<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 Section 240.14a-11(c) or Section
240.14a-12
FirstFed Bancshares, Inc - SEC File No. 0-20160
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Paul A. Larsen, Chief Financial Officer of the Registrant.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
March 14, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of FirstFed Bancshares,
Inc., I cordially invite you to attend the fifth Annual Meeting of Stockholders
of FirstFed Bancshares, Inc. to be held at 10:00 a.m. on April 22, 1997, at the
Casa Royale Banquets located at 783 Lee Street, Des Plaines, Illinois. The
accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
discuss the business to be conducted at the meeting. A copy of the Company's
1996 Annual Report and Form 10-K are also in this booklet. At the meeting we
shall report on Company operations and the outlook for the year ahead.
Your Board of Directors has nominated three persons to serve as Class II
directors, each of whom are incumbent directors. The Board of Directors also
proposes to amend Article I of the Company's Certificate of Incorporation to
change the name of the Company and amend Article IV of the Certificate to
increase the number of authorized shares of Common Stock, par value $.01 per
share, from 5,000,000 to 7,500,000 shares. The Company's management has
selected and recommends that you ratify the selection of Crowe, Chizek and
Company LLP to continue as the Company's independent public accountants for the
year ending December 31, 1997.
We recommend that you vote your shares for the director nominees and in
favor of the proposals.
I encourage you to attend the meeting in person. WHETHER OR NOT YOU PLAN
TO ATTEND, HOWEVER, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN
IT IN THE ACCOMPANYING POSTPAID RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. This
will ensure that your shares are represented at the meeting.
If you have any questions concerning these matters, please do not hesitate
to contact me at (847) 294-6500. We look forward with pleasure to seeing and
visiting with you at the meeting.
Very truly yours,
FIRSTFED BANCSHARES, INC.
Larry G. Gillie
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
- --------------------------------------------------------------------------------
749 Lee Street - Des Plaines, IL 60016-6471 - Phone: (847) 294-6500
Fax: (847) 824-3017
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 22, 1997
TO THE HOLDERS OF COMMON STOCK OF FIRSTFED BANCSHARES, INC.
Notice is hereby given that the Annual Meeting of Stockholders of FirstFed
Bancshares, Inc. (the "Company") will be held at the Casa Royale Banquets
located at 783 Lee Street, Des Plaines, Illinois, on April 22, 1997 at 10:00
a.m., for the purpose of considering and voting upon the following matters:
1. the election of three (3) Class II directors of the Company.
2. the amendment to Article I of the Company's Certificate of
Incorporation to change the name of the Company to [ ].
3. the amendment to Article IV of the Company's Certificate of
Incorporation to increase the number of authorized shares of Common
Stock, $.01 par value per share, from 5,000,000 to 7,500,000 shares.
4. the ratification of the appointment of Crowe, Chizek and Company
LLP as auditors for the Company for the fiscal year ending
December 31, 1997.
5. the transaction of such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The Board of Directors is not aware of any other business to come before
the meeting. Stockholders of record at the close of business on March 5, 1997,
are the stockholders entitled to vote at the meeting and any adjournments or
postponements thereof.
By Order of the Board of Directors
Larry G. Gillie
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
Des Plaines, Illinois
March 14, 1997
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF
MAILED WITHIN THE UNITED STATES.
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of FirstFed Bancshares, Inc. (the "Company") of
proxies to be used at the meeting which will be held at the Casa Royale
Banquets, located at 783 Lee Street, Des Plaines, Illinois, on April 22, 1997 at
10:00 a.m., and all adjournments or postponements of the meeting. The Proxy
Statement and the accompanying Notice of Meeting and Proxy are first being
mailed to holders of shares of common stock, par value $.01 per share, of the
Company (the "Common Stock") on or about March 14, 1997. Certain of the
information in the Proxy Statement relates to the First Federal Bank, Des
Plaines, Illinois (the "Bank"), a wholly owned subsidiary and predecessor of the
Company.
VOTING RIGHTS AND PROXY INFORMATION
All shares of Common Stock represented at the meeting by properly executed
proxies received prior to or at the meeting, and not revoked, will be voted at
the meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the nominees and for
adoption of the proposals set forth in this Proxy Statement. A majority of the
shares of the Common Stock, present in person or represented by proxy, shall
constitute a quorum for purposes of the meeting. Abstentions and broker non-
votes will be counted for purposes of determining a quorum.
Only holders of record of the Common Stock at the close of business on
March 5, 1997 will be entitled to vote at the meeting and at all adjournments or
postponements of the meeting. On March 5, 1997, the Company had 3,025,106
shares of Common Stock outstanding. Directors are elected by a plurality of the
votes cast in person or by proxy with a quorum present. For approval of the
amendments to the Company's Certificate of Incorporation, the affirmative vote
of the majority of the Company's outstanding shares entitled to vote on the
subject matter shall constitute stockholder approval. For all other matters,
the affirmative vote of a majority of the votes cast in person or by proxy with
a quorum present shall constitute stockholder approval. Abstentions and broker
"non-votes" will be considered in determining the presence of a quorum but will
not affect the vote required for approval of the proposal or the election of
directors.
