<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CITFED BANCORP, INC.
- - -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 (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> 2
[CITFED BANCORP, INC. LETTERHEAD]
June 13, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of CitFed Bancorp,
Inc., I cordially invite you to attend the Annual Meeting of Stockholders of
the Corporation. The Meeting will be held at 2:00 p.m. (Eastern Daylight
Time), on July 25, 1997, at the Corporation's executive offices in the Savers
Club Auditorium, One Citizens Federal Centre, Dayton, Ohio.
The attached Notice of Annual Meeting of Stockholders and Proxy
Statement discusses the business to be conducted at the Meeting. We have also
enclosed a copy of the Corporation's Annual Report to Stockholders. At the
meeting we will report on the Corporation's operations and outlook for the year
ahead.
I encourage you to attend the Meeting in person. Whether or not you
plan to attend, however, PLEASE READ THE ENCLOSED PROXY STATEMENT AND THEN
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING
POSTPAID RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. This will save the
Corporation additional expense in soliciting proxies and will ensure that your
shares are represented at the Meeting.
Thank you for your attention to this important matter.
Very truly yours,
Jerry L. Kirby
JERRY L. KIRBY
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 3
CITFED BANCORP, INC.
ONE CITIZENS FEDERAL CENTRE
DAYTON, OHIO
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 25, 1997
_______________
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of CitFed Bancorp, Inc. ("CitFed" or the "Corporation") will be held
at the Corporation's executive offices in the Savers Club Auditorium, One
Citizens Federal Centre, Dayton, Ohio, on Friday, July 25, 1997 at 2:00 p.m.
(Eastern Daylight Time). A Proxy Card and a Proxy Statement for the Meeting
are enclosed.
The Meeting is for the purpose of:
I. Electing three directors of the Corporation; and
such other matters as may properly come before the Meeting, or any adjournments
or postponements thereof. The Board of Directors is not aware of any other
business to come before the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which the
Meeting may be adjourned or postponed. Stockholders of record at the close of
business on June 4, 1997 will be entitled to vote the number of shares held of
record in their names on that date.
You are requested to fill in and sign the enclosed form of proxy which
is solicited on behalf of the Board of Directors, and to mail it promptly in
the enclosed envelope. The proxy will not be used if you attend and vote at
the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
John H. Curp
JOHN H. CURP
Corporate Secretary
Dayton, Ohio
June 13, 1997
- - --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
PRE-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
- - --------------------------------------------------------------------------------
<PAGE> 4
PROXY STATEMENT
CITFED BANCORP, INC.
ONE CITIZENS FEDERAL CENTRE
DAYTON, OHIO
ANNUAL MEETING OF STOCKHOLDERS
JULY 25, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of CitFed Bancorp, Inc.
("CitFed" or the "Corporation") to be used at the Annual Meeting of
Stockholders of the Corporation (the "Meeting"), to be held at the
Corporation's executive offices in the Savers Club Auditorium, One Citizens
Federal Centre, Dayton, Ohio, on July 25, 1997, at 2:00 p.m. (Eastern Daylight
Time), and at all adjournments or postponements of the Meeting. The
accompanying Notice of Meeting and this Proxy Statement are first being mailed
to stockholders on or about June 13, 1997. Certain of the information provided
herein relates to Citizens Federal Bank, F.S.B. (the "Bank"), a wholly owned
subsidiary and the predecessor of the Corporation.
At the Meeting, the stockholders of the Corporation are being asked to
consider and vote upon the election of three directors of the Corporation.
VOTING RIGHTS AND PROXY INFORMATION
All shares of common stock, par value $.01 per share, of the
Corporation (the "Common Stock") represented at the Meeting by properly
executed proxies received prior to or at the Meeting, and not revoked, will be
voted at the Meeting in accordance with the instructions thereon. Proxies
solicited on behalf of 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" the proposal set forth in this Proxy
Statement for consideration at the Meeting. The Corporation does not know of
any matters, other than as described in the Notice of Meeting, that are to come
before the Meeting. If any other matters are properly presented at the Meeting
for action, the persons named in the enclosed form of proxy will have the
discretion to vote on such matters in accordance with their best judgment.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary
of the Corporation at or before the Meeting a written notice of revocation
bearing a later date than the proxy; (ii) duly executing a subsequent proxy
relating to the same shares and delivering it to the Secretary of the
Corporation at or before the Meeting; or (iii) attending the Meeting and voting
in person (although attendance at the Meeting will not in and of itself
constitute revocation of a proxy). Any written notice revoking a proxy should
be delivered to John H. Curp, Secretary, CitFed Bancorp, Inc., One Citizens
Federal Centre, Dayton, Ohio.
One-half of the shares of the Common Stock present, in person or
represented by proxy, shall constitute a quorum for purposes of the Meeting.
Proxies marked as abstaining will be treated as present for purposes of
determining a quorum at the Meeting and will be counted as present and entitled
to vote on any matter as to which abstention is indicated.
VOTING REQUIRED FOR APPROVAL OF PROPOSALS
Directors shall be elected by a plurality of the shares present in
person or represented by proxy at the Meeting and entitled to be voted on the
election of directors. In all other matters, the affirmative vote of the
majority of shares present in person or represented by proxy at the Meeting and
entitled to vote on the matter shall be the act of the stockholders.
