SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
First Federal Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
First Federal Bancorp, Inc.
(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:
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 2001 Annual Meeting of Shareholders
of First Federal Bancorp, Inc. ("Bancorp"), will be held at the Holiday
Inn, 4645 East Pike, Zanesville, Ohio, on February 21, 2001, 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 2003;
2. To ratify the selection of Olive LLP ("Olive") as the auditors
of Bancorp for the current fiscal year; and
3. 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 26, 2000, 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 9, 2001 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 2001 Annual Meeting
of Shareholders of Bancorp to be held at the Holiday Inn, 4645 East Pike,
Zanesville, Ohio, on February 21, 2001, 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 2003; and
FOR the ratification of the selection of Olive LLP ("Olive") 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
26, 2000 (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 3,113,321 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 9, 2001.
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.
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 Olive 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
Olive 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
Olive 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 15, 2000:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (2)
------------------------ Percent of
Name and Address (1) Sole Shared Shares Outstanding
-------------------- ---- ------ ------------------
<S> <C> <C> <C>
Ward D. Coffman, III 170,320 (3) 14,000 5.85%
Connie Ayres LaPlante 72,440 (4) 142,048 6.78%
J. William Plummer 134,350 (5) 75,170 6.58%
___________________
<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 48,140 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> 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
15, 2000:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (2)
------------------------ Percent of
Name and Address (1) Sole Shared Shares Outstanding
-------------------- ---- ------ ------------------
<S> <C> <C> <C>
Ward D. Coffman, III 170,320 (3) 14,000 5.85%
Robert D. Goodrich, II 77,080 (4) - 2.46%
Patrick L. Hennessey 129,480 (5) 14,000 4.59%
Connie Ayres LaPlante 72,440 (6) 142,048 6.78%
John C. Matesich, III 77,480 (7) 14,000 2.90%
Don R. Parkhill 40,418 (8) 13,106 1.70%
J. William Plummer 134,350 (9) 75,170 6.58%
All directors and executive
officers of Bancorp
as a group (7 people) 701,568 230,324 (10) 27.55%
___________________
<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 24,480 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified
Plan and the 1997 Plan.
<F5> Includes 12,000 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified
Plan and the 1997 Plan.
<F6> See footnote 4 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 5 to the preceding table for a description of Mr.
Plummer's beneficial ownership.
<F10> Messrs. Coffman, Hennessey, Matesich and Plummer share control as
Trustees over 14,000 shares held in the First Federal Savings Bank of
Eastern Ohio Defined Benefit Plan. The 14,000 shares are included in
each of their numbers of shares beneficially owned but are included
only once in the total number of shares held by all directors and
executive officers of Bancorp as a group.
</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 2003:
<TABLE>
<CAPTION>
Name Age Position(s) Held Director Since (1)
---- --- ---------------- ------------------
<S> <C> <C> <C>
Ward D. Coffman, III 47 Secretary and Director 1992
Robert D. Goodrich, II 54 Director 1992
Patrick L. Hennessey 50 Director 1992
Connie Ayres LaPlante 44 Treasurer and Director 1992
___________________
<FN>
<F1> Each of such directors became a director of Bancorp in connection
with the 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
Name Age Position(s) Held Since (1) Term Expires
---- --- ---------------- --------- ------------
<S> <C> <C> <C> <C>
John C. Matesich, III 57 Chairman and Director 1992 2002
Don R. Parkhill 42 Director 1995 2002
J. William Plummer 55 President, Chief Executive 1992 2002
Officer and Director
___________________
<FN>
<F1> 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 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,
2000. 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,
2000.
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, Matesich, Parkhill, Goodrich and
Plummer and Ms. LaPlante. The Stock Option Committee met once during the
fiscal year ended September 30, 2000.
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 "PROPOSAL ONE:
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
review the results of their audit of Bancorp and First Federal. See "AUDIT
COMMITTEE REPORT." The Audit Committee met once during the fiscal year
ended September 30, 2000.
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 for the executive officers of
First Federal and, in conjunction with management, for the other employees
of First Federal. The Compensation Committee met once during the fiscal
year ended September 30, 2000.
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 $252,700. Messrs. Plummer, Coffman and Hennessey are the members of
the Loan Committee. The Loan Committee met six times by telephone during
the fiscal year ended September 30, 2000.