The Company does not know of any matters, other than as described in the
Notice of Meeting, that are to come before the meeting. If any other matters
are properly presented at the meeting for action, the persons named in the
enclosed form of proxy and acting thereunder will have the discretion to vote on
such matters in accordance with their best judgment.
The Board of Directors would like to have all stockholders represented at
the meeting. Whether or not you plan to attend, please complete, sign and date
the enclosed proxy and return it in the accompanying postpaid return envelope as
promptly as possible. A proxy given pursuant to this solicitation may be
revoked at any time before it is voted. Proxies may be revoked by: (i) duly
executing and delivering to the Secretary of the Company a later dated proxy
relating to the same shares prior to the exercise of such proxy, (ii) filing
with the Secretary of the Company at or before the meeting a written notice of
revocation bearing a later date than the proxy, or (iii) attending the meeting
and voting in person (although attendance at the meeting will not in and of
itself constitute revocation of a proxy). Any written notice revoking a proxy
should be delivered to Mr. Paul A. Larsen, Corporate Secretary, at 749 Lee
Street, Des Plaines, Illinois, 60016.
<PAGE>
ELECTION OF DIRECTORS
At the Annual Meeting of the Stockholders to be held on April 22, 1997, the
stockholders will be entitled to elect three (3) Class II directors for a term
expiring in 2000. The directors of the Company are divided into three classes
having staggered terms of three years. Each of the nominees for election as
Class II directors are incumbent directors. The Company has no knowledge that
any of the nominees will refuse or be unable to serve, but if any of the
nominees becomes unavailable for election, the holders of the proxies reserve
the right to substitute another person of their choice as a nominee when voting
at the meeting.
Set forth below is information concerning the nominees for election and for
the other directors whose terms of office will continue after the meeting,
including the age, year first elected a director and business experience of each
during the previous five years. The nominees, if elected at the Annual Meeting
of Stockholders, will serve as Class II directors for three year terms expiring
in 2000. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF
THE NOMINEES FOR DIRECTOR.
NOMINEES
PRESENT POSITION WITH DIRECTOR OF THE
NAME AND AGE THE COMPANY AND THE BANK COMPANY OR THE BANK SINCE
- ------------ ------------------------ -------------------------
CLASS II
- --------
(Term Expires 2000)
John A. Flink Director of the 1984
(Age 69) Company and of the Bank
Larry G. Gillie President, Chief 1994
(Age 56) Executive Officer
and Director of the
Company and of the Bank
Frank A. Svoboda, Jr. Director of the 1973
(Age 63) Company and Chairman
of the Board of the Bank
CONTINUING DIRECTORS
CLASS III
- ---------
(Term Expires 1998)
Donald J. Cameron Chairman of the Board 1984
(Age 72) of the Company and
Director of the Bank
Gerald T. Niedert Vice Chairman and 1987
(Age 51) Director of the
Company and of the Bank
Thomas TenHoeve Director of the 1987
(Age 61) Company and of the
Bank
David B. Speer Director of the 1997
(Age 47) Company and the Bank
2
<PAGE>
PRESENT POSITION WITH DIRECTOR OF THE
NAME AND AGE THE COMPANY AND THE BANK COMPANY OR THE BANK SINCE
- ------------ ------------------------ -------------------------
CLASS I
- -------
(Term Expires 1999)
George T. Drost Director of the 1987
(Age 50) Company and of the Bank
David E. Spiegler Director of the 1979
(Age 66) Company and of the Bank
David M. Miller Director of the 1996
(Age 47) Company and of the Bank
All of the Company's directors will hold office for the terms indicated, or
until their respective successors are duly elected and qualified. There are no
arrangements or understandings between the Company and any other person pursuant
to which any of the Company's directors have been selected for their respective
positions.
BIOGRAPHICAL DATA
The principal occupation of each director is set forth below. Each
director has held his present position for at least five years unless otherwise
indicated.
DONALD J. CAMERON has been the Company's Chairman of the Board since its
formation in 1992. He also served as the Company's President and Chief
Executive Officer from its formation through February 28, 1994. He served as
President of the Bank from January 1984 through February 28, 1994, and
previously served as Vice President of the Bank from January 1974.
GEORGE T. DROST is a principal with the law firm of Drost & Kivlahan, Ltd.,
Arlington Heights. Mr. Drost is also an Adjunct Professor for John Marshall Law
School in Chicago, Illinois, and currently serves as a director of the Advocate
Charitable Foundation, which is an affiliate of Advocate Health Care, Oak Brook,
Illinois, and the Uhlich Children's Home, Chicago, Illinois and the Lutheran
Foundation, an affiliate of the Lutheran Home and Services for the Aged,
Arlington Heights, Illinois.
