FIRST FEDERAL BANCORP, INC.
505 Market Street
Zanesville, Ohio 43701
(740) 453-0606
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 1999 Annual Meeting of Shareholders of
First Federal Bancorp, Inc. ("Bancorp"), will be held at the Holiday Inn,
4645 East Pike, Zanesville, Ohio, on February 17, 1999, at 2:00 p.m.,
Eastern Standard Time (the "Annual Meeting"), for the following purposes,
all of which are more completely set forth in the accompanying Proxy
Statement:
1. To re-elect Ward D. Coffman, III, Robert D. Goodrich, II, Patrick
L. Hennessey and Connie Ayres LaPlante as directors of Bancorp for
terms expiring in 2001;
2. To adopt an amendment to the Articles of Incorporation of Bancorp
to increase the authorized number of common shares;
3. To ratify the selection of Crowe, Chizek and Company LLP as the
auditors of Bancorp for the current fiscal year; and
4. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only shareholders of Bancorp of record at the close of business on
December 24, 1998, will be entitled to receive notice of and to vote at the
Annual Meeting. Whether or not you expect to attend the Annual Meeting, we
urge you to consider the accompanying Proxy Statement carefully and to SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES MAY BE VOTED
IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A QUORUM MAY BE ASSURED.
The giving of a Proxy does not affect your right to vote in person in the
event you attend the Annual Meeting.
Zanesville, Ohio J. William Plummer, President and
January 8, 1999 Chief Executive Officer
Ward D. Coffman, III, Secretary
FIRST FEDERAL BANCORP, INC.
505 Market Street
Zanesville, Ohio 43701
(740) 453-0606
PROXY STATEMENT
PROXIES
The enclosed Proxy is being solicited by the Board of Directors of
First Federal Bancorp, Inc. ("Bancorp"), for use at the 1999 Annual Meeting
of Shareholders of Bancorp to be held at the Holiday Inn, 4645 East Pike,
Zanesville, Ohio, on February 17, 1999, at 2:00 p.m., Eastern Standard Time,
and at any adjournments thereof (the "Annual Meeting"). Without affecting
any vote previously taken, the Proxy may be revoked by a shareholder before
exercise by giving notice of revocation to Bancorp in writing or in open
meeting. Attendance at the Annual Meeting will not, of itself, revoke a
Proxy.
Each properly executed Proxy received prior to the Annual Meeting and
not revoked will be voted as specified thereon or, in the absence of
specific instructions to the contrary, will be voted:
FOR the re-election of Ward D. Coffman, III, Robert D. Goodrich, II,
Patrick L. Hennessey and Connie Ayres LaPlante as directors of Bancorp
for terms expiring in 2001;
FOR the adoption of an amendment to the Articles of Incorporation of
Bancorp to increase the authorized number of common shares from
4,000,000 to 9,000,000; and.
FOR the ratification of the selection of Crowe, Chizek and Company LLP
("Crowe Chizek") as the auditors of Bancorp for the current fiscal
year.
Proxies may be solicited by the directors, officers and other
employees of Bancorp in person or by telephone, telecopy, telegraph or mail,
only for use at the Annual Meeting and will not be used for any other
meeting. The cost of soliciting Proxies will be borne by Bancorp.
Only shareholders of record as of the close of business on December
24, 1998 (the "Voting Record Date"), are eligible to vote at the Annual
Meeting. Bancorp's records disclose that, as of the Voting Record Date,
there were 3,150,532 common shares of Bancorp (the "Shares") outstanding. On
all matters, shareholders are entitled to one vote for each Share held.
This Proxy Statement is first being mailed to the shareholders of
Bancorp on or about January 8, 1999.
VOTE REQUIRED
Election of Directors
Under Ohio law and Bancorp's Code of Regulations (the "Regulations"),
the four nominees receiving the greatest number of votes will be elected as
directors. Shares as to which the authority to vote is withheld are not
counted toward the election of directors or toward the election of the
individual nominees specified on the Proxy.