<PAGE> 5
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on June 4, 1997
will be entitled to one vote for each share then held on all matters brought
before the Meeting. As of that date, the Corporation had 8,638,486 shares of
Common Stock issued and outstanding.
The following table sets forth information as of March 31, 1997
regarding the share ownership of (i) those persons who were known by management
to be the beneficial owners of more than 5% of the outstanding shares of Common
Stock and (ii) the shares of Common Stock beneficially owned by the executive
officers named below and all directors and executive officers as a group. For
information regarding the beneficial ownership of Common Stock by directors and
nominees of the Corporation, see "Proposal I - Election of Directors."
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED CLASS
- - ------------------------------------ -------------- ----------
<S> <C> <C>
McDonald & Co. Securities 577,822 6.69%
800 Superior Avenue
Cleveland, Ohio 44112(1)
NAMED EXECUTIVE OFFICERS
- - ------------------------
Jerry L. Kirby 161,043 1.84%
President, Chief Executive Officer and Chairman
of the Board of CitFed and the Bank
William M. Vichich 86,140 .99%
Executive Vice President, Chief Operating Officer and
Chief Financial Officer of CitFed and the Bank
Mary L. Larkins 49,497 .57%
Senior Vice President of CitFed and the Bank, Executive
Vice President of CitFed Mortgage Corporation
John H. Curp 45,283 .52%
Senior Vice President and Secretary of CitFed, Senior
Vice President and Legal Counsel of the Bank
Sebastian J. Melluzzo 3,750 .04%
Senior Vice President of CitFed, and
Senior Vice President of the Bank
All directors and executive officers of the Corporation and the 520,051 5.85 %
Bank as a group (17 persons) (2)
------------------
</TABLE>
(1) As reported by McDonald & Co. Securities and Henry Kerr, Senior Vice
President and General Counsel, ("McDonald & Co.") in a Schedule 13G dated
February 12, 1997. McDonald & Co. reported no voting power and sole
dispositive power with respect to 577,822 shares of the Company's stock.
(2) This amount includes shares held directly, through the Bank's 401(k) Plan,
held by certain members of the named individuals' families, or held by
trusts of which the named individual is a trustee or substantial
beneficiary with respect to which shares the respective directors and
officers may be deemed to have sole or shared voting and/or investment
power. Also included in the above amounts are 105,750 shares, 39,600
shares, 20,910 shares, 21,735 shares, 750 shares and 77,548 shares of
CitFed common stock subject to options which are immediately exercisable
or exercisable within 60 days of the voting record date by Mr. Kirby, Mr.
Vichich, Ms. Larkins, Mr. Curp, Mr. Melluzzo and all other directors and
executive officers as a group, respectively.
2
<PAGE> 6
PROPOSAL I - ELECTION OF DIRECTORS
GENERAL
The Corporation's Board of Directors consists of nine members and is
divided into three classes, with each class consisting of approximately
one-third of the Board. Approximately one-third of the directors are elected
annually and are generally elected to serve for a three-year period or until
their respective successors are elected and qualified.
The following table sets forth certain information, as of March 31,
1997, regarding the composition of the Corporation's Board of Directors,
including each director's term of office. The Board of Directors acting as the
nominating committee has recommended and approved the nominees identified in
the following table. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is withheld as to
a nominee) will be voted at the Meeting FOR the election of the nominees
identified below. If a nominee is unable to serve, the shares represented by
all valid proxies will be voted for the election of such substitute nominee as
the Board of Directors may recommend. At this time, the Board of Directors
knows of no reason why a nominee might be unable to serve if elected. Except
as disclosed herein, there are no arrangements or understandings between any
nominee and any other person pursuant to which the nominee was selected.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT
POSITION(S) HELD DIRECTOR TERM TO BENEFICIALLY OF
NAME AGE(1) IN CITFED SINCE(2) EXPIRE OWNED CLASS
- - -------------------- ------ ---------------------- -------- ------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Larry R. Ritter 53 Director 1987 2000 12,891(3) .15
James E. Walsh 67 Director 1977 2000 16,000(3) .19
Leon A. Whitney 67 Director 1984 2000 31,995(3)(4) .37
DIRECTORS CONTINUING IN OFFICE
Allen M. Hill 51 Director 1987 1999 22,674(3) .26
Gilbert P. Williamson 59 Director 1994 1999 7,500(3) .09
Jerry L. Kirby 62 President, Chief 1974 1998 161,043(5) 1.84
Executive Officer and
Chairman of the Board
Donald E. Broehm 67 Director 1982 1998 23,569(3) .27
Clarence E. Bowman, Jr. 43 Director 1989 1998 15,415(3) .18
Paul F. Dillenburger 48 Director 1989 1998 11,833(3) .14
- - ------------------
</TABLE>
(1) At March 31, 1997.
(2) Includes service as a director of the Bank.
(3) Includes shares held directly, including 6,000 shares subject to options
which are immediately exercisable, as well as shares which are held in
retirement accounts, or held by certain members of the named director's
family, with respect to which shares such director may be deemed to have
sole or shared voting and/or investment power.
(4) Includes 996 shares held directly by Mr. Whitney's spouse.