JOHN A. FLINK retired in 1990 as General Manager, Band Tools, of the DoALL
Company, an international machine tool distributor and industrial supplier
located in Des Plaines, Illinois, after serving in various marketing and
advertising capacities there since 1963.
LARRY G. GILLIE became the Company's President and Chief Executive Officer
on March 1, 1994, after serving as the Company's Executive Vice President since
its formation. Having served as President of the Northbrook Bank in Northbrook,
Illinois from 1979 to 1986, Mr. Gillie joined the Bank in 1987 as Vice President
of Operations. He became Executive Vice President on January 17, 1990 and then
President, Chief Executive Officer and a Director of the Bank on March 1, 1994.
DAVID M. MILLER currently serves as Vice President/Marketing for Comdisco,
Inc., a provider of technology solutions with offices in Rosemont, Illinois.
Mr. Miller joined that company in 1988 and has served as Marketing business
System Manager and Capital Equipment Group Director. Prior to joining Comdisco,
Inc., he was Regional Financial Services Manager for Storage Tek Corporation in
the midwest region and a former Vice President/Sales for Sanwa Business Credit
in Chicago.
3
<PAGE>
GERALD T. NIEDERT is currently Vice President/Business Development of
Dedicated Transportation, Inc., a truck transportation company located in Elk
Grove Village, Illinois. From 1986 to 1991, Mr. Niedert was Vice
President/Sales with Leaseway Transportation Corp., a truck transportation
company headquartered in Cleveland, Ohio. Prior to 1986, Mr. Niedert was the
Executive Vice President of Niedert Terminals, Inc.
DAVID B. SPEER is a 19 year veteran of Illinois Tool Works, Inc., a
multinational manufacturer of industrial systems. In October, 1995, Mr. Speer
was elected Executive Vice President of its worldwide construction products
group. He is a member of the American Marketing Association and American
Management Association.
DAVID E. SPIEGLER retired in 1988 as President of Spieglers Department
Store, in Des Plaines, Illinois.
FRANK A. SVOBODA, JR. is the Chairman of the Board of the Bank. Mr.
Svoboda was the owner of Svoboda's Mens Wear, Inc., a retail mens clothier
located in Des Plaines, Illinois until 1995.
THOMAS TENHOEVE, PH.D. retired in 1995 after having served for the previous
eleven years as President of Oakton Community College, a community college with
over 24,000 students on two campuses and 62 other locations located in the north
and northwest suburbs of Chicago.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During 1996, the Board of Directors held 12 meetings. No director attended
fewer than 80% of the total number of meetings of the Board of Directors of the
Company held during 1996 and the total number of meetings held by all committees
of the Board on which any such director served during 1996. The Board of
Directors of the Company has standing audit, compensation and nominating
committees.
The Board of Directors has a Nominating/Board Development Committee is
Chaired by Mr. Svoboda consisting of all members of the Board of Directors of
the Company. This committee recommends to the Board of Directors of the Company
nominees for election as directors and for nominees to fill any vacancies.
Pursuant to the Company's Bylaws, this committee will also consider nominees
recommended by stockholders provided any such recommendation is made in writing
and delivered to the Secretary of the Company no later than 30 days prior to the
date of the annual meeting at which directors are to be elected and otherwise
complies with the bylaws. During 1996, the Nominating Committee/Board
Development met once.
The Compensation Committee consists of Messrs. Drost (Chair), Flink,
Neidert and Svoboda. The Compensation Committee meets to review the
performance, salary and other compensation of the Chief Executive Officer and
recommends adjustments. During 1996, the Compensation Committee met two times.
The Audit/Compliance Committee consists of Messrs. TenHoeve (Chair),
Neidert and Cameron. The Audit/Compliance Committee reviews audit reports and
related matters to ensure effective compliance with regulations and internal
policies and procedures. This committee also approves the accounting firm
selected by management to perform the Company's and Bank's annual audit and acts
as the liaison between the auditors and the Board. Mr. Gillie serves EX OFFICIO
on this committee. During 1996, the Audit/Compliance Committee met two times.
COMPENSATION OF DIRECTORS
Directors of the Company are not paid a fee for serving on the Company's
Board or committees. During 1996 directors of the Bank received a fee of
$3,600 per year and $700 for each Bank Board and Executive committee meeting
attended (except for the Chairman of the Board of the Bank, who received $900
for each Board meeting attended). Directors may elect to defer all of their
fees. The Bank's non-employee directors also receive a $200 fee for each
Audit, Loan or Marketing committee meeting attended and a $250 per diem for
any authorized industry conferences attended. As of January 1, 1997, fees
for attendance at Bank Board and committee meetings were increased to $1,100
per meeting attended, except the Bank's Chairman, receives $1,300 per meeting
attended.
4
<PAGE>
The Company maintains a retirement plan for directors which provides
retirement benefits based upon the total number of years of service and average
monthly fees received during the last three years of service as a director.
