<PAGE>
<PAGE>
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:
[X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 14a-12
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
CFSB BANCORP, INC.
- ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
________________________________________________________________
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):
________________________________________________________________
4. Proposed maximum aggregate value of transaction:
________________________________________________________________
5. Total fee paid:
________________________________________________________________
[ ] 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:
____________________________________________
2. Form, Schedule or Registration Statement No.:
____________________________________________
3. Filing Party:
____________________________________________
4. Date Filed:
____________________________________________<PAGE>
<PAGE>
[LETTERHEAD]
March 17, 1998
Dear Stockholder:
We invite you to attend the Annual Meeting of the
Stockholders of CFSB Bancorp, Inc. (the "Corporation"), the
holding company of Community First Bank ("Community First"), to
be held at the Sheraton Lansing Hotel, 925 South Creyts Road,
Lansing, Michigan on Tuesday, April 21, 1998 at 11:00 a.m.,
local time.
The Annual Meeting has been called to consider the
election of two directors of the Corporation and a proposal to
amend the Corporation's Certificate of Incorporation to increase
the number of authorized shares of capital stock and common
stock. During the meeting, we will also report on the
operations of the Corporation during fiscal year 1997.
Directors and officers of the Corporation as well as
representatives of KPMG Peat Marwick LLP, the Corporation's
independent auditors, will be present to respond to any
questions that stockholders may have.
You are cordially invited to attend the Annual Meeting.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS
SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL
MEETING. This will not prevent you from voting in person but
will assure that your vote is counted if you are unable to
attend the meeting.
Sincerely,
Robert H. Becker
President and Chief
Executive Officer
<PAGE>
<PAGE>
________________________________________________________________
CFSB BANCORP, INC.
112 EAST ALLEGAN STREET
LANSING, MICHIGAN 48933
(517) 371-2911
________________________________________________________________
NOTICE OF ANNUAL MEETING
TO BE HELD ON APRIL 21, 1998
________________________________________________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders for the year ended December 31, 1997 (the "Annual
Meeting") of CFSB Bancorp, Inc. (the "Corporation"), the holding
company of Community First Bank will be held at the Sheraton
Lansing Hotel, 925 South Creyts Road, Lansing, Michigan on
Tuesday, April 21, 1998 at 11:00 a.m., local time.
A Proxy Card and a Proxy Statement for the Annual Meeting
are enclosed.
The Annual Meeting is for the purpose of considering and
acting upon:
I. The election of two directors of the Corporation;
II. An amendment to the Corporation's Certificate of
Incorporation to increase the number of authorized
shares of capital stock from 12,000,000 shares to
17,000,000 shares and the number of authorized
shares of common stock from 10,000,000 shares to
15,000,000 shares;
III. The transaction of such other matters as may
properly come before the Annual Meeting or any
adjournments thereof.
Note: The Board of Directors is not aware of any other
business to come before the Annual Meeting.
Any action may be taken on any one of the foregoing pro-
posals at the Annual Meeting on the date specified above or on
any date or dates to which, by original or later adjournment,
the Annual Meeting may be adjourned. Stockholders of record at
the close of business on February 27, 1998 are the stockholders
entitled to vote at the Annual Meeting and any adjournments
thereof.
You are requested to complete and sign the enclosed Proxy
Card which is solicited by the Board of Directors and to mail it
promptly in the enclosed envelope. The proxy will not be used
if you attend and vote at the Annual Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
John W. Abbott
Executive Vice President, Chief
Operating Officer and Secretary
Lansing, Michigan
March 17, 1998
________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE
CORPORATION THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER
TO INSURE A QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
________________________________________________________________
<PAGE>
________________________________________________________________
PROXY STATEMENT
OF
CFSB BANCORP, INC.
112 EAST ALLEGAN STREET
LANSING, MICHIGAN 48933
ANNUAL MEETING OF STOCKHOLDERS
APRIL 21, 1998
________________________________________________________________
________________________________________________________________
GENERAL
________________________________________________________________
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of CFSB
Bancorp, Inc. (the "Corporation"), the holding company of
Community First Bank ("Community First" or the "Bank"), to be
used at the Annual Meeting of Stockholders of the Corporation
for the year ended December 31, 1997 (the "Annual Meeting")
which will be held at the Sheraton Lansing Hotel, 925 South
Creyts Road, Lansing, Michigan on Tuesday, April 21, 1998 at
11:00 a.m., local time. The accompanying Notice of Annual
Meeting and Revocable Proxy and this Proxy Statement are being
first mailed to stockholders on or about March 17, 1998.
________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
________________________________________________________________
Regardless of the number of shares of the Corporation's
common stock, par value $.01 per share (the "Common Stock"),
owned, it is important stockholders be represented by proxy or
present in person at the Annual Meeting. Stockholders are
requested to vote by completing the enclosed Proxy Card and
returning it signed and dated in the enclosed postage-paid
envelope. Stockholders are urged to indicate their vote in the
spaces provided on the proxy card. PROXIES SOLICITED BY THE
BOARD OF DIRECTORS OF THE CORPORATION WILL BE VOTED IN
ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN. WHERE NO
INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED FOR EACH OF
THE NOMINEES STANDING FOR ELECTION AS DIRECTORS, AND FOR
PROPOSAL II -- APPROVAL OF INCREASE IN AUTHORIZED SHARES.
Proxies marked as abstentions will not be counted as votes cast.
In addition, shares held in street name which have been
designated by brokers on proxy cards as not voted will not be
counted as votes cast. Proxies marked as abstentions or as
broker no votes, however, will be treated as shares present for
purposes of determining whether a quorum is present.
