SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] 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 Rule 14a-11(c) or Rule 14a-12
FFY Financial Corp.
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(Name of Registrant as Specified in Its Charter)
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(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)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date Filed:
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[FFY FINANCIAL CORP. LETTERHEAD]
September 20, 1999
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of FFY Financial
Corp., I cordially invite you to attend the Annual Meeting of Stockholders
of the Corporation. The Meeting will be held at 10:00 a.m., Youngstown,
Ohio time, on October 20, 1999, at The Holiday Inn, 7410 South Avenue,
Youngstown, Ohio.
The Meeting is for the purpose of considering and acting upon the
election of three directors of the Corporation and the ratification of the
appointment of KPMG LLP as the Corporation's independent auditor. In
addition, the Meeting will include management's report on the Corporation's
financial and operating performance for the fiscal year ended June 30, 1999.
I 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
Corporation 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,
Jeffrey L. Francis
President and Chief Executive Officer
FFY FINANCIAL CORP.
724 Boardman-Poland Road
Youngstown, Ohio 44512
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 20, 1999
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of FFY Financial Corp. (the "Corporation") will be held at 10:00
a.m., Youngstown, Ohio time, on October 20, 1999, at The Holiday Inn, 7410
South Avenue, Youngstown, Ohio.
A proxy card and a Proxy Statement for the Meeting are enclosed. The
Meeting is for the purpose of considering and acting upon the election of
three directors of the Corporation, the ratification of the appointment of
KPMG LLP as the Corporation's independent auditor for the fiscal year ending
June 30, 2000 and such other matters 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.
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 or postponed. Stockholders of record at the close of business
on August 31, 1999 are the stockholders entitled to vote at the Meeting and
any adjournments or postponements thereof.
You are requested to complete, sign and date the enclosed proxy, which
is solicited on behalf of the Board of Directors, and to mail it promptly in
the enclosed postpaid return envelope. The proxy will not be used if you
attend and vote at the Meeting in person.
By Order of the Board of Directors,
J. Craig Carr
Secretary
Youngstown, Ohio
September 20, 1999
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE
EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
PRE-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
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PROXY STATEMENT
FFY Financial Corp.
724 Boardman-Poland Road
Youngstown, Ohio 44512
ANNUAL MEETING OF STOCKHOLDERS
October 20, 1999
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of FFY Financial Corp. (the
"Corporation") to be used at the Annual Meeting of Stockholders of the
Corporation (the "Meeting"), to be held at The Holiday Inn, 7410 South
Avenue, Youngstown, Ohio, on October 20, 1999, at 10:00 a.m., Youngstown,
Ohio time and at all adjournments or postponements of the Meeting. The
accompanying Notice of Meeting and form of proxy and this Proxy Statement
are first being mailed to stockholders on or about September 20, 1999.
Certain of the information provided herein relates to First Federal Savings
Bank of Youngstown ("First Federal" or the "Bank"), a wholly owned
subsidiary and the predecessor of the Corporation.
At the Meeting, the stockholders of the Corporation are being asked to
consider and vote upon the election of three directors of the Corporation
and the ratification of the appointment of KPMG LLP as the Corporation's
independent auditor for the fiscal year ending June 30, 2000.
On January 19, 1999, the Corporation announced a 100% stock dividend,
which is equivalent to a two-for-one stock split, that was paid on March 5,
1999 to shareholders of record on February 19, 1999 (the "Stock Dividend").
Consequently, all share and per share data have been restated as a result of
the Stock Dividend.
Voting Rights and Proxy Information
All shares of common stock, par value $.01 per share, of the
Corporation (the "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
election of the nominees for director named herein and for the ratification
of the appointment of the independent auditor. The Corporation 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
will have the discretion to vote on such matters in accordance with their
best judgment.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the
Secretary of the Corporation 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 Corporation 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 J. Craig Carr, Secretary, FFY
Financial Corp., 724 Boardman-Poland Road, Youngstown, Ohio 44512.
Vote Required for Approval of Proposals
Directors shall be elected by a plurality of the votes cast at the
Meeting. Approval of the proposal to ratify the appointment of KPMG LLP as
independent auditor requires the affirmative vote of the holders of a
majority of the shares actually voted at the Meeting on the matter. Proxies
marked to abstain with respect to a proposal will have the same effect as a
vote against the proposal. Broker non-votes will have no effect on the
vote. One-third of the shares of the Common Stock present in person or
represented by proxy shall constitute a quorum for purposes of the Meeting.
