<PAGE>
===========================================================================
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as Permit-
[X] Definitive Proxy Statement ted by Rule 14a-6(e) (2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FIRSTBANK CORPORATION
(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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
(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):
-----------------------------------------------------------------
<PAGE>
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of its
filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[FIRSTBANK NOTICE OF ANNUAL MEETING
CORPORATION OF SHAREHOLDERS
LOGO]
FIRSTBANK CORPORATION
311 WOODWORTH AVENUE
P.O. BOX 1029
ALMA, MICHIGAN 48801
The annual meeting of the shareholders of Firstbank Corporation will
be held at the Comfort Inn Conference Center at 3130 West Monroe (M-46),
Alma, Michigan 48801, on April 26, 1999, at 5 p.m. (Alma time) to consider
and vote upon:
1. Election of directors.
2. Any other business that may properly come before the meeting or
any adjournment of the meeting.
Shareholders of record at the close of business on March 8, 1999, will
be entitled to vote at the annual meeting and any adjournment of the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Mary D. Deci
Mary D. Deci, Vice President, Secretary
and Treasurer
Alma, Michigan
March 29, 1999
- ---------------------------------------------------------------------------
IMPORTANT
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND IN PERSON, YOU ARE URGED TO DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. THIS WILL
ASSURE YOUR REPRESENTATION AND A QUORUM FOR THE TRANSACTION OF BUSINESS AT
THE MEETING. IF YOU DO ATTEND THE MEETING IN PERSON, THE PROXY WILL NOT BE
USED IF YOU CHOOSE TO VOTE IN PERSON.
- ---------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
FIRSTBANK CORPORATION
311 Woodworth Avenue
P.O. Box 1029
Alma, Michigan 48801
Telephone: (517) 463-3131
ANNUAL MEETING OF SHAREHOLDERS
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Firstbank Corporation
(the "Corporation") to be voted at the annual meeting of its shareholders
to be held at the Comfort Inn Conference Center at 3130 West Monroe (M-46),
Alma, Michigan 48801, on Monday, April 26, 1999, at 5:00 p.m., Alma time,
and at any adjournment of the meeting, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. This proxy
statement and form of proxy are first being sent to shareholders on or
about March 29, 1999.
If a proxy in the accompanying form is properly executed, duly
returned to the Corporation, and not revoked, the shares represented by the
proxy will be voted at the annual meeting of the Corporation's shareholders
and at any adjournment of that meeting. Where a shareholder specifies a
choice, a proxy will be voted as specified. If no choice is specified, the
shares represented by the proxy will be voted for election of all nominees
of the Board of Directors. The Corporation's management does not know of
any other matters to be presented at the annual meeting. If other matters
are presented, the shares represented by proxy will be voted at the
discretion of the persons designated as proxies, who will take into
consideration the recommendations of the Corporation's management.
Any shareholder executing a proxy in the enclosed form has the
power to revoke it by notifying the Secretary of the Corporation in writing
at the address indicated above at any time before it is exercised, or by
appearing at the meeting and voting in person.
Solicitation of proxies is being made by mail. Directors,
officers, and regular employees of the Corporation and its subsidiaries may
also solicit proxies in person or by telephone without additional
compensation. In addition, banks, brokerage firms, and other custodians,
nominees, and fiduciaries may solicit proxies from the beneficial owners of
shares they hold and may be reimbursed by the Corporation for reasonable
expenses incurred in sending proxy material to beneficial owners of the
Corporation's stock. The Corporation will pay all expenses of soliciting
proxies.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors has nominated Edward B. Grant and Phillip
G. Peasley for reelection to the Board of Directors at the annual meeting
to serve 3-year terms that will expire in 2002.
The proposed nominees are willing to be elected and to serve. In
the event that any nominee is unable to serve or is otherwise unavailable
for election, which is not now contemplated, the incumbent Board of
Directors may or may not select a substitute nominee. If a substitute
nominee is selected, all proxies will be voted for the person so selected.
If a substitute nominee is not so selected, all proxies will be voted for
the election of the remaining nominee. Proxies will not be voted for a
greater number of persons than the number of nominees named.
