spouse or other
immediate family members) voting or dispositive power as to shares reported.
(3) Includes 10,449 shares awarded to each outside director under the FIRSTFED
AMERICA BANCORP, INC. 1997 Stock-Based Incentive Plan (the "Incentive
Plan"). Such awards commenced vesting at a rate of 20% per year beginning
August 5, 1998 but will vest immediately upon death, disability, retirement
or a change in control.
(4) Includes 10,448 options granted to each outside director under the Incentive
Plan which are currently exercisable or will become exercisable within 60
days and excludes 15,674 shares subject to unexercisable options granted to
each outside director under the Incentive Plan. Shares subject to options
granted under the Incentive Plan vest at a rate of 20% per year commencing
on August 5, 1998 but will vest immediately upon death, disability,
retirement or a change in control.
(5) Includes 87,072, 17,414, 17,414, 17,414, and 17,414 shares awarded to
Messrs. Stoico, Hjerpe, McGillicuddy, Sullivan and Tyrrell, respectively,
under the Incentive Plan. Such awards commenced vesting at a rate of 20%
per year beginning August 5, 1998 but will vest immediately upon death,
disability, retirement or a change in control. Each participant presently
has voting power as to the shares awarded. In addition, Mr. Hjerpe
received 8,707 additional shares awarded under the Incentive Plan which
will vest in five equal installments commencing on June 29, 1999, the first
anniversary of the effective date of the award.
(6) Includes 87,072, 26,121, 17,414, 17,414 and 17,414 options granted to
Messrs. Stoico, Hjerpe, McGillicuddy, Sullivan and Tyrrell, respectively,
under the Incentive Plan which are currently exercisable or will become
exercisable within 60 days and excludes 130,608, 60,950, 26,121, 26,121,
and 26,121 shares for Messrs. Stoico, Hjerpe, McGillicuddy, Sullivan and
Tyrrell, respectively, subject to unexercisable options granted to each of
these named executive officers under the Incentive Plan. Shares subject to
options granted under the Incentive Plan vest at a rate of 20% per year
commencing on August 5, 1998 but will vest immediately upon death,
disability, retirement or a change in control. Included in Mr. Hjerpe's
total are 8,707 additional options which are currently exercisable or will
become exercisable within 60 days, and excludes 34,829 options which are
unexercisable granted under the Incentive Plan which will vest in five
equal installments commencing on June 29, 1999, the first anniversary of
the effective date of the award.
(7) Includes a total of 348,289 shares awarded under the Incentive Plan as to
which voting may be directed. Excludes a total of 870,723 shares subject to
options granted under the Incentive Plan.
7
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Meetings of the Board of Directors and Committees of the Board of Directors
The Board of Directors of the Company and the Board of Directors of the
Bank conduct business through meetings of the Board of Directors and through
activities of their committees. The Board of Directors of the Company generally
meets quarterly while the Bank's Board of Directors generally meet on a monthly
basis and both may have additional meetings as needed. During the fiscal year
ended March 31, 1999, the Board of Directors of the Company held 12 meetings,
including five telephonic meetings. The Board of Directors of the Bank held 12
meetings during fiscal 1999. All of the directors of the Company and Bank
attended at least 75% of the total number of the Company's Board meetings held
and committee meetings on which such directors served during the fiscal year
ended March 31, 1999. The Board of Directors of the Company and Bank maintain
committees, the nature and composition of which are described below:
Audit and Compliance Committee. The Audit and Compliance Committee of the
Company consists of Messrs. Holden, Raymond and Sylvia, who are outside
Directors. The Audit and Compliance Committee of the Bank consists of Messrs.
Holden, Raymond, Sylvia and Gerhard S. Lowenstein, who are outside Directors.
These committees generally meet on a quarterly basis and are responsible for the
review of audit reports and management's actions regarding the implementation of
audit findings and to review compliance with all relevant laws and regulations.
The internal audit function, which is outsourced to The Harcourt Group, Ltd.,
reports to the Audit and Compliance Committees of the Company and Bank. The
Audit and Compliance Committees of the Company and Bank, on occasion, will
conduct their meetings as part of a full board meeting. Including these joint
meetings, the Committees met 4 times in fiscal 1999.
Nominating Committee. The Company's Nominating Committee for the 1999
Annual Meeting consists of Messrs. Stoico, Rodgers and Holden. The committee
considers and recommends the nominees for director to stand for election at the
Company's annual meeting of shareholders. The Company's Certificate of
Incorporation and Bylaws provide for shareholder nominations of directors.
These provisions require such nominations to be made pursuant to timely notice
in writing to the Secretary of the Company. The shareholder's notice of
nomination must contain all information relating to the nominee which is
required to be disclosed by the Company's Bylaws and by the Exchange Act. See
"Additional Information - Notice of Business to be Conducted at a Special or
Annual Meeting." The Nominating Committee met on April 9, 1999.