(5) Includes shares held directly, including 105,750 shares subject to
options which are immediately exercisable, as well as shares which are
held in retirement accounts, with respect to which shares Mr. Kirby may be
deemed to have sole or shared voting and/or investment power.
3
<PAGE> 7
The business experience of each director of CitFed is set forth below.
All directors have held their present position for at least five years unless
otherwise indicated.
LARRY R. RITTER - Mr. Ritter has been a partner of Continental Real
Estate Corporation, a fully integrated firm dealing with real estate
development, property management and real estate brokerage services since 1989.
He is the former president and chief operating officer of Rax Restaurants,
Inc., Columbus, Ohio, a position he assumed in 1985. He also served on the
corporate board of Rax Restaurants. Mr. Ritter has a master of business
administration degree from the University of Cincinnati and a bachelor of arts
in economics from Ohio State University.
JAMES E. WALSH - Mr. Walsh is a partner in Miller-Valentine
Construction. Mr. Walsh joined Miller-Valentine as a partner, vice president
and operations manager in 1964 and became the corporation's president in 1974,
and was the Chairman of the Board of Directors from 1988 through 1993. He is
on the Board of Directors of the West Central Ohio Chapter of Associated
General Contractors of America. Mr. Walsh received a bachelor of science
degree in civil engineering from the University of Dayton.
LEON A. WHITNEY - Mr. Whitney is the president of Baldwin & Whitney
Insurance Agency, Inc. In 1970 he was elected vice president and director and
became the Corporation's president in 1971. During his career he has served as
a member and chairman of several principal agent and insurance corporation
liaison groups and is currently active with many charitable and community
organizations. Mr. Whitney received a bachelor of arts degree in business
administration from the Ohio Wesleyan University.
ALLEN M. HILL - Mr. Hill is the president and chief executive officer
of the Dayton Power and Light Company (DP&L), having served in various
capacities since 1965. He also serves as a member of the Board of Directors of
DP&L. In addition to serving on the Board of Directors of CitFed, he is also
serving on the following Boards: the Dayton Boys/Girls Club, the Miami Valley
Regional Planning Commission, the Ohio Electric Utility Institute, the Dayton
Art Institute and the Hipple Cancer Research Center. Mr. Hill received a
bachelor of science degree in electrical engineering and a master of business
administration degree from the University of Dayton.
GILBERT P. WILLIAMSON - Mr. Williamson served as Chairman of the Board
and Chief Executive Officer of NCR Corporation from 1991 until he retired in
May 1993. Mr. Williamson was named Chairman and Chief Executive Officer of NCR
Corporation and became a member of AT&T's Management Executive Committee,
Operations Committee and Board of Directors following the purchase of NCR by
AT&T in 1991. Mr. Williamson joined NCR in 1962 as a systems engineer and
moved up through the company holding numerous positions prior to becoming
President and a member of the NCR Board in 1988. In addition to serving on the
Board of Directors of CitFed, he is also serving on the Boards of Directors of
the following companies: The Santa Cruz Operation, Inc., a software company
headquartered in Santa Cruz, California, Roberds, a furniture and home
electronics company headquartered in Dayton, Ohio and Retix, an open networking
company headquartered in Santa Monica, California. Mr. Williamson also serves
on a number of advisory boards and committees, and is included in numerous
community activities. Mr. Williamson holds a bachelor's degree in industrial
management from San Jose State University.
JERRY L. KIRBY - Mr. Kirby is Chairman of the Board, President and
Chief Executive Officer of CitFed, positions he has held since 1991. Mr. Kirby
joined the staff of the Bank in 1954 directly from having attended the
University of Michigan. He was named President and Chief Executive Officer of
the Bank in 1973 and additionally, in 1979, was elected Chairman of the Board
of the Bank. Mr. Kirby also serves on the Board of Directors of Roberds, a
furniture and home electronics company headquartered in Dayton, Ohio, as well
as on the Board of Directors of the Neff Folding Box Corporation, Supply One
Corporation, and the United Way of Dayton, Greene County and Preble County, for
which he served as campaign chairman in 1991. Mr. Kirby also serves on the
Dayton Business Committee as well as the Foundation Board of Trustees of
Sinclair Community College, the Wright State University Advisory Board for the
College of Business and Administration, the Board of Directions of Improved
Solutions for Urban Systems for the Greater Dayton Area and the Ohio Chamber of
Commerce. He is past chairman of both the Dayton Area Chamber of Commerce and
the Dayton Area Progress Council and served two terms on the Board of Directors
of the Cincinnati Branch, Federal Reserve Bank of Cleveland.
DONALD E. BROEHM - Mr. Broehm is the retired president of Mid-State
Bolt and Nut Corporation ("Mid-State"), a position he held from 1976 to 1995.
Mr. Broehm joined Mid-State in 1953. He is also the retired president of
Trans-America International, an importer of fasteners. He became a member of
the Board of the Bank in 1982 as a result of
4
<PAGE> 8
the merger with Ohio State Federal Savings and Loan of which he was a Board
member. He holds a bachelor of arts degree from Capital University.
CLARENCE E. BOWMAN, JR. - Mr. Bowman is the owner and director of
Bowman Funeral Chapel in Dayton. Mr. Bowman has a master of science degree
from the Ohio State University, a bachelor of business administration from the
University of Cincinnati and he graduated from the Cincinnati College of
Mortuary Science.
