<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 [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED
BY RULE 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
FIRSTFED 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:
-----------------------------------------------------------------------
Notes:
<PAGE>
[COMPANY LETTERHEAD]
June 17, 1998
Dear Stockholder:
We invite you to attend the Annual Meeting of Stockholders (the "Meeting") of
FirstFed Bancorp, Inc. (the "Company") to be held at the main office of the
Company located at 1630 Fourth Avenue North, Bessemer, Alabama, on Tuesday, July
14, 1998 at 4:30 p.m., local time.
The attached Notice of Meeting and Proxy Statement describe the formal
business to be transacted at the Meeting. During the Meeting, we will also
report on the operations of the Company's two financial institution
subsidiaries, First Federal Savings Bank and First State Bank of Bibb County.
Directors and officers of the Company as well as representatives of Arthur
Andersen LLP, the Company's independent auditors, will be present to respond to
any questions the stockholders may have.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE
MEETING. Your vote is important, regardless of the number of shares you own.
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,
[SIGNATURE]
B. K. Goodwin, III
Chairman of the Board, Chief Executive
Officer and President
<PAGE>
FIRSTFED BANCORP, INC.
1630 FOURTH AVENUE NORTH
BESSEMER, ALABAMA 35020
(205) 428-8472
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 14, 1998
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of FirstFed Bancorp, Inc. (the "Company") will be held at the main office of the
Company located at 1630 Fourth Avenue North, Bessemer, Alabama, on Tuesday, July
14, 1998 at 4:30 p.m., local time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon the following
matters:
(i) The election of three directors of the Company for terms of
three years;
(ii) A proposed amendment to Section A of Article Fourth of the
Company's Certificate of Incorporation to increase the Company's
authorized common stock from 3,000,000 to 10,000,000 shares, and
thereby to increase the total number of shares of authorized
capital stock from 4,000,000 to 11,000,000 shares, of which
10,000,000 shares shall be common stock and 1,000,000 shares
shall be preferred stock; and
(iii) The transaction of such other matters as may properly come
before the Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before the
Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the date
specified above or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Stockholders of record at the close
of business on June 5, 1998, are the stockholders entitled to vote at the
Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy 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 Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
[SIGNATURE]
Lynn J. Joyce
Secretary
Bessemer, Alabama
June 17, 1998
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE 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
FIRSTFED BANCORP, INC.
1630 FOURTH AVENUE NORTH
BESSEMER, ALABAMA 35020
ANNUAL MEETING OF STOCKHOLDERS
JULY 14, 1998
- --------------------------------------------------------------------------------
GENERAL
- --------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of FirstFed Bancorp, Inc. (the "Company") to
be used at the Annual Meeting of Stockholders of the Company (the "Meeting")
which will be held at the main office of the Company located at 1630 Fourth
Avenue North, Bessemer, Alabama, on Tuesday, July 14, 1998 at 4:30 p.m., local
time. The accompanying Notice of Meeting and this Proxy Statement are being
first mailed to stockholders on or about June 17, 1998.
- --------------------------------------------------------------------------------
VOTING AND REVOCABILITY OF PROXIES
- --------------------------------------------------------------------------------
Proxies solicited by the Board of Directors of the Company will be voted in
accordance with the directions given therein. WHERE NO INSTRUCTIONS ARE
INDICATED, PROXIES WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR SET FORTH BELOW,
FOR THE PROPOSAL TO APPROVE AN AMENDMENT TO SECTION A OF ARTICLE FOURTH OF THE
COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED CAPITAL STOCK,
AND IN FAVOR OF EACH OF THE OTHER PROPOSALS SET FORTH IN THIS PROXY STATEMENT
FOR CONSIDERATION AT THE MEETING. The proxy confers discretionary authority on
the persons named therein to vote with respect to the election of any person as
a director where the nominee is unable to serve or for good cause will not
serve, and with respect to matters incident to the conduct of the Meeting. If
any other business is presented at the Meeting, proxies will be voted by those
named therein in accordance with the determination of a majority of the Board of
Directors. 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.
Stockholders who execute proxies retain the right to revoke them at any time.
Unless so revoked, the shares represented by such proxies will be voted at the
Meeting and all adjournments thereof. Proxies may be revoked by written notice
to Lynn J. Joyce, Secretary of the Company, at the address shown above, by
filing of a later-dated proxy prior to a vote being taken on a particular
proposal at the Meeting or by attending the Meeting and voting in person. A
proxy will not be voted if a stockholder attends the Meeting and votes in
person. However, the mere presence of a stockholder at the Meeting will not, by
itself, revoke such stockholder's proxy.
- --------------------------------------------------------------------------------
VOTING SECURITIES
- --------------------------------------------------------------------------------
Stockholders of record as of the close of business on June 5, 1998 (the
"Record Date"), are entitled to one vote for each share of the Company's common
stock, par value $.01 per share (the "Common Stock"), then held, except that
pursuant to the Company's Restated Certificate of Incorporation, beneficial
owners of shares of Common Stock exceeding 10% of the then-outstanding shares of
Common Stock are not permitted to vote such excess shares. As of the Record
Date, the Company had 1,494,549 shares of Common Stock issued, of which
1,204,598 shares were outstanding. The presence, in person or by proxy, of the
holders of record of shares of capital stock of the Company entitling the
holders to cast a majority of the votes entitled to be cast is necessary to
constitute a quorum at the Meeting.