The presence in person or by proxy of the holders of one-
third of the outstanding shares of Common Stock entitled to vote
at the Annual Meeting is necessary to constitute a quorum
thereat. If a quorum is not present or represented by proxy,
the stockholders entitled to vote, present or represented by
proxy, have the power to adjourn the Annual Meeting from time to
time, without notice other than an announcement at the Annual
Meeting, until a quorum is present or represented. Assuming a
quorum is present, under Delaware law directors shall be elected
by a plurality of votes cast by stockholders at the Annual
Meeting (abstention and broker non-votes not being considered in
determining the outcome of the election). The approval of the
amendment of the Corporation's Certificate of Incorporation
requires the affirmative vote of a majority of the shares
outstanding (accordingly, abstentions and broker non-votes are
the same as a vote against the proposal). All other action to
be taken at the Annual Meeting requires the affirmative vote of
a majority of the shares represented and entitled to vote at the
Annual Meeting (accordingly, abstentions and broker non-votes
will not affect the outcome of any such action).
The Board of Directors knows of no additional matters that
will be presented for consideration at the Annual Meeting.
Execution of a proxy, however, confers on the designated
proxyholders discretionary authority to vote the shares in
accordance with the determination of a majority of the Board of
Directors on such other business, if any, that may properly come
before the Annual Meeting or any adjournments thereof.
<PAGE>
<PAGE>
A proxy may be revoked at any time prior to its exercise
by the filing of a written notice of revocation with the
Secretary of the Corporation, by delivering a duly executed
proxy bearing a later date to the Secretary of the Corporation
at the address listed above, or by attending the Annual Meeting
and voting in person.
The cost of solicitation of proxies in the form enclosed
herewith will be borne by the Corporation. Proxies may also be
solicited personally or by telephone or telegraph by directors,
officers and regular employees of the Corporation and the Bank,
without additional compensation therefore. The Corporation will
also request persons, firms and corporations holding shares in
their names, or in the name of their nominees, which are
beneficially owned by others, to send proxy materials to and
obtain proxies from such beneficial owners, and will reimburse
such holders for their reasonable expenses in doing so.
________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
________________________________________________________________
The securities entitled to vote at the Annual Meeting
consist of the Common Stock. Stockholders of record as of the
close of business on February 27, 1998 are entitled to one vote
for each share then held. As of February 27, 1998, the
Corporation had 7,607,478 shares of the Common Stock issued and
outstanding.
Persons and groups owning in excess of 5% of the
Corporation's Common Stock are required to file certain reports
regarding such ownership pursuant to the Securities Exchange Act
of 1934. The following table sets forth, as of February 27,
1998, the shares of Common Stock beneficially owned by the Chief
Executive Officer and Chief Operating Officer of the
Corporation, the Chief Lending Officer of the Bank, the Director
of Operations of the Bank, all directors and officers of the
Corporation as a group and each person who was the beneficial
owner of more than 5% of the Corporation's outstanding shares of
Common Stock at February 27, 1998, based on information supplied
by its transfer agent and filings made pursuant to the
Securities Exchange Act of 1934 as to which the Corporation had
information on February 27, 1998. Management knows of no person
other than those set forth below who owned more than 5% of the
Corporation's outstanding shares of Common Stock at February 27,
1998.
<TABLE>
<CAPTION>
Amount and Nature of Percent of Shares of
Beneficial Owner Beneficial Ownership(a) Common Stock Outstanding
- ---------------- ----------------------- ------------------------
<S> <C> <C>
CFSB Bancorp, Inc.
Employee Stock Ownership Plan
112 East Allegan Street
Lansing, Michigan 48933 78,842 (b) 1.04%
Robert H. Becker
President and
Chief Executive Officer 489,723 (c) 6.36%
John W. Abbott
Executive Vice President and
Chief Operating Officer 107,469 (d) 1.40%
Carl C. Farrar
Senior Vice President
Chief Lending Officer of the Bank 10,511 (e) .14%
Jack G. Nimphie
Senior Vice President
Director of Operations of the Bank 39,878 (f) .52%
All directors and executive officers
as a group (15 persons) 1,063,956 (g) 13.46%
</TABLE>
2<PAGE>
<PAGE>
_____________
(a) In accordance with Rule 13d-3 under the Securities Exchange
Act of 1934, a person is deemed to be the beneficial owner,
for purposes of this table, of any shares of the Common
Stock if he or she has sole or shared voting or investment
power with respect to such security, or has a right to
acquire beneficial ownership at any time within 60 days
from February 27, 1998. Except as otherwise noted, the
named individuals and each director or officer included
in the group exercise sole voting and investment power over
the shares of the Common Stock.
(b) Includes 78,842 shares held in a suspense account for
future allocation pursuant to the terms of the Employee
Stock Ownership Plan ("ESOP"), among participating
employees as the loans used to purchase the shares are
repaid, and excludes 580,336 shares allocated to
participants. The ESOP Trustee votes all allocated
shares as instructed by the participants, and the ESOP
Trustee votes all unallocated shares and all shares for
which no instructions have been received as directed by the
ESOP Committee or the Board of Directors. See footnote (g)
below.
(c) Includes 27,535 shares allocated to Mr. Becker under the
ESOP as to which he has voting power but no investment
power. Includes 96,258 shares which may be received upon
the exercise of stock options which are exercisable within
60 days of February 27, 1998.
(d) Includes 20,382 shares allocated to Mr. Abbott under the
ESOP as to which he has voting power but no investment
power. Includes 74,561 shares which may be received upon
the exercise of stock options which are exercisable within
60 days of February 27, 1998.
(e) Includes 5,019 shares allocated to Mr. Farrar under the
ESOP as to which he has voting power but no investment
power. Includes 5,492 shares which may be received upon
the exercise of stock options which are exercisable within
60 days of February 27, 1998.
(f) Includes 12,130 shares allocated to Mr. Nimphie under the
ESOP as to which he has voting power but no investment
power. Includes 21,627 shares which may be received upon
the exercise of stock options which are exercisable within
60 days of February 27, 1998.
(g) Includes 78,065 shares held by the ESOP but allocated to
certain directors and officers, and excludes 78,842 shares
held by the ESOP, which have not been allocated to any
participating employees as of February 27, 1998, and over
which shares certain directors and officers of the
Corporation, as members of the ESOP Committee, and as ESOP
Trustee, exercise shared voting and investment power.