Amendment of Articles of Incorporation
The affirmative vote of the holders of a majority of the shares
represented in person or by proxy at the Annual Meeting is necessary to
adopt the amendment to the Articles of Incorporation of Bancorp (the
"Articles"). Shares held by a nominee for a beneficial owner that are
represented in person or by proxy at the Annual Meeting but not voted with
respect to the amendment of the Articles ("Non-votes") and abstentions will
have the same effect as a vote against the adoption of the amendment. If,
however, shares are represented at the Annual Meeting by a shareholder who
signed and dated a proxy in the form of the enclosed Proxy but did not mark
a block on the Proxy with respect to the amendment, such shares will be
voted FOR adoption of the amendment and will not be considered Non-votes.
Ratification of Selection of Auditors
The affirmative vote of the holders of a majority of the Shares
represented in person or by proxy at the Annual Meeting is necessary to
ratify the selection of Crowe Chizek as the auditors of Bancorp for the
current fiscal year. The effect of an abstention is the same as an "against"
vote. If, however, a shareholder has signed and dated a proxy in the form of
the enclosed Proxy, but has not voted on the ratification of the selection
of Crowe Chizek as the auditors by marking the appropriate box on the Proxy,
such person's Shares will be voted FOR the ratification of the selection of
Crowe Chizek as the auditors.
VOTING SECURITIES AND OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
only persons known to Bancorp to own beneficially more than five percent
(5%) of the outstanding Shares as of December 24, 1998:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address(1) Beneficial Ownership(2) Shares Outstanding
- ------------------- ----------------------- ------------------
Sole Shared
---- ------
<S> <C> <C> <C>
Ward D. Coffman, III 170,320(3) 14,000 5.78%
Connie Ayres LaPlante 72,440(4) 140,048(5) 6.59%
J. William Plummer 195,520(6) 14,000 6.50%
__________________________
<FN>
<F1> Each of the individuals listed in this table may be contacted at the
address of Bancorp, 505 Market Street, Zanesville, Ohio 43701.
<F2> Includes Shares with respect to which the shareholder has sole or
shared voting or investment power as a fiduciary for a trust or
another person and Shares held by certain family members.
<F3> Includes 37,480 Shares subject to currently exercisable options
granted under the First Federal Bancorp, Inc., 1992 Stock Option Plan
for Non-Employee Directors (the "1992 Non-qualified Plan"), the First
Federal Bancorp, Inc., 1994 Stock Option Plan for Non-Employee
Directors (the "1994 Non-qualified Plan") and the First Federal
Bancorp, Inc., 1997 Performance Stock Option Plan for Senior Executive
Officers and Outside Directors (the "1997 Plan").
<F4> Includes 72,440 Shares subject to currently exercisable options
granted under the First Federal Bancorp, Inc., 1992 Incentive Stock
Option Plan for Officers and Key Employees (the "1992 ISO Plan"), the
First Federal Bancorp, Inc., 1994 Stock Option Plan for Officers and
Key Employees (the "1994 ISO Plan") and the 1997 Plan.
<F5> Does not include 2,000 Shares held by Ms. LaPlante's husband as co-
trustee of a profit sharing plan, with respect to which Ms. LaPlante
disclaims beneficial ownership.
<F6> Includes 72,440 Shares subject to currently exercisable options
granted under the 1992 ISO Plan, the 1994 ISO Plan and the 1997 Plan.
</FN>
</TABLE>
The following table sets forth certain information with respect to the
number of Shares beneficially owned by each director of Bancorp and by all
directors and executive officers of Bancorp as a group as of December 24,
1998:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address (1) Beneficial Ownership(2) Shares Outstanding
- -------------------- ----------------------- ------------------
Sole Shared
---- ------
<S> <C> <C> <C>
Ward D. Coffman, III 170,320(3) 14,000 5.78%
Robert D. Goodrich,II 77,080(4) 0 2.42%
Patrick L. Hennessey 129,480(5) 14,000 4.50%
Connie Ayres LaPlante 72,440(6) 140,048(6) 6.59%
John C. Matesich, III 77,480(7) 15,250 2.91%
Don R. Parkhill 50,450(8) 3,000 1.68%
J. William Plummer 195,520(9) 14,000 6.50%
All directors and
executive officers
of Bancorp as a
group (7 people) 772,770 158,298 26.73%
_________________________
<FN>
<F1> Each of the individuals listed in this table may be contacted at the
address of Bancorp, 505 Market Street, Zanesville, Ohio 43701.
