<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
FIRSTFED FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
FIRSTFED FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] 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:
________________________________________________________________________
(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:*
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
- --------
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
[_] 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:_________________________________________________
(2) Form, Schedule or Registration Statement No.:___________________________
(3) Filing Party:___________________________________________________________
(4) Date Filed:_____________________________________________________________
Notes:
<PAGE>
FIRSTFED FINANCIAL CORP.
401 WILSHIRE BOULEVARD
SANTA MONICA, CALIFORNIA 90401-1490
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 20, 1994
NOTICE IS HEREBY GIVEN that an annual meeting of stockholders (the "Annual
Meeting") of FirstFed Financial Corp. will be held in the Starlight Room of the
Miramar-Sheraton Hotel at 101 Wilshire Blvd., Santa Monica, California 90401 on
April 20, 1994 at 10:00 A.M., local time, for the following purposes:
(1) To elect three Directors to hold office for a three-year term and
until their successors are duly elected and qualified.
(2) To ratify the appointment of KPMG Peat Marwick as independent public
auditors of the Company for 1994.
(3) To transact such other business as may properly be brought before the
Annual Meeting or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on March 3, 1994 are
entitled to notice of and to vote at the Annual Meeting or any adjournment or
adjournments thereof.
IMPORTANT: If your shares are held in the name of a brokerage firm or
nominee, only that holder can execute a proxy on your behalf. To ensure that
your shares are voted, we urge you to telephone the individual responsible for
your account today and obtain instructions on how to direct him or her to
execute a proxy.
If you receive in separate mailings more than one proxy, it is an indication
that your shares are registered differently in more than one account. All proxy
cards received by you should be signed and mailed to ensure that all of your
shares are voted.
Ann E. Lederer
Secretary
Santa Monica, California
March 21, 1994
IT IS REQUESTED THAT YOU PROMPTLY MARK, DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING. THE PROXY MAY BE WITHDRAWN AT ANY TIME BEFORE IT IS VOTED AT THE
MEETING OR STOCKHOLDERS MAY VOTE IN PERSON AS DESCRIBED IN THE ACCOMPANYING
PROXY STATEMENT.
<PAGE>
FIRSTFED FINANCIAL CORP.
401 WILSHIRE BOULEVARD
SANTA MONICA, CALIFORNIA 90401-1490
----------------
PROXY STATEMENT
----------------
INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of FirstFed Financial Corp. ["FFC", and
collectively with its subsidiary, First Federal Bank of California ("Bank"),
the "Company"] for use at the Annual Meeting of Shareholders to be held on
April 20, 1994, and at any adjournment thereof. The approximate date of mailing
of this proxy statement is March 21, 1994.
The Board of Directors of the Company has selected March 3, 1994 as the
record date for the Annual Meeting. Only those shareholders of record at the
close of business on that date will be entitled to notice of and to vote at the
Annual Meeting. The Company had a total of 10,533,186 shares of common stock
("Company Stock") outstanding at that date. Shareholders will be entitled to
one vote for each share of Company Stock held by them of record at the close of
business on the record date on any matter that may be presented for
consideration and action by the shareholders at the Annual Meeting.
All valid proxies received in response to this solicitation will be voted in
accordance with the instructions indicated thereon by the shareholders giving
such proxies. If no contrary instructions are given, proxies received will be
voted in favor of the election of the three director nominees named in this
Proxy Statement and in favor of the other proposals described herein. Proxies
solicited hereby may be voted for adjournment of the Annual Meeting (whether or
not a quorum is present for the transaction of business) in order to permit
further solicitation of proxies if the Board of Directors of the Company
determines that such adjournment would be advisable in order to obtain
sufficient votes for approval of the matters to be voted upon at the Annual
Meeting.
The Board of Directors does not know of any other business to be presented
for action at the Annual Meeting. If any other business is properly presented
at the Annual Meeting and may properly be voted upon, the proxies solicited
hereby will be voted on such matters in accordance with the best judgment of
the proxy holders named in such proxies. A shareholder's proxy may be revoked
at any time before it is voted at the Annual Meeting by giving written notice
of such revocation to the Secretary of the Company (which notice may be given
by the filing of a duly executed proxy bearing a later date) or by attending
the Annual Meeting and voting in person.
The costs of this proxy solicitation will be paid by the Company. The Company
has retained Kissel-Blake, Inc. to assist in the solicitation of proxies for a
fee of $7,500 and reimbursement of certain expenses. To the extent necessary,
proxies may also be solicited by personnel of the Company in person, by
telephone, or through other forms of communications. Company personnel who
participate in this solicitation will not receive any additional compensation
for such solicitation. The Company will request record holders of shares
beneficially owned by others to forward this Proxy Statement and related
materials to the beneficial owners of such shares and will reimburse such
record holders for their reasonable expenses incurred in doing so.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The information set forth below is based upon filings as of March 7, 1994
made by the listed entities with the Securities and Exchange Commission
("SEC"). Except as set forth below, no person is known to the Company to own
beneficially more than 5% of the outstanding shares of Company Stock:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------- ---------- --------
<S> <C> <C>
First Federal Bank of California Employee Stock Own-
ership Plan and Trust............................... 940,888(1) 8.94%
401 Wilshire Boulevard
Santa Monica, CA 90401
Goldman, Sachs & Co. and The Goldman Sachs Group 910,593(2) 8.7%
L.P. ...............................................
85 Broad Street
New York, NY 10004
J. P. Morgan & Co. Incorporated..................... 1,041,600(3) 9.9%
60 Wall Street
New York, New York 10260
</TABLE>
- --------
(1) According to its filing on Schedule 13G with the SEC dated February 18,
1994, the First Federal Bank of California Employee Stock Ownership Plan
and Trust holds sole voting power over 247,726 of these shares, shared
voting power over 693,162 of these shares, and sole dispositive power over
all 940,888 of these shares. Such Plan's filing indicates that the shares
"were acquired in the ordinary course of business and were not acquired for
the purpose of and do not have the effect of changing or influencing the
control of the issuer of such securities and were not acquired in
connection with or as a participant in any transaction having such purpose
or effect."
(2) According to their filing on Schedule 13G with the SEC dated February 7,
1994, Goldman, Sachs & Co. and The Goldman Sachs Group L.P. hold shared
voting power over 816,743 of these shares and shared dispositive power over
all 910,593 of these shares. According to their filing, Goldman, Sachs &
Co. is a broker or dealer and investment advisor, and The Goldman Sachs
Group L.P. is its parent holding company.