See footnote (2) in Director's table under "Proposal I --
Election of Directors." Includes 295,354 shares which may
be received upon the exercise of stock options which are
exercisable within 60 days of February 27, 1998.
________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
________________________________________________________________
The Corporation's Board of Directors is currently composed
of eight members. Director Donald F. Wall will retire as a
Director, effective at the first meeting of the Board of
Directors following the Annual Meeting, and the Board will be
reduced in size to seven members. The Corporation's Certificate
of Incorporation requires directors be divided into three
classes, as nearly equal in number as possible. The members of
each class serve for a term of three years and until their
successors are elected and qualified, with approximately one-
third of the directors elected each year. The Board of
Directors has nominated Henry W. Wolcott, IV and Robert H.
Becker each for a three-year period, both of whom are currently
members of the Board of the Corporation.
It is intended the proxies solicited by the Board of
Directors will be voted for the election of the named nominees.
If any nominee is unable to serve, the shares represented by all
properly executed proxies which have not been revoked will be
voted for the election of such substitute as the Board of
Directors may recommend, or the size of the Board of Directors
may be reduced to eliminate the vacancy. At this time, the
Board knows of no reason why any nominee might be unavailable to
serve.
The following table sets forth for each nominee and each
continuing director his name and age at February 27, 1998, the
year he first became a director of Capitol Federal Savings Bank
("Capitol Federal") or Union Federal Savings ("Union Federal")
(the savings institutions that combined to form Community First
in December 1991), the expiration of his term as a director of
the Corporation, and the number and percentage of shares of
Common Stock beneficially
3<PAGE>
<PAGE>
owned. The members of Capitol Federal's Board of Directors who
were members of the Board in 1989 were initially appointed as
directors of the Corporation in 1989 in connection with the
incorporation and organization of the Corporation. The former
members of Union Federal's Board of Directors were appointed as
directors of the Corporation in January 1992 following the
completion of the combination. Each director of the Corporation
is also a member of the Board of Directors of the Corporation's
principal subsidiary, Community First.
<TABLE>
<CAPTION>
Shares of
Common Stock
Current Beneficially
Year First Term Owned at Percent
Elected to February 27, of
Name Age Director (1) Expire 1998 (2) Class
- -------------------------------------------------------------------------------------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
<S> <C> <C> <C> <C> <C>
Henry W. Wolcott, IV 51 1983 1998 4,830 .06%
Robert H. Becker 62 1987 1998 489,723 (3) 6.36%
DIRECTORS CONTINUING IN OFFICE
Cecil Mackey 69 1979 1999 29,088 .38%
James L. Reutter 64 1976 1999 135,124 1.77%
Donald F. Wall 70 1994 1999 4,976 .07%
David H. Brogan 63 1981 2000 74,529 .98%
William C. Hollister 57 1983 2000 97,123 1.27%
J. Paul Thompson, Jr. 64 1979 2000 14,639 .19%
</TABLE>
___________
(1) Represents the year first elected a director of Capitol
Federal, except for Mr. Thompson and Mr. Wolcott for whom it
represents the year first elected a director of Union
Federal, and Mr. Wall, for whom it represents the year first
elected as director of the Corporation.
(2) For the definition of beneficial ownership, see footnote (a)
to the table in "Voting Securities and Principal Holders
Thereof." Unless otherwise indicated, the named individual
exercises sole or shared voting or investment power over the
shares listed as beneficially owned by such person.
Excludes 78,842 shares held by the ESOP which have not been
allocated to participating employees as of February 27, 1998
and over which shares Directors Reutter, Brogan and
Hollister, as members of the ESOP Committee, and as
ESOP Trustee, exercise shared voting and investment power.
Includes 17,955, 22,452, 18,882, 18,882, 4,832, 2,927 and
1,742 shares which may be received upon the exercise of
stock options which are exercisable within 60 days of
February 27, 1998, for Directors Mackey, Reutter, Brogan,
Hollister, Thompson, Wall and Wolcott, respectively. For
Mr. Becker, see footnote (3) below.
(3) Includes 27,535 shares allocated to Mr. Becker under the
ESOP as to which he has voting power but no investment
power. Includes 96,258 shares which may be received upon
the exercise of stock options exercisable within 60 days of
February 27, 1998.
4<PAGE>
<PAGE>
The principal occupation of each director of the
Corporation and the Bank for the last five years is set forth
below. All of the directors have held their present position
for at least five years unless otherwise stated. All of the
directors reside in Michigan.
HENRY W. WOLCOTT, IV is a certified public accountant and
a shareholder in the firm of Kutas, Hawes, Wolcott & Bergman,
P.C., of Lansing, Michigan.
ROBERT H. BECKER joined Community First (formerly Capitol
Federal Savings) in November 1987 as the President and Chief
Executive Officer. Mr. Becker also serves as the Corporation's
President and Chief Executive Officer. Mr. Becker began his
banking career in 1957, and from 1976 to 1987, he served as
President and Chief Executive Officer of MetroBanc in Grand
Rapids, Michigan. Mr. Becker is a past Director of the Federal
Home Loan Bank of Indianapolis and a past Chairman of the
Michigan League of Savings Institutions. He is also a director
of the Lansing Community College Foundation, a Board member of
the Rotary Club of Lansing, and a member of the Finance
Committee of the Capital Region Community Foundation.
CECIL MACKEY has been a professor of economics at Michigan
State University since 1985. From 1979 to 1985, he was the
President of Michigan State University. Dr. Mackey is an
associate of the National China Council and a member of the
Michigan China Council and the Joint Yugoslav-American Advisory
Council. He previously served as Chairman of the Board of
Directors of the Debt-for-Development Coalition, a member of the
Board of Directors of the Michigan State University Foundation
and the Michigan Biotechnology Institute, and as a member of the
Governor's Commission on Jobs and Economic Development and the
Michigan High Technology Task Force. Dr. Mackey is a consultant
to the University of the United Arab Emirates.