<F2> Includes Shares with respect to which the shareholder has sole or
shared voting or investment power as a fiduciary for a trust or
another person and Shares held by certain family members.
<F3> See footnote 3 to the preceding table for a description of Mr.
Coffman's beneficial ownership.
<F4> Includes 37,480 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified Plan
and the 1997 Plan.
<F5> Includes 37,480 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified Plan
and the 1997 Plan.
<F6> See footnotes 4 and 5 to the preceding table for a description of Ms.
LaPlante's beneficial ownership.
<F7> Includes 37,480 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified Plan
and the 1997 Plan.
<F8> Includes 37,480 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified Plan
and the 1997 Plan.
<F9> See footnote 6 to the preceding table for a description of Mr.
Plummer's beneficial ownership.
</FN>
</TABLE>
PROPOSAL ONE: ELECTION OF DIRECTORS
In accordance with Article Two of the Code of Regulations of Bancorp
(the "Regulations"), four directors are to be elected at the Annual Meeting,
each for a term of two years and until their successors are elected. Each
holder of Shares is entitled to one vote for each director position for each
Share held. No shareholder may cumulate votes in the election of directors.
In accordance with Section 2.03 of the Regulations, nominees for
election as a director may be proposed only by the directors or by a
shareholder entitled to vote for directors. The directors will consider
shareholder nominations in selecting nominees. A shareholder who wishes to
make a nomination must follow the procedures set forth in the Regulations.
Such procedures require the submission of a written nomination by the
shareholder to the Secretary of Bancorp by the later of the November 15th
immediately preceding the annual meeting of shareholders or the sixtieth day
before the first anniversary of the most recent annual meeting of
shareholders held for the election of directors. Each such written
nomination must state the name, age, business or residence address of the
nominee, the principal occupation or employment of the nominee, the number
of Shares owned either beneficially or of record by each such nominee and
the length of time such Shares have been so owned.
Unless otherwise directed, Proxies received pursuant to this
solicitation will be voted for the nominees listed below, each of whom has
been designated by the directors. In the event that any nominee listed below
fails to stand for election at the Annual Meeting, Proxies will be voted for
such other person as may be designated by the directors. Management does not
anticipate that any of the nominees listed below will fail to stand for
election at the Annual Meeting.
The Board of Directors proposes the re-election of the following
persons to terms which will expire in 2001:
<TABLE>
<CAPTION>
Director
Name(1) Age(2) Position(s) Held Since(3)
- ------- ------ ---------------- --------
<S> <C> <C> <C>
Ward D. Coffman, III 45 Secretary and Director 1992
Robert D. Goodrich, II 52 Director 1992
Patrick L. Hennessey 48 Director 1992
Connie Ayres LaPlante 42 Treasurer and Director 1992
_________________________
<FN>
<F1> There are no family relationships among the directors or executive
officers of Bancorp.
<F2> As of December 24, 1998.
<F3> Each of such directors became a director of Bancorp in connection with
the 1992 conversion of First Federal Savings Bank of Eastern Ohio,
Inc. ("First Federal"), from mutual to stock form (the "Conversion")
and the formation of Bancorp as the holding company of First Federal.
Each director nominee also serves as a director of First Federal.
</FN>
</TABLE>
The following directors will continue to serve after the Annual
Meeting for the terms indicated:
<TABLE>
<CAPTION>
Director Term
Name (1) Age(2) Position(s) Held Since(3) Expires
- -------- ------ ---------------- -------- -------
<S> <C> <C> <C> <C>
John C. Matesich, III 55 Chairman and Director 1992 2000
Don R. Parkhill 40 Director 1995 2000
J. William Plummer 53 President,Chief Executive 1992 2000
Officer and Director
_________________________
<FN>
<F1> There are no family relationships among the directors or executive
officers of Bancorp.
<F2> As of December 24, 1998.
<F3> Messrs. Matesich and Plummer became directors of Bancorp in connection
with the Conversion and the formation of Bancorp as the holding
company of First Federal. Each director also serves as a director of
First Federal.
</FN>
</TABLE>
Ward D. Coffman, III, is an attorney who has been engaged in private
practice in the Zanesville area since 1978.
Robert D. Goodrich, II, is the Chairman of the Board and Chief
Executive Officer of Wendy's Management Group, Inc., a position he has held
since 1986.