(3) According to its filing on Schedule 13G with the SEC dated December 31,
1993, J.P. Morgan & Co. Incorporated holds sole voting power over 775,300
of these shares and sole dispositive power over all 1,041,600 of these
shares. According to its filing, J.P. Morgan & Co. Incorporated is a parent
holding company of Morgan Guaranty Trust Company of New York, a bank, and
J. P. Morgan Investment Management, Inc., an invesment advisor.
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of February 25, 1994, information
concerning the beneficial ownership of shares of Company Stock by each
Director, the Company's Chief Executive Officer and the other most highly
compensated named executive officers of the Company during the fiscal year
ended December 31, 1993, and all Directors and executive officers of the
Company as a group. Unless otherwise indicated, each person listed has sole
investment and voting power with respect to the shares indicated.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE
NAME OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
------------------------ ------------ ----------
<S> <C> <C>
Samuel J. Crawford, Jr........................... 65,528 *
James P. Giraldin(2)............................. 1,527 *
Martin B. Gottlieb(3)............................ 28,361 *
Christopher M. Harding........................... 4,838 *
Babette E. Heimbuch(4)........................... 197,129 1.87%
James L. Hesburgh................................ 46,256 *
June Lockhart.................................... 9,737 *
William S. Mortensen(5).......................... 246,219 2.33%
Charles F. Smith................................. 25,000 *
Steven L. Soboroff............................... 875 *
John R. Woodhull................................. 5,500 *
All Directors and Executive Officers as a Group
(16 persons).................................... 540,264(1)(6)(7) 5.12%
</TABLE>
- --------
* Less than 1%.
(1) The number of shares shown for each person includes shares, if any, held
beneficially or of record by the person's spouse; voting and investment
power of the shares indicated may also be shared by spouses.
(2) Includes 193 shares held in the First Federal Employee Stock Ownership
Plan and Trust ("ESOP") and 1,320 shares held through the Restricted Stock
Plan (see below).
(3) Includes 17,916 shares held through the ESOP and 7,468 shares held through
the Restricted Stock Plan.
(4) Includes 22,690 shares held through the ESOP, 11,102 shares held through
the Restricted Stock Plan, and 85,937 shares subject to options
exercisable within sixty (60) days of February 22, 1994.
(5) Includes 109,478 shares held through the ESOP, 15,241 shares held through
the Restricted Stock Plan, and 41,359 shares subject to options
exercisable within 60 days of February 22, 1994.
(6) Includes, with respect to Mr. Giraldin, Mr. Gottlieb, Ms. Heimbuch, Mr.
Mortensen, and all Directors and executive officers as a group, shares
held through the First Federal Bank of California Employee Stock Ownership
Plan and Trust.
(7) Includes, with respect to all executive officers as a group (including
those named) 130,812 shares of Company Stock subject to options granted
under the Bank's 1983 Stock Option Plan which are exercisable within 60
days of February 22, 1994. The percentages of outstanding shares owned by
each of such persons and such group were computed based upon the number of
shares which would have been outstanding if the options of each such
person or group had been exercised.
3
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that the Board of
Directors shall consist of not less than seven and not more than fifteen
Directors unless a greater number is fixed by the Board of Directors, that the
Directors shall be divided into three staggered classes as nearly equal in
number as possible, that each class of Directors shall be elected for a term
of three years and that one class of Directors shall be elected annually. The
class of Directors scheduled to be elected at the Annual Meeting is composed
of three Directors who will be elected to serve a three year term until the
annual meeting of stockholders in 1997 or until their successors are duly
elected and qualified. The nominees receiving the highest number of votes, up
to the number of Directors to be elected, are elected.
Set forth below are the names of the persons nominated by the Board of
Directors for election as Directors at the Annual Meeting, together with their
ages, principal occupations and business experience during the last five
years, present directorships and the year each first became a Director of the
Bank and of the Company. All of the nominees are presently Directors. If any
nominees should be unable to serve as a Director, the person or persons voting
the proxies solicited hereby will select another nominee in his or her place.
The Company has no reason to believe that any of the nominees will be unable
or unwilling to serve if elected.
<TABLE>
<CAPTION>
FIRST (1) FOR
POSITION HELD BECAME TERM TO
NOMINEES FOR ELECTION AGE WITH COMPANY DIRECTOR EXPIRE
- --------------------- --- ------------------------ --------- --------
<S> <C> <C> <C> <C>
Christopher M. Harding 41 Director 1984 1997(2)
James L. Hesburgh 60 Director 1975 1997(2)
Steven L. Soboroff 45 Director 1991 1997(2)
TERM
CONTINUING DIRECTORS EXPIRING
- -------------------- --------
William S. Mortensen 61 Director, Chairman of 1961 1995
the Board & Chief
Executive Officer
Samuel J. Crawford, Jr. 68 Director 1955 1996
Babette E. Heimbuch 46 Director, President & 1986 1995
Chief Operating Officer
June Lockhart 68 Director 1980 1996
Charles F. Smith 61 Director 1989 1996
John R. Woodhull 60 Director 1988 1995
</TABLE>
- --------
(1) The date given is the date such Director became a director of First
Federal Bank of California. Each Director (other than Mssrs. Smith,
Soboroff and Woodhull) has been a Director of the Company since its
organization.
(2) Term of service if re-elected as a Director of the Company at the Annual
Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR NOMINEES
CHRISTOPHER M. HARDING, JAMES L. HESBURGH AND STEVEN L. SOBOROFF.
William S. Mortensen joined the Bank in 1955 and was appointed a member of
the Board of Directors in 1961. He was named President of the Bank in 1969,
Chairman of the Board of Directors of the Bank in 1982 and continues to serve
as Chairman of the Board today. He was named Chairman of the Board of FFC in
1987. In addition, he is a past president of the National Council of Savings
Institutions and the California League of Savings Institutions and is
currently a director of the Federal Home Loan Bank of San Francisco.
4
<PAGE>
Samuel J. Crawford, Jr. is retired from the practice of law in Southern
California. He has served as a Director of the Bank for more than thirty years,
and a Director of FFC since 1987.
Christopher M. Harding is a managing partner of the law firm of Lawrence &
Harding. He is active in numerous local civic groups and has served on the
Board of Directors of Santa Monica Area Chamber of Commerce since 1982.
Babette E. Heimbuch was previously employed by the accounting firm of KPMG
Peat Marwick serving as the Audit Manager assigned to the Bank. Ms. Heimbuch
joined the Bank as Senior Vice President in 1982. She was elected Executive
Vice President in 1985, and was elected a Director of the Bank in March, 1986.