<PAGE>
- --------------------------------------------------------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------------------------------------------------------------------------------
Persons and groups beneficially owning more than 5% of the Common Stock are
required under federal securities laws to file certain reports with the
Securities and Exchange Commission ("SEC") detailing such ownership. The
following table sets forth information, as of the Record Date, with respect to
any person, including any group of persons, known by the Company to be the
beneficial owner of more than 5% of the issued and outstanding Common Stock.
Other than as disclosed below, management knows of no person who beneficially
owned more than 5% of the Common Stock at the Record Date.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF COMMON
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) STOCK OUTSTANDING
- ---------------------------------------- ---------------------- -----------------
<S> <C> <C>
First Federal Savings Bank
Employee Stock Ownership Plan and Trust
1630 Fourth Avenue North
Bessemer, Alabama 35020 111,623 (2) 9.3%
Wellington Management Company(3)
75 State Street
Boston, Massachusetts 02109 126,000 10.5%
</TABLE>
________________
(1) Based on information furnished by the respective beneficial owners. In
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), a person is deemed to be the beneficial
owner, for purposes of this table, if that person either has or shares
voting or investment power with respect to such Common Stock or has a right
to acquire beneficial ownership at any time within 60 days from the Record
Date. As used herein, "voting power" is the power to vote or direct the
voting of shares, and "investment power" is the power to dispose or direct
the disposition of shares. Except as otherwise noted, ownership is direct,
and the named individuals exercise sole voting and investment power over the
shares of the Common Stock.
(2) Shares of Common Stock initially were acquired by the Employee Stock
Ownership Plan and Trust ("ESOP") in connection with the mutual-to-stock
conversion (the "Conversion") of First Federal Savings Bank ("First
Federal"), the Company's wholly-owned savings bank subsidiary. During
fiscal 1998, an additional 43,931 shares were acquired by the ESOP. A
committee consisting of all directors of the Company administers the ESOP.
An unrelated corporate trustee for the ESOP (the "ESOP Trustee") has been
appointed by the Board of Directors, which may instruct the ESOP Trustee
regarding investment of funds contributed to the ESOP. Shares held by the
ESOP and allocated to participating employees must be voted in accordance
with the instructions received from the participating employees.
Unallocated shares, and allocated shares for which no instruction has been
received, will be voted in the same proportion as the allocated shares for
which instruction has been received. As of the Record Date, 67,697 shares
of Common Stock in the ESOP had been allocated to participating employees,
and, therefore, the ESOP Trustee will vote the remaining 43,931 unallocated
shares in the same proportion as allocated shares.
(3) Includes First Financial Fund, a mutual fund.
2
<PAGE>
The following table sets forth, as of the Record Date, the beneficial ownership
of the Company's Common Stock by each of the Company's directors and nominees,
the executive officers named in the Summary Compensation Table and by all
executive officers and directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF COMMON
NAME BENEFICIAL OWNERSHIP(1) STOCK OUTSTANDING
- ----------------------- ----------------------- -----------------
<S> <C> <C>
Fred T. Blair 17,144 (2) 1.33%
B. K. Goodwin, III 35,724 (3) 2.78
James B. Koikos 22,568 (4) 1.76
A. W. Kuhn 55,922 4.35
Malcolm E. Lewis 43,148 (5) 3.36
E. H. Moore, Jr. 42,396 (6) 3.30
James E. Mulkin 36,321 2.87
Robert E. Paden 34,566 2.69
G. Larry Russell 31,756 (7) 2.47
All directors and executive
officers as a group (11 persons) 360,676 (3) 28.05
</TABLE>
_____________________
(1) For the definition of beneficial ownership, see footnote 1 to the previous
table. Includes certain shares of Common Stock owned by businesses in which
the director is an officer or major stockholder or by spouses, by immediate
family members, or as a custodian or trustee for minor children, over which
shares the director effectively exercises sole or shared voting and/or
investment power, unless otherwise indicated. Includes 416 shares, 400
shares and 816 shares of Common Stock awarded under First Federal's
Recognition and Retention Plan ("RRP") to Directors Goodwin and Koikos and
to all executive officers and directors as a group, respectively, as to
which shares such directors have voting power. Includes 55 shares, 26,903
shares, 4,425 shares, 55 shares, 9,705 shares, 3,205 shares, 14,705 shares
and 81,173 shares of Common Stock, as to which shares Directors Blair,
Goodwin, Koikos, Lewis, Moore, Paden and Russell and all executive officers
and directors as a group, respectively, have the right to purchase pursuant
to stock options exercisable within 60 days after the Record Date. Such
shares are deemed to be outstanding for the purpose of computing the
percentage of outstanding shares of Common Stock beneficially owned by each
director and the group. Includes 11 shares, 151 shares, 27 shares, 65
shares, 65 shares, 65 shares, 65 shares, 65 shares, 65 shares and 829 shares
of Common Stock which vest over a three year period for Directors Blair,
Goodwin, Koikos, Kuhn, Lewis, Moore, Mulkin, Paden and Russell and for all
executive officers and directors as a group, respectively, pursuant to the
Company's Incentive Compensation Plan ("Incentive Plan"). See " --
Directors' Compensation -- Incentive Compensation Plan." Includes 3,840
shares, 600 shares, 3,840 shares, 800 shares, 3,840 shares and 14,320
shares of Common Stock vested from the RRP and held by a Deferred
Compensation Plan trust for the benefit of Directors Blair, Koikos, Moore,
Mulkin and Russell and all executive officers and directors as a group,
respectively. See "-- Directors' Compensation."