Patrick L. Hennessey is currently the President of P & D
Transportation. Mr. Hennessey has been employed by P & D Transportation
since 1985.
Connie Ayres LaPlante is a Senior Vice President and the Treasurer of
First Federal. Ms. LaPlante commenced employment with First Federal in 1978.
John C. Matesich, III, is the President of Matesich Distributing Co.,
a beer distributor in Southeastern Ohio. Mr. Matesich has been the President
of Matesich Distributing Co. since 1990 and has been employed by Matesich
Distributing Co. since 1972.
Don R. Parkhill was appointed to the Board of Directors effective
October 1, 1995. Mr. Parkhill has been the President of Blackson-Parkhill
Agency, Inc., doing business as Parkhill Sedanko Insurance Agency, Inc., in
Coshocton, Ohio, since 1987. Mr. Parkhill is also the owner of Parkhill
Business and Estate Planning, which has sold life insurance and assisted
with other financial planning needs since 1987.
J. William Plummer is currently the President and Chief Executive
Officer of First Federal. Mr. Plummer has been employed by First Federal
since 1970 and has served as the President and the Chief Executive Officer
since 1979.
Meetings of Directors
The Board of Directors of Bancorp met 14 times for regularly scheduled
and special meetings during the fiscal year ended September 30, 1998. Each
director attended at least 75% of the aggregate of such meetings and all
meetings of the committees of the Board of Directors of which such director
is a member.
The Board of Directors of First Federal met 24 times for regularly
scheduled and special meetings during the fiscal year ended September 30,
1998.
Committees of Directors
The Board of Directors of Bancorp has a Stock Option Committee, which
administers Bancorp's stock option plans. The Stock Option Committee is
comprised of Messrs. Coffman, Hennessey and Matesich. The Stock Option
Committee met once during the fiscal year ended September 30, 1998.
The Board of Directors of Bancorp does not have a Nominating
Committee. Nominations for election to the Board of Directors of Bancorp are
determined by the entire Board of Directors of Bancorp. In addition, the
Regulations provide a procedure for shareholders to nominate persons for
election to the Board of Directors of Bancorp. See "Election of Directors."
The Audit Committee and the Compensation Committee of the Board of
Directors of Bancorp meet in conjunction with the Audit Committee and the
Compensation Committee of the Board of Directors of First Federal. The Audit
Committee is comprised of Messrs. Coffman, Hennessey, Goodrich, Matesich and
Parkhill. The function of the Audit Committee is to recommend the retention
of outside auditors for Bancorp and First Federal and to meet with such
outside auditors to review the results of their audit of Bancorp and First
Federal. The Audit Committee met once during the fiscal year ended September
30, 1998.
Messrs. Coffman, Hennessey and Matesich are the members of the
Compensation Committee. The Compensation Committee reviews and recommends to
the full Board of Directors salary levels and benefits for the executive
officers of First Federal and, in conjunction with management, for the other
employees of First Federal. The Compensation Committee met three times
during the fiscal year ended September 30, 1998.
The Board of Directors of First Federal also has a Loan Committee. The
function of the Loan Committee is to approve loans for amounts greater than
$227,150. Messrs. Plummer, Coffman and Hennessey are the members of the Loan
Committee. The Loan Committee met ten times by telephone during the fiscal
year ended September 30, 1998.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following Summary Compensation Table sets forth certain
information with respect to the compensation paid by First Federal to the
chief executive officer of Bancorp and the only other officer of Bancorp to
receive cash compensation in excess of $100,000 during fiscal year 1998:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------ ----------------------
Name and Principal Awards
Position Year Salary($)(1) Bonus($) Options/SARs(#)
- ------------------ ---- ------------ -------- ---------------
<S> <C> <C> <C> <C>
J. William Plummer 1998 $140,266 $56,711 4,000(2)
President and Chief 1997 127,278 42,351 -
Executive Officer 1996 123,876 50,660 -
Connie Ayres LaPlante 1998 89,971 31,626 4,000(2)
Treasurer 1997 83,160 25,491 -
1996 80,393 28,254 -
_________________________
<FN>
<F1> Does not include amounts attributable to other miscellaneous benefits,
the cost of which was less than 10% of the officer's cash
compensation.
