SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] 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 ss. 240.14a-11(c) or ss. 240.14a-12
FFW CORPORATION
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(Name of Registrant as Specified in Its Charter)
<PAGE>
[FFW CORPORATION LETTERHEAD]
September 25, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of FFW Corporation
(the "Company"), we cordially invite you to attend the Annual Meeting (the
"Meeting") of Stockholders of the Company. The Meeting will be held at 2:30
p.m., Wabash, Indiana time, on October 28, 1997, at the office of the Company
located at 1205 North Cass Street, Wabash, Indiana.
In addition to the election of directors, stockholders are being asked
to ratify the appointment of Crowe, Chizek & Company LLP as the Company's
auditors. Accordingly, your Board of Directors unanimously recommends that you
vote for each of the proposals.
We encourage you to attend the Meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy and return it in the accompanying
postpaid return envelope as promptly as possible. This will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented at the Meeting.
Thank you for your attention to this important matter.
Very truly yours,
/s/ NICHOLAS M. GEORGE
----------------------
NICHOLAS M. GEORGE
President and Chief Executive Officer
<PAGE>
FFW CORPORATION
1205 North Cass Street
Wabash, Indiana 46992
(219) 563-3185
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 28, 1997
Notice is hereby given that an Annual Meeting of Stockholders (the
"Meeting") of FFW Corporation ("FFW" or the "Company") will be held at the
office of the Company located at 1205 North Cass Street, Wabash, Indiana, at
2:30 p.m. Wabash, Indiana time, on October 28, 1997.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company;
2. The ratification of the appointment of Crowe, Chizek & Company
LLP as auditors for the Company for the fiscal year ended June
30, 1998;
and such other matters as may properly come before the Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on September 19,
1997, are the stockholders entitled to vote at the Meeting, and any adjournments
thereof.
You are requested to complete and sign the enclosed form of proxy which
is solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Wayne W. Rees
-----------------
Wayne W. Rees
Chairman of the Board and Secretary
Wabash, Indiana
September 25, 1997
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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.
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<PAGE>
PROXY STATEMENT
FFW CORPORATION
1205 North Cass Street
Wabash, Indiana 46992
(219) 563-3185
ANNUAL MEETING OF STOCKHOLDERS
October 28, 1997
This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of FFW Corporation ("FFW" or the "Company")
of proxies to be used at the Annual Meeting of Stockholders of the Company (the
"Meeting") which will be held at the office of the Company, located at 1205
North Cass Street, Wabash, Indiana, on October 28, 1997, at 2:30 p.m., Wabash,
Indiana time, and all adjournments of the Meeting. The accompanying Notice of
Meeting and this Proxy Statement are first being mailed to stockholders on or
about September 29, 1997. Certain of the information provided herein relates to
First Federal Savings Bank of Wabash ("First Federal" or the "Bank"), a wholly
owned subsidiary and predecessor of the Company.
At the Meeting, stockholders of the Company are being asked to consider
and vote upon the election of two directors of the Company and a proposal to
ratify the appointment of Crowe, Chizek & Company LLP as the Company's auditors
for the fiscal year ending June 30, 1998.
Vote Required and Proxy Information
All shares of Company common stock ("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 the adoption of the proposal set forth in this Proxy
Statement. The Company does not know of any matters, other than those described
in the Notice of the 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.
Directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. In all matters other than the election of directors, the
affirmative vote of the majority of shares present in person or represented by
proxy at the Meeting and entitled to vote on the matter shall be the act of the
stockholders. Proxies marked to abstain with respect to a proposal have the same
effect as votes against the proposal. Broker non-votes have no effect on the
vote. One-third of the shares of the Company's Common Stock, present in person
or represented by proxy, shall constitute a quorum for purposes of the Meeting.
Abstentions and broker non-votes are counted for purposes of determining a
quorum.
2
<PAGE>
A proxy given pursuant to the solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy; (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting; or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Wayne W.
Rees, Secretary, FFW Corporation, 1205 North Cass Street, Wabash, Indiana 46992.
Voting Securities and Principal Holders Thereof
Stockholders of record as of the close of business on September 19,
1997, will be entitled to one vote for each share then held. As of that date,
the Company had 714,847 shares of Common Stock issued and outstanding. The
following table sets forth information regarding share ownership of: (i) those
persons or entities known by management to beneficially own more than five
percent of the Company's Common Stock and (ii) all directors and officers as a
group.