In 1987 she was elected Senior Executive Vice President of the Bank and of FFC
and a Director of FFC. Ms. Heimbuch was named President and Chief Operating
Officer of the Bank and FFC in 1989. Ms. Heimbuch is a director of Sunrise
Medical Inc. and Santa Monica Hospital.
James L. Hesburgh is President and a Director of James L. Hesburgh
International, Inc. and Battley USA, Inc. Mr. Hesburgh is also a director of
Fremont Funding, Inc., Sinto America, Inc. and Toastmaster, Inc. He serves as a
Trustee of St. John's Hospital and Health Center Foundation in Santa Monica,
California. He has served in senior management capacities with several major
United States corporations and specializes in international marketing and
consulting. Mr. Hesburgh has served as a Director of the Bank since 1975, and a
Director of FFC since 1987.
June Lockhart is an internationally known, award winning motion picture,
television and stage actress. For the past thirty years she has been a
spokesperson for the City of Hope and for the American Cancer Society. She is
currently an associate member of the Radio and Television News Directors
Association. Ms. Lockhart is the chair of the Media Committee for the Pan
American Health Organization and is on the advisory board of the National
Association of Radio Talk Show Hosts. She has been a spokesperson for
International Hearing Dogs, Inc. for over twenty years. Ms. Lockhart has served
as a Director of the Bank since 1980, and a Director of FFC since 1987.
Charles F. Smith is president of Charles F. Smith & Company, Inc. He serves
as a Director of Trans Ocean, Ltd., Logicon, Inc. and Fremont Funding, Inc., as
Chairman of the Marymount High School Board of Trustees, and is a Trustee of
St. John's Hospital and Health Center Foundation. Mr. Smith became a Director
of the Bank and FFC in 1989.
Steven L. Soboroff is an investor, real estate developer and President of
Soboroff Partners. He is President of Big Brothers of Greater Los Angeles and
Harbor Commissioner for the City of Los Angeles. Mr. Soboroff became a Director
of the Bank and FFC in 1991.
John R. Woodhull is President, Chief Executive Officer, and Chairman of the
Board of Logicon, Inc., and serves on the boards of Sunrise Medical, Inc. and
the Los Angeles Metropolitan YMCA. Mr. Woodhull became a Director of the Bank
and FFC in 1988.
Directors' Fees. Directors of the Bank, including Directors who are officers
of the Bank, receive annual directors' fees of $13,200, and Directors who are
not officers of the Bank also receive $1,250 for each regular meeting of the
Board attended. Members of the Executive Committee of the Board who are not
officers of the Bank receive $1,000 per month. Directors, excluding the Legal-
Audit Committee Chair, who are Chairs of Board Committees additionally receive
$400 per quarter. The Legal-Audit Committee Chair currently receives an annual
retainer of $10,620. Other members of the Legal-Audit Committee receive $600
per month. Directors of FFC receive no compensation.
Committees of the Board of Directors. The Company has standing Legal-Audit,
Executive Fair Lending/Community Reinvestment Act ("CRA"), Compensation and
Executive Committees. The Legal-Audit Committee currently consists of Messrs.
Crawford (Chair), Smith and Woodhull, all of whom are non-employee directors.
The Committee reviews litigation and reports on various legal, accounting and
auditing matters, including the selection of the Company's independent
auditors, the scope of audit procedures, the nature of services performed by
the independent auditors, the performance of the Company's independent and
internal auditors, its accounting practices, and monitors the Company's legal
and regulatory compliance programs. During the year ended December 31, 1993,
the Legal-Audit Committee held four meetings.
5
<PAGE>
The Executive Fair Lending/CRA Committee held four meetings in 1993. Its
responsibilities include monitoring the Bank's Community Reinvestment Act
activities and ensuring that the Bank complies with all directives from its
Board of Directors. Members of the Committee are Bank Director June Lockhart
(Chair) and Officers Steven Little, Martin Gottlieb, Beverly Teel, Elaine
Akouris, Robert Horn, Nancy Elander, Craig Smith, Shannon Millard, Megan
Davidson, Dan Stephens, Ann Lederer, and Diana Wright (Fair Lending/CRA
Officer).
The Compensation Committee, which held seven meetings in 1993, currently
consists of Directors Hesburgh (Chair), Soboroff and Harding, all of whom are
non-employee directors. This Committee administers the Company's salary and
other compensation programs. See "EXECUTIVE COMPENSATION--Report of
Compensation Committee."
The Executive Committee met one time in 1993 and is comprised of Chairman
Mortensen and Directors Crawford, Hesburgh, and Woodhull.
FFC does not have a standing nominating committee of the Board of Directors
(or another committee performing similar functions). The Bylaws of FFC provide
that only persons nominated in accordance with the procedures set forth
therein shall be eligible for election as Directors. Shareholder nominations
must be made pursuant to written notice received by FFC not less than 60 days
nor more than 90 days prior to the scheduled date of the Annual Meeting. Such
notice must state the nominee's name, age and address (business and
residence), the nominee's principal occupation or employment, and the class
and number of shares of Company Stock beneficially owned by the nominee on the
date of the notice. The required notice must also disclose certain information
relating to the nominee which would be required to be disclosed in a proxy
statement and in certain other filings under the federal securities laws. In
addition, the shareholder making the nomination must disclose his or her name
and address as they appear on FFC's books, the name and principal business or
residence address of any other record or beneficial shareholders known by the
nominating shareholder to support such nominee, and the class and number of
shares of Company Stock beneficially owned by the nominating shareholder and
any such supporting shareholders on the date of the notice.
Meetings of the Board of Directors. During 1993 there were twelve regular
meetings of the Board of Directors of the Bank and FFC. Each Director attended
at least 80% of the aggregate number of such meetings and of the meetings of
the Committee on which he or she served during the period during which he or
she held a position on the Board.
Information Relating to Executive Officers. Set forth below are the names
and ages of the current executive officers of the Company, other than Mr.
Mortensen and Ms. Heimbuch (see "ELECTION OF DIRECTORS"), together with the
positions held by these persons.
<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Brenda J. Battey........................ 36 Senior Vice President/Finance
(Bank); Treasurer (FFC)
James P. Giraldin....................... 41 Executive Vice President/Chief
Financial Officer
Martin B. Gottlieb...................... 53 Executive Vice President/ Marketing
and Savings Administration
Michael R. Hilton....................... 42 Vice President/Controller (FFC);
Senior Vice President/Controller
(Bank)
Joan D. Little.......................... 50 Executive Vice President/Loan
Production and Loan Operations
Steven R. Little........................ 53 Executive Vice President/Loan
Analysis, Loan Service, Mortgage
Banking and Community Reinvestment
</TABLE>
Brenda J. Battey joined the Bank in 1983 as Vice President/Controller. She
was elected to the position of Vice President/Finance in 1985, and to her
current position of Senior Vice President/Finance, in 1990.