PAUL F. DILLENBURGER - Mr. Dillenburger has worked in the public
accounting field from 1971 to the present and is currently a self-employed
certified public accountant in Cincinnati, Ohio. Until 1989, he served as a
senior partner at Dillenburger, Beyer & Pearlman, Inc., a CPA firm which he
founded in 1975. As a result of the merger with Liberal Savings and Loan
Association, he became a member of the Bank's Cincinnati Advisory Board in
1983, prior to joining the Board of Directors of the Bank in 1989. Mr.
Dillenburger received a bachelor of science degree in accounting from the
University of Notre Dame.
The Board of Directors of the Bank currently consists of nine
directors, all of whom are directors of CitFed. The Board is divided into
three classes and approximately one-third of the directors are elected
annually. Because CitFed owns all of the issued and outstanding shares of
capital stock of the Bank, CitFed elects the directors of the Bank.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
MEETINGS AND COMMITTEES OF CITFED. Meetings of CitFed's Board of
Directors are generally held on a quarterly basis. The Board of Directors met
eight times during the fiscal year ended March 31, 1997. During fiscal 1997,
no incumbent director of CitFed attended fewer than 75% of the aggregate of the
total number of Board meetings and the total number of meetings held by the
committees of the Board of Directors on which he or she served. Directors are
not paid a fixed fee for serving on the Board of CitFed; however, each Board
member is paid a contingent fee at year end based on CitFed's return on equity
for the fiscal year. The fee paid to directors for fiscal 1997 was $2,000.
Directors of CitFed, who are not officers of CitFed, are also paid $350 per
committee meeting attended.
The Board of Directors of CitFed has standing Executive, Audit, Stock
Option and Incentive Plan, Compensation and Nominating Committees.
The Executive Committee is comprised of Directors Kirby, Hill, Walsh,
Whitney, and Williamson. To the extent authorized by the Board of Directors
and by the Corporation's bylaws, this committee exercises all of the authority
of the Board of Directors between Board meetings. Specifically, the committee
works with senior management to accomplish the goals and objectives of CitFed
and in formulating future business strategies. The Executive Committee met
once during fiscal 1997.
The Audit Committee recommends independent auditors to the Board,
reviews the results of the auditors' services, reviews with management and the
internal auditors the systems control and internal audit reports and assures
that the books and records of the Corporation and the Bank are kept in
accordance with applicable accounting principles and standards. The members of
the Audit Committee are James E. Walsh (Chairman), Leon A. Whitney, and Paul F.
Dillenburger. In fiscal 1997, this committee did not meet at the Corporation
level; however, the subsidiary Bank's audit committee, which serves the same
function and has the identical makeup, met two times during fiscal 1997.
The Stock Option and Incentive Plan Committee is comprised of
Directors Hill and Ritter. This committee is responsible for administering the
Stock Option Plan. The Stock Option and Incentive Plan Committee met three
times during fiscal 1997.
The Compensation Committee, comprised of Directors Hill, Walsh and
Williamson, advises the Board on compensation issues. This committee met three
times during fiscal 1997.
The Nominating Committee is comprised of Directors Kirby, Bowman and
Broehm. This committee met once in fiscal 1997 and recommended nominees for
election as directors which were approved by the entire CitFed Board. While
the Board of Directors will consider nominees recommended by stockholders, the
Board has not actively solicited such nominations. Pursuant to the
Corporation's bylaws, nominations by stockholders must be delivered in writing
to the Secretary of CitFed at least 70 days before the date of the annual
meeting.
5
<PAGE> 9
Meetings and Committees of the Bank. The Bank's Board of Directors
meets monthly and may have additional special meetings upon request of the
managing officer or of three directors. The Board of Directors met 12 times
during fiscal 1997. During fiscal 1997, no incumbent director of the Bank
attended fewer than 75% of the aggregate of the total number of Board meetings
and the total number of meetings held by the committees of the Board of
Directors on which he or she served. Directors who are not officers of the
Bank received an annual retainer of $6,000 and fees of $1,000 per month for
each Board meeting attended and $350 for each committee meeting attended during
fiscal 1997.
The Executive Committee of the Bank is composed of Directors Kirby,
Hill, Walsh, Whitney and Williamson. To the extent authorized by the Board
of Directors of the Bank and by the Bank's bylaws, this committee exercises all
of the authority of the Board of Directors between Board meetings.
Specifically, the committee works with senior management to accomplish the
goals and objectives in the Bank's business plan and in formulating future
business strategies. The Bank's Executive Committee did not meet during fiscal
1997.
The Compensation Committee of the Bank, whose members are the same as
the Corporation's compensation committee, is responsible for reviewing and
making recommendations with respect to salaries for Bank and subsidiary
personnel. Three meetings were held by this committee during fiscal 1997.