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Beneficial Owner Owned of Class
- ---------------- ----- --------
<S> <C> <C>
FFW Corporation, Inc. Employee Stock Ownership Plan 59,150 8.27%
1025 North Cass Street
Wabash, IN 46992-1027(1)
The Midwest Bank Fund II, L.P., Bank Fund III, L.P., Bank Fund IV, L.P., Bank 62,011 8.67
Fund III Trust and Bank
Fund IV Trust (collectively, "the Funds")
208 S. LaSalle Street
Chicago, Illinois 60604(2)
Mr. and Mrs. Nicholas M. George(3) 62,483 8.49
4185 S 550 W
Wabash, IN 46992
Directors and executive officers of the Company and the Bank as a group 192,875 25.72
(9 persons)(4)
- -----------------------
(1) The amount reported represents shares held by the Employee Stock
Ownership Plan ("ESOP"), 37,753 of which were allocated to accounts of
participants. Ronald J. Metz, the trustee of the ESOP, may be deemed to
beneficially own the shares held by the ESOP which have not been
allocated to the accounts of participants or shares which are not voted
by participants.
3
<PAGE>
(2) As reported in an amended Schedule 13D filed with the Securities and
Exchange Commission ("SEC") on or about August 2, 1996. The Midwest
Bank Fund II, L.P., Bank Fund III, L.P., the Bank Fund III Trust, the
Bank Fund IV, L.P. and the Bank Fund IV Trust reported sole voting and
dispositive powers as to 8,718, 10,403, 31,890, 2,521, and 8,479 shares
of Common Stock, respectively.
(3) Includes 12,510 shares held directly by Mr. George, 19,295 shares held
jointly with Mrs. George, 1,999 shares held directly by Mrs. George,
1,000 shares held jointly by Mr. George and his son, 21,125 shares
subject to options granted to Mr. George under the 1992 Stock Option
Plan and Incentive Plan ("Stock Option Plan") and 6,554 shares
allocated to Mr. George's account under the ESOP. There are no shares
subject to options which are not exercisable within 60 days of
September 19, 1997.
(4) Includes shares held directly, as well as, jointly with family members,
and shares held in retirement accounts in a fiduciary capacity or by
certain family members, with respect to which shares the listed
individuals or group members may be deemed to have sole voting and
investment power. This table also includes 12,485 shares allocated to
the accounts of officers under the ESOP, 34,994 shares subject to
options granted under the Company's Stock Option Plan, to directors and
executive officers which were exercisable within 60 days of September
19, 1997. There are no shares subject to options granted under the
Stock Option Plan to directors and executive officers which are not
exercisable within 60 days of September 19, 1997.
</TABLE>
I. ELECTION OF DIRECTORS
General
The Company's Board of Directors currently consists of seven members.
Each of the directors of the Company has served in such capacity since its
incorporation in December 1992. The Board is divided into three classes, each of
which contains approximately one-third of the Board. Approximately one-third of
the directors is elected annually. Directors of the Company are generally
elected to serve for a three-year period or until their respective successors
are elected and qualified.
The table below sets forth certain information, as of September 19,
1997, regarding the composition of the Company's Board of Directors, including
each director's term of office. The Board of Directors acting as the nominating
committee has recommended and approved the nominees identified in the following
table. It is intended that the proxies solicited on behalf of the Board of
Directors (other than proxies in which the vote is withheld as to a nominee)
will be voted at the Meeting FOR the election of the nominees identified below.
If a nominee is unable to serve, the shares represented by all valid proxies
will be voted for the election of such substitute nominee as the Board of
Directors may recommend. At this time, the Board of Directors knows of no reason
why any nominee may be unable to serve, if elected. Except as disclosed herein,
there are no arrangements or understandings between the nominee and any other
person pursuant to which the nominee was selected.
4
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Term Stock
Director to Beneficially Percent
Name Age(1) Position(s) Held in the Company Since(2) Expire Owned(3) of Class
---- ------ ------------------------------- -------- ------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Wayne W. Rees 59 Chairman of the Board and Secretary 1983 2000 25,437 3.55%
Ronald D. Reynolds 50 Director 1991 2000 10,462 1.46
DIRECTORS CONTINUING IN OFFICE
Maynard E. Vollmer 69 Director 1969 1998 10,637 1.49
Joseph W. McSpadden 49 Director 1987 1998 10,437(4) 1.46
Nicholas M. George 50 President and Chief Executive Officer 1977 1999 62,483(5) 8.49
J. Stanley Myers 50 Director 1985 1999 17,037 2.37
Thomas L. Frank 54 Director 1987 1999 17,237 2.40
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(1) At June 30, 1997.