Compensation Committee. The Compensation Committee of the Company consists
of Messrs. Stoico, Oliveira and Rodgers. The Management and Personnel Committee
of the Bank consists of Messrs. Stoico, Oliveira, Rodgers and Willard E.
Olmsted. Such Committees are responsible for all matters regarding compensation
and fringe benefits for officers and employees of the Company and the Bank and
meet on an as needed basis. See "Executive Compensation - Compensation
Committee Report on Executive Compensation." The Compensation Committee of the
Company and the Management and Personnel Committee of the Bank met jointly 2
times in fiscal 1999.
Directors' Compensation
Directors' Fees. Directors of the Company do not receive compensation for
serving as Directors of the Company or on a Committee. Directors of the Bank
are currently paid an annual retainer of $10,000, except that the Chairman of
the Board of the Bank receives an annual retainer of $25,000. Directors of the
Bank also receive a fee of $650 for each regular and special board meeting which
they attend. Directors of the Company and the Bank are not compensated for
telephonic meetings. In addition, members of the Board's
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Executive Committee receive an annual retainer of $5,000 and a fee of $450 for
each Executive Committee meeting which they attend. The Audit and Compliance
Committee and the Management and Personnel Committee receive a fee of $450 for
each meeting which they attend.
Incentive Plan. Under the Incentive Plan maintained by the Company, each
member of the Board of Directors of the Company who is not an officer or
employee of the Company or the Bank received non-statutory stock options to
purchase 26,122 shares of Common Stock at an exercise price of $18.50, the fair
market value of the Common Stock on August 5, 1997, the date the option was
granted (as discussed below), and stock awards for 10,449 shares of common Stock
(collectively "Directors' Awards"). The Directors' Awards initially granted
under the Incentive Plan will vest over a five-year period, at a rate of 20%
each year commencing on August 5, 1998, the first anniversary of the date of the
grant.
Executive Compensation
The report of the Compensation Committee and the stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act,
except as to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
Compensation Committee Report on Executive Compensation. Under rules
established by the SEC, the Company is required to provide certain data and
information in regard to the compensation and benefits provided to the Company's
Chief Executive Officer and certain other executive officers of the Company and
the Bank for the fiscal year ended March 31, 1999. The following discussion
addresses compensation information relating to the Chief Executive Officer and
the executive officers of the Bank and Company for fiscal 1999 and sets forth
the joint report of the Compensation Committee of the Company and Management and
Personnel Committee of the Bank (collectively the "Compensation Committee").
The disclosure requirements for the Chief Executive Officer and other executive
officers include the use of tables and a report explaining the rationale and
considerations that led to fundamental compensation decisions affecting those
individuals. In fulfillment of this requirement, the Compensation Committee, at
the direction of the Board of Directors, has prepared the following report for
inclusion in this proxy statement.
General Policy. In the previous fiscal year, the Company and the Bank
engaged the services of a nationally known executive compensation consultant to
design the Executive Compensation Program to reflect the status of the Bank as a
stock institution and the Company as a publicly held entity and to ensure
competitive compensation levels in comparison to similarly situated publicly
held financial institutions. The Executive Compensation Program incorporates
the consolidated financial results of the Company as well as other factors
related to the performance of the Company's stock. For fiscal 1999, the
Executive Compensation Program was fully utilized to determine compensation
levels for base pay as well as incentive (bonus) compensation. The Executive
Compensation Program incorporates base salary and incentive compensation based
on measurable goal attainment and performance.
The Compensation Committee's responsibility is to recommend the amount and
composition of executive compensation paid to the executive officers. The Board
of Directors has the responsibility to review the report of the Compensation
Committee and approve such compensation. It is the policy of the Compensation
Committee to review executive compensation not less than annually and more often
if deemed necessary by the Compensation Committee. The process the Compensation
Committee utilized for fiscal 1999 involved a review of the Company's
compensation consultant's recommendations for a potential range for
9
<PAGE>
changes to base salaries. This range reflected an appropriate change in percent
based on economic, competitive market, peer group analysis, and position
responsibilities. Recommended changes in base pay were made to compensation
levels established in fiscal 1999 by the Committee using peer group analysis and
compensation recommended by the consultant.
In making its compensation determinations, the Compensation Committee also
considers the evaluations of executive officers performed by the Chief Executive
Officer and recommendations made by the Chief Executive Officer, except in the
case of its compensation deliberations regarding the Chief Executive Officer.
The performance of the Chief Executive Officer and other executive officers are
evaluated by the Compensation Committee and a recommendation is made to the
Board. Upon review, the Board sets all executive compensation within the
parameters of compensation policy as defined within the Executive Compensation
Program. The Chief Executive Officer, a member of the Board of Directors,
abstains from voting on matters related to his compensation.