Through 1999, retirement benefits became payable upon attainment of age 72 and
are payable for ten years. The maximum monthly retirement benefit available is
$1,500. In addition to the monthly retirement benefit, upon attainment of age
72 each director and their spouse is provided lifetime medical and dental
coverage as a supplement to Medicare. In February, 1997, the plan was amended
to provide that benefits become payable upon retirement for a period of ten
years, and supplemental medical and dental benefits begin at age 65.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock at March 5, 1997, by each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding Common Stock, by each director or nominee, by each executive
officer named in the Summary Compensation Table, and by all directors and
executive officers of the Company as a group.
NAME OF INDIVIDUAL AND AMOUNT AND NATURE OF PERCENT
NUMBER OF PERSONS IN GROUP BENEFICIAL OWNERSHIP(1)(2) OF CLASS
- -------------------------- -------------------------- --------
5% STOCKHOLDERS
FirstFed Bancshares, Inc.
Employee Stock Ownership Plan
("ESOP")(3)
749 Lee Street [ ] %
Des Plaines, IL 60016
Michael and Frances Halikias(4)
15750 S. Harlem Avenue
Suite 28
Orland Park, IL 60462 141,000 %
Brandes Investment Partners,
Inc. ("Brandes")(5)
12750 High Bluff Drive, 4th Floor
San Diego, CA 92130 195,682 %
First Manhattan Co.(6)
437 Madison Avenue
New York, NY 10022 160,750 %
DIRECTORS
Donald J. Cameron 119,380(7) %
George T. Drost 46,378(8) %
John A. Flink 32,533(9) %
Larry G. Gillie 125,109(10) %
David M. Miller 1,681 %
Gerald T. Niedert 46,218(11) %
David B. Speer [ ] %
David E. Spiegler 44,035(12) %
Frank A. Svoboda, Jr. 63,276(13) %
Thomas TenHoeve 27,118(14) *
OTHER NAMED EXECUTIVE OFFICERS
Paul A. Larsen(15)
16,093 %
All directors and executive officers %
as a group (15 persons)(16)
- ---------------------------------
* Less than one percent.
5
<PAGE>
(1) The information contained in this column is based upon information
furnished to the Company by the persons named above and the members of the
designated group, except as set forth in the footnotes below. The nature of
beneficial ownership for shares shown in this column is sole voting and
investment power, except as set forth in the footnotes below. Inclusion of
shares shall not constitute an admission of beneficial ownership or voting and
investment power over included shares.
(2) Includes shares held directly, shares allocated to the respective
individual under the ESOP, shares obtainable within the next 60 days pursuant to
options granted under the Company's 1992 Stock Option and Incentive Plan (the
"Stock Option Plan"), shares held in retirement accounts or in a fiduciary
capacity and shares held by certain family members, with respect to which shares
the listed individuals or group members may be deemed to have shared or sole
voting or investment power.
(3) Includes [108,989] shares held in the ESOP but specifically allocated
to employees' accounts. Larry G. Gillie and Paul A. Larsen serve as co-trustees
of the ESOP, and are deemed to have [ ] over such allocated shares and shared
voting and investment power over shares not so allocated.
(4) As reported in a Schedule 13D filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on March 9, 1995.
(5) In a Schedule 13G filed under the Exchange Act on February 12, 1996,
Brandes reported sole voting and shared dispositive power over 194,582 shares
and sole voting and dispositive power over 1,100 shares, all as an investment
adviser over shares beneficially owned by various clients.
(6) In a Schedule 13G filed under the Exchange Act on February 5, 1997,
First Manhattan Co. reported sole voting and dispositive power over 136,270
shares, shared voting and no dispositive power over 11,840 shares and no voting
but dispositive power over 24,480 shares. The Schedule 13G indicates First
Manhattan Co. holds such shares in its capacity as a registered broker/dealer,
investment adviser and partnership.
(7) Includes 61,500 shares subject to options granted under the Stock
Option Plan, over which shares Mr. Cameron has no voting and sole investment
power, and 38,955 shares held by Mr. Cameron's spouse, as trustee, over which
shares Mr. Cameron has no voting or investment power.
(8) Includes 15,990 shares subject to options granted under the Stock
Option Plan, over which shares Mr. Drost has no voting and sole investment
power, and 13,061 shares held by Mr. Drost's spouse, as trustee, over which
shares Mr. Drost has shared voting and no investment power.
(9) Includes 9,490 shares subject to options granted under the Stock
Option Plan, over which shares Mr. Flink has no voting and sole investment
power, and 315 shares held by Mr. Flink's spouse, over which Mr. Flink has no
voting or investment power.
(10) Excludes [ ] shares over which Mr. Gillie is deemed to have voting
and/or investment power as a co-trustee of the ESOP. Includes 91,620 shares
subject to options granted under the Stock Option Plan, over which shares Mr.
Gillie has no voting and sole investment power and 1,345 shares held by Mr.
Gillie's spouse and 1,528 shares for which Mr. Gillie serves as trustee, over
which shares Mr. Gillie has shared voting and investment power.