Vote Securities and Principal Holders Thereof
Stockholders of record as of the close of business on August 31, 1999
will be entitled to one vote for each share then held. As of that date, the
Corporation had 6,991,165 shares of Common Stock issued and outstanding.
The following table sets forth information as of June 30, 1999
regarding the share ownership of (i) those persons or entities known by
management to beneficially own more than five percent of the Corporation's
Common Stock, (ii) the executive officers named below, and (iii) all
directors and officers of the Corporation and the Bank as a group.
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Name and Address of Beneficial Owner Owned of Class
- ------------------------------------ ------------ --------
<S> <C> <C>
FFY Financial Corp. Employee Stock Ownership
and 401(k) Plan(1) 989,635 13.9%
724 Boardman-Poland Road
Youngstown, Ohio 44512
Named Officers(2)
- -----------------
Jeffrey L. Francis 164,425 2.3
President and Chief Executive Officer of the
Corporation and First Federal
Randy L. Shaffer 219,743 3.0
Vice President of the Corporation and
First Federal
J. Craig Carr 65,678 0.9
Vice President, General Counsel and Secretary of
the Corporation and First Federal
All directors and officers of the Corporation
and the Bank as a group (14 persons) 863,639 11.6
<FN>
<F1> The amount reported represents shares of Common Stock held by the FFY
Financial Corp. Employee Stock Ownership and 401(k) Plan (the "KSOP").
As of June 30, 1999, 460,409 shares of Common Stock held by the KSOP
had been allocated to accounts of participants. First Bankers Trust
Company, as trustee of the KSOP, may be deemed to beneficially own the
shares held by the KSOP which have not been allocated to the accounts
of participants or which have been allocated but have not been voted
by participants. Pursuant to the terms of the KSOP, participants in
the KSOP have the right to direct the voting of shares allocated to
participants accounts. Unallocated shares held by the KSOP are voted
by the plan trustee in the same manner that the plan trustee is
directed to vote by the majority of the plan participants who directed
the plan trustee as to the manner of voting the shares allocated to
their plan accounts. As of June 30, 1999, 20,444, 16,872, 13,978 and
89,984 shares had been allocated to the KSOP accounts of Mr. Francis,
Mr. Shaffer, Mr. Carr and all officers as a group, respectively.
These shares are also included in each individual's/group's respective
shares.
<F2> Amounts include shares held directly and shares held in retirement
accounts, shares held by certain members of a named individual's or
group member's family, or held by trusts of which a named individual
or group member is a trustee or substantial beneficiary with respect
to which the named individual or group member may have sole or shared
voting and/or investment power. The amounts also include 93,430,
84,080, 33,128 and 303,898 shares subject to options granted under the
Corporation's Stock Option and Incentive Plan (the "Stock Option
Plan") to Mr. Francis, Mr. Shaffer, Mr. Carr and all directors and
officers as a group, respectively.
</FN>
</TABLE>
I. ELECTION OF DIRECTORS
General
The Board of Directors of the Corporation (the "Board" or the "Board
of Directors") is comprised of ten directors and is divided into three
classes, each of which contains approximately one-third of the Board.
Approximately one-third of the directors are elected annually. Directors of
the Corporation are generally elected to serve for a three-year period or
until their respective successors are elected and qualified. Myron S. Roh,
Chairman of the Board, will retire as Chairman and Director of the
Corporation and the Bank effective the date of the Meeting. The Boards of
Directors of the Corporation and the Bank appreciate the years of dedicated
service provided by Mr. Roh. It is expected that Mr. Roh's successor as
Chairman of the Board will be appointed by the Board of Directors of the
Corporation on the annual meeting date at the Directors' Organizational
Meeting that follows the Annual Meeting.
The following table sets forth certain information, as of June 30,
1999, regarding the composition of the Board, including their terms 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
any 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
nominees and any other person pursuant to which the nominee was selected.