(2) Includes 15,248 shares of Common Stock owned by Mr. Blair's wife.
(3) Includes 3,853 shares and 17,100 shares of Common Stock owned by the ESOP
and allocated to the accounts of Mr. Goodwin and all executive officers as a
group, respectively.
(4) Includes 6,000 shares held in a trust of which Mr. Koikos is a trustee.
(5) Includes 1,000 shares of Common Stock owned by Mr. Lewis's wife.
(6) Includes 2,000 shares of Common Stock owned by Mr. Moore's wife.
(7) Includes 2,020 shares of Common Stock owned jointly by Mr. Russell's wife
and minor children. Also includes 1,000 shares of Common Stock owned by Mr.
Russell's brother's political campaign fund, of which fund Mr. Russell is
Chairman and as to which shares Mr. Russell has voting power.
- --------------------------------------------------------------------------------
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
Based solely on the Company's review of the copies of ownership reports which
it has received in the past fiscal year, or written representations from
officers, from directors or from persons who own more than 10% of the Common
Stock that no annual report of change in beneficial ownership was required, and
the Company believes that during the fiscal year ended March 31, 1998 ("fiscal
1998"), all the filing requirements applicable to such persons have been timely
met.
3
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL I -- ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
The Company's Board of Directors currently is composed of nine members. The
Company's Certificate of Incorporation requires that directors be divided into
three classes, as nearly equal in number as possible, each class to serve for a
three year period and until their successors are elected and qualified, with
approximately one-third of the directors elected each year. The Board of
Directors has nominated for election as directors B.K. Goodwin, III, A.W. Kuhn
and Robert E. Paden, all of whom are currently members of the Board, to each
serve as directors for three-year terms and until their successors are elected
and qualified. Under Delaware law, directors are elected by a plurality of the
votes present in person or by proxy and entitled to vote on the election of
directors.
It is intended that the persons named in 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 that
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 BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION AS DIRECTORS OF ALL
THE NOMINEES LISTED BELOW.
The following table sets forth certain information regarding each of the
Company's directors. Each director of the Company is also a member of the Board
of Directors of First Federal, its wholly-owned savings bank subsidiary. In
addition, B. K. Goodwin, III, who serves as Chairman of the Board of Directors
of the Company, also serves as Chairman of the Board of Directors of First State
Bank of Bibb County ("First State"), which is wholly-owned by First State
Corporation, a wholly-owned subsidiary of the Company. No other director of the
Company serves as a director of First State.
<TABLE>
<CAPTION>
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
YEAR FIRST ELECTED AS CURRENT
AGE AT RECORD DIRECTOR OF TERM TO
NAME DATE FIRST FEDERAL(1) EXPIRE
- ------------------------------ ------------- --------------------- -------
<S> <C> <C> <C>
B. K. Goodwin, III 46 1995 1998
A. W. Kuhn 76 1979 1998
Robert E. Paden 67 1992 1998
<CAPTION>
DIRECTORS CONTINUING IN OFFICE
YEAR FIRST ELECTED AS CURRENT
AGE AT RECORD DIRECTOR OF TERM TO
NAME DATE FIRST FEDERAL(1) EXPIRE
- ------------------------------ ------------- --------------------- -------
<S> <C> <C> <C>
James B. Koikos 60 1995 1999
E. H. Moore, Jr. 64 1991 1999
James E. Mulkin 68 1992 1999
Fred T. Blair 70 1968 2000
Malcolm E. Lewis 88 1968 2000
G. Larry Russell 47 1990 2000
</TABLE>
_____________________
(1) With the exception of Messrs. Mulkin and Paden, who were appointed as
directors of the Company in 1992, and Messrs. Goodwin and Koikos, who were
appointed as directors of the Company in 1995, all directors were initially
appointed in May 1991 in connection with the incorporation and organization
of the Company.
4
<PAGE>
Unless otherwise stated, the principal occupation of each director of
the Company for the last five years is set forth below.
B. K. GOODWIN, III. Mr. Goodwin is the Chairman of the Board, Chief
Executive Officer and President of the Company and First Federal, positions he
has occupied since January 1, 1996. He has also served as Chairman of the Board
of First State since January 1996. He had previously served as Senior Executive
Vice President of the Company and First Federal since February 1995. Prior to
that time, Mr. Goodwin served as Chairman of the Board, Chief Executive Officer
and President of Steiner Bank in Birmingham, Alabama, and as President, Chief
Operating Officer and Director of Secor Bank, Federal Savings Bank, in
Birmingham, Alabama.
A. W. KUHN. Mr. Kuhn retired as the Executive Director of Bessemer
Housing Authority, a public housing program, in 1994.
ROBERT E. PADEN. Mr. Paden is a self-employed Attorney in Bessemer,
Alabama.
JAMES B. KOIKOS. Mr. Koikos is a restaurateur. He is owner/partner
of the Bright Star Restaurant, Bessemer, Alabama, and the Merritt House,
Birmingham, Alabama.
E. H. MOORE, JR. Mr. Moore retired in 1992 from his position as
President of Deaton, Inc., a trucking company in Ensley, Alabama.