JAMES L. REUTTER is the President of Lansing Ice and Fuel
Company, Lansing, Michigan, and Chairman of O'Dell Ice Company,
Coleman, Michigan. Mr. Reutter has been the Chairman of
Community First's (formerly Capitol Federal's) Board of
Directors since 1988. Mr. Reutter also serves as a Director of
Michigan Millers Insurance Company. He is currently serving on
the Board of the Potter Park Zoological Society and the Lansing
Community College Foundation, and is a Trustee and the Treasurer
of the Thoman Foundation. Mr. Reutter was also the past
Chairman and a Trustee of Lansing Community College.
DONALD F. WALL is the President of Compass Management
Inc., a management consulting firm. Mr. Wall also is the
retired Chief Executive Officer of the Michigan League of
Savings Institutions. He has been a Director of the Bank since
February 1993. As noted above, Mr. Wall will retire as a
Director following the Annual Meeting.
DAVID H. BROGAN has worked in life insurance sales and
financial planning at Ohio National Life Insurance Company, a
provider of insurance and investment products, since 1956. Mr.
Brogan is a member of the Lansing Lions Club, and he is a
Trustee and the Treasurer of the Capital Region Community
Foundation. He has previously served as the Chairman of the
Board at St. Lawrence Hospital, as President of the East Lansing
Public Schools Board of Education, as an officer in the Michigan
State University Alumni Association, and as a Director of the
Lansing Community College Foundation.
WILLIAM C. HOLLISTER is the President of Basic Insight, a
firm engaged in performing consulting services related to
recruitment and selection and strategic planning. He was
formerly President of Manpower Health Care, Lansing, Michigan,
President of Coil Center Corporation, Howell, Michigan, and Vice
President of Kasle International Michigan, Dearborn, Michigan.
Mr. Hollister is a former member of the Board of Edward W.
Sparrow Hospital in Lansing and the Michigan Manufacturers
Association. He has also served as Chairman, Treasurer and
Trustee of Lansing Community College and served as a Director of
D&F Corporation of Sterling Heights, Michigan, an automotive
tooling design firm.
5<PAGE>
<PAGE>
J. PAUL THOMPSON, JR. has been in the environmental
engineering field since 1957, has been a Registered Professional
Engineer in Michigan since 1960 and was a principal in Fishbeck,
Thompson, Carr and Huber, Inc., until 1985. Since that time, he
has been President of Computer Graphics, Inc., a consultant to
municipalities in the area of water and sewer systems. He is a
retired U.S. Air Force Res. Major, a member and Past President
of the Lansing-Waverly Rotary Club and is presently a Trustee of
Central United Methodist Church, Lansing. He is also the
Treasurer of Memorial Nature Preserve of Shelby, Michigan.
________________________________________________________________
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
________________________________________________________________
The Corporation's and the Bank's Boards of Directors
conduct their business through meetings of the Boards and
through activities of their committees. During fiscal year
1997, the Corporation's Board of Directors held nine meetings.
No director attended fewer than 75% of the total meetings of the
Board of Directors and committees on which such Board member
served during this period.
The Board of Directors of the Corporation has an Executive
Committee, which also serves as the Executive Committee of the
Bank's Board of Directors, and meets as considered necessary by
the Chairman. The Executive Committee met two times during
fiscal 1997. The Executive Committee is made up of Directors
Reutter (Chairman), Becker, Brogan, Hollister and Thompson.
The Bank's Audit Committee also serves as the Audit
Committee of the Corporation, and consists of Directors Mackey
(Chairman), Hollister, Wall and Wolcott. These committees
recommend an audit firm to the full Board of Directors and meet
with the outside auditors to discuss the results of the annual
audit and any related matters. These committees also receive
and review all the reports and findings and other information
presented to them by the Corporation's and the Bank's officers
regarding financial reporting policies and practices. The
Corporation's Audit Committee and the Bank's Audit Committee met
two times during fiscal 1997.
The Bank's Compensation and Personnel Committee also
serves as the Compensation and Personnel Committee for the
Corporation, and consists of Directors Brogan (Chairman),
Hollister, Mackey and Thompson. This committee meets
periodically to review the performance of the Corporation's and
the Bank's Executive Officers and to recommend compensation and
benefit programs. The Compensation and Personnel Committee met
two times during fiscal 1997.
The Corporation's Nominating Committee comprised of the
full Board of Directors recommends nominees for election to the
Board of Directors. During 1997, this committee met one time to
make the nominations for election set forth herein.
6<PAGE>
<PAGE>
________________________________________________________________
EXECUTIVE COMPENSATION
________________________________________________________________
COMPENSATION SUMMARY
The following table sets forth all cash and noncash
compensation for each of the last three fiscal years awarded to
or earned by (i) the Chief Executive Officer, and (ii) the other
executive officers of the Corporation or the Bank whose salary
and bonus earned in 1997 exceeded $100,000 for services rendered
in all capacities to the Corporation and its subsidiaries.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------
NAME AND OTHER ANNUAL LONG-TERM ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION COMPENSATION COMPENSATION(2)
- ----------------- ---- -------- ----- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Becker 1997 $266,000 $90,343 $ -- $ -- $ 9,755
President and Chief 1996 253,000 80,596 -- -- 15,144
Executive Officer 1995 236,500 46,388 -- -- 14,691
John W. Abbott 1997 165,000 42,066 -- -- 3,168
Executive Vice 1996 155,000 37,776 -- -- 10,720
President and Chief 1995 145,000 20,836 -- -- 10,233
Operating Officer
Carl C. Farrar 1997 120,800 30,989 -- -- 3,451
Senior Vice President 1996 114,000 27,876 -- -- 10,139
Chief Lending Officer 1995 107,000 11,576 -- -- 8,089
of the Bank
Jack G. Nimphie 1997 92,500 16,248 -- -- 2,516
Senior Vice President 1996 87,500 14,763 -- -- 7,309
Director of Operations 1995 81,900 8,902 -- -- 6,194
of the Bank
</TABLE>
_____________
(1) Does not include perquisites which in the aggregate do not
exceed 10% of the cash compensation of the named executive
officers.