Nominees for election as directors are selected by the entire Board of
Directors of the Bank.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during fiscal 1997 were
Directors Hill, Walsh and Williamson. During fiscal 1997, Director Walsh had
loans outstanding with the Bank aggregating in excess of $60,000. All such
loans were made in the ordinary course of business, were made on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons, and did not involve
more than the normal risk of collectability or present other unfavorable
features.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
for services in all capacities to the Corporation and the Bank for the years
ended March 31, 1997, 1996 and 1995 of those persons who were, at March 31,
1997, (i) CitFed's Chief Executive Officer and (ii) the other four most highly
compensated executive officers of the Corporation and the Bank (the "named
executives").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
------------------------------------------------------------------------------------------------------------------
LONG TERM COMPENSATION
------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------------------------- --------------------- ------------------
FISCAL ALL
NAME AND YEAR RESTRICTED OPTIONS OTHER
PRINCIPAL ENDED OTHER ANNUAL STOCK SHARES LTIP COMPEN-
POSITION MARCH 31 SALARY BONUS COMPENSATION(1) AWARD(S) (#) PAYOUTS SATION
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JERRY L. KIRBY 1997 $350,989 $189,037 $--- --- --- --- $5,038(2)
Chairman of the Board, 1996 327,171 131,708 --- --- --- --- 3,443
President and Chief 1995 306,000 135,096 --- --- --- --- 3,136
Executive Officer of
CitFed and the Bank
WILLIAM M. VICHICH 1997 219,133 83,904 --- --- --- --- 5,612(2)
Executive Vice President, 1996 203,845 68,920 --- --- --- --- 5,310
Chief Operating Officer and 1995 190,000 59,916 --- --- --- --- 5,117
Chief Financial Officer of
CitFed and the Bank
MARY L. LARKINS 1997 174,820 66,343 --- --- --- --- 4,448(2)
Senior Vice President of 1996 167,500 49,783 --- --- --- --- 3,718
CitFed and the Bank, 1995 160,000 50,456 --- ---- --- --- 3,339
President of CitFed Mortgage
Corporation
of America
JOHN H. CURP 1997 142,691 43,708 --- --- --- --- 3,683(2)
Senior Vice President, 1996 130,970 35,577 --- --- --- --- 2,261
Legal Counsel and Secretary 1995 125,000 31,535 --- --- --- --- 2,188
of CitFed, Senior Vice
President and Legal Counsel
of the Bank
SEBASTIAN J. MELLUZZO(3) 1997 128,800 40,211 --- --- --- --- 2,813(2)
Senior Vice President of 1996 59,214 21,963 --- --- --- --- ---
CitFed and the Bank
</TABLE>
____________________
(1) Certain Executive Officers of the Bank receive indirect compensation in the
form of personal benefits including: personal tax, financial and estate
planning services, club memberships and the use of automobiles. The amount
of such indirect compensation in fiscal 1997 did not exceed, with respect
to any officer, the lesser of $50,000 or 10% of the total amount of annual
salary and bonus paid to such officer.
(2) Consists of fiscal 1997 contributions by the Bank under its 401(k) plan of
approximately $0, $4,821, $3,846, $3,139 and $945 and the payment of
insurance premiums by the Bank of $5,038, $791, $602, $544 and $1,868 on
behalf of officers Kirby, Vichich, Larkins, Curp and Melluzzo respectively.
(3) Began employment with the Corporation and the Bank during fiscal 1996.
7
<PAGE> 11
The following table provides information as to the number and value of
stock options held by the named executive officers at the fiscal year ended
March 31, 1997. No Stock Appreciation Rights have been granted under the Stock
Option Plan. At March 31, 1997 the closing price of CitFed's Common Stock was
$35.125 per share.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
-------------------------------------------------------------------------------------------------------------------
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
MARCH 31, 1997 MARCH 31, 1997(1)
---------------------------- --------------------------
SHARES ACQUIRED VALUE
ON EXERCISE REALIZED(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jerry L. Kirby 9,000 $153,000 105,750 --- $3,079,969 $ ---
William M. Vichich 1,615 30,625 39,600 --- 1,153,350 ---
Mary L. Larkins --- --- 20,910 --- 609,004 ---
John H. Curp --- --- 21,735 --- 633,032 ---
Sebastian J. Melluzzo(3) --- --- 750 750 8,591 8,591
</TABLE>
(1) Represents the aggregate dollar value realized upon exercise of the
options, calculated as the difference between the fair market value at the
exercise date, and the exercise price of the options.
(2) Represents the aggregate market value of the named executive officer's
stock options as of March 31, 1997. The market value per share of Common
Stock is the difference between the market price per share of the Common
Stock ($35.125 per share based upon the closing price per share of the
Common Stock as reported on the Nasdaq National Market on March 31, 1997,
less the exercise price of the options).
(3) Began employment with the Corporation and the Bank during fiscal 1996.