<TABLE>
<CAPTION>
Shares of
Term Common Stock Percent
Position(s) Held in Director to Beneficially of
Name Age(1) the Corporation Since(2) Expire Owned(3) Class(3)
---- --- ------------------- -------- ------ ------------ --------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
Jeffrey L. Francis 48 President, CEO and Director 1992 2002 164,425 2.3%
Samuel A. Roth 56 Nominee 2002 4,000 0.1
Ronald P. Volpe, Ph.D. 56 Director 1996 2002 21,890 0.3
DIRECTORS CONTINUING IN OFFICE
Marie Izzo Cartwright 46 Director 1991 2000 54,236 0.8
Henry P. Nemenz 60 Director 1991 2000 54,918 0.8
W. Terry Patrick 49 Director 1992 2000 41,594 0.6
A. Gary Bitonte, MD 51 Director 1990 2001 121,586 1.7
William A. Russell 51 Director 1998 2001 8,869 0.1
Randy L. Shaffer 48 Vice President and Director 1996 2001 219,743 3.0
Robert L. Wagmiller 55 Director 1998 2001 10,630 0.1
<FN>
<F1> At June 30, 1999.
<F2> Includes service as a director of the Bank.
<F3> Includes shares held directly and 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. The amount also includes 93,430, 19,890,
19,890, 6,630, 84,080 and 6,630 shares subject to options currently
exercisable which were granted under the Stock Option Plan to
Directors Francis, Volpe, Patrick, Russell, Shaffer and Wagmiller,
respectively.
</FN>
</TABLE>
The business experience of each director of the Corporation is set
forth below. All directors have held their present positions for at least
five years, unless otherwise indicated.
Jeffrey L. Francis - Mr. Francis is President and Chief Executive
Officer of the Corporation and the Bank. He began his career with the Bank
in 1973 and has served in his current capacity since March 1996. Mr.
Francis was named Executive Vice President and Treasurer of the Corporation
and Executive Vice President and Chief Operating Officer of the Bank in
October 1995. Prior to his most recent positions, he was Vice President and
Treasurer of the Corporation and the Bank in which capacities he was
responsible for managing the Bank's securities portfolio and supervising its
data processing, accounting and savings departments. Mr. Francis holds a
BBA degree from Kent State University and a MBA from Youngstown State
University. Mr. Francis is also President of FFY Holdings, Inc., a wholly-
owned subsidiary of the Corporation.
Samuel A. Roth - Mr. Roth is the President of FirstEnergy Facilities
Services Group, a FirstEnergy holding company for the mechanical
construction, contracting and energy management companies that FirstEnergy
has acquired. Mr. Roth previously served as President and Chief Executive
Officer of Roth Bros., Inc., a diversified Engineering and Contracting
Corporation. Mr. Roth graduated from Ohio State University in 1966 with a
Bachelor of Mechanical Engineering Degree. A licensed professional
engineer, Mr. Roth has been involved in the engineering and contracting
fields for over thirty years and is registered in Ohio, Pennsylvania, and
New Jersey. Mr. Roth has served as president of many professional
organizations and has done extensive volunteer work in community
organizations.
Ronald P. Volpe, Ph.D. - Dr. Volpe has been a professor of finance at
the Williamson College of Business Administration at Youngstown State
University since 1975. Dr. Volpe received his BSBA degree from Youngstown
State University, MBA from Central Michigan University and Ph.D. from the
University of Pittsburgh. Prior to his career in higher education, he was
employed as a member of the accounting and finance staff of The Ford Motor
Company in Dearborn, Michigan.
Marie Izzo Cartwright - Ms. Cartwright has served as Vice President of
Corporate Communications and Marketing for Glimcher Properties Limited
Partnership since October 1996. Ms. Cartwright formerly served as Vice
President of Corporate Communications for DeBartolo Properties Management,
Inc. ("DeBartolo"). Ms. Cartwright, who joined DeBartolo in 1985 as
Director of Public Relations, was promoted to assistant vice president in
1989 and elevated to vice president in June 1994. An honors graduate of
Kent State University with a BA degree in journalism, Ms. Cartwright has 24
years experience in both corporate and agency public relations, marketing
and advertising.
Henry P. Nemenz - Mr. Nemenz has been President of H.P. Nemenz Food
Stores since 1976, which owns and operates retail grocery stores in the
Youngstown, Ohio area. Since 1995, Mr. Nemenz has also been the President
of Food Store Management which operates 16 Save-A-Lot retail grocery stores
in Mahoning, Columbiana, Jefferson, Trumbull and Ashtabula counties in
northeastern Ohio, as well as stores in Virginia and Pennsylvania.
W. Terry Patrick - Mr. Patrick has been a partner in the law firm of
Friedman & Rummell Co., L.P.A. of Youngstown, Ohio since 1980, where his
practice is concentrated in the areas of Business, Estate and Succession
Planning. Mr. Patrick also serves as a consultant to numerous regional
businesses.