6
<PAGE>
James P. Giraldin joined the Bank in May of 1992 as Executive Vice
President/Chief Financial Officer. Prior to joining FFC, Mr. Giraldin was Chief
Executive Officer of Irvine City Bank for 5 years. He previously served as
Chief Financial Officer for two other savings and loans and was a certified
public accountant with KPMG Peat Marwick.
Martin B. Gottlieb joined the Bank in 1980 as Vice President of Business
Development and Market Research. He was elected to the position of Senior Vice
President in 1982 and to his current position of Executive Vice
President/Marketing and Savings Administration in 1987. He was appointed
Executive Vice President of FFC in 1987.
Michael R. Hilton joined the Bank in 1984 as Assistant Vice
President/Controller. He was elected to the position of Vice
President/Controller, of the Bank in 1985 and of FFC in 1987. He was elected to
his current position of Senior Vice President/Controller of the Bank, in 1990.
Joan D. Little joined First Federal in 1981 as Manager of the Secondary
Market Department. In 1982 she was appointed Senior Vice President, Chief Loan
Officer and in 1987 was appointed Executive Vice President. From 1991 through
1993 Ms. Little was the Director of Strategic Planning and worked on a part-
time basis. In October, 1993, Ms. Little was again appointed Chief Lending
Officer. Ms. Little is primarily responsible for the areas of Loan Production
and Loan Operations.
Steven R. Little joined First Federal as Chief Lending Officer in October,
1993 and is in charge of the following lending activities: Loan Service, Loan
Analysis, Mortgage Banking and Community Reinvestment. Previously, Mr. Little
was employed by Western Federal Savings for 23 years, most recently as
Executive Vice President and Chief Loan Officer.
EXECUTIVE COMPENSATION
The following SUMMARY COMPENSATION TABLE includes compensation for the years
ended December 31, 1993, 1992 and 1991 for services in all capacities awarded
to, earned by, or paid to the Company's Chief Executive Officer and the other
named executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- --------------------- -------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME & COMPEN- STOCK OPTIONS/ LTIP COMPEN-
PRINCIPAL SALARY BONUS SATION AWARD SAR'S PAYOUTS SATION
POSITION YEAR ($) ($) ($)(1) ($)(2) (#) ($) ($)(3)
--------- ---- ------- ------- ------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William S. Mortensen.... 1993 332,800 -0- (1) 77,969 -0- -0- 2,629
Chief Executive Officer 1992 312,000 138,500 (1) 43,246 -0- -0- 28,762
1991 300,000 185,000 (1) 59,998 -0- -0- 30,000
Babette E. Heimbuch..... 1993 225,540 -0- (1) 54,835 -0- -0- 2,629
President/Chief Operat- 1992 217,140 97,500 (1) 31,740 -0- -0- 20,418
ing Officer
1991 204,840 130,000 (1) 44,001 -0- -0- 30,000
Sheryl Anne Balthazar... 1993 188,597 -0- (1) -0- -0- -0- -0-
Former Chief Lending 1992 167,880 65,000 (1) 20,948 11,250 -0- -0-
Officer
1991 69,733 70,000 (1) 29,002 -0- -0- -0-
James P. Giraldin....... 1993 173,760 75,000 (1) -0- -0- -0- 2,629
Chief Financial Officer 1992 100,000 45,000 (1) 20,948 11,250 -0- -0-
Martin B. Gottlieb...... 1993 154,560 -0- (1) 38,035 -0- -0- 2,629
Marketing/Savings 1992 149,340 67,500 (1) 20,948 -0- -0- 14,043
1991 143,580 90,000 (1) 29,002 -0- -0- 22,007
</TABLE>
- --------
(1) Perquisites to each officer did not exceed the lesser of $50,000 or 10% of
the total salary and bonus for such officer.
7
<PAGE>
(2) The aggregate restricted stock holdings at December 31, 1993 for the named
executive officers consisted of approximately 35,131 shares worth $562,096
at the then current market value, without giving effect to the diminution
of value attributable to the restrictions on such stock. The value of the
restricted stock awards at the end of the last fiscal year based upon a
stock price of $16.00 per share as of December 31, 1993 is $243,856,
$177,632, $21,120, and $119,488 for Mr. Mortensen, Ms. Heimbuch, Mr.
Giraldin and Mr. Gottlieb, respectively. The number of restricted stock
awards held by Mr. Mortensen, Ms. Heimbuch, Mr. Giraldin and Mr. Gottlieb
at the end of the last fiscal year is 15,241, 11,102, 1,320 and 7,468,
respectively. No restricted stock award vests in under four years from the
date of grant. Dividends will be paid on the restricted stock if and when
paid on the Company Stock. Stock dividends shall be subject to all of the
restrictions applicable to the restricted stock.
(3) Employee Stock Ownership Plan contributions. See "EXECUTIVE COMPENSATION--
Employee Stock Ownership Plan."
Bonus Program. The Company maintains a bonus program to assist in attaining
its business objectives through incentive compensation. Bonuses may be paid at
the discretion of the Compensation Committee of the Board if the Company
achieves its planned financial objectives. See "Report of Compensation
Committee."
Pension Plan. The Company has a non-contributory defined benefit pension plan
(the "Pension Plan"). Employees become participants after reaching the age of
21 years and completing one year of service. The benefits of participants vest
100% after five years of service. The annual amount of normal retirement
pension is equal to the product of 1.2% of the average annual base compensation
up to Social Security covered compensation, plus 1.8% of the average annual
base compensation in excess of Social Security compensation and years of
participation up to a maximum of 35 years.
The Pension Plan also provides that once an employee has attained the age of
55 and has accumulated at least 20 years of service, the employee may retire
and commence receiving benefits immediately. If the benefits commence before
age 65, then the monthly benefits paid to such employees are reduced.
The following table shows the estimated annual benefits upon retirement to
participants in specified remuneration and years of service classifications.
The amounts shown are subject to the maximum benefit limitations set forth in
the Internal Revenue Code. The pension benefits shown are based upon retirement
at age 65 and the payment of a single life annuity to the participants.