A vote of shareholders holding a plurality of shares voting is
required to elect directors. For the purpose of counting votes on this
proposal abstentions, broker non-votes, and other shares not voted will not
be counted as shares voted.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ELECTION OF ALL NOMINEES AS DIRECTORS
VOTING SECURITIES
At the close of business on March 8, 1999, the record date for
determination of the shareholders entitled to vote at the annual meeting,
the Corporation had issued and outstanding 4,500,641 shares of its Common
Stock, the only class of voting securities presently outstanding. Each
share entitles its holder to one vote on each matter to be voted upon at
the meeting.
The following table shows certain information concerning the
number of shares of Common Stock held by the only shareholder who is known
to management of the Corporation to be the beneficial owner of more than 5
percent of the outstanding shares of Common Stock of the Corporation as of
December 31, 1998.
-2-
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP <F1>
----------------------------------------------
SOLE SHARED
VOTING AND VOTING OR TOTAL
NAME AND ADDRESS OF INVESTMENT INVESTMENT BENEFICIAL PERCENT
BENEFICIAL OWNER POWER POWER <F2> OWNERSHIP OF CLASS
- --------------------------- ---------- ----------- ---------- --------
<S> <C> <C> <C> <C>
Firstbank Corporation
Employee Stock Ownership
Plan ("ESOP")
311 Woodworth Avenue
Alma, Michigan 48801 <F3> 34,848 354,220 389,068 8.6%
</TABLE>
The following table shows certain information concerning the
shares of the Corporation beneficially owned by each of the Corporation's
directors and nominees for director, by the executive officers named in the
summary compensation table below, and by all directors and executive
officers as a group as of December 31, 1998.
<TABLE>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP <F1>
----------------------------------------------
<CAPTION>
NAME OF SOLE SHARED TOTAL BENEFICIAL PERCENT OF
BENEFICIAL OWNER VOTING AND VOTING OR OWNERSHIP CLASS
- ---------------- INVESTMENT INVESTMENT --------- -----
POWER POWER <F2>
----- ----------
<S> <C> <C> <C> <C>
Duane A. Carr 14,982 14,982 <F*>
William E. Goggin 9,454 4,564 14,018 <F*>
Edward B. Grant 3,256 3,256 <F*>
Charles W. Jennings 2,929 2,929 <F*>
John McCormack 41,404<F4><F5> 16,128 57,532<F4><F5> 1.27%
Phillip G. Peasley 12,212 86 12,298 <F*>
Dale A. Peters 13,375<F4><F5> 2,700 16,075 <F*>
David D. Roslund 8,362 215 8,577 <F*>
-3-
<PAGE>
Richard J. Schurtz 28,026 28,026
Thomas R. Sullivan 14,441<F4><F5> 14,441<F4><F5> <F*>
James E. Wheeler II 8,925<F4><F5> 11,853 20,778<F4><F5> <F*>
All directors and
executive officers 158,801<F4><F5> 57,674 216,475<F4><F5> 4.78%
<FN>
<F*> Represents less than 1 percent of the outstanding shares.
<F1> The numbers of shares stated are based on information furnished by
each person listed and include shares personally owned of record by
that person and shares which under applicable regulations are deemed
to be otherwise beneficially owned by that person. Under these
regulations, a beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise, has or shares voting power
or investment power with respect to the security. Voting power
includes the power to vote or to direct the voting of the security.
Investment power includes the power to dispose or to direct the
disposition of the security. A person will also be considered the
beneficial owner of a security if the person has a right to acquire
beneficial ownership of the security within 60 days.
<F2> Includes shares as to which the indicated person is legally entitled
to share voting or investment power by reason of joint ownership,
trust, or other contract or property right, and shares held by spouses
and children over whom the indicated person may have substantial
influence by reason of the relationship.
<F3> John McCormack, Dale A. Peters, Richard J. Schurtz and Thomas R.