__________________
EMPLOYMENT AGREEMENTS. The Bank has entered into employment agreements
with Messrs. Kirby, Vichich, Curp, and Melluzzo, Ms. Larkins, and four other
executive officers. The employment agreements provide for annual base salaries
in amounts not less than the employees' current salaries. The employment
agreements provide for an initial term of three years for Mr. Kirby, two years
for Mr. Vichich, Mr. Curp and Ms. Larkins, and one year for all others. The
agreements provide for termination upon the employee's death, for cause or in
certain events specified by OTS regulations. The employment agreements are
terminable by the employee upon 90 days notice to the Bank. The employment
agreements provide for payment to the employee of up to 299% for Messrs. Kirby,
Vichich, Curp, Melluzzo and Ms. Larkins and the four other individuals, of the
employee's five-year average compensation in the event there is a change in
control of the Bank where employment terminates involuntarily in connection with
such change in control or within 24 months thereafter. This termination payment
is subject to reduction by the amount of all other compensation to the employee
deemed for purposes of the Internal Revenue Code of 1986, as amended (the
"Code") to be contingent on a change in control. Such termination payments are
provided on a similar basis in connection with a voluntary termination of
employment, where the change in control was at any time opposed by the
Corporation's Board of Directors. For the purposes of the employment
agreements, a change in control is defined to mean: (i) the acquisition by a
person or group of persons of beneficial ownership of 25% or more of the Common
Stock of the Corporation, (ii) as a result of any cash tender offer, merger or
other business combination, sale of assets or contested election, the persons
who were directors of the Corporation cease to constitute a majority of the
Board, or (iii) the stockholders approve the sale or other disposition of all or
substantially all the assets of the Corporation; provided, however, that any
such events shall not constitute a "change of control" if approved by the
Corporation's Board. Assuming a change of control had taken place as of March
31, 1997, the aggregate amount payable to Mr. Kirby, Mr. Vichich, Ms. Larkins,
Mr. Curp and Mr. Melluzzo would have been approximately $1,360,000, $750,000,
$610,000, $480,000 and $375,000, respectively.
8
<PAGE> 12
The agreements also provide, among other things, for participation in
an equitable manner and employee benefits applicable to executive personnel.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Bank's subsidiary Board of Directors
has furnished the following report on executive compensation:
The Bank's Compensation Committee has responsibility for reviewing the
compensation policies and plans for the Bank's and its affiliates. The
policies and plans established are designed to achieve both short-term and
long-term operational performance of the Bank and to build stockholder value
through both dividend payout and anticipated price appreciation in CitFed's
Common Stock as a result of the Bank's performance.
One of the Committee's primary objectives in the compensation area is
to develop and maintain compensation plans which provide the Bank with the
means of attracting and retaining quality executives at competitive
compensation levels and to implement compensation plans which seek to motivate
executives to perform to the full extent of their abilities, which seek to
enhance the profitability of CitFed, and thus stockholder value, by aligning
closely the financial interest of CitFed's executives with those of its
stockholders. In determining compensation levels, plans and adjustments, the
Committee takes into account, among other things, compensation and benefit plan
studies and recommendations made by independent consultants each year. These
studies analyze and compare the Bank's compensation plans to other financial
institutions of similar make up and size. The Committee reviews the selection
of peer companies used for compensation comparison purposes. The studies focus
on base compensation, annual incentive compensation, equity based compensation,
and long term incentive compensation.
The Compensation Committee has established a goal of providing base pay
for executive officers at approximately ninety-five percent of the median of
the peer group, and a total cash compensation goal, including both base pay and
performance based incentive award opportunities, at the median level of the
peer group.
With respect to Mr. Kirby, at the beginning of fiscal 1997, his base
salary was $346,000. Effective April 1, 1997 the base salary granted to him
was $375,000. In determining Mr. Kirby's base salary the Committee took into
account a comparison of chief executive officers in the peer group of financial
institutions, the Bank's success in increasing its earnings over the previous
fiscal year, the status of non-performing assets, improving the Bank's
efficiency ratio, and increasing the Bank's return on average equity, while at
the same time expanding the Bank's core deposits and the market areas of both
the Bank's and its mortgage banking subsidiary. The Committee also took into
account the Bank's success in meeting its financial and nonfinancial objectives
as well as an overall assessment of Mr. Kirby's contribution to the 6.8%
increase in CitFed's stockholders' equity, the resulting 48.4% appreciation in
market price for CitFed's stockholders and the 71.3% increase in the regular
stock dividend rate during 1997.
Each of the Bank's executive officers participates in the Annual
Incentive Plan. Target incentive award level opportunities are established for
each participant in the plan. The Annual Incentive Plan award payout formula
is based on the achievement of specially defined business and financial goals
relating to return on average equity, asset quality, increase in non-interest
income, improvement of CitFed's efficiency ratio, and overall corporate and
individual performance, as reviewed and approved by the Bank's Board of
Directors. These goals reflect aggressive, yet realistically achievable goals.
Threshold financial performance objectives are established which represent the
minimum acceptable performance levels required for incentive payout. Target
and outstanding attainment levels are also set which encourages
over-achievement of each goal.
For the fiscal year ended March 31, 1997, each of the Bank's executive
officers, including Mr. Kirby, received incentive cash compensation under the
guidelines of the Bank's annual incentive plan. Based upon Mr. Kirby's
incentive award opportunity and the Bank's performance in achieving its
financial and business goals, the amount of incentive cash compensation earned
by Mr. Kirby during the 1997 fiscal year was $189,037.
Upon the mutual to stock conversion of the Bank in 1992, the Bank and
CitFed have included stock options and restricted stock awards as key elements
in their total compensation package. Equity based compensation provides a long
term alignment of interests and results achieved for stockholders and the
compensation rewards provided to executive officers by providing those
executives and others on whom the continued success of the Corporation most
depends with a proprietary interest in CitFed. In 1991, the CitFed Stock
Option Plan and the CitFed MRP were adopted providing for the grant of several
types of equity based awards including stock options and restricted stock
awards.