Compensation of the Chief Executive Officer. The Chief Executive Officer
was evaluated on his performance in managing the Company during fiscal 1999,
including the effort related to operating the Company in its second year as a
public company, fiscal performance, and earnings per share. Certain
quantitative and qualitative factors were reviewed to determine the Chief
Executive Officer's compensation. Following a review of the Chief Executive
Officer's performance, it was determined that the total cash compensation for
the Chief Executive Officer would be established according to the compensation
philosophy as recommended by the executive compensation consultant. In reaching
its determination regarding the Chief Executive Officer's base salary, the
Compensation Committee utilized the report of Watson Wyatt and recommended to
the Board of Directors a base salary substantially equivalent to the amount
recommended by Watson Wyatt. The Committee's determination of the Chief
Executive Officer's incentive compensation for fiscal 1999 also was determined
by the Committee following a review of the Chief Executive Officer's
performance. In reaching its determination regarding the recommended level of
the Chief Executive Officer's cash incentive compensation for fiscal 1999, the
Committee utilized the Incentive Compensation Program guidelines, established
the prior year, and recommended to the Board an amount of incentive compensation
within the guidelines of the Incentive Compensation Program for certain goal
attainment.
10
<PAGE>
The Compensation Committee of the Board of Directors
of the Company
Robert F. Stoico Gilbert C. Oliveira
Thomas A. Rodgers, Jr.
The Management and Personnel Committee
of the Board of Directors of the Bank
Robert F. Stoico Gilbert C. Oliveira
Thomas A. Rodgers, Jr. Willard E. Olmsted
11
<PAGE>
Stock Performance Graph. The following graph shows a comparison of total
shareholder return on the Company's Common Stock, based on the market price of
the Common Stock with the cumulative total return of companies on the American
Stock Exchange and the MG Index for Savings and Loans for the period beginning
on January 15, 1997, the day the Company's Common Stock began trading, through
March 31, 1999. The graph was derived from a limited period of time and, as a
result, may not be indicative of possible future performance of the Company's
Common Stock. The data were supplied by Media General Financial Services.
[GRAPH APPEARS HERE]
SUMMARY
<TABLE>
<CAPTION>
1/15/97 3/31/97 6/30/97 3/31/98 6/30/98 3/31/99
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
FIRSTFED AMERICA
BANCORP, INC. 100.00 136.30 177.50 211.30 193.80 120.00
AMERICAN STOCK
EXCHANGE 100.00 97.14 106.69 127.44 123.93 120.33
MG INDEX FOR
SAVINGS AND LOANS 100.00 101.75 121.07 172.30 163.04 141.28
</TABLE>
Notes:
A. The lines represent annual index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 1/15/97.
12
<PAGE>
Summary Compensation Table. The following table shows, for the years
ended March 31, 1999, 1998 and 1997, the cash compensation paid, as well as
certain other compensation paid or accrued for that year to the Chief Executive
Officer and the Named Executive Officers.
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------------------------
Annual Compensation(1) Awards Payouts
----------------------------------------------------------------------------------------
Securities
Other Restricted Underlying
Annual Stock Options/ LTIP All Other
Name and Principal Fiscal Compensation Awards SARs Payouts Compensation
Positions Year Salary($) Bonus($) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert F. Stoico, Chairman, 1999 $382,128 $180,736 - - - - $269,845
President and Chief 1998 354,579 171,300 - $1,610,832 217,680 - 292,281
Executive Officer 1997 328,941 100,000 - - - - 239,216
Edward A. Hjerpe, III 1999 203,140 78,006 - 167,610 43,536 - 51,761
Executive Vice President, 1998 126,035 50,000 - 322,159 43,536 - 25,012
Treasurer, Chief Operating
Officer and Chief Financial
Officer(7)
Kevin J. McGillicuddy 1999 125,340 38,523 - - - - 42,761
Senior Vice President 1998 117,314 20,000 - 322,159 43,536 - 56,216
1997 105,677 15,000 - - - - 44,310
Frederick R. Sullivan 1999 125,340 38,523 - - - - 42,961
Senior Vice President 1998 117,316 25,000 - 322,159 43,536 - 58,229
1997 105,677 15,000 - - - - 43,518
Terrence M. Tyrrell 1999 105,342 20,000 - - - - 33,117
Senior Vice President 1998 101,201 20,000 - 322,159 43,536 - 47,006
1997 98,446 15,000 - - - - 37,555
</TABLE>
(1) Under Annual Compensation, the column titled "Salary" includes directors'
fees for the named President and Chief Executive Officer.
(2) For fiscal year 1999, there were no (a) perquisites over the lesser of
$50,000 or 10% of the individual's total salary and bonus for the year; (b)
payments of above-market preferential earnings on deferred compensation; (c)
payments of earnings with respect to long-term incentive plans prior to
settlement or maturation; (d) tax payment reimbursements; or (e)
preferential discounts on stock.