<F2> Represents the number of Shares underlying options granted under the
1997 Plan, as adjusted for the stock split in the form of a stock
dividend effective July 1998. Bancorp does not have a stock benefit
plan which provides for the grant of "SARs," an abbreviation for
"Stock Appreciation Rights."
</FN>
</TABLE>
Employment Agreements
In October 1998, First Federal entered into employment agreements with
Mr. Plummer and Ms. LaPlante, each with a term of three years. The
agreements provide for a salary review by the Board of Directors not less
often than annually and the inclusion of the employee in any formally
established employee benefit, bonus pension and profit-sharing plans for
which senior management personnel are eligible. Each employment agreement
may be terminated by First Federal at any time. In the event of termination
for "just cause," as defined in the employment agreement, the employee will
have no right to receive any compensation or other benefits for any period
after such termination. In the event of termination within one year of any
change in "control" (as defined below) of First Federal or Bancorp, each
employee will be entitled to receive (a) a payment in an amount equal to the
sum of (i) the amount of compensation to which the employee is entitled for
the remainder of the term of the agreement, plus (ii) the difference between
(x) the product of three multiplied by the total compensation paid to the
employee for the immediately preceding calendar year less (y) the amount
paid to the employee pursuant to (i); and (b) continued health, life and
disability insurance and other benefits substantially equal to those which
the employee was receiving at the time the agreement was terminated until
the earliest to occur of the end of the term of the agreement, or the date
the employee becomes employed by another employer. "Control," as defined in
the employment agreements, generally refers to the acquisition by any person
or entity of the ownership or power to vote ten percent (10%) or more of the
shares of either First Federal or Bancorp, the control of the election of a
majority of the directors of either First Federal or Bancorp or the exercise
of a controlling influence over the management or policies of either First
Federal or Bancorp.
In the event of termination other than for "just cause" (as defined in
the employment agreement) or in connection with a change of control, the
employee will be entitled to a continuation of salary payments for a period
of time equal to the term of the employment agreement, as well as a
continuation of benefits substantially equal to those being provided at the
date of termination of employment until the earlier to occur of the end of
the employment agreement term or the date the employee becomes employed
full-time by another employer.
Compensation of Directors
Each non-employee director of Bancorp receives a fee of $250 per month
and $50 for each meeting of the Board of Directors attended, with payment
for two excused absences per year. Each non-employee director of First
Federal receives a fee of $500 per month and $200 for each meeting of the
Board of Directors attended, with payment for four excused absences per
year. In addition to regular fees paid to the directors of First Federal,
members of the Compensation Committee and members of the Benefits Committee
who are not employees receive $150 for each meeting attended. Members of the
Loan Committee, other than the executive officers, receive $50 for each
meeting attended in person, although no fees were paid during the fiscal
year ended September 30, 1998, because only telephonic meetings were held
during the year. No committee fees are paid to members of the Audit
Committee.
Certain Transactions with First Federal
All loans by First Federal to executive officers and directors of
First Federal and Bancorp with outstanding balances during the two fiscal
years ended September 30, 1998, were made in the ordinary course of business
and on the same terms and conditions, including interest rates and
collateral, as those of comparable loans to other persons. None of such
loans involve more than the normal risk of collectibility or present other
unfavorable features and are current in their payments.
During the fiscal year ended September 30, 1998, First Federal
retained the services of Ward D. Coffman, III, an attorney engaged in
private practice in the Zanesville area. Mr. Coffman is the secretary and a
director of Bancorp and serves as general counsel to First Federal. From
time to time, Mr. Coffman will serve as general counsel to First Federal
during the fiscal year beginning October 1, 1998.
Stock Option Plans
The shareholders of Bancorp approved stock option plans for employees
(the "ISO Plans") and non-employee directors (the "Non-qualified Plans") in
1993 and in 1995. The purposes of the ISO Plans and the Non-qualified Plans
include attracting and retaining the best available personnel as officers,
employees and directors of Bancorp and First Federal and providing
incentives to the officers, employees and directors of Bancorp and First
Federal by facilitating their purchases of an ownership interest in Bancorp.