9
<PAGE> 13
These plans were ratified by CitFed stockholders in 1992. Since the
initial awards in January, 1992, no additional restricted stock or stock
options have been awarded to Mr. Kirby. All stock options awarded to Mr. Kirby
to date are vested.
Through the compensation programs described above, a significant
portion of the Bank's executive compensation is linked directly to individual
and corporate performance which is intended to result in stock price
appreciation. The Committee will continue to review the peer group and all
elements of compensation to assure that the compensation objectives and plans
meet CitFed's business objective and its philosophy of linking executive
compensation to stockholder interests as discussed above.
In 1993, Congress amended the Internal Revenue Code to add Section
162(m) to limit the corporate deduction for compensation paid to a
corporation's five most highly compensated officers to one million dollars per
executive per year, with certain exemptions. The Committee carefully reviewed
the impact of this legislation on the cost of the Bank's current executive
compensation plans. Under the legislation and regulations adopted thereunder,
it is not expected that any portion of CitFed's (or subsidiaries) deduction for
employee remuneration will be non-deductible in fiscal 1997 or in future years
by reason of compensation awards granted in fiscal 1997. The Committee intends
to review CitFed's (and subsidiaries) executive compensation policies on an
ongoing basis, and propose appropriate modifications, if the Committee deems
them necessary, to these executive compensation plans with a view toward
implementing CitFed's (and subsidiaries) compensation policies in a manner that
avoids or minimizes any disallowance of tax deductions under Section 162(m).
The foregoing report is furnished by the Compensation Committee of the
Board of Directors:
Allen M. Hill (Chairman) Gilbert P. Williamson James E. Walsh
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The line graph below compares the cumulative total stockholder return
on the Corporation's common stock to the cumulative total return of the Nasdaq
Stock Market Index and the Nasdaq Bank Stock Index for the period from April 1,
1992 to March 31, 1997. The graph assumes that $100 was invested on April 1,
1992 and that all dividends were reinvested. The Corporation became a publicly
traded Corporation on January 29, 1992.
[GRAPH]
<TABLE>
<CAPTION>
3/31/92 3/31/93 3/31/94 3/31/95 3/31/96 3/31/97
<S> <C> <C> <C> <C> <C> <C>
CitFed Bancorp, Inc. $100 $149 $208 $233 $306 $457
NASDAQ Stock Market $100 $115 $124 $138 $187 $208
NASDAQ Bank Stock $100 $144 $146 $162 $228 $312
</TABLE>
10
<PAGE> 14
BENEFIT PLANS
PENSION PLANS. The Bank's employees are included in a noncontributory
defined benefit retirement plan (the "Pension Plan") which covers all employees
who have met minimum service requirements. The Bank's funding policy is to
contribute annually the maximum amount that can be deducted for federal income
tax purposes. The following table sets forth, in specified compensation and
years of service classifications, the estimated annual benefits payable upon
retirement at age 65 (including amounts payable pursuant to the supplemental
retirement benefit agreements discussed below) under the Bank's
non-contributory qualified defined benefit pension plan.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
------------------------------------------------------------------------------------
YEARS OF SERVICE
-----------------------------------------------------------------
Remuneration 10 15 20 25 30
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$150,000 $ 38,400 $ 50,175 $ 61,950 $ 85,500 $ 85,500
175,000 44,800 58,538 72,275 99,750 99,750
200,000 51,200 66,900 82,600 114,000 114,000
225,000 57,600 75,263 92,925 128,250 128,250
250,000 64,000 83,625 103,250 142,500 142,500
300,000 76,800 100,350 123,900 171,000 171,000
400,000 102,400 133,800 165,200 228,000 228,000
500,000 128,000 167,250 206,500 285,000 285,000
600,000 153,600 200,700 247,800 342,000 342,000
</TABLE>
The Plan provides a monthly benefit equal to 1.25% of average monthly
compensation up to Social Security covered compensation plus 1.8% of average
monthly compensation in excess of covered compensation, times the number of
years of service up to 30 years. Wages considered for the Plan are for the
highest five consecutive plan years of base compensation out of the last ten
years of employment. At March 31, 1997, the estimated years of service of
Messrs. Kirby, Vichich, Curp, Melluzzo and Ms. Larkins under the Pension Plan
were 44, 13, 21, 2 and 14, respectively.
The maximum annual compensation which may be taken into account under
the Internal Revenue Code (as adjusted from time to time by the Internal
Revenue Service) for calculating contributions under qualified defined benefit
plans currently is $150,000 and the maximum annual benefit permitted under such
plans currently is $125,000.
SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENTS. The Bank has entered into
a supplemental retirement benefit agreement with Jerry L. Kirby, the President,
Chief Executive Officer and Chairman of the Board. This unfunded,
non-qualifying agreement provides for retirement income supplemental to that to
be provided under the Bank's pension plan, payable on an annual basis in an
amount equal to 57% of Mr. Kirby's average compensation based on the highest
three years of compensation during the five years prior to retirement less the
amount of the benefits payable to him under the Bank's qualified pension plans.
Until disbursed, the amounts, if any, directed to be deferred will continue to
be assets of the Bank, subject to the claims of general creditors. Assuming
Mr. Kirby's employment was involuntarily terminated as of March 31, 1997, he
would have been eligible to receive, at normal retirement, an annual benefit of
approximately $160,000 under his agreement. The annual benefit upon
retirement (at normal retirement age) payable to Mr. Kirby under his severance
agreement is estimated, based on assumed salary increases, to be approximately
$160,000 (which amount is included in the pension plan table above). Mr.