(2) For 1997, includes funds contributed by the Bank to each
individual's account under the deferred savings 401(k) plan
and, in the case of Mr. Becker, an additional $6,755 in
automobile expenses. For 1996, includes funds contributed
by the Bank to each individual's account under the deferred
savings 401(k) plan and, in the case of Mr. Becker, an
additional $4,424 in automobile expenses. For 1996,
includes contributions to ESOP in the following
amounts for payment of shares allocated to the following
individuals: $4,720 for Mr. Becker; $4,720 for Mr. Abbott;
$4,464 for Mr. Farrar; and $3,218 for Mr. Nimphie. For
1995, includes contributions to ESOP in the following
amounts for payment of shares allocated to the
following individuals: $4,233 for Mr. Becker; $4,233 for Mr.
Abbott; $3,346 for Mr. Farrar; and $2,562 for Mr. Nimphie.
Information regarding contributions to the ESOP for 1997 on
behalf of these individuals was not available as of the date
of this Proxy Statement and will be reported in next year's
Proxy Statement.
7<PAGE>
<PAGE>
OPTION/SAR EXERCISES AND YEAR-END VALUES
The following table sets forth information concerning
exercises of options during the year ended December 31, 1997, by
the named executive officers, as well as the value of options
held by such persons at the end of the fiscal year. No options
were granted during the year ended December 31, 1997 and no SARs
were outstanding at December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY
SHARES ACQUIRED VALUE YEAR-END OPTIONS/SARS
NAME ON EXERCISE REALIZED (EXERCISABLE) AT FISCAL YEAR-END
- ---- --------------- -------- ------------------ --------------------
<S> <C> <C> <C> <C>
Robert H. Becker 3,300 $69,102 (4) 96,258 $2,304,417 (1)(3)
John W. Abbott 450 9,648 (5) 74,561 1,784,990 (1)(3)
Carl C. Farrar -- -- 27,272 (7) 99,405 (1)
322,780 (2)
Jack G. Nimphie 500 9,100 (6) 43,407 (8) 517,750 (1)
322,780 (2)
</TABLE>
_________
(1) Exercisable.
(2) Unexercisable.
(3) Represents market price per share at end of year ($26.25 on
December 31, 1997) less average option exercise price per
share ($2.31).
(4) Represents difference between exercise price per share
($2.31) and market price per share on date of exercise
($23.25).
(5) Represents difference between an exercise price of $2.31 per
share and a market price per share on date of exercise of
$23.75.
(6) Represents difference between an exercise price of $3.80 per
share and a market price share on the date of exercise of
$22.00.
(7) Mr. Farrar has options for 5,492 shares which are
exercisable at an exercise price per share of $8.15 and
options for 21,780 shares which are unexercisable and have
a weighted average exercisable price of $11.43 per share.
(8) Mr. Nimphie has options for 21,627 shares which are
exercisable at an exercise price of $2.31 per share and
options for 21,780 shares which are unexercisable and
have an exercise price of $11.43 per share.
EMPLOYMENT AGREEMENTS
Effective upon Capitol Federal's conversion from mutual to
stock form on June 29, 1990, the Bank and Robert H. Becker and
John W. Abbott entered into employment agreements, each for
terms of three years with specified annual base salaries. These
agreements provide (i) that at each anniversary date of their
commencement the Board of Directors may act to approve one-year
extensions, (ii) for a salary review by the Board of Directors
not less often than annually, and (iii) for the inclusion of the
named individuals in any discretionary bonus plans, customary
fringe benefits and for vacation and sick leave. Messrs.
Becker's and Abbott's annual base salaries at December 31, 1997,
were $266,000 and $165,000, respectively. Each agreement will
be terminated upon death, and will be terminable by Community
First for "just cause" as defined in the agreement. If
Community First terminates one of these employees without just
cause, the employee will be entitled to a continuation of his
salary and benefits up to the date of termination of the term of
the agreement. Each employee will be able to terminate his
agreement by providing 60 days' written notice to the Board of
Directors.
8
<PAGE>
<PAGE>
The employment agreements contain provisions stating that
in the event of the voluntary or involuntary termination of
employment in connection with, or within one year after, any
change in control of the Corporation or the Bank not approved in
advance by the vote of two-thirds of the full Boards of
Directors of the Corporation or the Bank, the employee will be
paid within 30 days of such termination a sum equal to 2.99
times the average annual compensation he received during the
five-year period immediately prior to the date of change in
control. "Control" generally refers to the acquisition by any
person or entity of the ownership or power to vote more than 25%
of the Corporation's or the Bank's stock, the control of the
election of a majority of Directors or the exercise of a
controlling influence over the management or policies of the
Corporation and the Bank. The agreements also provide for a
similar lump sum payment to be made to Mr. Becker or Mr. Abbott
in the event of his voluntary termination of employment upon the
occurrence, or within 60 days thereafter, of certain specified
events following any change in control, whether approved by the
Board of Directors or otherwise, including (i) requiring the
employee to move his personal residence or perform his principal
executive functions more than 35 miles from the Bank's current
principal office, (ii) requiring the employee to report to a
person or persons other than the Board of Directors or
President, respectively, of the Corporation or the Bank, (iii)
the failure to maintain existing employee benefit plans,
including material vacation, fringe benefits, stock option and
retirement plans; (iv) assigning duties and responsibilities to
the employee which are other than those normally associated with
his position with Community First; (v) a material diminution of
his authority and responsibility; and for Mr. Becker (vi)
failure to elect him to the Board of Directors. The aggregate
payments that would be made to Messrs. Becker and Abbott
assuming the termination of employment under the foregoing
circumstances at December 31, 1997 would have been approximately
$844,273 and $497,343, respectively.