A. Gary Bitonte, MD - After receiving a Bachelor of Science and
Doctor of Medicine degree from The Ohio State University, Dr. Bitonte's
exemplary urologic surgery practice spanned 21 years. Currently, he holds
faculty-teaching appointments at Northeastern Ohio and Ohio University
Medical Schools. He is a consultant for medical prosthetic manufacturers
and manages private investments. He is also a Director of FFY Insurance
(formerly Daniel W. Landers Insurance), an affiliate of the Corporation.
William A. Russell - Mr. Russell is the President of Canteen Service
of Steel Valley, Inc., a food and vending service company that employees 20
people and has served the surrounding five county area for over 63 years.
He has been associated with Canteen Service of Steel Valley, Inc. for the
past 25 years. Mr. Russell graduated from Bowling Green State University in
1969 and went on to serve in the United States Navy from 1970 through 1974.
Randy L. Shaffer - Mr. Shaffer is Vice President of the Corporation
and the Bank, responsible for coordinating the activities of the lending
departments and development of lending policies and procedures. Mr. Shaffer
has served in various capacities since joining the Bank in 1973 and has
served in his current position since 1986. He earned a BA degree in
economics from Hiram College, served as a Director of the Youngstown Board
of Realtors, and is a member of the Home Builders Association of Mahoning
Valley and the Mortgage Bankers of Northeastern Ohio. Mr. Shaffer is also
Vice President of FFY Holdings, Inc., a wholly-owned subsidiary of the
Corporation.
Robert L. Wagmiller - Mr. Wagmiller is a Senior Advisor at Hill, Barth
and King, Inc., a certified public accounting firm that employs 180
professionals. He has been associated with Hill, Barth and King, Inc. for
the past 35 years and has served in his current capacity for the past 22
years. Mr. Wagmiller received his degree in Wholesale Management from Ohio
State University and his Bachelor of Science degree in Business
Administration from Youngstown State University. He is also a Director of
FFY Insurance (formerly Daniel W. Landers Insurance), an affiliate of the
Corporation.
Meetings and Committees of the Board of Directors
Meetings and Committees of the Corporation. The Board of Directors
meets quarterly and may have additional special meetings upon the written
request of the President or at least three directors. The Board of
Directors met 12 times during the year ended June 30, 1999. During fiscal
year 1999, no incumbent director of the Corporation attended fewer than 75%
of the aggregate total number of meetings of the Board and committees on
which he or she served. The Board of Directors of the Corporation has
standing Stock Option, Audit and Executive Committees.
During fiscal year 1999, the members of the Corporation's Stock Option
Committee were Directors Bitonte (Chairman), Nemenz and Patrick. The Stock
Option Committee is responsible for administering the Corporation's Stock
Option Plan. The Stock Option Committee met one time in fiscal year 1999.
The Audit Committee is responsible for selecting the Corporation's
independent auditors and meeting with the independent auditors to outline
the scope and review the results of the annual audit. The Audit Committee
also meets with the Corporation's internal audit staff on a periodic basis.
During fiscal year 1999, the members of this committee were Directors Roh
(Chairman), Cartwright, Nemenz, Volpe and Wagmiller. The Audit Committee
met five times during fiscal year 1999.
During fiscal year 1999, the members of the Executive Committee were
Directors Francis (Chairman), Bitonte, Nemenz, Roh, Shaffer and Patrick. To
the extent authorized by the Board of Directors and by the Corporation's
bylaws, this committee exercises all of the authority of the Board of
Directors between Board meetings. The Executive Committee did not meet
during fiscal 1999.
The entire Board of Directors acts as a nominating committee for
selecting nominees for election as directors. While the Board of Directors
of the Corporation will consider nominees recommended by stockholders, the
Board has not actively solicited such nominations. The Board of Directors
met one time during fiscal 1999 in its capacity as a nominating committee.
Pursuant to the Corporation's bylaws, nominations for directors by
stockholders must be made in writing and delivered to the Secretary of the
Corporation at least 60 days prior to the meeting date. If, however, less
than 70 days' notice of the date of the meeting is first given or made to
stockholders by public announcement or mail, then nominations must be
received by the Corporation not later than the close of business on the
tenth day following the earlier of the day on which notice of the date of
the meeting was mailed or the day on which public announcement of the date
of the meeting was first made. In addition to meeting the applicable
deadline, nominations must be accompanied by certain information specified
in the Corporation's bylaws.