JAMES E. MULKIN. Mr. Mulkin is the President of Mulkin Enterprises,
Bessemer, Alabama, a diversified business operation.
FRED T. BLAIR. Mr. Blair is retired. On January 1, 1996, Mr. Blair
retired from his positions as Chairman of the Board, President and Chief
Executive Officer of the Company and First Federal. He had served as President
and Chief Executive Officer of the Company since its inception in 1991 and with
First Federal since 1968 and Chairman since 1995.
MALCOLM E. LEWIS. Mr. Lewis is retired.
G. LARRY RUSSELL. Mr. Russell is a self-employed Certified Public
Accountant in Bessemer, Alabama.
OTHER EXECUTIVE OFFICERS
C. LARRY SEALE, age 61, is Executive Vice President of the Company and
First Federal.
LYNN J. JOYCE, age 34, is Chief Financial Officer, Vice President,
Secretary and Treasurer of the Company and First Federal.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal 1998, the Board of Directors of the Company held 12
regular meetings and one special meeting. During fiscal 1998, no director of
the Company attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors of the Company and the total number of
meetings held by all committees of the Board on which he served. The Board of
Directors of the Company maintains committees, the nature and composition of
which are described below. All committees consist of the full Board of
Directors, except that only non-employee directors may serve on the Audit
Committee.
The Audit Committee of the Company meets periodically to examine and
approve the audit report prepared by the independent auditors of the Company, to
review and recommend the independent auditors to be engaged by the Company, to
review the internal audit function and internal accounting controls, and to
review and approve conflict of interest and audit policies. During fiscal 1998,
the Audit Committee, which consists of all non-employee directors of the
Company, met one time.
The Company's Compensation Committee, which consists of all the
directors of the Company, meets periodically to evaluate the compensation and
fringe benefits of the directors, officers and employees and to recommend
changes and to monitor and evaluate employee morale. The Compensation Committee
met one time during fiscal 1998.
5
<PAGE>
The Company's Nominating Committee, which consists of all directors of
the Company, meets periodically for the purpose of nominating candidates for
director of the Company. While the Board of Directors will consider nominees
recommended by stockholders, it has not actively solicited recommendations from
the Company's stockholders for nominees, nor has it established any procedures
for this purpose. During fiscal 1998, the Board met once in its capacity as the
Nominating Committee. Stockholders who make nominations of candidates for
directors must make such nominations in accordance with the procedures set forth
in the Company's Bylaws.
EXECUTIVE COMPENSATION AND OTHER BENEFITS
Summary Compensation Table. The following table sets forth the cash
and noncash compensation for fiscal 1998, 1997 and 1996 awarded to or earned by
the Chief Executive Officer of the Company. No other executive officer of the
Company earned salary and bonus in fiscal 1998 in excess of $100,000 for
services rendered in all capacities to the Company and its subsidiaries.
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------------------------
Annual Compensation Awards Payouts
------------------------------------- -------------------------- ------------
Other Restricted Securities
Name and Fiscal Annual Stock Underlying All Other
Principal Position Year Salary Bonus Compensation(1) Award(s)(2) Options LTIP Payouts Compensation
- --------------------- ------ --------- ------- --------------- ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
B.K. Goodwin, III 1998 $ 156,250 $ 4,785 $ -- $ 4,171 235 $ -- $ 28,188 (3)
Chairman of the 1997 138,750 5,805 -- 1,423 15,390 -- 25,938
Board, Chief 1996 101,250 19,685 -- 29,136 1,278 -- 23,188
Executive Officer
and President of
the Company and
First Federal;
Chairman of the
Board of First
State
</TABLE>
____________
(1) Executive officers of the Company receive indirect compensation in the form
of certain perquisites and other personal benefits. The amount of such
benefits received by the named executive officer in fiscal 1998 did not
exceed 10% of the executive officer's salary and bonus.
(2) Calculated by multiplying the number of shares of Common Stock awarded
pursuant to the Incentive Plan based on the closing sale price of the
Common Stock on the date the shares were awarded as reported on the Nasdaq
SmallCap Market ($17.75 per share). See " -- Directors' Compensation."
Mr. Goodwin's award for fiscal 1996 included an award pursuant to the RRP.
(3) Includes director's fees of $20,400 (including $2,400 received as a
director of First State) paid to Mr. Goodwin. See " -- Directors'
Compensation." Also includes $7,788 paid to Mr. Goodwin for unused
vacation and sick leave.
Option Grants in Fiscal 1998. The following table contains information
concerning the grant of stock options during fiscal 1998 to the executive
officer named in the Summary Compensation Table, above. Options were granted
pursuant to the Incentive Plan or to the 1991 Stock Option Plan, or stock
options or stock appreciation rights pursuant to the 1995 Stock Option and
Incentive Plan.
<TABLE>
<CAPTION>
Number of Securities % of Total Options Exercise or Base
Underlying Options Granted Granted to Employees in Price Expiration
Name (# of Shares) Fiscal Year ($ per Share) Date
- ---------------------- -------------------------- ----------------------- -------------------- ----------
<S> <C> <C> <C> <C>
B. K. Goodwin, III 235(1) 8.1% $17.75 9/30/07
</TABLE>
________________
(1) See " -- Directors' Compensation."