The maximum annual benefit currently permitted under the Pension Plan is
$118,800 (single life). Benefits shown below are payable for life with 10 years
payments guaranteed.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------
REMUNERATION 20 25 30 35 40
------------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 50,000.................................. 15,457 19,321 23,185 27,050 27,050
100,000.................................. 33,457 41,821 50,185 58,550 58,550
150,000.................................. 51,457 64,321 77,185 90,050 90,050
200,000.................................. 69,457 86,821 104,185 106,583 106,583
250,000.................................. 73,797 92,246 106,583 106,583 106,583
300,000.................................. 73,797 92,246 106,583 106,583 106,583
350,000.................................. 73,797 92,246 106,583 106,583 106,583
400,000.................................. 73,797 92,246 106,583 106,583 106,583
450,000.................................. 73,797 92,246 106,583 106,583 106,583
500,000.................................. 73,797 92,246 106,583 106,583 106,583
</TABLE>
8
<PAGE>
Estimated credited years of service for each of the individuals named in the
Summary Compensation Table are: Mr. Mortensen--39 years, Ms. Heimbuch--12
years, Mr. Gottlieb--13 years, Mr. Giraldin--1 year.
Supplemental Executive Retirement Plan. The Company has adopted a
Supplemental Executive Retirement Plan ("SERP") covering the Chairman of the
Board and President. The effective date of the SERP is January 1, 1986. Any
individual employed by the Company as its President or Chairman of the Board
will participate in the SERP during the period such person is employed in
either capacity. The SERP is administered by the Compensation Committee of the
Board. All benefits payable under the SERP are paid from the general assets of
the Company.
Mr. Mortensen and Ms. Heimbuch have 39 and 12 years of credited service,
respectively.
If the participant continues in his or her employment with the Company until
he or she attains sixty (60) years of age, the participant will be entitled to
a supplemental retirement benefit equal to the excess of the amount calculated
in (i) below over the amount calculated in (ii) below: (i) seventy-five percent
(75%) of the participant's final average earnings (amended in 1989 to provide
that "earnings" include management bonuses), multiplied by a fraction of which
the numerator equals the number of consecutive years of service, up to twenty-
five (25), and the denominator is twenty-five (25); (ii) the monthly benefit
provided under the Pension Plan.
The SERP provides that if a participant has completed twenty (20) consecutive
years of service and such participant has attained the age of fifty (50) years,
such participant shall be eligible to receive an early supplemental retirement
benefit equal to the amount of the monthly normal supplemental retirement
benefit as calculated above reduced by one-half of one percent (0.5%) for each
of the first sixty (60) months and one third of one percent (0.33%) for each of
the succeeding sixty (60) months by which the commencement date for early
supplement retirement benefits precedes such participant's normal retirement
date.
The following table shows the estimated annual benefits payable upon
retirement at age 60 to participants in the SERP for the indicated levels of
average compensation and various periods of service, assuming no future changes
in such plan and based upon the formula described above:
SERP TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------
REMUNERATION 20 25 30 35 40
- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$200,000................................ 73,009 90,612 78,276 72,792 72,792
250,000................................ 100,035 124,386 111,237 110,292 110,292
300,000................................ 130,035 161,886 148,737 147,792 147,792
350,000................................ 160,035 199,386 186,237 185,292 185,292
400,000................................ 190,035 236,886 223,737 222,792 222,792
450,000................................ 220,035 274,386 261,237 260,292 260,292
500,000................................ 250,035 311,886 298,737 297,792 297,792
</TABLE>
Employee Stock Ownership Plan. The Company has an employee stock ownership
plan (the "Plan"). Employees of FFC, the Bank and all subsidiaries who have
completed 1,000 or more hours of service in a year of employment are eligible
to participate in the Plan.
The contributions to the Plan may be in cash or in Company Stock. The Board
of Directors at the end of each Plan year determines the amount of contribution
for that Plan year and contributions are credited to individual accounts
maintained for Plan participants. In no event may the contributions exceed the
maximum contribution allowed by the Employee Retirement Income Security Act of
1974. Allocations are made pro rata, based on the earnings of each participant
(subject to a maximum compensation limit as set forth in the Plan) as a
percentage of the earnings of all eligible participants.
9
<PAGE>
Pursuant to the Plan's provisions, the Plan borrowed money from the Bank to
fund the Plan. In September, 1987 the Bank assigned all of its interest in the
notes evidencing the Plan loan to FFC as initial capital, and at December 31,
1993 the Plan owed FFC $2,918,170. The highest balance of such loan in 1993 was
$3,088,486. The interest rate provided in the notes is adjusted monthly to
equal the Bank's weighted average cost of funds, and was 3.83% at December 31,
1993.
The benefits of participants in the Plan are fully vested after 7 years of
service. A participant also becomes 100% vested upon the date of disability,
retirement or death.
At year end the Plan owned 940,888 shares (8.94%) of the Company Stock.
Stock Option and Stock Appreciation Rights Plan. Options to purchase shares
of the Company's common stock are granted under the First Federal 1983 Stock
Option and Stock Appreciation Rights Plan, as amended in 1987 ("Stock Plan").
Under the current Stock Plan, options to purchase up to 287,066 shares
(adjusted for stock splits) remain available to be granted to full-time
employees of the Company, including officers of the Company or its
subsidiaries.
The Stock Plan permits the Company to grant to full-time employees of the
Company and its subsidiaries incentive stock options, as defined in Section
422A of the Internal Revenue Code of 1986, as amended (the "Code") or
nonstatutory options. Stock appreciation rights granted under the Stock Plan
may, at the discretion of the Board of Directors, enable the recipient on
exercise to receive payment, in stock or cash (as determined by the Board of
Directors), of increases in the market value or per share book value of Company
Stock from the date of grant (referred to as "base price" and "base book value"
respectively) to the date of exercise. Stock appreciation rights may be granted
in tandem with options (in which event exercise of one will extinguish the
other) or separately. The Stock Plan does not limit the number of stock
appreciation rights that can be granted. All options granted under the Stock
Plan must have exercise prices at least equal to the fair market value of
Company Stock at the date of grant. All stock appreciation rights granted under
the Stock Plan must have base prices or base book values at least equal to the
fair market value or book value of Company Stock at the date of grant.
Options or stock appreciation rights may be exercised by the recipient during
the period either (a) while he or she is an employee or (b) within two months
after termination of his or her employment for any reason other than death,
permanent disability, or normal retirement. In the event of a recipient's
death, his or her options or stock appreciation rights may be exercised by the
person entitled to do so under his or her will or by his or her legal
representative at any time prior to expiration of the option or stock
appreciation rights, but in any event not later than one year after the date of
his or her death.