(3) Includes stock awards of 87,072, 17,414, 17,414, 17,414 and 17,414 shares
granted to Messrs. Stoico, Hjerpe, McGillicuddy, Sullivan and Tyrrell,
respectively, under the Incentive Plan. The awards began vesting in five
equal annual installments commencing on August 5, 1998, the first
anniversary of the effective date of the award. Mr. Hjerpe received an
additional 8,707 stock awards under the Incentive Plan which will vest in
five equal installments commencing on June 29, 1999, the first anniversary
of the effective date of the award. When shares become vested and are
distributed, the recipient will also receive an amount equal to accumulated
cash and stock dividends (if any) with respect thereto plus earnings
thereon. All awards vest immediately upon termination of employment due to
death, disability, retirement or following change in control. As of March
31, 1999, the market value of the shares held by Messrs. Stoico, Hjerpe,
McGillicuddy, Sullivan and Tyrrell was $1,044,864, $313,452, $208,968,
$208,968 and $208,968, respectively . The dollar amounts set forth in the
table represent the market value of the shares awarded on the date of grant.
(4) Includes stock options granted to Messrs. Stoico, Hjerpe, McGillicuddy,
Sullivan and Tyrrell, respectively, pursuant to the Incentive Plan for
fiscal 1998. Mr. Hjerpe received 43,536 additional options under the
Incentive Plan which will vest in five equal installments commencing on June
29, 1999, the first anniversary of the effective date of the award. See
"Option Grants in Last Fiscal Year" table for discussion of options granted
under the Incentive Plan.
(5) For fiscal years 1999, 1998 and 1997, there were no payouts or awards under
any long-term incentive plan.
(6) Includes employer contributions of $21,300, $8,300, $18,700, $18,900 and
$12,900 to the Bank's Retirement Plan for Messrs. Stoico, Hjerpe,
McGillicuddy, Sullivan and Tyrrell, respectively, for fiscal year 1999.
Also includes $25,710, $15,065, $20,291, $20,291 and $17,045 representing
the value of shares allocated under the ESOP for the benefit of Messrs.
Stoico, Hjerpe, McGillicuddy, Sullivan and Tyrrell, respectively, as of
March 31, 1999. Also includes employer contributions of $10,582, $6,084,
$3,770, $3,770, and $3,172 to the Bank's non-qualified Thrift Plan for
Messrs. Stoico, Hjerpe, McGillicuddy, Sullivan and Tyrrell, respectively.
Also includes payments of $174,086 and $22,312 in employer contributions to
Messrs. Stoico and Hjerpe pursuant to the Bank's Supplemental Retirement
Plan for fiscal 1999. Also includes $38,167 in employer contributions to a
supplemental non-qualified ESOP for Mr. Stoico for fiscal 1999.
(7) Mr. Hjerpe began employment with the Company on July 31, 1997.
13
<PAGE>
Compensation Arrangements
Employment Agreements. The Bank and the Company have entered into
employment agreements (collectively, the "Employment Agreement(s)" or
"Agreement(s)") with Messrs. Stoico, Hjerpe, McGillicuddy, Sullivan, and Tyrrell
(individually, the "Executive"). The Employment Agreements are intended to
ensure that the Bank and the Company will be able to maintain a stable and
competent management base. The continued success of the Bank and the Company
depends to a significant degree on the skills and competence of Messrs. Stoico,
Hjerpe, McGillicuddy, Sullivan and Tyrrell.
The Bank Employment Agreements provide for a three-year term for Mr. Stoico
and a two-year term for Mr. Hjerpe. The Company Agreements for Mr. Stoico and
Mr. Hjerpe provide for a five year term. The Bank and Company Agreements for
Messrs. McGillicuddy, Sullivan and Tyrrell also provide for a two-year term.
The Bank Employment Agreements provide that, commencing on the first anniversary
date and continuing each anniversary date thereafter, the Board of Directors may
extend the agreement for an additional year so that the remaining term shall be
three years, in the case of Mr. Stoico, and two years, in the cases of Messrs.
Hjerpe, McGillicuddy, Sullivan and Tyrrell, unless written notice of non-renewal
is given by the Board of the Bank after conducting a performance evaluation of
the Executive. The terms of the Company Employment Agreements are extended on a
daily basis to provide constant term for five years for Mr. Stoico and Mr.
Hjerpe and two years for Messrs. McGillicuddy, Sullivan and Tyrrell unless
written notice of non-renewal is given by the Board of the Company or the
Executive. In addition to the base salary, the Agreements provide for, among
other things, participation in employee and executive benefits plans and other
fringe benefits applicable to similarly-situated executive personnel.