DIRECTORS' COMPENSATION
Each non-employee member of the Boards of Directors of the
Corporation and the Bank receives a fee of $900 per month,
except the President and Chief Executive Officer, who does not
receive any director's fees, and the Chairman of the Board, who
receives $2,200 per month. In addition, each director, except
the President and Chief Executive Officer, receives a fee of
$400 per monthly meeting attended. The Chairman of each
committee, except the Executive Committee, receives a fee of
$100 per month. Directors of the Corporation and the Bank
receive one fee for serving as directors of both entities, plus
applicable committee chairman fees.
COMPENSATION AND PERSONNEL COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
GENERAL. The function of administering the Corporation's
and Community First's Executive Compensation Policies is
currently performed by the Compensation and Personnel Committee
of the Board of Directors of Community First which is composed
of four directors. The Committee is responsible for developing
and making recommendations to the Board concerning compensation
paid to the executive officers and for administering all aspects
of the Corporation's and Community First's Executive
Compensation Program including employee benefit plans. It is
the responsibility of this Committee to develop and make
recommendations to the Board concerning compensation paid to the
Chief Executive Officer.
The Committee makes its recommendations to the Board
concerning executive compensation on the basis of its annual
review and evaluation of the Corporation's corporate
performance, and the compensation of its executive officers as
compared with other savings and loan holding companies similar
in size and market capitalization. To assist in this review,
the Committee obtains survey data prepared by independent
compensation consulting firms.
EXECUTIVE COMPENSATION PROGRAM. The Corporation's and
Community First's Executive Compensation Program which was
developed with the objective of attracting and retaining highly
qualified and motivated executives and recognizing and rewarding
outstanding performance has the following components: (i) base
salaries, (ii) stock options, (iii) a management incentive
compensation plan and (iv) miscellaneous other fringe benefits.
9
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<PAGE>
MANAGEMENT'S ROLE AND THE BUSINESS PLAN. The
Administrative Committee of the Bank, which consists of its
executive officers, annually develops a Business Plan. The Plan
includes objectives, goals and strategies which management
intends to achieve over a one- to three-year period. The Plan
is reviewed and updated annually and approved by the Board of
Directors of the Bank. Each objective, goal and strategy is
assigned to a member of the Administrative Committee. The
goals, objectives and strategies may be monetary or non-monetary
in nature. The Chief Executive Officer has the overall
responsibility for the successful implementation of the Plan.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. Compensation for
the Chief Executive Officer is based on the Compensation and
Personnel Committee's evaluation of Management's successful
implementation of the Business Plan. Their evaluation also
takes into consideration events and general economic trends that
are outside management's control and the level of compensation
of other thrift chief executive officers in the same geographic
area, the Midwest, managing institutions with assets sizes of
between $500 million and $1 billion, some of which are included
in the peer line of the stock performance graph below. In 1997,
the Committee reviewed reports from Ben E. Cole Financial, Inc.
and the SNL Executive Compensation Review. These reports, which
were analyzed by the Committee, included comprehensive financial
performance comparisons of the Bank relative to those of peer
group thrift institutions and commercial banks throughout the
country. The Committee also reviewed the information in the
reports relating to compensation levels and practices of its
peer institutions relative to the Bank's compensation levels for
its senior executive officers. The SNL Report reflects that Mr.
Becker's compensation is comparable with that paid to chief
executive officers of thrifts with assets of $500 million to $1
billion nationwide and is comparable to Chief Executive Officers
of a selected peer group of 40 Thrifts. The Committee also
considered the three recommendations in the Cole Report, as
described below.
Given the findings of the reports and the Bank's record
improvement in profitability, accompanied by a steady rise in
assets, the Cole Report recommended: (i) the Board raise Mr.
Becker's base salary to keep pace with the growth of banks of
similar size; (ii) the Board provide for a CEO cash bonus award
opportunity based on Board-approved, predetermined quantitative
objectives; and (iii) the Board consider including stock awards
in competitive amounts on an annual basis, and that the awards
be related to the achievement of Board and shareholder strategic
goals. It is the Compensation and Personnel Committee's intent
to maintain compensation levels comparable to compensation
levels of chief executive officers of the Bank's peer group.
COMPENSATION OF OTHER EXECUTIVE OFFICERS. The Chief
Executive Officer determines the base salary compensation paid
to other members of the Administrative Committee, after review
with the Compensation and Personnel Committee. The
determination is discretionary based on his evaluation of each
Administrative Committee member's contribution to the
implementation of the Business Plan, general trends and events
outside the control of each member of the Committee and
independent studies of compensation levels of similar positions
in other financial institutions. Bonuses were paid in 1997
based on the Management Incentive Compensation Plan which
evaluates the Corporation's performance as measured by "Return
on Average Equity" and "Return on Average Assets" in comparison
to other publicly-traded thrifts and thrift holding companies,
nationally, with assets between $500 million and $1 billion, as
published by the SNL Securities Thrift Performance Report.
David H. Brogan (Chairman) Cecil Mackey
William C. Hollister J. Paul Thompson, Jr.
Members of the Compensation and Personnel Committee
10<PAGE>
<PAGE>
STOCK PERFORMANCE
The graph and table which follow show the cumulative total
return on the Common Stock of the Corporation since December 31,
1992, compared with the cumulative total return of other
publicly traded savings institutions and savings institution
holding companies (the "Industry Index") and the National
Association of Securities Dealers, Inc. Automated Quotation
System Market Index (the "Market Index") over the same period.
Cumulative total return on the stock or the index equals the
total increase in value since December 31, 1992, assuming
reinvestment of all dividends paid on the stock or the index,
respectively. The graph and table were prepared assuming $100
was invested on December 31, 1992, in the Common Stock of the
Corporation and in the indexes.