(2) Includes service as a director of the Bank.
(3) Amounts include shares held directly and jointly with family members,
as well as, shares which are held in retirement accounts, or held by
certain members of the named individuals' families, or held by trusts
of which the named individual is a trustee or substantial beneficiary,
with respect to which shares the respective directors may be deemed to
have sole or shared voting and/or investment power. Amounts also
include 2,641, 2,225, 0, 0, 21,125, 2,725 and 2,725 shares subject to
options owned by Messrs. Rees, Reynolds, Vollmer, McSpadden, George,
Myers and Frank, respectively, under the Stock Option Plan which are
exercisable within 60 days of September 19, 1997.
(4) Excludes 1,000 shares of stock held by a corporation in which Mr.
McSpadden is a minority shareholder. Mr. McSpadden expressly disclaims
beneficial ownership with respect to such shares.
(5) See footnote 3 on page 2 for additional information regarding shares
beneficially owned by Mr. George.
</TABLE>
The principal occupation of each director of the Company is set forth
below. All directors have held their present position for at least five years
unless otherwise indicated.
Wayne W. Rees. Mr. Rees is the owner and publisher of The Paper of
Wabash County, Inc., a newspaper published in Wabash, Indiana. Mr. Rees has been
Chairman of the Board and Secretary of the Company since December 1992. Mr. Rees
has served as Chairman of the Bank's Board of Directors since July 1992.
5
<PAGE>
Nicholas M. George. Mr. George is the President and Chief Executive
Officer of the Company, a position he has held since December 1992. Mr. George
is also President and Chief Executive Officer of First Federal, a position he
has held for the past 20 years. Mr. George joined First Federal as a vice
president in 1972 and was promoted to President in 1976. Mr. George has
responsibility for the overall management and establishment of First Federal's
objectives, policies, and strategic plans. He assists in the overall
administration of First Federal, including the implementation of and reporting
on policies and plans adopted by the Board of Directors. He also serves as
President and Director of FirstFed Financial of Wabash, Inc., the Company's
subsidiary, a position he has held since 1989.
Maynard E. Vollmer. Mr. Vollmer is retired and was the owner of
Maynard's Men Shop, a men's apparel shop located in North Manchester, Indiana.
Joseph W. McSpadden. Mr. McSpadden is the Vice President and part owner
of Beauchamp & McSpadden, an insurance agency located in Wabash, Indiana.
J. Stanley Myers. Mr. Myers is the owner and operator of ServiSoft
Water Conditioning, Inc., a soft water appliance company located in Wabash,
Indiana.
Thomas L. Frank. Mr. Frank is the Comptroller for B. Walter & Company,
a manufacturer of wood furniture and products located in Wabash, Indiana.
Ronald D. Reynolds. Mr. Reynolds is the owner of J. M. Reynolds Oil
Co., Inc., an oil supply company located in Wabash, Indiana.
Meetings and Committees of the Board of Directors
Meetings and Committees of the Company. Meetings of the Company's Board
of Directors are generally held on a monthly basis. The Board of Directors met
12 times during fiscal 1997. During fiscal 1997, no incumbent director of the
Company attended fewer than 75% of the aggregate of the total number of Board
meetings and the total number of meetings held by the committees of the Board of
Directors on which he served.
The Board of Directors of the Company has standing Executive, Audit,
Stock Option, Investment and Nominating Committees.
The Executive Committee is comprised of any three outside Directors.
The Executive Committee meets on an as needed basis and exercises the power of
the Board of Directors between Board meetings. This Committee did not meet
during fiscal 1997.
The Audit Committee recommends independent auditors to the Board,
reviews the results of the auditors' services, reviews with management and the
internal auditors the systems of internal control and internal audit reports and
assures that the books and records of the Company are kept in accordance with
applicable accounting principles and standards. The members of the Audit
Committee are Directors George, Frank, Reynolds and Chief Financial Officer
Redman. During the fiscal year ended June 30, 1997, this Committee met four
times.
The Stock Option Committee is composed of Directors Frank, Reynolds and
Vollmer. This Committee is responsible for administering the Company's Stock
Option Plan and reviews compensation and benefit matters. This Committee met one
time during the fiscal year ended June 30, 1997.
6
<PAGE>
The Investment Committee is comprised of Directors Frank, McSpadden and
George. This Committee is responsible for reviewing and approving the
investments of the Company, as well as setting investment strategies. During
fiscal 1997, this Committee met four times.