The Employment Agreements provide for termination by the Bank or the
Company for cause as described in the Agreements at any time. In the event the
Bank or the Company chooses to terminate the Executive's employment for reasons
other than for cause, or in the event of the Executive's resignation from the
Bank and the Company for any reason, within sixty (60) days of the change in
control or at any time during the remaining term of the Agreements, upon: (i)
failure to re-elect the Executive to his current offices; (ii) a material change
in the Executive's functions, duties or responsibilities; (iii) a relocation of
the Executive's principal place of employment by more than 25 miles; (iv)
liquidation or dissolution of the Bank or the Company; or (v) a breach of the
Agreement by the Bank or the Company or in the case of the Company Agreement for
Mr. Stoico and Mr. Hjerpe, failure by the Company to renew the Employment
Agreement, the Executive or, in the event of death, his beneficiary would be
entitled to receive an amount equal to the remaining base salary payments due to
the Executive and the contributions that would have been made on the Executive's
behalf to any employee benefit plans of the Bank or the Company during the
remaining term of the Agreement. The Bank and the Company would also continue
and pay for the Executive's life, health and disability coverage for the
remaining term of the Employment Agreement. Upon any termination of the
Executive, the Executive is subject to a covenant not to compete with the
Company or the Bank for one year.
Under the Agreements, if voluntary or involuntary termination follows a
change in control of the Bank or the Company (as defined in the Employment
Agreements), the Executive or, in the event of the Executive's death, his
beneficiary, would be entitled to a severance payment equal to the greater of:
(i) the payments due for the remaining terms of the Agreements; or (ii) five
times the average of the five preceding taxable years' annual compensation for
Mr. Stoico and Mr. Hjerpe under the Company Agreements, three times for Mr.
Stoico and Mr. Hjerpe under the Bank Agreements, and three times the average of
the five preceding years' taxable compensation for Messrs. McGillicuddy,
Sullivan and Tyrrell under the Bank and Company Agreements. The Bank and the
Company would also continue the Executive's life, health, and disability
coverage for sixty months in the case of Mr. Stoico and Mr. Hjerpe and twenty-
four months in the cases of
14
<PAGE>
Messrs. McGillicuddy, Sullivan and Tyrrell. Notwithstanding that both Agreements
provide for a severance payment in the event of a change in control, the
Executive would only be entitled to receive a severance payment under one
Agreement. In the event of a change in control, based upon the Executive's base
salary and incentive bonus for fiscal year 1999 as reported in the Summary
Compensation Table, Messrs. Stoico, Hjerpe, McGillicuddy, Sullivan and Tyrrell
would receive approximately $2.7 million, $1.3 million, $412,000, $427,000 and
$364,000, respectively, in severance payments, in addition to other cash and
noncash benefits.
Payments to Executive under the Bank's Agreement will be guaranteed by the
Company in the event that payments or benefits are not paid by the Bank.
Payment under the Company Agreement would be made by the Company. All
reasonable costs and legal fees paid or incurred by the Executive pursuant to
any dispute or question of interpretation relating to the Agreements shall be
paid by the Bank or Company, respectively, if the Executive is successful on the
merits pursuant to a legal judgment, arbitration or settlement. The Employment
Agreements also provide that the Bank and Company shall indemnify the Executive
to the fullest extent allowable under federal and Delaware law, respectively.
Change in Control Agreements. The Bank entered into Change in Control
Agreements (the "CIC Agreements") with nine (9) executive officers of the Bank
and the Bank's corporate secretary (individually, the "Executive"). Each CIC
agreement provides for a two-year term. Commencing on the first anniversary
date and continuing on each anniversary thereafter, the CIC Agreements may be
renewed by the Board of the Bank for an additional year. The Bank's CIC
Agreement provides that in the event voluntary or involuntary termination
following a change in control of the Bank or the Company (as defined in the
agreement), the Executive would be entitled to receive a severance payment equal
to two times the Executive's average compensation for the twelve months
preceding termination. The Bank would also continue and pay for the Executive's
life, health and disability coverage for twenty-four (24) full calendar months
following termination. Payments to the Executive under the Bank's CIC Agreements
will be guaranteed by the Company in the event that payments or benefits are not
paid by the Bank. If a change in control occurs, based upon two times fiscal
1999 base salary and incentive bonus and pursuant to the CIC Agreements, the
Executives would receive, in the aggregate, $1.69 million, in addition to other
cash and noncash benefits. With respect to Mr. Stoico and Mr. Hjerpe, in the
event of a change in control, payments under the Company's Employment
Agreements, as well as certain other plans and arrangements in which the
Executives participate, may constitute a "parachute payment" for federal income
tax purposes, resulting in the possible obligation of a federal excise tax for
the Executive. In such case, the Company is obligated to pay the Executive an
amount so as to enable the Executive to retain the payments he would have
retained had he not been subject to the excise tax.
Incentive Plan. The Company maintains the FIRSTFED AMERICA BANCORP, INC.
1997 Stock-Based Incentive Plan ("the Incentive Plan"), which provides
discretionary awards of options to purchase Common Stock, option-related awards
and awards of Common Stock (collectively, "Awards") to officers, directors and
key employees as determined by a committee of the Board of Directors. Awards of
Common Stock to officers, directors and key employees is provided under
"Restricted Stock Awards" in the "Summary Compensation Table." The following
table lists all grants of options under the Incentive Plan to the Named
Executive Officers for fiscal 1999 and contains certain information about
potential value of those options based upon certain assumptions as to the
appreciation of the Company's stock over the life of the option.