Meetings and Committees of the Bank. The Bank's Board of Directors
meets monthly and may hold additional special meetings upon the written
request of the President or at least three directors. The Board of
Directors met 13 times during the year ended June 30, 1999. During fiscal
year 1999, no incumbent director of the Bank attended fewer than 75% of the
aggregate total number of meetings of the Board and committees on which he
or she served. The Bank has standing Executive, Audit and Compensation
Committees. The Bank also has other committees which meet as needed to
review various other functions of the Bank.
The Bank's Executive Committee exercises the powers of the full Board
of Directors between Board Meetings, except that this committee does not
have the authority of the Board to amend the charter or bylaws, adopt a plan
of merger, consolidation, dissolution, or provide for the disposition of all
or substantially all of the property and assets of the Bank. During fiscal
year 1999, the Executive Committee was composed of Directors Francis
(Chairman), Bitonte, Nemenz, Roh, Patrick and Shaffer. The Executive
Committee met 15 times during the fiscal year ended June 30, 1999.
The Audit Committee is responsible for selecting the Bank's
independent auditors and meeting with the independent auditors to outline
the scope and review the results of the annual audit. The Audit Committee
also meets with the Bank's internal audit staff on a periodic basis. During
fiscal year 1999, the members of this committee were Directors Roh
(Chairman), Cartwright, Nemenz, Volpe and Wagmiller. This Committee held
five meetings during fiscal year 1999.
The Bank's Compensation Committee recommends employee compensation,
benefits and personnel policies to the Board of Directors, as well as
salaries and bonuses for executive officers. The members of this committee
during fiscal year 1999 were Directors Patrick (Chairman), Bitonte, Nemenz,
Russell and Roh. The Compensation Committee held five meetings during the
fiscal year ended June 30, 1999.
Director Compensation. Each director of the Corporation is paid a fee
of $100 per Board meeting attended. Each non-employee member of a committee
of the Corporation's Board of Directors is paid $50 per committee meeting
attended. Each director of the Bank is paid a fee of $1,250 per quarter
plus $450 per Board meeting attended. Each non-employee member of a
committee of the Bank's Board of Directors is paid $150 per committee
meeting attended, and the Chairman of each committee of the Bank's Board of
Directors receives $200 per committee meeting attended. Bank directors who
are employed by the Bank do not receive a fee for attending committee
meetings.
On October 21, 1998, Directors Russell and Wagmiller were each granted
an option to purchase 9,945 shares of Common Stock at an exercise price of
$27.625, the market value per share of the Common Stock on the grant date.
(The number of shares and exercise price were adjusted to 19,890 and
$13.8125, respectively, to reflect the Stock Dividend.) One-third, or
6,630, of these shares vested on April 21, 1999, another 6,630 shares are
scheduled to vest on April 21, 2000, and the remaining 6,630 shares are
scheduled to vest on April 21, 2001.
Assuming his election to the Board of Directors, Mr. Roth will, on
October 20, 1999, be granted an option to purchase 19,890 shares of Common
Stock at an exercise price equal to the fair market value of the
Corporation's common stock on that date. One-third, or 6,630 of these
shares will vest on April 20, 2000, another 6,630 shares will vest on April
20, 2001 and the remaining 6,630 shares will vest on April 20, 2002.
Executive Compensation
The following table sets forth information concerning the compensation
for services in all capacities to the Corporation for the years ended June
30, 1999, 1998 and 1997 for (i) the Corporation's Chief Executive Officer
and (ii) the other executive officers of the Corporation and the Bank whose
salary and bonus for fiscal 1999 exceeded $100,000 (the "named executives").
<TABLE>
<CAPTION>
Summary Compensation Table
- ----------------------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation Compensation Awards
--------------------------------------- ------------------------
Other Annual Restricted Options/ All Other
Name and Principal Salary(5) Bonus Compensation(1) Stock Awards SARs Compensation
Position Year ($) ($) ($) ($) (#) ($)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jeffrey L. Francis 1999 $186,908 $40,000 $--- $--- --- $63,957 (2)
President and Chief 1998 160,750 40,000 --- --- --- 59,955 (3)
Executive Officer 1997 114,746 44,391 --- --- --- 55,621 (4)
- ----------------------------------------------------------------------------------------------------------------------
Randy L. Shaffer 1999 $104,338 $18,000 $--- $--- --- $45,829 (2)
Vice President 1998 102,010 18,000 --- --- --- 41,820 (3)
1997 94,955 22,688 --- --- --- 46,101 (4)
- ----------------------------------------------------------------------------------------------------------------------
J. Craig Carr 1999 $ 84,586 $18,000 $--- $--- --- $41,754 (2)
Vice President, General 1998 82,236 18,000 --- --- --- 37,741 (3)
Counsel and Secretary 1997 74,718 21,838 --- --- --- 41,206 (4)
- ----------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Does not include perquisites which did not exceed the lesser of
$50,000 or 10% of the named individuals' salary and bonus.