Sullivan, all officers of the Corporation, and Nancy A. Stark, Human
Resources Officer for Bank of Alma, a wholly owned subsidiary of the
Corporation, are the members of the Pension Committee of the
Corporation. Bank of Alma is the trustee of the ESOP Trust, which
holds shares of the Corporation for the ESOP. The trustee has voting
and limited investment power over shares, if any, held by the ESOP
Trust which have not been allocated to individual accounts, and
limited investment power over shares which have been allocated to
individual accounts. The Pension Committee has the power to direct
the trustee as to the voting of the shares held by the ESOP Trust that
have not been allocated to an individual account, if any. Each of the
members of the Pension Committee disclaims beneficial ownership of
shares held by the ESOP (except shares allocated to the person's
individual account under the ESOP), and ESOP shares are not reported
as beneficially owned by the members of the Pension Committee as
individuals unless the shares have been allocated to the person's
individual account under the ESOP.
-4-
<PAGE>
<F4> Includes shares allocated to individual accounts under the ESOP.
<F5> Shares that may be acquired pursuant to stock options that
are exercisable within 60 days are included in the table. The number
of shares subject to such options for Mr. McCormack is 9,403 shares,
Mr. Peters is 5,748 shares, Mr. Sullivan is 6,553 shares, Mr. Wheeler
is 6,269 shares, Mr. Schurtz is 25,168 shares, and officers as a group
is 62,251 shares. No other listed person owns options.
</FN>
</TABLE>
BOARD OF DIRECTORS
The Articles of Incorporation of the Corporation provide that the
Board of Directors will be divided into three classes, as nearly equal in
number as possible, with the term of office of one class expiring each
year. The present Board of Directors consists of seven persons who were
elected to the Board of Directors for terms of three years each by the
Corporation's shareholders. The term of office of one class of directors
consisting of two directors expires in 1999.
Biographical information concerning the current directors and the
nominees who are nominated for election to the Board of Directors at the
annual meeting is presented below. Except as otherwise indicated, all
directors and nominees have had the same principal employment for over
five years.
NOMINEES FOR 3-YEAR TERMS EXPIRING IN 2002
EDWARD B. GRANT (age 49) has been a director of Firstbank, a
wholly owned subsidiary of the Corporation, since 1988, and of the
Corporation since 1990. He has served as Chairman of the Board of
Firstbank since 1989. Mr. Grant is Chairman, School of Accounting, at
Central Michigan University. He is also President of LEARNet, Inc., a
video production service, and is a certified public accountant.
PHILLIP G. PEASLEY (age 65) has been a director of Bank of Alma,
a wholly owned subsidiary of the Company, since 1973, and of the
Corporation since 1985. He is the owner and President of Peasley's
Hardware & Furniture, Inc., a retail hardware and furniture store.
DIRECTORS WITH TERMS EXPIRING IN 2001
DUANE A. CARR (age 59) has been a Director of Bank of Lakeview
since 1980 and of the Corporation since 1998. He is an attorney with
the law firm of Carr and Mullendore in Greenville, Michigan. He is an
active farmer in Carr Farms Partnership in Lakeview, Michigan.
-5-
<PAGE>
WILLIAM E. GOGGIN (age 53) has been a director of Bank of Alma
since 1974, and of the Corporation since 1985. Mr. Goggin has served
as Chairman of the Board of the Corporation since 1986. He is an
attorney with the law firm of Goggin & Baker.
CHARLES W. JENNINGS (age 62) has been a director of 1st Bank, a
wholly owned subsidiary of the Corporation, since 1987, and a director
of the Corporation since 1989. Mr. Jennings is an attorney with the
law firm of Jennings & Ellias, P.C.
DIRECTORS WITH TERMS EXPIRING IN 2000
JOHN MCCORMACK (age 62) has been President and Chief Executive
Officer and a director of the Corporation since 1986. He has also
been President and Chief Executive Officer and a director of Bank of
Alma since 1986. Previously, he served Bank of Alma in other
capacities. Mr. McCormack is a director of 1st Bank, Bank of Lakeview
and Firstbank, wholly owned subsidiaries of the Corporation.
DAVID D. ROSLUND (age 58) has been a director of the Corporation
since 1995 and has been a director of Bank of Alma since 1990.