(11) Includes 15,990 shares subject to options granted under the Stock
Option Plan, over which shares Mr. Niedert has no voting and sole investment
power.
(12) Includes 12,990 shares subject to options granted under the Stock
Option Plan, over which shares Mr. Spiegler has no voting and sole investment
power, and 27,528 shares held by Mr. Spiegler's spouse, over which shares Mr.
Spiegler has shared voting power and no investment power.
(13) Includes 25,650 shares subject to options granted under the Stock
Option Plan, over which shares Mr. Svoboda has no voting and sole investment
power, and 3,000 shares for which Mr. Svoboda serves as co-trustee and 2,250
shares held by Mr. Svoboda's spouse, over which shares Mr. Svoboda has shared
voting and investment power.
(14) Includes 15,990 shares subject to options granted under the Stock
Option Plan, over which shares Dr. TenHoeve has no voting and sole investment
power, and 8,902 shares held in a trust for benefit of Dr. TenHoeve, over which
shares Dr. TenHoeve has no voting or investment power.
(15) Excludes [ ] shares over which Mr. Larsen is deemed to have voting
and/or investment power as a co-trustee of the ESOP. Includes 12,000 shares
subject to options granted under the Stock Option Plan, over which shares Mr.
Larsen has no voting and sole investment power.
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors and persons who own more than 10% of the Common
Stock to file reports of ownership and changes in ownership with the
Securities
6
<PAGE>
and Exchange Commission and with the exchange on which the shares of Common
Stock are traded. Such persons are also required to furnish the Company
with copies of all Section 16(a) forms they file. Based solely upon the
Company's review of such forms and, if appropriate, representations made to
the Company by any such reporting person concerning whether a Form 5 was
required to be filed for the 1996 fiscal year, the Company is not aware
that any of its directors and executive officers or 10% stockholders failed
to comply with the filing requirements of Section 16(a) during the period
commencing January 1, 1996 through December 31, 1996.
VOTING AGREEMENTS
The Company's ESOP is administered by Messrs. Larry G. Gillie, the
Company's President and Chief Executive Officers, and Paul A. Larsen, its
Senior Vice President and Chief Financial Officer. Shares held in the ESOP
and not allocated to participants in the ESOP are voted by the
administrators at their discretion. SHARES ALLOCATED TO PARTICIPANT
ACCOUNTS MAY BE VOTED BY THE RESPECTIVE PARTICIPANT OR, IF ANY PARTICIPANT
DOES NOT VOTE, SUCH SHARES MAY BE VOTED BY THE ADMINISTRATORS.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
paid or granted to the Company's Chief Executive Officer and to each of the
other executive officers of the Company and the Bank whose aggregate salary
and bonus exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
- ------------------------------------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G) (H)
<S> <C> <C> <C> <C> <C> <C> <C>
RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL OTHER ANNUAL STOCK UNDERLYING COMPENSATION
POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION($) AWARD($) OPTIONS/SARS (#) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Larry G. Gillie, 1996 $180,492 $15,300 $ --- $ --- --- $44,570
President, Chief 1995 140,529 6,300 --- --- --- 28,685
Executive Officer(2) 1994 129,615 300 --- --- --- 23,780
- ------------------------------------------------------------------------------------------------------------------------------------
Paul A. Larsen, Senior 1996 $ 92,170 $11,330 $ --- $ --- --- $19,348
Vice President and Chief 1995 59,637 300 --- --- --- 174
Financial Officer(3) 1994 --- --- --- --- --- ---
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes amounts deferred under the Bank's Profit Sharing Plan.
(2) Amounts shown as All Other Compensation include ESOP contributions for Mr.
Gillie in the amounts of $22,880 for 1994, $22,170 for 1995 and $36,000
(estimated) for 1996, matching contributions made by the Bank under the Bank's
Profit Sharing Plan of $15,615 for 1995 and $7,670 for 1996, and a premium
payment in the amount of $900 for life insurance for each year.
(3) 1995 information reflects a March 25, 1995 employment date. Amounts shown
as All Other Compensation include an ESOP contribution for Mr. Larsen of $19,000
(estimated) for 1996 and a premium payment in the amount of $174 for 1995 and
$348 for 1996 for life insurance.
7
<PAGE>
The following table sets forth certain information concerning the number
and value of stock options at December 31, 1996, held by the named executive
officer.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END (#) FY-END ($)
(D) (E)
---------------------------------------------------------------
SHARES ACQUIRED
NAME ON EXERCISE (#) VALUE REALIZED ($) EXERCISABLE UNEXERCISABLE(1) EXERCISABLE UNEXERCISABLE
(A) (B) (C)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Larry G. Gillie --- --- 91,620 48,000 $821,500 $212,160
- ------------------------------------------------------------------------------------------------------------------------------------
Paul A. Larsen --- --- 12,000 24,000 $ 52,000 $104,000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Remaining options become exercisable one-half each on January 1, 1999 and
2001.