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 $100,000 during fiscal year 2000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
-------------------------- -----------------
Awards
Name and Principal -----------------
Position Year Salary ($)(1) Bonus ($) Options/ SARs (#)
------------------ ---- ------------- --------- -----------------
<S> <C> <C> <C> <C>
J. William Plummer 2000 $151,328 $44,313 -
President and Chief 1999 144,611 38,519 -
Executive Officer 1998 140,266 56,711 4,000(2)
Connie Ayres LaPlante 2000 97,758 24,331 -
Treasurer 1999 92,698 21,146 -
1998 89,971 31,626 4,000(2)
___________________
<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 November 2000, 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, 2000, 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, 2000, 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, 2000, 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, 2000.
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 677,075 common shares for issuance
under the ISO Plans and the Non-qualified Plans, of which 452,226 were
subject to outstanding options on December 17, 2000. 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 that 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. Options were granted
under the 1997 Plan in fiscal year 1998 but not in fiscal years 1999 or
2000.
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.
No options were granted to Mr. Plummer or Ms. LaPlante during the
fiscal year ended September 30, 2000. 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 9/30/00 Option/SAR Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
9/30/00(#) 9/30/00(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 $257,090/0
Connie Ayres LaPlante 12,150 $53,156 48,140/0 $141,665/0
___________________
<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, 2000, as reported
by The Nasdaq Stock Market.
</FN>
</TABLE>
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, Bancorp's directors and executive
officers and persons holding more than ten percent of the common shares of
Bancorp are required to report their ownership of common shares and changes
in such ownership to the Securities and Exchange Commission (the "SEC") and
Bancorp. The SEC has established specific due dates for such reports.
Based upon a review of such reports, Bancorp must disclose any failures to
file such reports timely in Proxy Statements used in connection with annual
meetings of shareholders. Mr. Goodrich reported in 2000 four transfers of
shares into a trust that should have been reported on two Forms 5 for prior
years.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of Bancorp is comprised
of five directors, all of whom are considered "independent" under Rule
4200(a)(14) of the National Association of Securities Dealers' listing
standards. The Audit Committee is responsible for overseeing Bancorp's
accounting functions and controls, as well as recommending to the Board of
Directors an accounting firm to audit Bancorp's financial statements. The
Audit Committee has adopted a charter to set forth its responsibilities
(the "Charter"). A copy of the Charter is attached to this Proxy Statement
as Exhibit A.
As required by the Charter, the Audit Committee received and reviewed
the report of Olive regarding the results of their audit, as well as the
written disclosures and the letter from Olive required by Independence
Standards Board Standard No. 1. The Audit Committee reviewed the audited
financial statements with the management of Bancorp. A representative of
Olive also discussed with the Audit Committee the independence of Olive
from Bancorp, as well as the matters required to be discussed by Statement
of Auditing Standards 61. Discussions between the Audit Committee and the
representative of Olive included the following:
* Olive's responsibilities in accordance with generally accepted
auditing standards
* The initial selection of, and whether there were any changes
in, significant accounting policies or their application
* Management's judgments and accounting estimates
* Whether there were any significant audit adjustments
* Whether there were any disagreements with management
* Whether there was any consultation with other accountants
* Whether there were any major issues discussed with management
prior to Olive's retention
* Whether Olive encountered any difficulties in performing the
audit
* Olive's judgments about the quality of Bancorp's accounting
principles
* Olive's responsibilities for information prepared by management
that is included in documents containing audited financial
statements
Based on its review of the financial statements and its discussions
with management and the representative of Olive, the Audit Committee did
not become aware of any material misstatements or omissions in the
financial statements. Accordingly, the Audit Committee recommended to the
Board of Directors that the audited financial statements be included in the
Annual Report on Form 10-KSB for the year ended September 30, 2000, to be
filed with the SEC.
Ward D. Coffman, III
Robert D. Goodrich, II
Patrick L. Hennessey
John C. Matesich, III
Don R. Parkhill
PROPOSAL TWO: RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of Bancorp has selected Olive 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 Olive 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.
Upon the recommendation of the Audit Committee and the approval of
the Board of Directors of Bancorp, Crowe Chizek and Company LLP ("Crowe
Chizek") was dismissed as Bancorp's independent public auditors on December
16, 1999. On the same date, Olive was engaged to audit Bancorp's financial
statements for the fiscal year ended September 30, 2000. The decision to
change auditors was based upon a belief that Olive could serve Bancorp's
needs more efficiently and responsively than Crowe Chizek.
The report of Crowe Chizek on the financial statements for the fiscal
years ended September 30, 1999, and September 30, 1998, contained no
adverse opinion or disclaimer of opinion, nor was it modified as to
uncertainty, audit scope or accounting principles. There has not been any
disagreement between Bancorp and Crowe Chizek on any matter of accounting
principles or practices, financial statement disclosure or auditing scope
or procedure.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE RATIFICATION OF THE SELECTION OF OLIVE 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 2002 Annual Meeting of Shareholders
should be sent to Bancorp by certified mail and must be received by Bancorp
not later than September 11, 2001. In addition, if a shareholder intends
to present a proposal at the 2002 Annual Meeting and the proposal is not
received by November 25, 2001, then the proxies designated by the Board of
Directors of Bancorp for the 2002 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 that 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, 2000 Chief Executive Officer
Ward D. Coffman, III, Secretary
Exhibit A
FIRST FEDERAL BANCORP, INC.