Mr. Roslund, a certified public accountant, is the Administrator of
Wilcox Health Care Center, a nursing home located in Alma. He also is
an investor in and manager of several local small businesses.
The Board of Directors of the Corporation has a standing audit
committee. It is the duty of the audit committee to cause a suitable
examination of the Corporation's financial records and operations, and
those of its subsidiaries, to be made by the internal auditor through a
program of continuous internal audits; to recommend to the Board of
Directors the appointment of independent auditors to audit the consolidated
financial statements of the Corporation and its subsidiaries and make such
additional examinations as the committee deems advisable; to review reports
of examination of the Corporation and its subsidiaries received from
regulatory authorities; and to report to the Board of Directors at least
once each calendar year on the results of examinations made and offer such
conclusions and recommendations as the committee deems appropriate.
Messrs. Goggin, Grant, and Roslund served on this committee. During 1998,
the audit committee held three meetings.
The Board of Directors of the Corporation does not have standing
nominating or compensation committees. The entire Board of Directors
performs the functions of those committees. In making nominations for
election to the Board of Directors, the Board of Directors will consider
recommendations of shareholders. Shareholders who wish to recommend
nominees should submit their recommendations in writing, delivered or
mailed to the Secretary of the Corporation.
-6-
<PAGE>
The Board of Directors of the Corporation held 12 regularly
scheduled and one special meeting during 1998. All incumbent directors
attended at least 75 percent of all meetings of the Board of Directors and
any committees on which they served.
REPORT ON EXECUTIVE COMPENSATION
All of the officers of the Corporation are also officers of one
or more of the Corporation's subsidiary banks. They serve as officers of
the Corporation as an incident to their primary service as an officer and
employee of a subsidiary bank and, except for certain directors' fees,
receive no compensation directly from the Corporation. Although there is a
great deal of communication between the Board of Directors of the
Corporation and the Boards of Directors of the banks, the Boards of
Directors of the banks retain authority and responsibility for setting
compensation for their own officers, including those officers who also
serve as officers of the Corporation.
The entire Board of Directors of the Corporation serves as a
compensation committee, with Mr. McCormack excused from meetings where
decisions with respect to his own compensation are made. The entire Board
of Directors of the Corporation, except Mr. McCormack, serves as a
committee to administer the Stock Option and Restricted Stock Plan of 1993
(the "1993 Plan") and the Stock Option and Restricted Stock Plan of 1997
(the "1997 Plan"). The Corporation's Board of Directors has responsibility
for establishing the formal employee benefit plans which are available to
the employees of all of the subsidiary banks. These plans currently
include a qualified employee stock ownership and 401(k) plan, a
non-qualified deferred compensation plan, the 1993 Plan, and the 1997 Plan.
The Board of Directors of the Corporation reviews the compensation to be
paid to the chief executive officers of the subsidiary banks, each of whom
is also an officer of the Corporation. Recommendation and formal
authorization of the compensation of the subsidiary bank chief executive
officers is, however, the role of the Boards of Directors of the subsidiary
banks.
All officers receive a salary and, if net income is satisfactory,
an annual cash bonus. It is the policy of the Corporation and the banks
to set salaries at levels which will be competitive with other comparable
financial institutions in order to enable the Corporation and the banks to
retain, and when needed attract, qualified executive officers. Information
on compensation levels of other institutions is obtained from compensation
surveys published by the Michigan Banker's Association, the Bank
Administration Institute and from other similar sources. In setting
salaries, the Corporation and the banks also seek to assure relative
fairness in the compensation of officers and to recognize the value of the
contribution that each makes to the Corporation's success. Annual cash
-7-
<PAGE>
bonuses are based on a discretionary evaluation of the performance of the
Corporation and the bank served by the officer. Bonuses also take into
account recognition of specific personal achievements of the individual
officers.
During 1998, stock options were awarded under the 1993 Plan and
1997 Plan to all full-time benefit eligible employees as of January 1,
1999. The number of shares subject to each option was based on the
position and a discretionary assessment of the performance of each grantee.
The options awarded in 1998 vest over different periods of time depending
on the employment classification of the grantee. All options awarded to
hourly employees become fully vested six months after the grant date.