<F2> 1999 amounts represent allocations under the Corporation's KSOP and
term life insurance premiums. These amounts respectively include
$62,965 and $992 paid for Mr. Francis; $45,159 and $670 paid for Mr.
Shaffer; and $41,149 and $605 paid for Mr. Carr.
<F3> 1998 amounts represent allocations under the Corporation's KSOP and
term life insurance premiums. These amounts respectively include
$59,498 and $457 paid for Mr. Francis; $41,522 and $298 paid for Mr.
Shaffer; and $37,476 and $265 paid for Mr. Carr.
<F4> 1997 amounts represent allocations under Corporation's KSOP, the
present value payout from the termination of the Supplemental
Executive Retirement Plan ("SERP") and term life insurance premiums
paid on behalf of the executives. These amounts respectively include
$47,445, $7,313 and $863 paid for Mr. Francis; $38,488, $7,009 and
$604 paid for Mr. Shaffer; and $32,643, $8,563 and $-0- paid for Mr.
Carr.
<F5> For Messrs. Francis and Shaffer, amounts includes fees for services as
directors of the Corporation and Bank. Mr. Francis earned $11,900 in
1999: $10,750 in 1998; and $9,125 in 1997. Mr. Shaffer earned $11,750
in 1998: $10,750 in 1998; and $9,125 in 1997. For Mr. Carr amounts
include compensation for attending meetings of the Corporation's Board
of Directors, $250 in 1999; $-0- in 1998; and $-0- in 1997.
</FN>
</TABLE>
The table below provides information as to options exercised by each
of the named executives for the fiscal year ended June 30, 1999 and the
value of the options held by such executives at year-end measured in terms
of the $19.00 closing price of the Corporation's Common Stock on June 30,
1999.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
- ---------------------------------------------------------------------------------------------------------------------
Value Realized Number of Value of Unexercised in-the-
from Exercise of Options in the Unexercised Options/SARs at Money Options/SARs at
current fiscal year June 30, 1999(1) June 30, 1999(2)
------------------------------- ---------------------------- ----------------------------
Shares Acquired Value Exercisable Unexercisable Exercisable Unexercisable
Name on Exercise (#) Realized ($) (#) (#) ($) ($)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey L. Francis --- --- 93,430 --- $1,308,020 $---
Randy L. Shaffer 1,600 $18,600 84,080 --- 1,177,120 ---
J. Craig Carr --- --- 33,128 --- 463,792 ---
<FN>
<F1> Amounts have been adjusted to reflect the Stock Dividend.
<F2> The difference between the aggregate option exercise price and the
fair market value of the underlying shares at June 30, 1999.
</FN>
</TABLE>
All options for the three executives named above were granted as of
the date of the Bank's conversion to stock form (June 28, 1993) and expire
10 years from the date of grant. The exercise price for options was set at
the market price on the date of grant ($5.00 after the adjustment for the
Stock Dividend).
Employment Agreements. The Bank has employment agreements with
Messrs. Francis and Shaffer. The employment agreements are designed to
assist the Bank in maintaining a stable and competent management team. The
continued success of the Bank depends to a significant degree on the skills
and competence of its officers. These agreements were filed with, and
approved by, the Office of Thrift Supervision (the OTS) as part of the
application of the Corporation for approval to become a savings and loan
holding company. The employment agreements provide for annual base salary
and an initial term of three years. The agreements provide for extensions
of one year, in addition to the then-remaining term under the agreement, on
each anniversary of the effective date of the agreements (June 28, 1993)
subject to a formal performance evaluation performed by disinterested
members of the Board of Directors of the Bank. The agreements were extended
for an additional year on June 15, 1999. The agreements provide for
termination upon the employee's death, for cause or upon certain events
specified by OTS regulations. The employment agreements are also terminable
by the employee upon 90 days' notice to the Bank.