No grants of stock options and stock appreciation rights ("SARs") were made
to the named executive officers during the year ended December 31, 1993.
10
<PAGE>
The following table sets forth information concerning each exercise of stock
options by the Chief Executive Officer and other named executive officers
during the year ended December 31, 1993. All of the options exercised by Mr.
Mortensen and Ms. Heimbuch and 18,467 of the options exercised by Mr. Gottlieb
during 1993 were options granted in 1983 which were subject to expiration in
December 1993.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION/SAR EXERCISES IN 1993 & DECEMBER 31, 1993 OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 31, 1993 (#) DECEMBER 31, 1993 ($)
--------------------- ---------------------
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- -------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
William S. Mortensen.... 32,014 $462,826 41,359/-0- $561,738/-0-
Babette E. Heimbuch..... 5,608 $ 77,570 85,937/-0- $426,248/-0-
James P. Giraldin....... -0- -0- -0-/11,250 -0-/-0-
Martin B. Gottlieb...... 34,287 $563,767 -0-/-0- -0-/-0-
</TABLE>
Restricted Stock Plan. The Restricted Stock Plan was adopted to provide a
vehicle for increasing the stock ownership of selected officers and employees
of the Company and its subsidiaries in order to increase their proprietary
interest in the success of the Company and to encourage them to remain in the
employ of the Company and its subsidiaries. The Restricted Stock Plan gives the
Board of Directors of the Company increased flexibility in administering the
Company's current incentive bonus program, Stock Plan and other related
programs.
The Company adopted the Restricted Stock Plan in 1990. It is funded out of
allocations made under the Bonus Program (see "EXECUTIVE COMPENSATION--Bonus
Program") whereby sums otherwise available for cash bonuses are used to
reacquire issued shares of Company Stock in the open market for the accounts of
beneficiaries under this plan.
The material terms of the Restricted Stock Plan are summarized below:
Administration
The Restricted Stock Plan is administered by the Compensation Committee of
the Board of Directors. The Committee has the power to determine the times at
which and the employees (including, but not limited to, employees who serve as
officers or directors) of the Company or its subsidiaries to whom restricted
stock shall be issued, and is charged with general supervision of the
Restricted Stock Plan.
Eligibility
Restricted stock may be granted to all regular full-time employees of the
Company or a subsidiary.
The SUMMARY COMPENSATION TABLE on page 7 shows the dollar value of Company
Stock awarded under the Restricted Stock Plan to the Chief Executive Officer
and the other named executive officers.
Restrictions Applicable to Grants Under the Restricted Stock Plan
The Committee may place such restrictions on any shares of restricted stock
issued to an eligible employee as it deems appropriate. Shares of stock shall
vest (i.e., become nonforfeitable) in accordance with a vesting schedule
established by the Committee based upon continued service by the recipient as
an officer or employee of the Company or subsidiary. Currently, the Committee
has determined that shares shall vest
11
<PAGE>
and become nonforfeitable, and restrictions on disposition of restricted stock
shall terminate, in increments of 25% per year beginning on or after the fourth
anniversary of the award date and becoming 100% nonforfeitable on or after the
seventh anniversary of the award date. Notwithstanding this vesting schedule,
all shares previously awarded to a recipient shall become nonforfeitable upon
the occurrence of the individual's retirement, disability or death or upon a
change in control of the Company, as defined in the Restricted Stock Plan.
Certain Relationships and Related Transactions. The Bank offered mortgage
loans and consumer loans to Company Directors and officers (vice president and
above) until the end of 1989 (at which time the Bank stopped offering such
loans, except loans on savings accounts and overdraft lines of credit, to
Company Directors and officers). These loans were made in the ordinary course
of business and, in the judgment of management, did not involve more than the
normal risk of collectibility. To qualify under the Employee Loan Benefit
Program ("ELBP"), all real estate and home equity credit line loans were
required to be secured by the employee's primary residence. Employee real
estate loan benefits required one year of full-time employment with the
Company.
All ELBP loans were made on substantially the same terms as those prevailing
at the time for comparable transactions with non-affiliated persons, except for
the interest rates and loan fees charged thereon. Other loans of up to $100,000
were made to affiliated persons, but were made at market rates and terms.
ELBP real estate loans were written as adjustable mortgage loans ("AML's"),
and are modified while the person is employed by the Company to a rate
approximately equal to (but not less than) the Bank's cost of funds during the
month prior to the loan approval for the first three months of the loan.
Thereafter, the interest rate adjusts monthly to a rate equal to the Weighted
Average Cost of Funds, All Members of the Federal Home Loan Bank of San
Francisco. Fees were charged for appraisal, credit report, title policy and
document costs only. All preferential rates are subject to increase upon
termination of the individual's employment with the Company.
The following table sets forth amounts in excess of $60,000 in the aggregate
receivable from Directors and executive officers as of December 31, 1993.
<TABLE>
<CAPTION>
HIGHEST
BALANCE
OUTSTANDING UNPAID
DURING BALANCE INTEREST
YEAR ENDED AT RATE AT
TYPE OF DEC. 31, DEC. 31, DEC. 31, YEAR
NAME LOAN 1993 1993 1993 MADE
- ---- ------- ----------- -------- -------- ----
<S> <C> <C> <C> <C> <C>
Christopher M. Harding............... 1st TD 299,505 286,277 3.881% 1985
2nd TD 34,736 33,635 3.881% 1987
Babette E. Heimbuch.................. 1st TD 414,034 400,961 3.881% 1988
James L. Hesburgh.................... 1st TD 179,108 173,948 7.500% 1979
2nd TD 93,061 -0- -0-% 1984
William S. Mortensen................. 1st TD 122,667 104,696 3.881% 1989
John R. Woodhull..................... 1st TD 396,043 381,973 3.881% 1989
Brenda J. Battey..................... 1st TD 283,502 -0- -0-% 1989
</TABLE>
Employment Contracts and Termination of Employment and Change of Control
Arrangements. The Company has no employment contracts with any of the named
executive officers. The Restricted Stock Bonus Plan, adopted by the Company's
shareholders in 1991, and the First Federal 1983 Stock Option and Stock
Appreciation Rights Plan, adopted by the Company's shareholders in 1984,
provide for accelerated vesting of rights in the event of certain change of
control events.
12
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
Decisions on compensation of the Company's executives are made by a three-
member Compensation Committee composed entirely of non-employee directors. Set
forth below is the report submitted by Messrs. Hesburgh (Chair), Harding and
Soboroff addressing the Company's compensation policies for 1993 as they
affected Mr. Mortensen (the Company's Chief Executive Officer) and the
Company's other executive officers.