Options awarded to salaried employees vest over a period of nine years from
the date of the grant with 10% vesting six months after the grant date and
an additional 10% vesting on each anniversary of the date of the grant.
Both the 1993 Plan and the 1997 Plan allow the Corporation to issue
restricted stock to officers and employees of the Corporation and its
subsidiaries. However, no shares of restricted stock were awarded in 1998.
The Corporation generally maintains a conservative level of
perquisites and personal benefits. The dollar value of perquisites and
personal benefits provided to executive officers does not exceed 10% of
each executive officer's respective annual salary and bonus.
Section 162(m) of the Internal Revenue Code provides that
publicly held corporations may not deduct compensation paid to certain
executive officers in excess of $1 million annually, with certain
exemptions. The Corporation's Board of Directors has examined its
executive compensation policies in light of Section 162(m) and the
regulations issued by the Internal Revenue Service to implement that
section. It is not expected that any portion of the Corporation's
deduction for employee remuneration will be disallowed in 1999 or in future
years by reason of actions expected to be taken in 1999.
The salary and bonus of John McCormack, President and Chief
Executive Officer of the Corporation and Bank of Alma, was recommended by
the Compensation Committee of Bank of Alma and approved by the Boards of
Directors of the Corporation and Bank of Alma. In recommending and
approving Mr. McCormack's salary, the committee and the boards considered a
survey of compensation paid to executive officers by Michigan financial
institutions of more or less comparable size. Mr. McCormack's salary,
bonus, and stock option awards were also based on a discretionary
evaluation of Mr. McCormack's personal performance and the operating
results of the Corporation and Bank of Alma. For this purpose, the
committee and the Boards of Directors focused on the earnings of the
Corporation and Bank of Alma in the year just completed, the quality and
-8-
<PAGE>
productivity of the management team, reductions in administrative staffing,
and continuing improvements made in loan quality, loan and loan allowance
management, and loan documentation and procedure.
Respectfully submitted,
Duane A. Carr
William E. Goggin
Edward B. Grant
Charles W. Jennings
John McCormack
Phillip G. Peasley
David D. Roslund
-9-
<PAGE>
STOCK PERFORMANCE
The following graph compares the cumulative total shareholder
return on the common stock of the Corporation to the KBW 50 Index,
published by Keefe, Bruyette & Woods, Inc., and the Standard & Poor's 500
Stock Index assuming a $100 investment at the end of 1993. The Standard &
Poor's 500 Stock Index is a broad equity market index. The KBW 50 Index is
composed of 50 money center and regional bank holding companies.
Cumulative total return is measured by dividing (i) the sum of (A) the
cumulative amount of dividends for the measurement period, assuming
dividend reinvestment, and (B) the difference between the share price at
the end and the beginning of the measurement period; by (ii) the share
price at the beginning of the measurement period. The Standard & Poor's
500 Index and the KBW 50 Index assume dividend reinvestment.
[STOCK PERFORMANCE GRAPH]
The table below shows dollar values for cumulative total
shareholder return plotted in the graph above.