6
<PAGE>
Aggregate Fiscal 1998 Option Exercises and Fiscal Year-End Option
Values. The following table sets forth information concerning options exercised
during fiscal 1998 and the value of options held by the named executive officer
at the end of the fiscal year.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year-End Fiscal Year-End (1)
Shares Value ------------------------------ ----------------------------
Name Acquired on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- --------------------- ----------------------- ----------- ------------------------------ ----------------------------
<S> <C> <C> <C> <C>
B. K. Goodwin, III -- $ -- 26,903/-- $358,583/$ --
</TABLE>
__________________
(1) Calculated based on the fair market value of the underlying Common Stock as
reported on the Nasdaq SmallCap Market at fiscal year-end.
Employment Agreements. Effective January 1, 1996, the Company and
First Federal entered into employment agreements with Mr. Goodwin in his
respective capacities as Chief Executive Officer and President of the Company
and First Federal (the "Employment Agreements"). The Employment Agreements are
intended to enable the Company and its banking subsidiaries to maintain a stable
and competent management base.
The Employment Agreements provide for three-year terms and may be
extended each year for an additional year so that the remaining term shall be
three years. Each of the Employment Agreements was extended for an additional
year as of January 1, 1998. The Employment Agreements provide for, among other
things, a discretionary cash bonus, participation in all employee benefit plans,
death benefits and reimbursement of reasonable out-of-pocket business expenses.
In the event of the executive's death, the Employment Agreements provide for
payment of the remaining compensation due thereunder, plus medical insurance for
the executive's spouse for six months thereafter.
The Employment Agreements provide for termination for cause at any
time. In the event termination is other than for cause, the executive would be
entitled to receive his base salary for the remaining term of the Employment
Agreement, plus his salary for an additional 12-month period. In addition, Mr.
Goodwin would be entitled, at his election, to continued insurance benefits
coverage through the expiration of the term of his Employment Agreements or a
cash payment in an amount equal to the cost of obtaining substantially equal
benefits.
In the event of a change in control of the Company or First Federal
that results in either the dismissal of the executive or the executive's
resignation upon the occurrence of certain specified events, the executive would
be entitled to a severance payment equal to the excess of (i) 2.99 times his
"base amount," as defined in Section 280G(b)(3) of the Internal Revenue Code,
over (ii) the sum of any other parachute payments, as defined under Section
280G(b)(2) of the Internal Revenue Code, that the executive receives on account
of the change in control. Subject to the foregoing, the Company and First
Federal also would continue the executive's life, health, accident, and
disability coverage for six months following termination and, in the event of
executive's death, pay death benefits and health insurance (for the remainder of
the six month period, if any) to the executive's surviving spouse, if any. In
addition, during the first year following a change in control, Mr. Goodwin would
receive such severance payment if he voluntarily terminates employment within 90
days of the occurrence of certain specified events (for example, a required move
of his personal residence or a material reduction in his base compensation)
which had not been agreed to in advance. The aggregate payments that would be
made to the executive assuming termination of employment under the foregoing
circumstances at March 31, 1998, and without regard to other severance payments
would have been approximately $656,250 to Mr. Goodwin.
In addition, all directors of the Company have entered into
Indemnification Agreements with the Company. For a description of the terms of
such Indemnification Agreements, see " -- Directors' Compensation --
Indemnification Agreements."
DIRECTORS' COMPENSATION
Fees. The directors of the Company receive $900 per month in
connection with their service on the Board of Directors of the Company and $600
per month in connection with their service on the Board of Directors of First
Federal. In addition, Mr. Goodwin receives $200 per month in connection with
his service as Chairman of the Board of Directors of First State.
7
<PAGE>
Incentive Compensation Plan. The Company maintains the Incentive Plan,
the purpose of which is to provide incentive compensation for eligible employees
and directors in the event the Company achieves certain performance goals
indicative of its profitability and stability. A mathematical formula set forth
in the Incentive Plan determines three forms of incentive compensation that
participants may receive: (i) annual cash bonuses ("Bonuses"), (ii) restricted
stock awards ("Restricted Stock"), and (iii) stock options ("Options"). For
each year in which the Incentive Plan is in effect, the Company will pay each
participant a Bonus equal to the product of (i) the participant's annual base
salary or director's fees, and (ii) a "Bonus Percentage," defined as the sum of
(a) "Safe ROA Bonus Percentage" which considers return-on-assets ("ROA")
compared to the median ROA of other members of a peer group in the Southeast,
the nonperforming assets ("NPA") compared to the peer group and the CAMEL rating
of First Federal, plus (b) "Growth Rewards," which are determined by the Board
of Directors each year.
For each Incentive Plan year, each participating key employee and
director will receive a Restricted Stock award in the form of a right,
conditioned on the participant's future performance of services, to shares of
Common Stock. On a per capita basis, non-employee directors receive in the
aggregate, shares of Restricted Stock having an aggregate fair market value
equal to 7% of the total Bonuses paid to directors and key employees for such
year. On a pro rata basis, key employees receive a Restricted Stock award based
on their relative compensation equal to 14% of the total Bonuses paid to
directors and key employees for such year. Vesting of Restricted Stock awards
will generally occur at the rate of 331/3% per year of a participant's service
after the date of the Restricted Stock award. Vesting will be accelerated to
100% upon a participant's retirement at or after age 65, death, discharge from
service for any reason other than cause, or a change in control of the Company.