15
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Options(1)
- ------------------------------------------------------------------------------------ ---------------------
Number of
Securities % of Total
Underlying Options/SARs Exercise or
Options/ Granted to Base Price
SARs Granted Employees in Per Expiration
Name (#)(2)(3)(4)(5) Fiscal Year(6) Share Date(7) 5% 10%
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward A. Hjerpe, III 43,536 57.6% $19.25 6/29/08 $527,220 $1,335,684
</TABLE>
________________________________
(1) The amounts represent certain assumed rates of appreciation. Actual gains,
if any, on stock option exercises and Common Stock holdings are dependent
on the future performance of the Common Stock and overall stock market
conditions. There can be no assurance that the amounts reflected in this
table will be realized.
(2) Options granted pursuant to the Incentive Plan are exercisable in five
equal annual installments commencing on June 29, 1999, provided, however,
options will be immediately exercisable in the event the optionee
terminates employment due to death or disability, retirement or a change in
control.
(3) The purchase price may be made in whole or in part in cash or Common Stock.
(4) Options include limited rights (SARs) pursuant to which the options may be
exercised in the event of a change in control of the Company. Upon the
exercise of a limited right, the optionee would receive a cash payment
equal to the difference between the exercise price of the related option on
the date of grant and the fair market value of the underlying shares of
Common Stock on the date the limited right is exercised.
(5) All options are intended to be Incentive Stock Options to the extent
permissible under Section 422 of the Code.
(6) Includes options granted to officers, directors and employees.
(7) The option term is ten years.
16
<PAGE>
The following table provides certain information with respect to the number
of shares of Common Stock represented by outstanding options held by the Named
Executive Officers as of March 31, 1999. As of March 31, 1999 there were no
unexercised options which were "in-the-money."
Fiscal Year-End Option/SAR Value
<TABLE>
<CAPTION> Value of
Number Unexercised
of Securities in-the-money
Underlying Unexercised Options/SARs
Options/SARs at Fiscal Year-
Name at Fiscal Year-End(#)(1) End ($)(2)(3)
- ---- -------------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert F. Stoico 43,536 174,144 - -
Edward A. Hjerpe, III 8,707 78,365 - -
Kevin J. McGillicuddy 8,707 34,829 - -
Frederick R. Sullivan 8,707 34,829 - -
Terrence M. Tyrrell 8,707 34,829 - -
</TABLE>
____________________________________
(1) The options in this table have an exercise price of $18.50 with the
exception of 43,536 options for Mr. Hjerpe which were awarded on June 29,
1998 and have an exercise price of $19.25.
(2) The price of the Common Stock on March 31, 1999 was $12.00.
(3) Based on the market value of the underlying Common Stock at fiscal year end,
minus the exercise price.
Retirement Plan. The Bank participates in the Financial Institutions
Retirement Fund (the "Retirement Plan") to provide retirement benefits for
eligible employees. Employees become eligible to participate in the Retirement
Plan after the completion of 12 consecutive months of employment with the Bank
and the attainment of age 21. The Retirement Plan excludes hourly paid
employees from participation. Benefits under the Retirement Plan are based on
the participant's years of service and salary. A participant may elect early
retirement as early as age 45. However, such participant's normal retirement
benefits will be reduced by an early retirement factor based on age at early
retirement.
Participants generally have no vested interest in Retirement Plan benefits
prior to the completion of five years of service with the Bank. Following the
completion of five years of vesting service, or in the event of a participant's
attainment of age 65, death or termination of employment due to disability, a
participant becomes 100% vested in his/her accrued benefit under the Retirement
Plan. The table below reflects the pension benefit payable, and any payment due
under the Supplemental Executive Retirement Plan, discussed below, to a
participant assuming various levels of earnings and years of service. The
amounts of benefits paid under the Retirement Plan are not reduced for any
social security benefit payable to participants. As of January 1, 1999, Messrs.
Stoico, Hjerpe, McGillicuddy, Sullivan and Tyrrell had credited years of service
of 25 years 4 months, 10 years 6 months, 2 year 11 months, 9 years 9 months, and
17 years 7 months, respectively. The Retirement Plan provides the participant
portability with another participating member. Mr. Hjerpe's credited years of
service include credited years of service with his former employer, a
participant in the same multiple employer retirement plan.
17
<PAGE>
<TABLE>
<CAPTION>
Years of Benefit Service
--------------------------------------------------
Final Average
Earnings (1) (3) 15 20 25 30 35
- ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 15,000 $ 20,000 $ 25,000 $ 30,000 $ 35,000
$ 75,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500
$ 100,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000 $ 70,000
$ 125,000 $ 37,500 $ 50,000 $ 62,500 $ 75,000 $ 87,500
$ 150,000 $ 45,000 $ 60,000 $ 75,000 $ 90,000 $105,000
$200,000(2) $ 60,000 $ 80,000 $100,000 $120,000 $140,000
$250,000(2) $ 75,000 $100,000 $125,000 $150,000 $175,000
$300,000(2) $ 90,000 $120,000 $150,000 $180,000 $210,000
$350,000(2) $105,000 $140,000 $175,000 $210,000 $245,000
$400,000(2) $120,000 $160,000 $200,000 $240,000 $280,000
</TABLE>
_________________________
(1) The compensation utilized for formula purposes includes the salary reported
in the "Summary Compensation Table."