The entire Board of Directors acts as a nominating committee for
selecting nominees for election as directors. While the Board of Directors of
the Company will consider nominees recommended by stockholders, the Board has
not actively solicited such nominations. Pursuant to the Company's Bylaws,
nominations by stockholders must be delivered in writing to the Secretary of the
Company at least 30 days before the date of the Meeting. This Committee met once
during the fiscal year ended June 30, 1997.
Meetings and Committees of the Bank. Meetings of the Bank's Board of
Directors are generally held on a monthly basis. The Board of Directors met 13
times during the fiscal year ended June 30, 1997. During fiscal 1997, no
incumbent director of the Bank attended fewer than 75% of the aggregate of the
total number of Board meetings and the total number of meetings held by the
committees of the Board of Directors on which he served.
The Board of Directors of the Bank has various committees, the
principal of which include Executive, Audit, Advertising, Personnel, Planning,
Investment, Building and Nominating Committees.
The Executive Committee of the Bank generally acts in lieu of the full
Board of Directors between board meetings. The Executive Committee also has
responsibility for oversight of the Bank's lending policies. This committee
consists of three outside directors. The members of this committee are any three
outside Directors as of June 30, 1997. During the fiscal year ended June 30,
1997, this committee met seven times.
The Audit Committee of the Bank is composed of Directors George, Frank,
McSpadden, and Chief Financial Officer Redman. The Audit Committee meets on a
quarterly basis to review budgets and is responsible for reviewing the annual
audit report and reporting to the full Board of Directors. This committee also
meets with the Bank's external auditors prior to the annual audit to review
audit procedures. This committee met four times during the fiscal year ended
June 30, 1997.
The Advertising Committee of the Bank is responsible for all
advertising, public relations and promotions of the Bank. Members of this
committee include Directors Rees, Vollmer and George. This committee meets at
least annually and on an as needed basis. The Advertising Committee met one time
during fiscal 1997.
The Personnel/Compensation Committee of the Bank establishes and
reviews compensation, bonuses, benefits and the personnel policies of the Bank.
The current members of this committee are Directors Vollmer, Frank and Reynolds.
This committee meets at least annually on an as needed basis. The committee met
five times during the fiscal year ended June 30, 1997.
The Planning Committee of the Bank is comprised of Directors Rees,
Myers and George and Chief Financial Officer Redman and Vice President Sanders.
This committee has authority to make recommendations to the Bank's Board of
Directors regarding changes to the Bank's strategic plan. This committee met one
time during the fiscal year ended June 30, 1997.
7
<PAGE>
The Investment Committee of the Bank meets quarterly to review and
approve investments of the Bank and set investment strategies. The members of
this committee are Directors Frank, McSpadden and George. This committee held
six meetings during the fiscal year ended June 30, 1997.
The Building Committee comprised of Directors Myers, Reynolds and
George inspects all buildings and grounds owned by the Bank to ensure they are
being properly maintained. This committee also recommends and supervises
building projects, decorating projects and/or general maintenance programs.
Meetings of this committee are held on an as needed basis. The Building
Committee met one time during fiscal year ended June 30, 1997.
The Nominating Committee of the Bank is comprised of the entire board
of directors. The committee makes written nominations prior to the annual
meeting. This committee held one meeting during fiscal 1997.
Director Compensation
Cash Compensation. The Company's directors are paid a fee of $200 per
meeting attended for serving on the Company's Board of Directors. No fee is paid
for membership on the Company's committees. All present members of the Company's
Board of Directors are also members of the Bank's Board of Directors. All Bank
directors, other than the Chairman, receive a fee of $650 per meeting attended.
The Chairman of the Bank receives a fee of $750 per meeting attended. No fee is
paid to directors of the Bank for committee membership.
Deferred Compensation Plan ("DCP"). In 1986, the Bank adopted the DCP
for the benefit of its directors. The DCP is a voluntary deferred compensation
plan which permits directors of the Bank to defer receipt of all or a portion of
their regular board fees. This plan was established to hold and attract quality
directors by providing a retirement benefit in amounts related to Board fees
deferred annually. Under the DCP, a participant or his beneficiary, will receive
retirement payments (equal to the amount deferred plus interest accrued thereon)
payable in monthly installments upon retirement from the Board at age 70.