Kirby may elect within a certain time frame to receive the present value of the
entire supplemental benefit in one lump sum.
The Bank has also entered into supplemental retirement benefit
agreements with Mr. Vichich, Mr. Curp, Ms. Larkins and three other executive
officers. These agreements are identical to Mr. Kirby's agreement described
above, except that they provide for supplemental retirement income to be
payable on an annual basis in an amount between 26% and 57% (based on a
combination of age and years of service) of such individual's average
compensation (as defined above) and they do not permit the participant to elect
to receive the present value of his or her entire supplemental benefit in one
lump sum. Assuming the employment of Mr. Vichich, Mr. Curp, and Ms. Larkins had
been involuntarily terminated as of March 31, 1997, they would have been
eligible to receive, at normal retirement, an annual benefit of approximately
$58,000, $45,000, $45,000, respectively, under their agreements. The annual
benefit upon retirement (at normal retirement age) payable to each such
individual under his or her supplemental retirement
11
<PAGE> 15
agreement is estimated, based on assumed annual salary increases, to be
approximately $233,000, $92,000, and $161,000, respectively (which amounts are
included in the pension plan table above).
CERTAIN TRANSACTIONS
The Bank, like many financial institutions, followed a policy of
granting various types of loans to officers, directors and employees. All
loans to executive officers and directors are made in the ordinary course of
business in accordance with the Bank's standard underwriting practices and
procedures, were all made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral, as these
prevailing at the time for comparable transactions with other persons, and did
not include more than the normal risk of collectability or present other
unfavorable features.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Corporation's directors and executive officers, and persons who
own more than 10% of a registered class of the Corporation's equity securities,
to file with the Securities and Exchange Commission (the "SEC) initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Corporation. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish the Corporation with
copies of all Section 16(a) forms they file.
To the Corporation's knowledge, based solely on a review of the copies
of such reports furnished to the Corporation and written representations that
no other reports were required during the fiscal year ended March 31, 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were complied with.
INDEPENDENT AUDITORS
CitFed's independent auditors are Deloitte & Touche LLP, independent
auditors. Representatives of Deloitte & Touche LLP are expected to attend
CitFed's Annual Meeting to respond to appropriate questions and to make a
statement if they so desire.
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
executive offices, One Citizens Federal Centre, Dayton, Ohio, no later than
February 10, 1998. Any such proposals shall be subject to the requirements of
the proxy rules adopted under the Securities Exchange Act of 1934, as amended.
12
<PAGE> 16
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of 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 Corporation Common Stock. In addition,
CitFed has engaged Chemical Bank ("Chemical") to assist CitFed in distributing
proxy materials and contacting record and beneficial owners of CitFed Common
Stock. CitFed has agreed to pay Chemical approximately $4,000 plus
out-of-pocket expenses for its services to be rendered on behalf of CitFed. In
addition to solicitation by mail, directors and officers of the Corporation and
regular employees of the Bank may solicit proxies personally or by telegraph or
telephone, without additional compensation.
13
<PAGE> 17
REVOCABLE PROXY
CITFED BANCORP, INC
ANNUAL MEETING OF STOCKHOLDERS
July 25, 1997
The undersigned hereby appoints the Board of Directors of CitFed
Bancorp, Inc. (the "Corporation"), and its survivor, with full power of
substitution, to act as attorneys and proxies for the undersigned to vote all
shares of common stock of the Corporation which the undersigned is entitled to
vote at the Annual Meeting of Stockholders (the "Meeting"), to be held on
Friday, July 25, 1997 at THE CORPORATION'S EXECUTIVE OFFICES IN THE SAVERS CLUB
AUDITORIUM, ONE CITIZENS FEDERAL CENTRE, Dayton, Ohio, at 2:00 p.m. (Eastern
Daylight Time), and at any and all adjournments thereof, as follows:
I. The election of the following directors for terms of three
years:
FOR WITHHELD
LARRY R. RITTER / / / /
JAMES E. WALSH / / / /
LEON A. WHITNEY / / / /
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the listed nominees.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
<PAGE> 18
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This proxy may be revoked at any time before it is voted by: (i) filing
with the Secretary of the Corporation at or before the Meeting a written notice
of revocation bearing a later date than the proxy; (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the Secretary
of the Corporation at or before the Meeting; or (iii) attending the Meeting and
voting in person (although attendance at the Meeting will not in and of itself
constitute revocation of a proxy). If this proxy is properly revoked as
described above, then the power of such attorneys and proxies shall be deemed
terminated and of no further force and effect.
The undersigned acknowledges receipt from the Corporation prior to the
execution of this Proxy, of Notice of the Meeting, a related Proxy Statement
and the Corporation's Annual Report to Stockholders for the fiscal year ended
March 31, 1997.
Dated:
--------------------------
------------------------------- -----------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
------------------------------- -----------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ABOVE ON THIS CARD.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE YOUR FULL TITLE. IF SHARES ARE HELD
JOINTLY, EACH HOLDER SHOULD SIGN.
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PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE
--------------------------------------------------------------