In addition, for each Incentive Plan year, each participating key
employee and director will receive Options to purchase five times the number of
shares subject to a Restricted Stock award granted to the participant for such
year.
1991 Stock Option Plan. Pursuant to the FirstFed Bancorp, Inc. 1991
Stock Option Plan for Outside Directors, non-employee directors first elected to
the Board of Directors subsequent to the Conversion automatically are awarded
options to acquire 2,000 shares of Common Stock, provided sufficient options are
available for grant under such plan.
Recognition and Retention Plan. Pursuant to the RRP, newly elected
non-employee directors automatically are awarded 1,000 shares of restricted
Common Stock, provided shares are available for grant under such plan.
1995 Stock Option Plan. Pursuant to the FirstFed Bancorp, Inc. 1995
Stock Option and Incentive Plan, as amended in May 1998 (the "1995 Stock Option
Plan"), directors and selected employees of the Company and its affiliates are
eligible to receive options to acquire shares of Common Stock, stock
appreciation rights and restricted stock awards (collectively, the "Awards").
The Company has reserved 72,000 shares of Common Stock for issuance of Awards
under the 1995 Stock Option Plan. Effective May 19, 1998, each director of the
Company received a restricted stock award for 1,000 shares of Common Stock that
vests at the rate of 20% per year of service and accelerates to 100% upon a
Change in Control, as defined in the 1995 Stock Option Plan, or termination of
service due to death, disability, or retirement after age 65. Awards may also
be granted at the discretion of a committee that is comprised solely of non-
employee members of the Board of Directors. Participants may elect to defer
receipt of all or a percentage of shares that would otherwise be transferred
upon the vesting of a restricted stock award.
Directors' Retirement Plan. In their capacity as directors of First
Federal, directors of the Company participate in First Federal's Directors'
Retirement Plan (the "Directors' Plan"), which was approved by the Company's
stockholders in 1992 and amended effective January 1, 1994. Each director of
First Federal, whenever elected or appointed and whether or not also employed by
First Federal, is entitled to participate in the Directors' Plan, and thereby to
receive an annual retirement benefit for ten years in an amount per year equal
to $9,600 times the director's "applicable percentage." A director's
"applicable percentage" is based on his or her overall years of service as a
director of First Federal and increases from 0% for less than three years of
service, to 50% for between three and five years of service, to 75% for between
six and nine years of service, to 100% for 10 or more years of service.
Retirement benefits become payable upon a director's termination of service on
the Board of Directors for any reason. If a Participant dies prior to
collecting his entire vested benefit under the Directors' Plan, First Federal
will pay the present value of such vested but unpaid benefit to the director's
designated beneficiary (if living), and
8
<PAGE>
otherwise to the director's estate (unless the director had elected to have said
death benefit paid in installments). First Federal's Board of Directors may
amend or terminate the Directors' Plan at any time, provided that such action
may not affect the rights of directors to receive their vested interest. The
Directors' Plan is an unfunded plan for federal income tax and labor law
purposes, although First Federal has established a grantor trust, the assets of
which remain subject to the claims of First Federal's creditors. First Federal
expects to regularly contribute amounts to the trust equal to the accrued
expense for plan benefits.
Deferred Compensation Plans. First Federal and the Company maintain
separate but similar deferred compensation plans pursuant to which directors,
officers and select employees may annually elect to defer the receipt of Board
fees and up to 25% of their salary. Associated with each plan is a separate
grantor trust to which all fee and salary deferrals may be contributed. The
assets of these trusts will be used to pay benefits to participants, but are
subject to the claims of general creditors until distributed from the trusts.
Subject to the guidelines under each plan, each participant may elect (i) the
time and manner under which his or her plan benefit will be paid, and (ii) the
measure of the deemed investment return on his or her deferred compensation
account. Such return may be based in whole or part on either the rate of return
on Common Stock or First Federal's highest yielding certificate of deposit. A
participant's interest in the plans is at all times nonforfeitable, nonalienable
and nontransferable, although the interest of a deceased participant will be
paid to his or her designated beneficiary. The Boards of Directors of First
Federal and the Company are responsible for management of the operation and
administration of the respective plans and have the discretion to amend these
plans and the related trust agreements (subject to participant consent as to
vested benefits).
Indemnification Agreements. The Company has entered into
Indemnification Agreements (the "Indemnification Agreements") with each of the
Company's directors and with certain officers of the Company and First Federal.
The Indemnification Agreements provide for retroactive as well as prospective
indemnification to the fullest extent permitted by law against any and all
expenses (including attorneys' fees and all other costs and obligations),
judgments, fines, penalties and amounts paid in settlement in connection with
any claim or proceeding arising out of that person's service as an officer or
director of the Company or First Federal. The Indemnification Agreements also
provide for the prompt advancement of expenses to the director or officer in
connection with investigating, defending or being a witness or participating in
any proceeding. The Indemnification Agreements further provide a mechanism
through which the director or officer may seek court relief in the event the
Company's Board of Directors (or other person appointed by such Board)
determines that the director or officer would not be permitted to be indemnified
under applicable law. The Indemnification Agreements impose on the Company the
burden of proving that the director or officer is not entitled to
indemnification in any particular case.