If the director's service on the Board ceases for any reason other than
death or disability, prior to age 70, amounts deferred pursuant to the DCP will
be held by the Bank until the director reaches age 70. In the event of death or
disability of the director while serving on the Bank's board, monthly or annual
payments will be made to the director or his designated beneficiary. In the
event of the director's death following retirement, the remaining benefits will
be paid to the designated beneficiary. These benefit payments are not subject to
any reduction for Social Security benefits or other offset amounts. Until
disbursed, the amounts due and payable under the DCPs continue to be assets of
the Bank, subject to the claims of general creditors. During fiscal 1997, no
directors were deferring compensation pursuant to the DCP.
Executive Compensation
The Company has not paid any compensation to its executive officers
since its formation. The Company does not presently anticipate paying any
compensation to such persons until it becomes actively involved in the operation
or acquisition of business other than the Bank and FirstFed Financial of Wabash,
Inc.
8
<PAGE>
The following table sets forth information regarding compensation paid
by the Company and the Bank to their Chief Executive Officer for services
rendered during the fiscal year ended June 30, 1997. No other executive officer
made in excess of $100,000 during the fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Restricted
Other Annual Stock Options/ LTIP All Other
Salary Bonus Compensation Award(s) SARs Payouts Compensation
Name and Principal Position Year ($)(1) ($)(2) ($) ($) (#) ($) ($)(3)
--------------------------- ---- ------ ------ --- --- --- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nicholas M. George, President 1997 $110,699 $24,019 $4,706
and Chief Executive Officer 1996 100,462 17,880 --- --- --- --- 5,684
1995 96,738 16,709 --- --- --- --- 4,264
- ------------------------------
(1) Includes $5,963, $5,488 and $5,300 of compensation deferred pursuant to
the 401(k) Plan and directors fees paid of $10,200, $9,000 and $8,400
for fiscal 1997, 1996 and 1995, respectively.
(2) Represents an annual cash bonus paid pursuant to the Bank's Incentive
Compensation Plan. The amount of the bonus depends on the achievement
of various performance criteria adopted from time-to-time for the Bank
and its employees.
(3) Includes the Bank's contributions of $2,981, $2,744 and $2,650 to Mr.
George's account under the 401(k) Plan and $1,725, $1,665 and $1,614 of
disability insurance premiums paid by the Bank during fiscal years
1997, 1996 and 1995, respectively.
</TABLE>
The following table sets forth information regarding the number and
value of stock options at June 30, 1997 held by the Company's Chief Executive
Officer. No stock options were granted to or exercised by Mr. George during
fiscal 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Number of Unexercised Value of Unexercised In-the-Money
Shares Options/SARs at FY-End(#) Options/SARs at FY-End ($)
Acquired Value
Name on Exercise (#)Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- --------------------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Nicholas M. George N/A N/A 21,125 0(1) $359,125(2) $-0-(2)
- ----------------------------------
9
<PAGE>
(1) Represents an option to purchase Common Stock awarded to the Company's
Chief Executive Officer. Pursuant to the terms of the incentive stock
option award, options vest at a rate one-quarter of the initial award
per year commencing on April 1, 1994.
(2) Represents the aggregate market value (market price of the Common Stock
less the exercise price) of the option granted based upon the average
of the bid and asked price of $27.00 per share of the Common Stock as
reported on the Nasdaq system on June 30, 1997.
</TABLE>
Employment Agreement and Salary Continuation Plan
The Bank has employment agreements with Nicholas M. George, Charles E.
Redman and Joyce K. Sanders, each for a three-year term. The employment
agreements provide for an annual base salary as determined by the Board of
Directors. Salary increases are reviewed not less often than annually
thereafter, and are subject to the sole discretion of the Board of Directors.
The employment contracts provide for an extension for one additional year upon
authorization by the Board of Directors at the end of each year. The contracts
provide for termination upon the employee's death, for cause or upon certain
events specified by Office of Thrift Supervision ("OTS") regulations. The
employment contracts are terminable by the respective employee upon 90 days'
notice to the Bank. The employment contracts provide for payment to the
employee, in the event there is a change in control of the Company or the Bank,
as defined in such agreement, where employment terminates involuntarily in
connection with such change in control or within 12 months thereafter, of the
remaining salary payable under the contract, plus a termination payment equal to
299% of the respective employee's highest salary in effect under the employment
contract at any time during the 12 months prior to the date of termination,
provided that total payments made to each employee under his or her respective
employment agreement may not exceed three times the employee's annual salary or
an amount that would cause certain adverse tax consequences to the Bank and the
employee under Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"). Assuming a change in control were to take place as of June 30,
1997, the aggregate amounts payable to Mr. George, Mr. Redman and Ms. Sanders
pursuant to this change in control provision would be approximately $318,000,
$170,000 and $145,000, respectively. Each contract contains a provision which
prohibits the employee, for a period of one year, from, directly or indirectly,
owning, managing, operating or controlling, or participating in the ownership,
management, operation or control of, or be employed by or connected in any
manner with, any financial institution having an office located within 20 miles
of any office of the Bank at the date of the employee's termination. The
contracts provide, among other things, for participation in an equitable manner
in employee benefits applicable to executive personnel. These employment
contracts may have an "anti-takeover" effect that could affect a proposed future
acquisition of control of the Bank.