(2) The maximum amount of annual compensation which can be considered in
computing benefits under Section 401(a)(17) of the Internal Revenue Code of
1986, as amended (the "Code"), is $160,000 for plan years beginning on or
after January 1, 1998.
(3) The maximum annual benefit payable at age 65 for plan years beginning on or
after January 1, 1998 is $130,000/year.
The following table sets forth the years of credited service (i.e., benefit
service) as of December 31, 1998 for each Named Executive Officer.
<TABLE>
<CAPTION>
Credited Service
(1)
-------------------
Years Months
------- --------
<S> <C> <C>
Robert F. Stoico 25 4
Edward A. Hjerpe, III 11 6
Kevin J. McGillicuddy 2 11
Frederick R. Sullivan 9 9
Terrence M. Tyrrell 17 7
</TABLE>
___________________________
(1) The Retirement Plan provides the participant portability with another
participating member. Mr. Hjerpe's credited years of service include
credited years of service with his former employer, a participant in the
same multiple employer retirement plan.
18
<PAGE>
Supplemental Executive Retirement Plan. The Bank currently maintains a
Supplemental Executive Retirement Plan under which it annually credits a
specified amount of money to the account of plan participants. Benefits under
the Plan become payable following a participant's termination of employment. The
Bank intends the benefits provided under the Supplemental Executive Retirement
Plan to make participants whole for reductions in benefits payable under the
terms of the Thrift, ESOP and Retirement Plan maintained by the Bank, as a
result of limitations imposed by the Code, and provide additional retirement
benefits for participants.
Participants generally vest in the amounts credited to the Supplemental
Executive Retirement Plan after completing five years of employment with the
Bank (the same time period over which they become vested in benefits under the
corresponding tax-qualified retirement plans). However, participants vest
immediately upon death or disability. In connection with the Conversion, the
Supplemental Executive Retirement Plan was amended to permit participants to
direct that all or a portion of the amounts then existing (and/or future
amounts) credited to their accounts be converted into stock units based on the
value of the Common Stock. The Bank currently maintains an irrevocable grantor's
trust (also known as a "rabbi trust") to hold assets of the Bank for the
exclusive purpose of paying benefits under the Supplemental Executive Retirement
Plan. However, in the event of the insolvency of the Bank, the assets of the
trust are first subject to the claims of the Bank's creditors. The assets of
this trust may be used to acquire shares of Common Stock to satisfy the
obligations of the Bank for the payment of benefits under the Supplemental
Executive Retirement Plan. As of March 31, 1999, only Mr. Stoico and Mr. Hjerpe
participated in the Supplemental Executive Retirement Plan.
Incentive Award and Salary Deferral Plan. Effective January 1, 1998 the
Bank established a compensation plan whereby eligible executives may defer a
percentage of their annual salary into a non-qualified plan. Executives receive
a 50% matching contribution on the first six percent of salary deferral which is
consistent with the Bank's 401(k) Plan. Investment options provided through
the Plan Trustee include Company stock and allow the executive to elect various
investment funds under the plan.
Transactions With Certain Related Persons
The Bank makes all loans to its executive officers, directors and employees
on the same terms and conditions offered to the general public. The Bank's
policy provides that all loans made by the Bank to its executive officers and
directors be made in the ordinary course of business, on substantially the same
terms, including collateral, as those prevailing at the time for comparable
transactions with other persons and may not involve more than the normal risk of
collectibility or present other unfavorable features. All such loans were made
by the Bank in the ordinary course of business, with no favorable terms and such
loans do not involve more than the normal risk of collectibility or present
unfavorable terms.
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended March 31,
1999, were KPMG LLP. The Company's Board of Directors has reappointed KPMG LLP
to continue as independent auditors for the Bank and the Company for the fiscal
year ending March 31, 2000, subject to ratification of such appointment by the
shareholders.
19
<PAGE>
Representatives of KPMG LLP will be present at the Annual Meeting. They
will be given an opportunity to make a statement if they desire to do so and
will be available to respond to appropriate questions from shareholders present
at the Annual Meeting.
Unless marked to the contrary, the shares represented by the enclosed proxy
card will be voted FOR ratification of the appointment of KPMG LLP as the
independent auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
ADDITIONAL INFORMATION
Shareholder Proposals
To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 1999 Annual Meeting of Shareholders, a shareholder
proposal must be received by the Secretary of the Company at the address set
forth on the Notice of Annual Meeting of Shareholders not later than February
15, 1999. Any such proposal will be subject to 17 C.F.R. (S) 240.14a-8 of the
Rules and Regulations under the Exchange Act.