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Firstbank $100.0 $105.4 $135.7 $179.3 $267.9 $354.1
KBW 50 $100.0 $ 94.9 $152.0 $215.0 $314.3 $340.3
S&P 500 $100.0 $101.3 $139.4 $171.4 $228.6 $293.9
</TABLE>
-10-
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Executive officers of the Corporation are compensated by Bank of
Alma, Firstbank, 1st Bank, or Bank of Lakeview, in accordance with their
employment with the applicable banks. They do not receive any compensation
directly from the Corporation, except for directors' fees paid by the
Corporation to Mr. McCormack. Presented below is the remuneration paid for
the three years ended December 31, 1998, by Bank of Alma, Firstbank, 1st
Bank, and Bank of Lakeview to the five most highly compensated officers of
the Corporation for the year ended December 31, 1998.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
NAME AND PRINCIPAL POSITION YEAR ANNUAL COMPENSATION
- --------------------------- ---- ------------------- LONG TERM ALL OTHER
SALARY <F1> BONUS <F1> COMPENSATION COMPENSATION <F5>
----------- ---------- ------------ -----------------
SECURITIES
UNDERLYING
OPTIONS <F2>
------------
<S> <C> <C> <C> <C> <C>
John McCormack 1998 $168,561 $50,540 3,150 $5,945
President, Chief Executive 1997 157,605 37,677 3,308 6,013
Officer and director of the 1996 149,294 44,177 3,474 6,537
Corporation and Bank of
Alma
Thomas R. Sullivan 1998 $119,671 $20,000 2,625 $4,897
Executive Vice President 1997 109,699 17,500 2,756 4,616
of the Corporation and 1996 100,521 15,000 2,894 4,337
President, Chief Executive
Officer and director of
Firstbank
Dale A. Peters 1998 $89,753 $39,103 2,625 $3,770
Vice President of the 1997 82,972 35,000 2,756 3,496
Corporation and President 1996 80,578 25,000 2,894 4,406
and Chief Executive Officer
of 1st Bank
-11-
<PAGE>
Richard J. Schurtz 1998 $106,048 $15,139 2,625 $4,008
Vice President of the 1997<F3> 40,788 27,373<F4> 1,542
Corporation and President 1996 0 -- -- --
and Chief Executive Officer
of Bank of Lakeview
James E. Wheeler II 1998 $89,255 $23,750 2,100 $2,624
Vice President of the 1997 85,266 20,275 2,205 2,793
Corporation and Senior Vice 1996 81,583 24,200 2,315 3,011
President and Chief Loan
Officer of Bank of Alma
__________________________________
<FN>
<F1> Includes directors' fees and compensation voluntarily deferred under
the ESOP and under the Firstbank Corporation Nonqualified Deferred
Compensation Plan.
<F2> The numbers of shares subject to stock options have been adjusted to
reflect stock dividends and a stock split.
<F3> Partial year compensation.
<F4> Mr. Schurtz received options to purchase 24,617 shares of Firstbank
Corporation stock pursuant to the 1997 acquisition of Bank of
Lakeview.
<F5> All other compensation for the year ended December 31, 1998, is
comprised of matching contributions under the ESOP as follows:
John McCormack $5,945
Thomas R. Sullivan 4,897
Dale A. Peters 3,770
Richard J. Schurtz 4,008
James E. Wheeler II 2,624
</FN>
</TABLE>
Stock options are believed to help align the interests of
employees with the interests of shareholders by promoting stock ownership
by employees and by rewarding them for appreciation in the price of the
Corporation's stock. Stock options which were granted or outstanding
during 1998 were granted under the 1993 and 1997 Plans.
The following tables set forth information concerning stock
options granted to and retained by the named executive officers of the
Corporation during 1998. None of the named officers exercised stock
options during 1998.
-12-
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
% OF
TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SHARES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES FOR OPTION TERM
OPTIONS IN FISCAL EXERCISE EXPIRATION -----------------------------
NAME GRANTED <F2> YEAR PRICE <F2> DATE 0% 5% 10%
---- ------------ --------- ---------- ---------- --- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
John McCormack 3,150 3.7% $30.48 11/23/08 $0 $60,374 $152,999
Thomas R. Sullivan 2,625 3.1% $30.48 11/23/08 0 $50,312 $127,499
Dale A. Peters 2,625 3.1% $30.48 11/23/08 0 $50,312 $127,499
Richard J. Schurtz 2,625 3.1% $30.48 11/23/08 0 $50,312 $127,499
James E. Wheeler II 2,100 2.5% $30.48 11/23/08 0 $40,249 $102,000
</TABLE>
<TABLE>
YEAR END OPTION VALUES
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS AT THE-MONEY OPTIONS AT
YEAR END <F2> YEAR END
------------- --------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
John McCormack 9,403/12,023 $175,495/129,142
Thomas R. Sullivan 6,553/ 9,386 $120,270/ 95,280
Dale A. Peters 5,748/ 8,851 $103,479/ 84,085
Richard J. Schurtz 25,168/ 4,830 $466,578/ 18,195
James E. Wheeler II 6,269/ 8,015 $116,966/ 86,092
- ---------------------------
<FN>
<F1> The per share exercise price of each option is equal to the
market value of the common stock on the date each option was
granted. All outstanding options were granted for a term of ten
years. Options terminate, subject to certain limited exercise
provisions, in the event of death, retirement, or other
termination of employment. No option is exercisable until six
-13-
<PAGE>
months after the date of grant. Except for options granted in
1994 which became fully vested six months after the date of
grant, the right to exercise options vests over nine years with
10% becoming vested six months from the grant date and an
additional 10% vesting on each anniversary of the date of grant.