Effective October 1992, the Bank adopted a salary continuation plan for
the benefit of President George in order to encourage Mr. George's continued
employment with the Bank until November 1, 2011 (the, "retirement date"). The
plan provides retirement and death benefits to Mr. George or his designated
beneficiary upon Mr. George's retirement, early retirement or death while
employed by the Bank, provided that Mr. George gives the Bank six months'
10
<PAGE>
written notice of any early retirement. This cash benefit, as described in the
plan, is increased for each year Mr. George remains employed by the Bank.
Benefits provided for under the plan vest one year from the date of adoption of
the plan. The Bank has purchased an annuity to fund its obligations under this
plan.
In the event of Mr. George's retirement or death at June 30, 1997, the
amounts payable to Mr. George or his beneficiary pursuant to the plan would be
$68,008 and $392,185, respectively. Retirement or early retirement payments
pursuant to the plan would be made monthly or in a lump sum payment at the
option of Mr. George while death benefits would be made in a lump sum payment.
In the event Mr. George voluntarily terminates his employment with the
Bank for any reason, other than death, early retirement or retirement, Mr.
George is entitled to receive only the vested portion of the retirement benefit
provided for in the plan. In the event Mr. George terminated his employment with
the Bank on June 30, 1997, $68,008 would be payable to Mr. George pursuant to
this provision.
Certain Transactions
The Bank, like many financial institutions, has followed a policy of
granting to officers, directors and employees loans secured by the borrower's
residence and consumer loans. All loans to the Bank's officers and directors are
made in the ordinary course of business and on the same terms, including
interest rate and collateral, and conditions as those of comparable transactions
prevailing at the time, and do not involve more than the normal risk of
collectibility or present other unfavorable features.
II. RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has renewed the Company's arrangement for Crowe,
Chizek & Company LLP to be its auditors for the 1998 fiscal year, subject to the
ratification of the appointment by the Company's stockholders. A representative
of Crowe, Chizek & Company LLP is expected to attend the Meeting to respond to
appropriate questions and will have an opportunity to make a statement if he so
desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK & COMPANY LLP AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1998.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for the next Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's main office located at
1205 North Cass Street, Wabash, Indiana 46992, no later than May 29, 1998. Any
such proposal shall be subject to the requirements of the proxy rules adopted
under the Exchange Act.
11
<PAGE>
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, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the 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.
Wabash, Indiana
September 29, 1997
12
<PAGE>
REVOCABLE PROXY
FFW CORPORATION
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 28, 1997
The undersigned hereby appoints the Board of Directors of FFWCorporation (the
"Company"), and the survivor of them, with full powers of substitution, to act
as attorneys and proxies for the undersigned to vote all shares of common stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting"), to be held on October 28, 1997 at 2:30 p.m.,
and at any and all adjournments thereof, as indicated on this Proxy.
1. The election as directors of all nominees listed (except as marked to the
contrary below):
WAYNE W. REES RONALD D. REYNOLDS
[ ] FOR [ ] WITHHOLD [ ] EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. The ratification of the appointment of Crowe Chizek & Company LLP as auditors
of the Company for the fiscal year ending June 30, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote on such other matters
as may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the listed proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY
IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The stockholder acknowledges receipt from the Company, prior to the execution
of this Proxy, of Notice of the Meeting, a Proxy Statement dated September 25,
1997 and the Company's Annual Report to Stockholders for the fiscal year ending
June 30, 1997.
<PAGE>
Please be sure to sign and date
this Proxy in the box below.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
FFW CORPORATION
Should the stockholder be present and elect to vote at the Meeting or at any
adjournment thereof, and after notification to the Secretary of the Company at
the Meeting of the stockholder's decision to terminate this Proxy, then the
power of such attorneys and proxies shall be deemed terminated and of no further
force and effect.
Please sign exactly as your name(s) appear(s) above on this card. When signing
as attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL
THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