Bancorp currently has reserved 752,164 common shares for issuance
under the ISO Plans and the Non-qualified Plans, of which 547,180 were
subject to outstanding options on December 15, 1998. Options granted under
the ISO Plans are intended to qualify as "incentive stock options" ("ISOs")
under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), which, if certain conditions are met, permits the optionees to
delay the recognition of federal taxable income on the Shares received upon
the exercise of options.
The Stock Option Committee of the Board of Directors may grant options
under the ISO Plans at such times as it deems most beneficial to Bancorp and
First Federal. The option exercise price for ISOs is determined by the Stock
Option Committee at the time of option grant. The exercise price must not be
less than 100% of the fair market value of the Shares on the date of the
grant.
The Non-qualified Plans provide for the grant of options that are not
intended to qualify as "incentive stock options" under Section 422 of the
Code ("Non-qualified Options"). Grants of Non-qualified Options are made
automatically to each non-employee director at the time the Non-qualified
Plans became effective or upon a new director's election. Non-qualified
Options granted under the 1994 Non-qualified Plan are immediately
exercisable upon grant. Non-qualified Options granted under the 1992 Non-
qualified Plan are first exercisable one year after the date of grant. The
exercise price for Non-qualified Options is at least the fair market value
of the Shares on the date of the grant. Termination or removal of an Option
recipient for cause, as defined in the ISO Plans and the Non-qualified
Plans, will result in the annulment of any outstanding Options.
The shareholders of Bancorp approved at the 1997 Annual Meeting of
Shareholders the 1997 Plan. The Board of Directors of Bancorp has reserved
108,000 Shares for issuance upon the exercise of options granted pursuant to
the 1997 Plan. Unlike the ISO Plans and the Non-qualified Plans, the 1997
Plan provides for the automatic grant of options if, and only if, the return
on average equity ("ROE") of Bancorp for any fiscal year during the five-
year term of the 1997 Plan equals or exceeds the average of the returns on
equity of Bancorp for the five fiscal years preceding any such fiscal year
(the "Average"). When the ROE during any year of the five-year term equals
or exceeds the Average, then an option to purchase 4,000 common shares will
be granted to each of the four senior executive officers of First Federal
and the five non-employee directors of First Federal and Bancorp on December
1 of such year. However, the maximum number of common shares which may be
subject to options granted to any participant under the 1997 Plan is 12,000.
As a result, options under the 1997 Plan may be granted in only three of the
five years of the term.
The options granted to senior executive officers pursuant to the 1997
Plan are intended to qualify as ISOs, and the options granted to non-
employee directors will be Non-qualified Options. The exercise price of the
options granted pursuant to the 1997 Plan will be equal to the fair market
value of the Shares on the date of the grant, or 110% of the fair market
value of the Shares on the date of the grant to a participant who owns more
than 10% of Bancorp's outstanding Shares. Any option granted pursuant to the
1997 Plan will, unless otherwise specified by the Stock Option Committee at
the time of grant, be exercisable immediately after the date of grant of
such option, provided that the optionee will have been a senior executive
officer or non-employee director of Bancorp or First Federal at all times
during the period beginning with the date of grant of any such option and
ending on the date which is three months before the date of exercise of the
option.
All ISOs and Non-qualified Options are immediately exercisable in the
event of a "change of control," as defined in the plans. A "change of
control" includes execution of an agreement for a merger or acquisition or
the acquisition of the beneficial ownership of 25% or more of the voting
shares of Bancorp by any person or entity.
The following table sets forth information regarding all grants of
options to purchase common shares of Bancorp made to Mr. Plummer and Ms.
LaPlante during the fiscal year ended September 30, 1998:
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Individual Grants
------------------------------------------------------------------------------------------
% of Total Options/
Number of Securities SARs Granted to
Underlying Options/ Employees in Fiscal Year Exercise or Base
Name SARs Granted (#) Year Ended 9/30/98 Price($/Share) Expiration Date
- ---- -------------------- ------------------------ ---------------- ---------------
<S> <C> <C> <C> <C>
J. William Plummer 4,000 19.90% $9.97 December 1, 2007
Connie Ayres LaPlante 4,000 19.90% $9.97 December 1, 2007
</TABLE>
The following table sets forth information regarding the number and
value of unexercised options held by the persons listed in the Summary
Compensation Table:
Aggregated Option/SAR Exercises In Last Fiscal Year and 9/30/98 Option/SAR
Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at at
9/30/98(#) 9/30/98(1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
- ---- --------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
J. William Plummer N/A N/A 72,440/0 $621,520/0
Connie Ayres LaPlante N/A N/A 72,440/0 $621,520/0
_________________________
<FN>
<F1> An option is "in-the-money" if the fair market value of the underlying
Shares exceeds the exercise price of the option. The figure represents
the value of such unexercised options, determined by multiplying the
number of Shares subject to unexercised options by the difference
between the exercise prices of such options and the closing sale price
for the Shares on September 30, 1998.