The Members of the Compensation Committee have the responsibility to oversee
the Company's various compensation plans, including its annual bonus plan,
Employee Stock Ownership Plan ("ESOP"), and annual salary review. The Committee
reviews compensation levels of all members of management, including executive
officers, evaluates their performance, and considers officer succession and
related matters. The Committee reviews with the Board all aspects of
compensation for officers at the level of vice president or above, as well as
reviewing bonus compensation for assistant vice presidents.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person who served as a member of the Compensation Committee was an
employee of the Company or any of its subsidiaries, was formerly an officer of
the Company or any of its subsidiaries, or had any transaction with the Company
or its subsidiaries, except as specifically described in this Proxy Statement.
COMPENSATION PHILOSOPHY
The Compensation Committee's executive compensation philosophy is to provide
competitive levels of compensation, tie compensation levels and individual
compensation to operating performance, and assist the Company in attracting and
retaining talented management.
The principal elements of the Company's executive compensation are base
salary, annual bonus, stock options and restricted stock awards. Each of these
elements are discussed below. In reviewing and making recommendations as to
overall levels of compensation, the Compensation Committee also takes into
account deferred and non-cash benefits, including pension benefits, insurance
and other benefits. Compensation has been, and will continue to be structured
so as to be tax deductible.
BASE SALARY
Executive officer base salaries are initially determined, but not
established, by reference to the competitive marketplace for executive talent
for the responsibilities of the particular position. The Company's Human
Resources Department participates in, obtains information from, and analyzes
the results of a salary and benefits survey conducted annually by the
California League of Savings Institutions ("Cal League"). The Cal League survey
is considered an effective tool to initiate the Compensation Committee review
process since it utilizes information obtained from other savings institutions
in California. The Company has utilized the Cal League survey annually for
approximately the last twenty years. The Compensation Committee reviews the
results of the annual survey to ensure that the Company's salary grades and
benefits are comparable to those provided by its peers. The Committee's goal
generally is to be within the 85th percentile of what it has determined to be
the appropriate peer group as reported on the Cal League survey.
Additionally, in 1993, the Company participated in the SNL Executive
Compensation Review of 1993 ("SNL Review") in order to analyze more closely the
compensation of executive officers.
Annual salary adjustments are determined by evaluating the performance of the
Company generally and the performance of each executive officer. General annual
salary adjustments to base salary for executive officers in 1993 were 2.0
percent, representing a cost of living increase.
13
<PAGE>
ANNUAL BONUSES
A substantial portion of the annual compensation of each officer is based
upon the performance of the Company, as well as the individual contribution of
the officer to the Company's performance. While corporate performance measures
such as net income, earnings per common share, return on stockholders' equity
and return on average total assets are considered, the Committee does not apply
a specific quantitative formula in making compensation decisions. Non-financial
performance measures also may be included, such as improvements in product
quality, efficiency, customer relations, and employee relations. No particular
weight is given to one factor over another among these performance measures.
For 1993, the most important qualitative factor was the Committee's assessment
of management's ability to respond to the problems presented due to the poor
condition of Southern california's real estate market. In the past, bonuses
have typically ranged from 0 percent of base salary to 50 percent awarded for
outstanding accomplishments during the year. Thus, a large portion of an
executive officer's compensation may be determined by the Compensation
Committee at the end of each year based upon the officer's contribution to the
Company's performance during the year.
For purposes of establishing the annual bonus pool, the Company's performance
is measured against earnings goals established prior to the commencement of
each fiscal year by the Board. The maximum bonus pool typically has been
equivalent to seven percent of year end net profit before federal income tax.
Based upon information available at the time the Compensation Committee made
its year-end determination as to annual bonuses, in 1993, for the first time
since 1981, no net earnings were anticipated due to the continuing effect of
the recession in Southern California and the related decline in the real estate
market. Nevertheless, the Committee felt the Company's executive officers and
certain other officers had made truly outstanding achievements in meeting the
challenges of the year. Accordingly, bonuses were awarded to a number of
officers. Mr. Giraldin received a cash bonus, while Messrs. Mortensen and
Gottlieb and Ms. Heimbuch received restricted stock bonuses in lieu of any cash
bonus. The bonuses to executive officers represent a decrease of approximately
fifty-seven percent compared to the prior year's level of cash and restricted
stock bonuses.
STOCK OPTIONS AND RESTRICTED STOCK
The Compensation Committee believes that stock ownership by management and
employees and performance-based compensation arrangements in the form of
Company Stock are beneficial in ensuring that management's interest in the
Company's performance corresponds to those of the Company's shareholders. It
also believes that stock ownership helps attract and retain key executives. The
Company awards stock options and restricted stock grants in furtherance of this
philosophy.
Awards of stock options typically are made upon employment or promotion of
officers at the level of vice president and above. The awards are based upon a
standardized dollar value at each participating level of responsibility and
reflect the Compensation Committee's determination of the appropriate incentive
for the responsibilities of that particular officer level. Other stock option
awards may be made to officers of the Company from time to time. No stock
option awards were made to the named executive officers during 1993.
In addition to stock options, as indicated above, restricted stock grants are
made by the Compensation Committee as part of the Company's bonus program.
Restricted stock grants may be made to officers at the level of assistant vice
president and above.
CHIEF EXECUTIVE OFFICER COMPENSATION
Chief Executive Officer William S. Mortensen's base salary for 1994 was
increased by $6,480, or 2 percent, a cost of living increase. The Committee's
decision to award Mr. Mortensen a bonus for 1993 was based upon its assessment
of his ability and dedication to excellent financial performance of the Company
during his twenty-five years of continuous leadership as Chief Executive
Officer. The Committee also considered Mr. Mortensen's leadership contributions
toward the Company's accomplishments during 1993,
14
<PAGE>
including (i) the purchase of two savings branch offices from the Resolution
Trust Corporation, resulting in the acquisition of $113 million in deposits,
(ii) the enhancement of a program for the management and sale of the Bank's
increased amount of real estate owned (REO), and (iii) implementation of a
mortgage banking division, which is expected to greatly increase the Bank's
loan volume in 1994. The Committee noted that despite the very difficult
economic environment that continued throughout 1993, capital levels well
exceeded the regulatory requirements, operating earnings were very strong, and
important structural changes had been made to better position the Company in
1994.