EMPLOYMENT AGREEMENTS
The Company has entered into a one-year employment agreement with
Larry G. Gillie. The agreement provides for an annual salary of
$180,000, subject to annual increases as determined by the Board of
Directors. The employment agreement provides for an automatic
extension of one year on each anniversary date, provided there is a
satisfactory review of Mr. Gillie's performance. Either the Company
or Mr. Gillie may elect not to renew the agreement upon written notice
provided at least 90 days prior to the anniversary date.
The agreement further provides for the continued payment of Mr.
Gillie's salary and health benefit coverage for one year in the event
employment is terminated without cause. In addition, the agreement
provides for an additional payment to Mr. Gillie of approximately
three times his annual salary in the event there is a change in
control of the Company or the Bank and his employment terminates
voluntarily within one year after such change in control or
involuntarily within three years after such change in control. The
agreement further provides that for a period of one year after
termination of his employment for any reason, Mr. Gillie will not
manage, operate or control any financial institution having an office
within 35 miles of any office of the Bank as of the effective date of
the agreement.
CHANGE OF CONTROL AGREEMENTS
In addition to the change of control provisions set forth in
Larry Gillie's employment agreement, the Company has entered into a
one-year change of control agreement with Mr. Paul A. Larsen. The
agreement provides for an automatic extension of one year on each
anniversary date, provided there is a satisfactory review of Mr.
Larsen's performance. The agreement provides for a payment to Mr.
Larsen of one year's annual salary in the event there is a change in
control of the Company or the Bank and his employment terminates
voluntarily or involuntarily within one year after such change in
control. In such event, Mr. Larsen would also be entitled to receive
health insurance for one year following his termination date.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the members of the Compensation Committee were
George T. Drost, John A. Flink, Gerald T. Niedert and Frank A.
Svoboda. None of these individuals was an officer or employee of the
Company or any of its subsidiaries during 1996, and none of these
individuals is a former officer or employee of the Company or any of
its subsidiaries.
8
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
THE COMPENSATION COMMITTEE HAS FURNISHED THE FOLLOWING REPORT ON
EXECUTIVE COMPENSATION. THE INCORPORATION BY REFERENCE OF THIS PROXY
STATEMENT INTO ANY DOCUMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION BY THE COMPANY SHALL NOT BE DEEMED TO INCLUDE THE REPORT
UNLESS SUCH REPORT IS SPECIFICALLY STATED TO BE INCORPORATED BY
REFERENCE INTO SUCH DOCUMENT.
COMPENSATION POLICIES. This report describes the Company's compensation
policies as endorsed by the Board of Directors and the Compensation
Committee and the resulting actions taken by the Company for 1996.
Essentially, the executive compensation program of the Company has been
designed to:
* Support a pay-for-performance policy that differentiates compensation
amounts based on Company and individual performance;
* Provide compensation opportunities that are comparable to those
offered by other leading companies in the financial services industry,
thus allowing the Company to compete for and retain talented
executives who are critical to the Company's long-term success; and
* Align the interests of executives with the long-term interests of
stockholders through award opportunities that can result in ownership
of Common Stock.
At present, the executive compensation program is comprised of salary
and long-term incentive opportunities in the form of stock options,
restricted stock and benefits typically offered to executives by major
corporations.
SALARY AND DEFERRED COMPENSATION. The Board of Directors, acting on the
recommendation of the Compensation Committee, determines the salary paid to
the Chief Executive Officer (the "CEO"). The CEO determines the salaries
paid to the other executive officers. In each case, salary increases
reflect both individual performance as well as the Bank's financial
performance, as measured by its return on assets and profitability. In the
case of executive officers, salary increases were granted in amounts
ranging from 4% to 19% based on individual performance, position, tenure,
comparative data and the Bank's operating results.
Mr. Gillie's 1996 salary was based upon an analysis of: (i) the
compensation of the chief executive officers of 16 comparable financial
institutions with publicly traded common stock; (ii) financial institutions
in the Chicago metropolitan area with similar net asset amounts; and (iii)
a commercially available financial institution survey. Mr. Gillie's salary
was set at an amount slightly below the middle of the salary range
established by this analysis. Fees received for membership on the Board of
Directors of the Bank were also considered.
STOCK AWARDS. The Company's Stock Option Plan and Bank Incentive Plan
("BIP") are designed to align a significant portion of the executive
compensation program with stockholder interests. The Stock Option Plan and
BIP, both approved by stockholders permit the granting of stock-based
awards. To date, two types of awards have been granted to executive
officers and other key employees:
Stock Options - Rights to purchase shares of Common Stock at the fair
market value per share as of the date the option is granted; and
Restricted Stock - Shares of Common Stock that the recipient cannot
sell or otherwise dispose of until the applicable restriction period
lapses and that are forfeited if the recipient terminates employment
for any reason other than retirement, disability, or death prior to
the lapsing of the restriction period (or applicable portion of such
period). Vesting periods are established primarily by reference to a
recipient's position, tenure and age.