</FN>
</TABLE>
PROPOSAL TWO: AMENDMENT OF ARTICLES
The Board of Directors recommends that the shareholders adopt a
proposed amendment to Article Fourth of the Articles to increase the
authorized number of common shares from 4,000,000 to 9,000,000. The terms of
the additional shares would be identical to the common shares already
authorized by the Articles. The Board of Directors recommends such increase
in order to ensure flexibility of action with respect to future
opportunities. Bancorp has no current plans to issue the additional shares.
If the proposed amendment is adopted, the additional common shares
authorized could be used for various corporate purposes, including stock
splits and stock dividends, acquisitions of other companies, public
offerings and stock options and other employee benefit plans. The shares
could be issued, without preemptive rights, as the Board of Directors may
determine, without necessarily requiring further approval by Bancorp's
shareholders, other than as may be required in certain instances by Ohio law
or the rules of The Nasdaq Stock Market ("Nasdaq"). For instance, Ohio law
requires shareholder approval for the issuance of shares in connection with
certain mergers and acquisitions, and Nasdaq also requires shareholder
approval of certain stock benefit plans.
Opportunities often arise that require prompt action, and the delay
necessary for shareholder approval could be detrimental to Bancorp and its
shareholders. Although the directors do not intend to seek shareholder
approval for future issuances of shares unless required by law or Nasdaq,
the directors will not issue any common shares except on terms the Board of
Directors deems to be in the best interests of Bancorp and its shareholders.
As of the Record Date, no preferred shares and 3,150,532 common shares
of Bancorp were issued and outstanding. Stock splits in the form of stock
dividends paid in each of 1994, 1996 and 1998 have reduced the number of
authorized but unissued common shares substantially. In addition,
approximately 740,000 common shares are reserved for issuance pursuant to
stock option plans. There are, therefore, approximately 110,000 authorized
shares available for future use.
The issuance of additional shares may have a dilutive effect on
earnings per share and on the equity and voting power of existing holders of
common shares. The proposed increase in the authorized number of shares
might also be viewed as having the effect of discouraging an attempt by
another person or entity, through the acquisition of a substantial number of
Bancorp's common shares, to acquire control of Bancorp with a view to
imposing a merger, sale of all or any part of its assets or a similar
transaction, because the issuance of new common shares or the granting of
rights to purchase common shares, perhaps on very favorable terms, could be
used to dilute the stock ownership of a person or entity seeking to obtain
control of Bancorp. In addition, although the Board of Directors at present
has no intention of doing so, authorized but unissued common shares could be
issued to a holder that would thereby have sufficient voting power to assure
that the transactions described in Article Sixth of the Articles, such as
mergers or sales of substantial amounts of the assets of Bancorp, and any
proposal to change the number of directors or to amend the Articles, would
not receive the 75 percent shareholder vote required therefor by Article
Sixth. The increase in the authorized number of shares has not been proposed
for the purpose of having an anti-takeover effect, and the Board of
Directors has no knowledge of any current efforts to obtain control of
Bancorp.
At the Annual Meeting, the shareholders will be asked to approve the
following resolution:
RESOLVED, that the Articles of Incorporation of First Federal Bancorp,
Inc., be amended by deleting Article FOURTH in its entirety and
substituting therefor the following Article FOURTH:
FOURTH: The authorized number of shares of the corporation shall
be ten million (10,000,000), nine million (9,000,000) of which
shall be common shares, each without par value, and one million
(1,000,000) of which shall be preferred shares, each with a par
value of $100 per share. The directors of the corporation may
adopt an amendment to the Articles of Incorporation in respect
of any unissued or treasury shares of any class and thereby fix
or change: the division of such shares into series and the
designation and authorized number of each series; the dividend
rate; the dates of payment of dividends and the dates from which
they are cumulative; liquidation price; redemption rights and
price; sinking fund requirements; conversion rights; and
restrictions on the issuance of shares of any class or series.