Following a Change in Control, all determinations regarding a right to
indemnity and a right to advancement of expenses shall be made by independent
legal counsel to be selected by the director or officer and approved by the
Board. The Indemnification Agreements provide that a Change in Control shall be
deemed to have occurred if (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing 25% or more of the total voting power represented by the Company's
then outstanding Voting Securities, or (ii) during any 24-consecutive-month-
period, individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the Board of
Directors or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the total power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (iv) the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of transactions) of
all or substantially all the Company's assets. In the event of a potential
Change of Control, the director or officer may require the Company to establish
a trust in an amount sufficient to cover the anticipated claims under the
agreement.
9
<PAGE>
While not requiring the maintenance of directors' and officers' liability
insurance, the Indemnification Agreements require that the directors and
officers be provided with maximum coverage if there is such a policy. Further,
the Indemnification Agreements provide that if the Company pays a director or
officer pursuant to an Indemnification Agreement, the Company will be subrogated
to such director's or officer's rights to recover from third parties.
TRANSACTIONS WITH MANAGEMENT
First Federal and First State each offer loans to officers and
directors of First Federal, First State and the Company in the ordinary course
of business. Such loans to directors and executive officers were made in the
ordinary course of business, were made on substantially the same terms,
including interest rates and collateral, as those prevailing for comparable
transactions with non-affiliates and do not involve more than the normal risk of
collectibility or present other unfavorable features.
- --------------------------------------------------------------------------------
PROPOSAL II -- AMENDMENT OF CERTIFICATE OF INCORPORATION
- --------------------------------------------------------------------------------
Section A of Article Fourth of the Company's Certificate of Incorporation
currently authorizes the issuance of a total of 4,000,000 shares of capital
stock, of which 3,000,000 shares shall be Common Stock and 1,000,000 shares
shall be preferred stock, par value $.01 per share ("Preferred Stock"). As of
the Record Date, there were outstanding 1,204,598 shares of Common Stock and no
shares of Preferred Stock. In addition, as of the Record Date, there were
289,951 shares of Common Stock held as treasury stock.
The proposed amendment to Section A of Article Fourth of the Certificate of
Incorporation is to increase the number of authorized shares of Common Stock
from 3,000,000 to 10,000,000 shares, and thereby to increase the total number of
shares of authorized capital stock from 4,000,000 to 11,000,000. The entire
text to Section A of Article Fourth of the Certificate of Incorporation, as
proposed to be amended, is attached hereto as Exhibit A and incorporated herein
by reference.
REASONS FOR THE AMENDMENT
Although the Company has no present plan, arrangement or understanding to
issue additional shares of Common or Preferred Stock other than pursuant to the
Company's current stock benefit plans and the Company's Dividend Reinvestment
and Stock Purchase Plan, the Board of Directors believes that the availability
of increased shares of Common Stock will provide the Company with needed
flexibility in meeting corporate needs that may arise. In the future,
additional authorized but unissued shares of Common Stock would be available for
general corporate purposes, including but not limited to, possible issuances in
future mergers or acquisitions, in a future public offering or private
placement, or under a future stock benefit plan. If the proposed amendment is
approved, the Board of Directors currently intends to consider a stock dividend
or stock split subsequent to the Annual Meeting. The Board of Directors does not
intend to issue any additional shares of capital stock except on terms which the
Board of Directors deems to be in the best interests of the Company and its
stockholders.
The proposed increase in the number of shares of Common Stock authorized
for issuance will not affect the rights, such as voting and liquidation rights,
of the outstanding shares of Common Stock. If, however, additional shares were
issued, other than pursuant to a stock dividend or stock split, the percentage
ownership interests of existing stockholders would be reduced and, depending on
the terms pursuant to which the new shares were issued, the book value of
outstanding shares could be diluted. Each share of the Common Stock will have
the same rights and will be identical in all respects with each other share of
Common Stock. Holders of Common Stock do not have any preemptive right to
subscribe for or purchase any additional securities issued by the Company.
POSSIBLE ANTI-TAKEOVER EFFECT OF AMENDMENT
The additional authorized but unissued shares of Common Stock could,
consistent with the fiduciary responsibility of the Company's directors, be
issued without stockholder approval in transactions that might dilute the
percentage ownership of current stockholders and/or render more difficult a
change in control of the Company. For example, such shares could be used to
create a substantial voting block favorable to the Board of Directors, to effect
an acquisition that would preclude an acquirer's gaining control or to dilute an
acquirer's voting power. The Board of Directors, however, is not aware of any
effort to obtain control of the Company and does not currently contemplate the
issuance of the authorized shares for the foregoing purposes.
10
<PAGE>
In addition to an increase in authorized shares of Common Stock that could
be issued to defend against a hostile acquisition of the Company, other
provisions of the Company's Certificate of Incorporation and Bylaws and other
limitations which could be viewed as having an "anti-takeover" effect include:
(i) a limitation on beneficial ownership in excess of 10% of the outstanding
Common Stock; (ii) a classified Board of Directors; (iii) denial of cumulative
voting and the call of special meetings by other than the Board of Directors;
(iv) a super-majority vote (80%) to approve business combinations with principal
stockholders and to amend or repeal certain provisions of the Certificate of
Incorporation and Bylaws; (v) factors set forth in the Certificate of
Incorporation to be considered by the Board of Directors when evaluating offers;
(vi) notice requirements for nominations and new business; (vii) acceleration of
management benefits in the event of a change in control; (viii) Delaware
corporate law limitations on acquisitions by principal stockholders; and (ix)
federal regulatory approval requirements.