9
<PAGE>
In granting stock options and restricted stock to executive officers, the
Committee takes into account the practices of other financial services companies
as verified by external surveys, as well as the executive's level of
responsibility and past contributions to the Company. The Company did not grant
stock options to its Chief Executive Officer or Senior Management Officers
during 1996. In 1995, nonqualified stock options were granted to key employees
as follows: Mr. Gillie- 72,000; Senior Management Officers (5) - 36,000 each;
Non-Senior Management Officers (12) - 9,000 each. These options became
effective as of February 21, 1995, and vest in equal portions every two years
over the next six years.
George T. Drost
John A. Flink
Gerald T. Niedert
Frank A. Svoboda
PERFORMANCE GRAPH
THE INCORPORATION BY REFERENCE OF THIS PROXY STATEMENT INTO ANY DOCUMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY THE COMPANY SHALL NOT BE
DEEMED TO INCLUDE THE FOLLOWING PERFORMANCE GRAPH AND RELATED INFORMATION UNLESS
THE GRAPH AND THE RELATED INFORMATION ARE SPECIFICALLY STATED TO BE INCORPORATED
BY REFERENCE INTO SUCH DOCUMENT.
The line graph below compares the cumulative total stockholder return on a
$100 investment in the Company's Common Stock to the cumulative total return of
a broad index of stocks traded on the Nasdaq Stock Market and a savings and loan
industry index for the period June 30, 1992, the date of the Company's initial
public offering, through December 31, 1996. The graph has been prepared at the
Company's request by Research Holdings Limited, San Francisco, California.
COMPARISON OF CUMULATIVE TOTAL RETURN*
ASSUMES $100 INVESTED ON JUNE 30, 1992
10
<PAGE>
*Total return assumes reinvestment of dividends
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return
- ------------------------------------------------------------------------------------------------------------------------------------
6/30/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
FirstFed Bancshares, Inc. $ 100 $ 136 $ 170 $ 157 $ 195 $ 243
Dow Jones S&L 100 103 107 94 156 195
Nasdaq 100 120 138 135 190 234
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TRANSACTIONS WITH MANAGEMENT
Directors and officers of the Company and the Bank, and their associates,
were customers of and had transactions with the Company and the Bank during
1996. Additional transactions may be expected to take place in the future. All
outstanding loans, commitments to loan, transactions in repurchase agreements
and certificates of deposit and depository relationships, in the opinion of
management, were made in the ordinary course of business, on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and did not involve more
than the normal risk of collectibility or present other unfavorable features.
All loans by the Bank to its senior officers and directors are subject to
Office of Thrift Supervision regulations restricting loans and other
transactions with affiliated persons of the Bank. A savings association is
prohibited from making loans to its senior officers and directors at favorable
rates or on terms not comparable to those prevailing to the general public
unless such favorable terms are part of a compensation package.
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY
The Board of Directors of the Company has unanimously approved an amendment
to the Company's Certificate of Incorporation to change the name of the Company
from FirstFed Bancshares, Inc. to [ ]. In the event the stockholders
approve the proposed change of name, the implementation of the new name would
occur on or about ______________, 1997.
The Board of Directors and management of the Company believe that the
proposed name change will increase identification of the Company in the
marketplaces. Specifically, it is intended that the name will lead to
heightened recognition of the full scope of the Company's banking operations by
customers, investors and the general public by clearly distinguishing the
Company from other thrift holding companies whose subsidiary savings & loan
institutions concentrate primarily on generating deposits and originating
residential home mortgages. The Company desires to promote an image more
consistent with its operational philosophy, which strives to serve the needs of
the commercial loan market as well as continuing to provide residential
financing. The Board of Directors believes the name change will more closely
reflect the Company's intention to continue to expand its commercial lending
operations. If the proposed amendment is approved and the name of the Company
changed, it is management's intention to also change the name of the Bank to
further promote its operational philosophy, although a final decision on a
future name has not yet been made.
To be approved by the Company's stockholders, the Amendment must receive
the affirmative vote of a majority of shares outstanding and entitled to vote on
the Amendment at the Annual Meeting of Stockholders. THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE YOUR SHARES FOR THE AMENDMENT.
11
<PAGE>
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
The Board of Directors of the Company has unanimously approved an amendment
(the "Amendment") to Article IV of the Company's Certificate of Incorporation
("Certificate") that would increase the number of authorized shares of the
Company's Common Stock, $.01 par value per share, from 5,000,000 shares to
7,500,000 shares. As of March 5, 1997, the Company had 3,025,106 shares of
Common Stock issued and outstanding. The Board of Directors has proposed
adoption of the Amendment for several reasons, including those set forth below.
First, the Amendment will provide for the additional shares of Common Stock
necessary to effectuate additional stock dividends, should the Board of
Directors determine that such dividends are in the best interests of the Company
and its stockholders.