<F2> The numbers have been adjusted in accordance with the 1993 Plan and
the 1997 Plan to reflect stock dividends and a stock split.
</FN>
</TABLE>
The Corporation pays its Chairman of the Board a retainer of
$3,000 per year and pays each of its directors who is not compensated as an
officer of the Corporation a fee of $500 for each regular Board of
Directors meeting attended, $700 for each full day and $500 for each half
day special Board of Directors meeting attended, and $200 for each
conference call in which the director participates. In addition, directors
who serve on the Corporation's audit committee are paid $150 for each
committee meeting attended.
Each director or nominee of the Corporation is also a director of
Bank of Alma, Firstbank, 1st Bank, or Bank of Lakeview. Bank of Alma pays
its Chairman of the Board a retainer of $3,000 per year and pays each of
its directors who is not compensated as an officer of Bank of Alma a fee
for each regular Board of Directors meeting attended based on years served
as a director. For each regular meeting, directors that have served up to
five years receive $300, six through ten years receive $400, and over ten
years receive $500. Each director attending a special full day Board of
Directors meeting receives $600, and for each half day meeting, $350. In
addition, directors of Bank of Alma who serve on committees are paid $200
for each executive committee meeting attended and $100 for each other
committee meeting attended.
Bank of Alma, Firstbank, and Bank of Lakeview pay the Chairmen of
their Board of Directors a retainer of 200 shares of Firstbank Corporation
common stock per year. Bank of Alma, Firstbank, 1st Bank, and Bank of
Lakeview pay each of their other directors, who is not compensated as an
officer of the bank, a retainer of 100 shares of Firstbank Corporation
common stock. In addition, Firstbank, 1st Bank, and Bank of Lakeview pay
each director a fee of $200 for each regular Board of Directors meeting
attended and $100 for each committee meeting attended. Directors of
Firstbank and 1st Bank have the option of receiving meeting fees in cash or
Firstbank Corporation common stock. Firstbank and 1st Bank pay directors
$300 for each special Board of Directors meeting attended.
Directors of the Corporation and each subsidiary bank may elect
to defer their director fees under the Firstbank Corporation Nonqualified
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Deferred Compensation Plan. Deferrals are discretionary and each director
is permitted to select an investment option for the deferred fees under the
Deferred Compensation Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Exchange Act requires the Corporation's directors, officers,
and persons who own more than 10% of the Corporation's common stock to file
reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC"). SEC regulations require such reporting
persons to furnish the Corporation with copies of all such reports they
file. Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no
filings were required for those persons, the Corporation believes that,
from January 1, 1998, through December 31, 1998, its directors, officers,
and greater than 10% shareholders complied with all applicable filing
requirements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The entire Board of Directors of the Corporation serves as a
compensation committee. Mr. McCormack, the President and Chief Executive
Officer of the Corporation, serves on the Board of Directors and
participates in deliberations concerning compensation of other executive
officers. Mr. McCormack, however, is excused from meetings at which
decisions with respect to his own compensation are made. The entire Board
of Directors, except Mr. McCormack, serves as a committee to administer the
1993 and 1997 Plans.
Mr. Goggin is the owner of Goggin & Baker, a law firm which Bank
of Alma has retained in prior years and proposes to retain in the current
fiscal year. Fees paid by the Corporation and its subsidiaries represented
less than 5% of the gross revenues of the law firm during 1998. Mr.