The holders of preferred shares shall not have any voting power,
except as otherwise provided by law.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE "FOR" THE AMENDMENT
TO THE ARTICLES OF INCORPORATION.
PROPOSAL THREE: RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of Bancorp has selected Crowe Chizek as the
auditors of Bancorp and its subsidiary for the current fiscal year and
recommends that the shareholders ratify such selection. Management expects
that a representative of Crowe Chizek will be present at the Annual Meeting,
will have the opportunity to make a statement if he or she so desires and
will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE SELECTION OF CROWE CHIZEK AS THE AUDITORS OF BANCORP FOR
THE CURRENT FISCAL YEAR.
PROPOSALS OF SECURITY HOLDERS AND OTHER MATTERS
Any proposals of security holders intended to be included in Bancorp's
Proxy Statement for the 2000 Annual Meeting of Shareholders should be sent
to Bancorp by certified mail and must be received by Bancorp not later than
September 10, 1999. In addition, if a shareholder intends to present a
proposal at the 2000 Annual Meeting without including the proposal in the
proxy materials related to that meeting, and if the proposal is not received
by November 24, 1999, then the proxies designated by the Board of Directors
of Bancorp for the 2000 Annual Meeting of Shareholders of Bancorp may vote
in their discretion on any such proposal any shares for which they have been
appointed proxies without mention of such matter in the proxy statement or
on the proxy card for such meeting.
Management knows of no other business which may be brought before the
Annual Meeting, including matters incident to the conduct of the Annual
Meeting. If, however, other matters are brought before the Annual Meeting,
the persons named in the enclosed Proxy intend to vote such Proxy in
accordance with their best judgment.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
Zanesville, Ohio J. William Plummer, President and
December 15, 1998 Chief Executive Officer
Ward D. Coffman, III, Secretary
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FIRST FEDERAL BANCORP, INC.
THE FIRST FEDERAL BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 17, 1999
The undersigned shareholder of First Federal Bancorp, Inc. ("Bancorp")
hereby constitutes and appoints John C. Matesich, III; Don R. Parkhill and
Larry W. Snode, or any one of them, the Proxy or Proxies of the undersigned
with full power of substitution and resubstitution, to vote at the Annual
Meeting of Shareholders of Bancorp to be held at the Holiday Inn, 4645 East
Pike, Zanesville, Ohio, on February 17, 1999, at 2:00 p.m. (the "Annual
Meeting"), all of the shares of Bancorp which the undersigned is entitled to
vote at the Annual Meeting, or at any adjournment thereof, on each of the
following proposals, all of which are described in the accompanying Proxy
Statement:
1. To re-elect four directors of Bancorp for terms expiring in 2001;
[ ] FOR all nominees listed below [ ] WITHHOLD authority to vote for
(except as marked to the all nominees listed below:
contrary below):
Ward D. Coffman, III
Robert D. Goodrich, II
Patrick L. Hennessey
Connie Ayres LaPlante
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
_________________________________________________________________________
2. To adopt an amendment to the Articles of Incorporation of Bancorp to
increase the authorized number of common shares;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the selection of Crowe, Chizek and Company as the auditors of
Bancorp for the current fiscal year; and
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IMPORTANT: Please sign and date this Proxy on the reverse side.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. Unless otherwise specified, the
shares will be voted FOR proposals 1, 2 and 3.
All Proxies previously given by the undersigned are hereby revoked. Receipt
of the Notice of the Annual Meeting of Shareholders of Bancorp and of the
accompanying Proxy Statement is hereby acknowledged.
Please sign exactly as your name appears on your Stock Certificates(s).
Executors, Administrators, Trustees, Guardians, Attorneys and Agents should
give their full titles.
___________________ ____________________
Signature Signature
___________________ ____________________
Print or Type Name Print or Type Name
Date: _____________ Date: ______________
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF BANCORP. PLEASE DATE,
SIGN AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED FOR
MAILING IN THE U.S.A.