The employment agreements provide for payment to the employee of his
salary for the remainder of the term of the agreement, plus up to 299% of
the employee's base compensation, in the event there is a "change in
control" of the Bank where employment terminates involuntarily in connection
with such change in control or within twelve months thereafter. This
termination payment is subject to reduction by the amount of all other
compensation to the employee deemed for purposes of the Internal Revenue
Code of 1986, as amended (the "Code"), to be contingent on a "change in
control" and may not equal or exceed three times the employee's average
annual compensation over the most recent five year period or be non-
deductible by the Bank for federal income tax purposes. For the purposes of
the employment agreements, a "change in control" is defined as any event
which would require the filing of an application for acquisition of control
or notice of change in control pursuant to 12 C.F.R. Sections 574.3 or
574.4. Such events would generally be triggered prior to the acquisition or
control of 10% of the Common Stock. The agreements also provide for
participation in an equitable manner in employee benefits applicable to
executive personnel.
Based on their current salaries, if Messrs. Francis's and Shaffer's
employment had been terminated as of June 30, 1999, under circumstances
entitling them to severance pay as described above, they would have been
entitled to receive lump sum cash payments of approximately $536,000 and
$366,000, respectively.
Report on Executive Compensation
The Committee. The responsibility of compensation matters for the
Corporation rests with the Compensation Committee of the Board of Directors
(the "Compensation Committee"). The members of the Compensation Committee
are independent directors of the Corporation and the Bank. Mr. Francis
attends committee meetings to present recommendations and to provide
information. However, he does not participate in any deliberations
regarding his own compensation. The Compensation Committee met five times
during the year ended June 30, 1999. The most significant issues addressed
each year by the Compensation Committee are: 1) approval of salary
adjustments for officers of the Corporation and Bank; 2) approval of
payments under the Bank's executive bonus plan; and 3) completion of
evaluations of the performance of executive officers in accordance with the
provisions of employment contracts.
Salary Adjustments. Effective July 1, 1998, the base salary of Mr.
Francis was increased from $150,000 per year to $175,000 per year. No
changes have been made to this base salary since that time. Discussions of
annual salary adjustments for other executives were held in December 1998
for calendar year 1999. In determining Mr. Francis' compensation, the
Compensation Committee considered the following: (i) salary information for
the chief executive officers of comparable institutions gathered from local,
regional and national salary surveys; (ii) information from proxy statements
of publicly traded banks and thrifts; (iii) the financial performance of the
Corporation during the preceding year as measured by return on assets and
equity, loan loss and delinquency levels, total general and administrative
expenses and earnings per share, with regard to both the absolute level of
such measures and as compared to peer institutions, including similar
publicly traded thrift holding companies; (iv) regional and national
statistics; (v) regulatory examination comments received during the
preceding year; and (vi) the Bank's progress toward completing a number of
long-term initiatives, as monitored by the Board of Directors. The Bank's
other executive officers were also reviewed based upon the same criteria.
The percentage increase in base salary for each of the Bank's five highest
paid executive officers, other than Mr. Francis, was less than 4%.
Bonus. The Bank has a long history of paying annual bonuses based on
annual net income. The Compensation Committee believes that these payments
more closely tie employee compensation to the Corporation's annual
performance and act as an incentive for management to work toward increasing
net income. A bonus totaling 2% of pre-tax net income of the Bank is
distributed annually following the completion of the fiscal year. Payments
under this plan are allocated on a discretionary basis to those individuals
who, in the opinion of the Compensation Committee and the Board of
Directors, most contributed to the success of the Bank during the year.
For the year ended June 30, 1999, select officers of the Corporation and the
Bank received payments under the Bank's discretionary bonus plan. Mr.
Francis' payment totaled $40,000, the same amount that he received for
fiscal 1998. The five highest paid executives of the Corporation and the
Bank (other than Mr. Francis) also received bonuses in fiscal 1999 equal to
that received in fiscal 1998. The Compensation Committee continues to
evaluate the Corporation's compensation arrangements with a focus on return
on equity, earnings per share growth and individual performance.
Performance Evaluations. As noted above, during each year the
Compensation Committee completes performance evaluations of the executive
officers of the Corporation. Each executive officer was evaluated based on
experience, knowledge and his or her vision of the Corporation's future.