[Line graph appears here depicting the cumulative total
shareholder return of $100 invested in the Common Stock as
compared to $100 invested in all companies whose equity
securities are traded on the Nasdaq market and banking companies
traded on the Nasdaq market. Line graph begins at December 31,
1992 and plots the cumulative total return at December 31, 1993,
1994, 1995, 1996 and 1997. Plot points are provided below.]
<TABLE>
<CAPTION>
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CFSB Bancorp, Inc. 100 146 146 208 213 484
NASDAQ Bank Stocks 100 114 114 169 223 377
NASDAQ Stock Market-U.S. 100 115 112 159 195 240
</TABLE>
11
<PAGE>
<PAGE>
________________________________________________________________
TRANSACTIONS WITH MANAGEMENT
________________________________________________________________
Community First Bank has a policy of offering loans to
officers and employees on terms substantially equivalent to
those offered to the public, although the Bank's policy does
allow the Bank to waive the payment of the one (1%) percent
discount point for mortgage loans on their primary residence,
and allows a rate to be offered which is 1/2% below the stated
rate on consumer and home equity loans. It also allows the Bank
to waive certain loan origination fees.
________________________________________________________________
PROPOSAL II - APPROVAL OF INCREASE IN AUTHORIZED SHARES
________________________________________________________________
GENERAL. The Corporation is currently authorized to issue
12,000,000 shares of capital stock and 10,000,000 shares of
Common Stock. The Corporation's Board of Directors recommends
that stockholders approve an amendment (the "Share Amendment")
to Article VII of the Corporation's Certificate of Incorporation
that would increase the authorized shares of capital stock from
12,000,000 shares to 17,000,000 shares and the authorized shares
of Common Stock from 10,000,000 shares to 15,000,000 shares.
The number of authorized shares of preferred stock will remain
at 2,000,000 shares. If the Share Amendment is approved by the
Corporation's stockholders, the first sentence of ARTICLE VII of
the Corporation's Certificate of Incorporation as amended will
read as follows:
The aggregate number of shares of all classes of capital
stock which the Corporation has authority to issue is
17,000,000 of which 15,000,000 are to be shares of common
stock, $.01 par value per share, and of which 2,000,000
are to be shares of serial preferred stock, $.01 par value
per share.
PURPOSE. The Corporation proposes to increase the number
of authorized shares of Capital Stock to 17,000,000 shares, and
authorized number of shares of Common Stock to 15,000,000 shares
to provide additional shares for general corporate purposes,
including possible future acquisitions, stock dividends and
splits, raising additional capital and issuances pursuant to
employee stock benefit plans. Since 1992, the Corporation has
declared a number of stock splits in the form of a stock
dividend, and paid various 10% stock dividends. Most recently,
in 1997, the Corporation paid a 10% stock dividend in June 1997,
and in December 1997 declared a three-for-two stock split
distributed to stockholders in the form of a 50% stock dividend.
As of December 31, 1997, there were 7,607,478 shares of Common
Stock outstanding and an additional 627,821 shares were reserved
for issuance pursuant to various stock-based employee benefit
plans of the Corporation. This leaves the Corporation with
1,764,701 authorized but unissued, unreserved and uncommitted
shares of Common Stock available for issuance.
The Board of Directors believes that an increase in the
total number of shares of authorized Common Stock will better
enable the Corporation to meet its future needs, and give it
greater flexibility to take advantage of opportunities to issue
such stock in order to obtain capital, as consideration for
possible combinations or acquisitions or for other purposes
(including, without limitation, stock splits and stock dividends
in appropriate circumstances). There are, at present, no plans,
understandings, agreements or arrangements concerning possible
combinations or acquisitions, or the issuance of additional
shares of Corporation Common Stock, except for shares to be
issued pursuant to the exercise of stock options.
DILUTION. The Corporation's issuance of shares of Common
Stock, including the additional shares that will be authorized
if the proposed Share Amendment is adopted, may dilute the
present equity ownership position of current holders of Common
Stock and may be made without stockholder approval, unless
otherwise required by applicable laws or stock exchange
regulation. Under existing National Association of Securities
Dealers rules and policies, approval of a majority of the
outstanding shares of Common Stock would be required in
connection with any transaction or series of related
transactions that would result in the original issuance of
additional shares of Common Stock, other than in a public
offering for cash, (i) if the Common Stock (including securities
convertible into or exercisable for Common Stock) has, or will
have upon issuance, voting power equal to or in excess of 20% of
the voting power outstanding
12<PAGE>
<PAGE>
before the issuance of such Common Stock; (ii) if the number of
shares of Common Stock to be issued is or will be equal to or in
excess of 20% of the number of shares outstanding before the
issuance of the Common Stock; or (iii) if the issuance would
result in a change in control of the Corporation.
POTENTIAL ANTI-TAKEOVER EFFECTS. The additional
authorized but unissued shares of the Common Stock that would
become available if the Share Amendment is approved could be
used to make a change in control of the Corporation more
difficult and expensive. Under certain circumstances, such
shares could be used to create impediments or to frustrate
persons seeking to cause a takeover or to otherwise gain control
of the Corporation. Such shares could be sold to purchasers who
might side with the Board in opposing a takeover bid that the
Board determines not to be in the best interests of the
Corporation and its stockholders. The Share Amendment might
also have the effect of discouraging an attempt by another
person or entity, through the acquisition of a substantial
number of shares of the Corporation's Common Stock, to acquire
control of the Corporation with a view to consummating a merger,
sale of all or any part of the Corporation's assets, or a
similar transaction, since the issuance of new shares could be
used to dilute the stock ownership of such person or entity.
RECOMMENDATION; VOTE REQUIRED. The Board of Directors
believes that the Share Amendment is in the best interests of
the stockholders of the Corporation. Approval of this proposal
requires a vote in favor of the Share Amendment by the holders
of a majority of the outstanding shares of Common Stock of the
Corporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE PROPOSAL TO AMEND THE CORPORATION'S CERTIFICATE OF
INCORPORATION TO INCREASE THE CORPORATION'S AUTHORIZED SHARES OF
CAPITAL STOCK AND AUTHORIZED SHARES OF COMMON STOCK, WHICH
PROPOSAL IS IDENTIFIED AS PROPOSAL II ON THE ENCLOSED PROXY
CARD.