Second, the additional shares authorized by the Amendment will provide
management with a substantial number of shares of Common Stock to enter into
certain transactions involving the use of Common Stock that may be advisable
from time to time. Such transactions could include, but are not limited to, the
acquisition by the Company of additional branch locations, subsidiaries or bank
or thrift holding companies. Although no such transactions are planned for the
immediate future, management and the Board of Directors believe that it is in
the Company's best interests to have available a large number of authorized
shares of Common Stock if such transactions become advisable.
Third, the additional shares of Common Stock authorized by the Amendment
could be used to raise additional working capital for the Company or the Bank.
The Board of Directors does not currently have any plans to raise capital
through the issuance of additional shares or otherwise, but these shares would
be available for that purpose.
The increase in the number of shares of Common Stock authorized by the
Amendment will allow for the possibility of substantial dilution of the voting
power of current stockholders of the Company, although no dilution will occur as
a direct result of any stock dividends which may be declared in the future. The
degree of any such dilution which would occur following the issuance of any
additional shares of Common Stock in transactions other than stock dividends
would depend upon the number of shares of Common Stock that are actually issued
in such transactions, which number cannot be determined at this time. Issuance
of a large number of additional shares could significantly dilute the voting
power of existing stockholders.
The existence of a substantial number of authorized and unissued shares of
Common Stock could also impede an attempt to acquire control of the Company
because the Company would have the ability to issue additional shares of Common
Stock in response to any such attempt. The Company is not aware of any such
attempt to acquire control at this time, and no decision has been made as to
whether any or all newly authorized but unissued shares of Common Stock would be
issued in response to any such attempt.
To be approved by the Company's stockholders, the Amendment must receive
the affirmative vote of a majority of shares outstanding and entitled to vote on
the Amendment at the Annual Meeting of Stockholders. THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE YOUR SHARES FOR THE AMENDMENT.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Crowe, Chizek and
Company LLP, independent accountants, to be the Company's auditors for the
fiscal year ending December 31, 1997, and recommends that the stockholders
ratify the appointment. A representative of Crowe, Chizek and Company LLP is
expected to attend the Annual Meeting and will be available to respond to
appropriate questions and to make a statement if he or she so desires. If the
appointment of the auditors is not ratified, the matter of the appointment of
auditors will be considered by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK AND COMPANY LLP.
12
<PAGE>
STOCKHOLDER PROPOSALS
Any proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders must be received by the Secretary of the Company at its
principal executive offices at 749 Lee Street, Des Plaines, Illinois 60016 on
or before November 14, 1997, to be considered for inclusion in the Company's
Proxy Statement and proxy relating to such meeting.
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 matter should properly come before the meeting, holders of
the proxies will act in accordance with their best judgment.
The cost of solicitation of 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 solicitation by mail,
directors, officers and regular employees of the Company and/or the Bank may
solicit proxies personally or by telegraph or telephone without additional
compensation.
BY ORDER OF THE BOARD OF DIRECTORS
Larry G. Gillie
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
Des Plaines, Illinois
March 14, 1997
<PAGE>
PROXY FIRSTFED BANCSHARES, INC. PROXY
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS -- APRIL 22, 1997
The undersigned hereby appoints George T. Drost, Gerald T. Niedert and
David E. Spiegler or any of them acting in the absence of the others, with power
of substitution, attorneys and proxies, for and in the name and place of the
undersigned, to vote the number of shares of Common Stock that the undersigned
would be entitled to vote if then personally present at the Annual Meeting of
the Stockholders of FirstFed Bancshares, Inc., to be held at the Casa Royale
Banquets located at 783 Lee Street, Des Plaines, Illinois, on Tuesday, April 22,
1997, at 10:00 a.m., local time, or any adjournments or postponements thereof,
upon the matters set forth in the Notice of Annual Meeting and Proxy Statement
(receipt of which is hereby acknowledged) as designated on the reverse side, and
in their discretion, the proxies are authorized to vote upon such other business
as may come before the meeting:
/ / Check here for address change. / / Check here if you plan to
New Address: attend the meeting.
-------------------
-------------------------------
-------------------------------
(Continued and to be signed on reverse side.)
<PAGE>
FIRSTFED BANCSHARES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
1. Election of Directors 3. To amend the Certificate of
John A. Flink, Incorporation to increase the
Larry G. Gillie, and number of authorized shares
Frank A. Svoboda, Jr. of Common Stock.
2. To amend the Certificate 4. To ratify the selection of
of Incorporation Crowe, Chizek & Company LLP
to change the name of the as independent auditors for
Company. the Company for 1997.
The Board of Directors recommends a
vote FOR all proposals.
THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH SPECIFICATION MADE.
IF NO CHOICES ARE INDICATED, THIS
PROXY WILL BE VOTED FOR ALL
PROPOSALS.
Dated: , 1997
-----------------------
NOTE: Please sign exactly as your
name(s) appears. For joint
accounts, each owner should
sign. When signing as executor, Signature(s)
administrator, attorney, -----------------------
trustee or guardian, etc.,
please give your full title. -----------------------