The level of Mr. Mortensen's aggregate salary and bonus for 1993 was
comparable to the Company's performance ranking in relation to the peer groups
(based on geographic location, asset size and levels of Return on Average
Assets) shown in the League Survey and SNL Review. The other benefits received
by Mr. Mortensen are as set forth in the Summary Compensation Table.
Compensation Committee:
James L. Hesburgh (Chair)
Christopher M. Harding
Steven L. Soboroff
15
<PAGE>
PERFORMANCE GRAPH
The SEC has adopted a requirement that companies include in their proxy
statements a line graph presentation comparing cumulative five-year shareholder
returns with two other specified indices. The Board of Directors has selected
published indices consisting of the New York Stock Exchange Market Index and
the MG Industry Group 541--Savings and Loan Index. These indices are prepared
and published by the New York Stock Exchange and Media General Financial
Services, respectively, which are not affiliated with the Company.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG FIRSTFED FINANCIAL, NYSE MARKET STOCK AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Fiscal Year Ending Firstfed MG Bond Market
(Fiscal Year Covered) Financial Industry Index
- ------------------- ---------- --------- -----------
<S> <C> <C> <C>
FYE 1988 100.00 100.00 100.00
FYE 1989 151.35 118.09 127.57
FYE 1990 118.02 81.94 122.36
FYE 1991 201.58 132.35 158.35
FYE 1992 173.42 175.70 165.80
FYE 1993 144.14 217.87 188.25
</TABLE>
It should be noted that this graph represents historical stock price
performance and is not necessarily indicative of any future stock price
performance.
THE FOREGOING REPORT OF THE BOARD COMPENSATION COMMITTEE AND THE PERFORMANCE
GRAPH THAT APPEARS IMMEDIATELY AFTER SUCH REPORT SHALL NOT BE DEEMED TO BE
SOLICITING MATERIAL OR TO BE FILED WITH THE SEC OR INCORPORATED BY REFERENCE IN
ANY DOCUMENT SO FILED.
16
<PAGE>
PROPOSAL 2
Appointment of Independent Auditors. KPMG Peat Marwick have been the
independent public auditors of the Bank for more than twenty-five years and,
upon recommendation of the Audit Committee, have been appointed by the Board of
Directors as the auditors for 1994. The stockholders of the Company are
requested to ratify this appointment. A representative of KPMG Peat Marwick is
expected to be present at the Annual Meeting with the opportunity to make a
statement if he or she so desires and to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE APPOINTMENT
OF KPMG PEAT MARWICK AS THE COMPANY'S INDEPENDENT PUBLIC AUDITORS FOR 1994.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors and persons who beneficially own more than ten percent
(10%) of the Company's stock, to file initial reports of ownership and reports
of changes in ownership with the Securities & Exchange Commission (SEC) and the
New York Stock Exchange. Executive officers, directors and greater than ten
percent (10%) beneficial owners are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers, directors and greater than ten percent (10%) beneficial
owners were satisfied.
SHAREHOLDER PROPOSALS
Any shareholder of the Company wishing to have a proposal considered for
inclusion in the Company's 1995 proxy solicitation materials must set forth
such proposal in writing and file it with the Secretary of the Company on or
before November 18, 1994. Shareholder proposals not included in the Company's
1995 proxy solicitation materials must, in order to be considered at the 1995
Annual Meeting, be submitted in writing to the Secretary of the Company by no
earlier than January 19, 1995 nor later than February 20, 1995.
The Board of Directors of the Company will review any shareholder proposals
which are filed as required and will determine whether such proposals meet
applicable criteria for inclusion in its 1995 proxy solicitation materials or
consideration at the 1995 Annual Meeting.
17
<PAGE>
ANNUAL REPORT
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1993, including, but not limited to, statements of consolidated
financial condition and related statements of consolidated income, statements
of shareholders' equity and changes in financial position for fiscal years
ended December 31, 1993, 1992, and 1991, prepared in conformity with generally
accepted accounting principles, has previously been sent to shareholders. A
copy of the Annual Report to Shareholders for year ended December 31, 1993 may
be obtained without charge by writing to the Secretary at the address
indicated in the following paragraph.
UPON WRITTEN REQUEST OF ANY SHAREHOLDER SOLICITED HEREBY, THE COMPANY WILL
PROVIDE FREE OF CHARGE A COPY OF ITS 1993 ANNUAL REPORT ON FORM 10-K WHICH HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS SHOULD BE
DIRECTED TO SECRETARY, FIRSTFED FINANCIAL CORP., 401 WILSHIRE BLVD., SANTA
MONICA, CALIFORNIA 90401.
By Order of the Board of Directors
-------------------------------------
Ann E. Lederer, Corporate Secretary
18
<PAGE>
REVOCABLE PROXY
FIRSTFED FINANCIAL CORP.
401 WILSHIRE BOULEVARD, SANTA MONICA, CALIFORNIA 90401
PROXY FOR ANNUAL MEETING--APRIL 20, 1994--THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints William S. Mortensen, Babette E.
Heimbuch and James P. Giraldin, as proxies, each with the power to
appoint his/her substitute, and hereby authorizes them to represent and
to vote as designated on the reverse all shares of Common Stock of
FirstFed Financial Corp. held of record by the undersigned on March 3,
1994, at the annual meeting of stockholders to be held on April 20,
1994, or any adjournment thereof.
A vote FOR nominees Harding, Hesburgh and Soboroff, and FOR Proposal 2
is recommended by the Board of Directors.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE>
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
------------------------------------------------------------------------
------------------------------------------------------------------------
1. ELECTION OF DIRECTORS (Year of
Expiration of Nominees' Proposed (EXCEPT NOMINEE(S)
Terms as Director: 1997) FOR WITHHOLD WRITTEN BELOW)
Christopher M. Harding, 3. In their discretion,
James L. Hesburgh, the proxies are
Steven L. Soboroff authorized to vote upon
------------------------------ such other business
2. Ratification of KPMG Peat FOR WITHHOLD that may properly come
Marwick as the Company's before the meeting.
independent Public Auditors
for 1994. THIS PROXY WHEN PROPERLY
EXECUTED WILL BE VOTED IN
THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED
STOCKHOLDER. IF DIRECTION
IS MADE, THIS PROXY WILL
BE VOTED FOR THE DIRECTORS
NAMED IN PROPOSAL 1 AND
FOR PROPOSALS 2 AND 3.
Dated: ___________, 1994
Signature _________________________
Signature if jointly held _________
Please sign exactly as your name
appears below. When shares are held
by joint tenants, both should sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporation name, by president or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