________________________________________________________________
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________________________________
KPMG Peat Marwick LLP was the Corporation's independent
auditing firm for the 1997 fiscal year. A representative of
KPMG Peat Marwick LLP is expected to be present at the Annual
Meeting to respond to stockholders' questions and will have the
opportunity to make a statement if he or she so desires.
________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________
Pursuant to regulations promulgated under the Exchange
Act, the Company's officers and directors and all persons who
own more than ten percent of the Common Stock ("Reporting
Persons") are required to file reports detailing their ownership
and changes of ownership in the Common Stock and to furnish the
Company with copies of all such ownership reports that are
filed. Based solely on the Company's review of the copies of
such ownership reports which it has received in the past fiscal
year or with respect to the past fiscal year, or written
representations from such persons that no annual report of
changes in beneficial ownership were required, the Company
believes during fiscal year 1997 and prior fiscal years all
Reporting Persons have complied with these reporting
requirements.
________________________________________________________________
OTHER MATTERS
________________________________________________________________
The Board of Directors is not aware of any business to
come before the Annual Meeting other than those matters
described above in this Proxy Statement. However, if any other
matters should properly come before the Annual Meeting, it is
intended proxies in the accompanying form will be voted in
respect thereof in accordance with the determination of a
majority of the Board of Directors.
13<PAGE>
<PAGE>
________________________________________________________________
MISCELLANEOUS
________________________________________________________________
The cost of soliciting proxies will be borne by the
Corporation. The Corporation will reimburse brokerage firms and
other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations
by mail, directors, officers and regular employees of the
Corporation may solicit proxies personally or by telegraph or
telephone without additional compensation.
The Corporation's 1997 Annual Report to Stockholders,
including financial statements, has been mailed to all
stockholders of record as of the close of business on February
27, 1998. Any stockholder who has not received a copy of such
Annual Report may obtain a copy by writing to the Secretary of
the Corporation. Such Annual Report is not to be treated as a
part of the proxy solicitation material or as having been
incorporated herein by reference.
THE CORPORATION IS REQUIRED TO FILE AN ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997, WITH THE
SECURITIES AND EXCHANGE COMMISSION. STOCKHOLDERS OF RECORD AS
OF FEBRUARY 27, 1998, MAY OBTAIN, WITHOUT CHARGE, A COPY OF SUCH
REPORT UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION,
112 EAST ALLEGAN STREET, LANSING, MICHIGAN 48933.
________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________
In order to be eligible for inclusion in the Corporation's
proxy materials for next year's Annual Meeting of Stockholders,
any stockholder proposal to take action at such meeting must be
received at the Corporation's office at 112 East Allegan Street,
Lansing, Michigan 48933, no later than November 23, 1998. Any
such proposals shall be subject to the requirements of the proxy
rules adopted under the Securities Exchange Act of 1934.
BY ORDER OF THE BOARD OF DIRECTORS
John W. Abbott
Executive Vice President, Chief
Operating Officer and Secretary
Lansing, Michigan
March 17, 1998
14<PAGE>
<PAGE>
REVOCABLE PROXY
CFSB BANCORP, INC.
LANSING, MICHIGAN
______________________
ANNUAL MEETING OF STOCKHOLDERS
April 21, 1998
______________________
The undersigned hereby appoints David H. Brogan, William C.
Hollister and J. Paul Thompson, Jr. with full powers of
substitution to act, as attorneys and proxies for the
undersigned, to vote all shares of Common Stock of CFSB Bancorp,
Inc. which the undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held at the Sheraton Lansing
Hotel, 925 South Creyts Road, Lansing, Michigan on Tuesday,
April 21, 1998 at 11:00 a.m., local time, and at any and all
adjournments thereof, as indicated below and in accordance with
the determination of a majority of the Board of Directors with
respect to other matters which come before the Annual Meeting.
VOTE
FOR WITHHELD
--- --------
I. The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ]
Robert H. Becker
Henry W. Wolcott, IV
INSTRUCTION: TO WITHHOLD YOUR VOTE
FOR ANY INDIVIDUAL NOMINEE, INSERT THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
_______________________________
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
II. The approval of an amendment to the
Corporation's Certificate of Incorporation
increasing the number of authorized shares
of capital stock and authorized shares of
common stock. [ ] [ ] [ ]
</TABLE>
The Board of Directors recommends a vote "FOR" the
election of listed nominees, and for Proposal II -- Approval of
the Increase in Authorized Shares.
________________________________________________________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT, IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE LISTED
NOMINEES AND FOR PROPOSAL II -- APPROVAL OF THE INCREASE IN
AUTHORIZED SHARES. IF ANY OTHER BUSINESS IS PRESENTED AT THE
ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE
BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL
MEETING. THIS PROXY CONFERS DISCRETIONARY AUTHORITY ON THE
HOLDERS THEREOF TO VOTE WITH RESPECT TO THE ELECTION OF ANY
PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR
GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF
THE ANNUAL MEETING.
________________________________________________________________
<PAGE>
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the
Annual Meeting or at any adjournment thereof and after notifica-
tion to the Secretary of the Corporation at the Annual Meeting
of the stockholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated
and of no further force and effect. The undersigned hereby
revokes any and all proxies heretofore given with respect to the
shares of Common Stock held of record by the undersigned.
The undersigned acknowledges receipt from the Corporation
prior to the execution of this proxy of a Notice of Annual
Meeting, a Proxy Statement and an Annual Report.
Dated: _______________________, 1998
__________________________ __________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________ __________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope in
which this card was mailed. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title.
If shares are held jointly, each holder should sign.
IF YOU ARE PLANNING TO ATTEND THE ANNUAL MEETING PLEASE CHECK
THIS BOX. [ ]
________________________________________________________________
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE.
________________________________________________________________