AUDIT COMMITTEE CHARTER
I. Purpose
The purpose of the Audit Committee is to assist the Board of
Directors of First Federal Bancorp, Inc. ("FFBZ)" in fulfilling its
responsibility to shareholders, the public, and government bodies relating
to corporate accounting, reporting practices of FFBZ, and the quality and
integrity of the financial reports of FFBZ.
II. Composition
The Committee shall be comprised of three or more directors, as
determined by the Board, each of whom shall be independent directors and
free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member
of the Committee. All members of the Committee shall be able to read and
understand FFBZ's basic financial statements. Satisfaction of this
financial literacy requirement shall be determined in accordance with the
applicable rules of The Nasdaq Stock Market, Inc.
The members of the Committee shall be elected by the Board at the
annual organization meeting of FFBZ or until their successors shall be
duly elected and qualified. The members of the Committee may designate a
chair by majority vote of the full Committee membership.
III. Meetings
The Committee is to meet at least two times annually and as many
additional times as the Committee deems necessary. Content of the agenda
for each meeting should be set by the Committee chair. The Committee is to
meet with the chief financial officer, independent accounts, and internal
auditor at least once each year and at other times when considered
appropriate. Committee members will strive to be present at all meetings.
As necessary or desirable, the Committee may request that members of
management and representatives of the independent accountants be present at
Committee meetings.
IV. Responsibilities
To fulfill its responsibilities and duties, the Committee shall:
1. Review and update this Charter periodically as conditions
dictate, but at least annually.
2. Review FFBZ's annual financial statements and any annual
financial reports submitted to any governmental body or the public,
including any reports or opinions rendered by the independent accountants.
3. Recommend to the Board the selection of the independent
accountants, considering independence and effectiveness and in light of the
independent accountants' ultimate accountability to the Committee and the
Board and the ultimate authority and responsibility of the Committee and
the Board to select, evaluate and, where appropriate, replace the
independent accountants (or to nominate the independent accountants to be
proposed for shareholder approval in any proxy statement). The Committee
should ensure that the independent accountants submit to the Committee
periodically a written statement of all relationships between the
independent accountants and FFBZ, consistent with Independence Standards
Board Standard 1 and engage in active dialog with the independent
accountants about all significant relationships the accountants have with
FFBZ to determine the accountants' independence.
4. Review the performance of the independent accountants and
consult with the independent accountants out of the presence of management
about internal controls and the completeness and accuracy of FFBZ's
financial statements. The Committee's review should include the matters
required to be discussed by Statement on Auditing Standards No. 61 and an
explanation from the independent accountants of the factors considered by
the independent accountants in determining the audit's scope. The
accountants should confirm that no limitations have been placed on the
scope or nature of the audit. The Committee should recommend to the Board
whether the audited financial statements should be contained in FFBZ's
Annual Report on Form 10-KSB to be filed with the Securities and Exchange
Commission.
5. Review with management, the independent accountants and the
internal auditor any difficulties of disagreements encountered during the
course of the audit, as well as any improvements that could be made in the
audit or internal control procedures.
6. Receive communications, if any, from the independent
accountants with respect to interim financial information before the filing
of the Quarterly Report on Form 10-QSB with the Securities and Exchange
Commission and discuss such communications with management of FFBZ. The
chair of the Committee may represent the entire Committee for purposes of
this receipt of communications and discussion with management.
7. Prepare a report to be included in the Proxy Statement for
FFBZ's annual meeting of shareholders, as required by the regulations of
the Securities and Exchange Commission.
8. Perform any other activities consistent with this Charter,
FFBZ's Code of Regulations and governing law, as the Committee or the Board
deems necessary or appropriate.
While the Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Committee to plan or conduct audits
or to determine that FFBZ's financial statements are complete and accurate
and prepared in accordance with generally accepted accounting principals.
That is the responsibility of management and FFBZ's independent
accountants.
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 21, 2001
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 21, 2001, 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 2003;
[ ] FOR all nominees listed [ ] WITHHOLD authority to vote
below (except as marked to for all nominees listed below:
the 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.)
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2. To ratify the selection of Olive LLP as the auditors of Bancorp for
the current fiscal year; and
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
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 and 2.
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
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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.