Notice of Business to be Conducted at a Special or Annual Meeting
The Bylaws of the Company set forth the procedures by which a shareholder
may properly bring business before a meeting of shareholders. Pursuant to the
Bylaws, only business brought by or at the direction of the Board of Directors
may be conducted at an annual meeting. The Bylaws of the Company provide an
advance notice procedure for a shareholder to properly bring business before an
annual meeting. The shareholder must give written advance notice to the
Secretary of the Company not less than ninety (90) days before the date
originally fixed for such meeting; provided, however, that in the event that
less than one hundred (100) days notice or prior public disclosure of the date
of the meeting is given or made to shareholders, notice by the shareholder to be
timely must be received not later than the close of business on the tenth day
following the date on which the Company's notice to shareholders of the annual
meeting date was mailed or such public disclosure was made. In order for the
notice of a stockholder proposal for consideration at the Company's 2000 Annual
Meeting of Stockholders to be timely, the Company would have to receive such
notice no later than April 22, 2000 assuming the 2000 annual meeting is held on
July 21, 2000 and that the Company provides at least 100 days notice or public
disclosure of the date of the meeting. The advance notice by shareholders must
include the shareholder's name and address, as they appear on the Company's
record of shareholders, a brief description of the proposed business, the reason
for conducting such business at the annual meeting, the class and number of
shares of the Company's capital stock that are beneficially owned by such
shareholder and any material interest of such shareholder in the proposed
business. In the case of nominations to the Board of Directors, certain
information regarding the nominee must be provided. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy statement or the
proxy relating to any Annual Meeting any shareholder proposal which does not
meet all of the requirements for inclusion established by the SEC in effect at
the time such proposal is received.
20
<PAGE>
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
Whether or not you intend to be present at the Annual Meeting, you are
urged to return your proxy card promptly. If you are then present at the Annual
Meeting and wish to vote your shares in person, your original proxy may be
revoked by voting at the Annual Meeting. However, if you are a shareholder
whose shares are not registered in your own name, you will need appropriate
documentation from your recordholder to vote personally at the Annual Meeting.
A COPY OF THE FORM 10-K (WITHOUT EXHIBITS) FOR THE FISCAL YEAR ENDED
MARCH 31, 1999, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO
SHAREHOLDERS OF RECORD UPON WRITTEN REQUEST TO PHILIP G. CAMPBELL, FIRSTFED
AMERICA BANCORP, INC., ONE FIRSTFED PARK, SWANSEA, MASSACHUSETTS 02777.
By Order of the Board of Directors
Cecilia R. Viveiros
Corporate Secretary
Swansea , Massachusetts
June 17, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, YOU ARE REQUESTED TO SIGN, DATE AND PROMPTLY
RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
21
<PAGE>
REVOCABLE PROXY
FIRSTFED AMERICA BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
July 29, 1999
2:00 p.m. Eastern Time
------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert F. Stoico, Thomas A. Rodgers, Jr.
and John S. Holden, Jr. or any one or more of them acting in the absence of
others each with full power of substitution, to act as proxy for the
undersigned, and to vote all shares of Common Stock of FIRSTFED AMERICA BANCORP,
INC. (the "Company") which the undersigned is entitled to vote only at the
Annual Meeting of Shareholders, to be held on July 29, 1999, at 2:00 p.m.
Eastern Time, at the Westin Hotel, One West Exchange Street, Providence, Rhode
Island 02903, and at any and all adjournments thereof, with all of the powers
the undersigned would possess if personally present at such meeting as follows:
1. The election as directors of all nominees listed (except as marked to
the contrary below).
Richard W. Cederberg
Gilbert C. Oliveira
Paul A. Raymond, DDS
FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- ------
[_] [_] [_]
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR
ALL EXCEPT" and write that nominee's name on the line provided below.
- --------------------------------------------------------------------------------
2. The ratification of the appointment of KPMG LLP as independent auditors
of FIRSTFED AMERICA BANCORP, INC. for the fiscal year ending March 31,
2000.
FOR AGAINST ABSTAIN
--- ------- -------
[_] [_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
This proxy is revocable and will be voted as directed, but if no
instructions are specified, this proxy will be voted FOR each of the proposals
listed. If any other business is presented at the Annual Meeting, including
whether or not to adjourn the meeting, this proxy will be voted by the proxies
in their best judgment. At the present time, the Board of Directors knows of no
other business to be presented at the Annual Meeting.
Dated:
--------------------------
---------------------------------
SIGNATURE OF SHAREHOLDER
---------------------------------
SIGNATURE OF CO-HOLDER (IF ANY)
<PAGE>
---------------------------------
SIGNATURE OF SHAREHOLDER
---------------------------------
SIGNATURE OF CO-HOLDER (IF ANY)
The above signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Shareholders and of a
Proxy Statement dated June __, 1999 and of the Annual Report to Shareholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
------------------------------
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