In the judgment of the Board of Directors, the Board is in the best
position to consider all relevant factors and to negotiate for what is in the
best interests of the stockholders of the Company. Accordingly, the Board of
Directors of the Company believes that it is in the best interests of the
Company and its stockholders to encourage potential acquirers to negotiate
directly with the Company's Board of Directors and that the proposed amendment
will encourage such negotiations and help to discourage non-negotiated takeover
attempts.
RECOMMENDATION OF THE BOARD OF DIRECTORS
Approval of the above-described amendment to Section A of Fourth Article of
the Certificate of Incorporation requires the affirmative vote of a majority of
the outstanding Common Stock entitled to be voted thereon at the Meeting. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO SECTION
A OF ARTICLE FOURTH OF THE CERTIFICATE OF INCORPORATION.
- --------------------------------------------------------------------------------
RELATIONSHIP WITH INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
Arthur Andersen LLP, which was the Company's independent auditors for
fiscal 1998, is expected to be retained by the Board of Directors to be the
Company's auditors for the fiscal year ending December 31, 1998. A
representative of Arthur Andersen LLP is expected to be present at the Meeting
to respond to stockholders' questions and will have the opportunity to make a
statement if he or she so desires.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
as directed by a majority of the Board of Directors.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The
Company 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 Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
The Company's 1998 Annual Report to Stockholders, including financial
statements, is being mailed to all stockholders of record as of the close of
business on the Record Date. Any stockholder who has not received a copy of
such Annual Report may obtain a copy by writing to the Secretary of the Company.
Such Annual Report is not to be treated as a part of the proxy solicitation
material nor as having been incorporated herein by reference.
11
<PAGE>
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
The Board of Directors has changed the fiscal year-end of the Company
from March 31 to December 31 of each year, effective December 31, 1998. Such a
change will, among other things, permit the Company to report results of
operations at the same time as most bank holding companies. As a result of this
change, it is expected that the 1999 Annual Meeting of Stockholders will be held
on or about April 27, 1999. In order to be eligible for inclusion in the
Company's proxy materials for the 1999 Annual Meeting, any stockholder proposal
to take action at such meeting must be received at the Company's main office at
1630 Fourth Avenue North, Bessemer, Alabama 35020, no later than December 1,
1998. Nothing in this paragraph shall be deemed to require the Company to
include in its proxy statement and proxy relating to the 1999 Annual Meeting any
stockholder proposal which does not meet all of the requirements for inclusion
established by the SEC or the Company's Certificate of Incorporation or Bylaws
in effect at the time such proposal is received.
BY ORDER OF THE BOARD OF DIRECTORS
[SIGNATURE]
Lynn J. Joyce
Secretary
Bessemer, Alabama
June 17, 1998
- --------------------------------------------------------------------------------
ANNUAL REPORT ON FORM 10-KSB
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL
YEAR ENDED MARCH 31, 1998, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON
WRITTEN REQUEST TO THE SECRETARY, FIRSTFED BANCORP, INC., 1630 FOURTH AVENUE
NORTH, BESSEMER, ALABAMA 35020.
- --------------------------------------------------------------------------------
12
<PAGE>
EXHIBIT A
FOURTH: A. The total number of shares of all classes of stock which
the Corporation shall have authority to issue is eleven million (11,000,000)
consisting of:
1. one million (1,000,000) shares of Preferred Stock, par
value one cent ($.01) per share (the "Preferred Stock"); and
2. ten million (10,000,000) shares of Common Stock, par
value one cent ($.01) per share (the "Common Stock").
<PAGE>
REVOCABLE PROXY
FIRSTFED BANCORP, INC.
BESSEMER, ALABAMA
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
JULY 14, 1998
- --------------------------------------------------------------------------------
The undersigned hereby appoints James E. Mulkin, E.H. Moore, Jr. and
James B. Koikos, or any of them, with full powers of substitution, to act as
proxies for the undersigned to vote all shares of the Company's common stock
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
(the "Meeting"), to be held at the main office of the Company located at 1630
Fourth Avenue North, Bessemer, Alabama, on Tuesday, July 14, 1998 at 4:30 p.m.,
local time, and at any and all adjournments thereof, as follows:
FOR WITHHOLD
--- --------
1. The election as directors of the [_] [_]
nominees listed below.
B.K. Goodwin, III
A.W. Kuhn
Robert E. Paden
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE LINE BELOW.
---------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION AS DIRECTORS OF ALL
THE NOMINEES LISTED ABOVE.
2. Amendment of Section A of Article Fourth of the Company's Certificate of
Incorporation to increase the Company's authorized common stock from
3,000,000 to 10,000,000 shares.
FOR [_] AGAINST [_] ABSTAIN [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENT TO THE
CERTIFICATE OF INCORPORATION.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE NOMINEES FOR ELECTION AS A DIRECTOR. IF ANY
OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE
NAMED IN THIS PROXY AS DIRECTED BY 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 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 1998 ANNUAL MEETING.
- --------------------------------------------------------------------------------
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or at any
adjournment thereof and after notification to the Secretary of the Company at
the 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 acknowledges receipt from the Company prior to the execution
of this proxy of notice of the Meeting, a Proxy Statement dated June 17, 1998
and the Company's 1998 Annual Report to Stockholders.
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.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------