Jennings is an attorney with, and President and 50 percent shareholder of,
Jennings & Ellias, P.C., a law firm which has performed services for 1st
Bank in prior years and which 1st Bank may continue to use for legal
matters in the future. Fees paid by the Corporation and its subsidiaries
represented less than 5% of the gross revenues of the law firm during 1998.
Mr. Carr is a partner and 50% owner of Carr and Mullendore, a law firm
which has performed services for Bank of Lakeview in prior years and which
Bank of Lakeview may continue to use for legal matters in the future. Fees
paid by the Corporation and its subsidiaries represented less than 5% of
the gross revenues of the law firm during 1998.
Directors and officers of the Corporation and their associates
were customers of, and had transactions with, the Corporation's subsidiary
banks in the ordinary course of business between January 1, 1998, and
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December 31, 1998. All loans and commitments included in such transactions
were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions
with other persons and did not involve more than the normal risk of
collectibility or present other unfavorable features. All loans to
directors, officers, and their associates were current as of December 31,
1998.
INDEPENDENT AUDITORS
The Board of Directors of the Corporation has appointed the firm
of Crowe, Chizek and Company LLP, certified public accountants, as
independent auditors of the Corporation for the 1999 fiscal year. Crowe,
Chizek and Company LLP also examined and reported on the Corporation's
financial statements as of, and for the year ended, December 31, 1998. A
representative of Crowe, Chizek and Company LLP is expected to be present
at the annual shareholders' meeting and have an opportunity to make a
statement if the representative desires to do so. The Crowe, Chizek and
Company LLP representative is also expected to be available to respond to
appropriate questions.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the next annual
meeting must be received by the Corporation for inclusion in its proxy
statement and form of proxy relating to that meeting by November 29, 1999.
Shareholder proposals should be made in accordance with Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as amended, and
should be addressed to Mary D. Deci, Secretary, Firstbank Corporation,
311 Woodworth Avenue, Alma, Michigan 48801. Proxies to be solicited by the
Corporation to vote at the annual meeting of shareholders to be held in
2000 may confer discretionary authority on the persons named as proxies to
vote on any matter if the Corporation did not have notice of the matter by
February 14, 2000.
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PROXY FIRSTBANK CORPORATION
ANNUAL MEETING OF SHAREHOLDERS - APRIL 26, 1999
The undersigned shareholder acknowledges receipt of a Notice of
Annual Meeting and a Proxy Statement for the annual meeting referred to
above, and appoints JOHN McCORMACK and MARY D. DECI, or either of them,
each with full power of substitution, attorneys and proxies to represent
the shareholder, and to vote and act with respect to all shares that the
shareholder would be entitled to vote, at the annual meeting of
shareholders of Firstbank Corporation referred to above and at any
adjournment of that meeting, on all matters which come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF
THIS PROXY IS PROPERLY EXECUTED AND DELIVERED, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE OTHER SIDE OF THIS PROXY. IF
NO SPECIFICATION IS GIVEN, THE SHARES WILL BE VOTED FOR ELECTION OF ALL
NOMINEES NAMED ON THIS PROXY AS DIRECTORS. THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTER
WHICH MAY COME BEFORE THE MEETING.
Signatures should be IDENTICAL
to the name(s) on your stock
certificate (which are on the
address label to the left).
JOINT OWNERS SHOULD EACH SIGN
PERSONALLY. When signing on
behalf of a corporation,
partnership, LLC, estate,
trust or other entity, or as
attorney or guardian, indicate
title or capacity of person
signing and give the full name
of the entity or person on
whose behalf this proxy is
signed.
Signature X____________________________________
Signature X____________________________________
Date _______________________________, 1999
<PAGE>
1. Election of Directors
[ ] VOTE FOR ALL nominees listed [ ] WITHHOLD AUTHORITY to vote
below (except as marked to the for all nominees listed
contrary below) below
YOUR BOARD OF DIRECTORS RECOMMENDS AUTHORIZATION TO VOTE
FOR ALL NOMINEES LISTED BELOW
EDWARD B. GRANT PHILLIP G. PEASLEY
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space below.)
2. In their discretion, upon all other matters that may be presented
at the meeting.
PLEASE SIGN AND DATE THE OTHER SIDE. RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