The evaluation process included a written evaluation by Mr. Francis and
individual interviews with the Compensation Committee. Among other items,
the Compensation Committee considered Corporation performance statistics as
objective measures of performance, as well as discussion of progress toward
goals established the previous year. The committee prepared and presented a
written report of each evaluation, which was reviewed by the entire Board of
Directors in July 1999.
Stock Options/Restricted Stock. During 1993, the stockholders of the
Corporation ratified the Corporation's Stock Option and Recognition and
Retention Plans. During the fiscal year ended June 30, 1999 no grants were
made to executive officers under the Company's Stock Option Plan or
Recognition and Retention Plan.
The foregoing report on executive compensation was furnished by the
Compensation Committee of the Board of Directors:
W. Terry Patrick, Chairman Henry P. Nemenz A. Gary Bitonte
Myron S. Roh William A. Russell
Stockholder Return Performance Presentation
The line graph below compares the cumulative total stockholder return
on the Corporation's common stock to the cumulative total return of the
NASDAQ Stock Market Index and the NASDAQ Banking Index for the period June
30, 1994 through June 30, 1999. The graph assumes that $100 was invested on
June 30, 1994 and that all dividends were reinvested. The performance shown
on the graph below is not necessarily indicative of future performance. The
Corporation became a publicly traded company on June 28, 1993.
PERFORMANCE GRAPH DATA
JUNE 30, 1998
<TABLE>
<CAPTION>
NASDAQ NASDAQ
FFYF US BANK
---- ------ ------
<S> <C> <C> <C>
06/30/94 100.000 100.000 100.000
07/29/94 108.026 102.054 101.387
08/31/94 115.448 108.557 103.976
09/30/94 117.097 108.280 101.105
10/31/94 125.349 110.392 98.067
11/30/94 129.500 106.734 93.974
12/30/94 126.179 107.024 93.431
01/31/95 125.344 107.639 96.568
02/28/95 121.166 113.329 101.292
03/31/95 119.494 116.693 102.292
04/28/95 120.335 120.368 105.127
05/31/95 122.859 123.482 108.348
06/30/95 129.591 133.482 112.956
07/31/95 151.479 143.284 118.277
08/31/95 152.325 146.193 124.644
09/29/95 143.016 149.559 127.521
10/31/95 148.270 148.697 129.603
11/30/95 144.861 152.185 136.267
12/29/95 143.157 151.380 139.213
01/31/96 146.739 152.137 139.538
02/29/96 151.030 157.937 141.454
03/29/96 155.321 158.467 144.697
04/30/96 158.066 171.595 143.960
05/31/96 154.611 179.468 146.377
06/28/96 164.113 171.378 147.101
07/31/96 166.003 156.122 145.269
08/30/96 166.872 164.878 155.331
09/20/96 166.872 177.482 162.777
10/31/96 173.300 175.517 169.985
11/29/96 181.789 186.407 182.690
12/31/96 177.238 186.251 183.812
01/31/97 178.038 199.468 194.035
02/28/97 177.156 188.436 204.987
03/31/97 179.801 176.149 197.605
04/30/97 182.799 181.634 202.044
05/30/97 186.349 202.209 214.660
06/30/97 184.574 208.424 229.935
07/31/97 184.929 230.386 247.579
08/29/97 193.862 230.041 245.564
09/30/97 199.223 243.681 271.173
10/31/97 206.914 230.987 272.270
11/28/97 214.111 232.218 282.881
12/31/97 238.401 228.224 307.753
01/30/98 231.744 235.446 294.231
02/27/98 248.039 257.586 310.471
03/31/98 241.702 267.090 325.309
04/30/98 254.905 271.588 329.356
05/29/98 236.698 256.513 318.037
06/30/98 236.698 274.429 318.659
07/31/98 248.168 271.209 309.130
08/31/98 228.938 217.660 251.818
09/30/98 196.886 247.874 269.010
10/30/98 228.563 258.590 288.547
11/30/98 238.701 284.697 297.657
12/31/98 257.133 321.591 305.648
01/29/99 262.483 368.289 298.079
02/26/99 261.555 335.254 295.600
03/31/99 272.685 359.462 293.384
04/30/99 274.339 369.058 314.994
05/28/99 272.473 360.420 309.777
06/30/99 283.670 392.512 314.866
</TABLE>
Certain Transactions. The Bank, like many financial institutions, has
followed a policy of granting various types of loans to officers, directors
and employees. All loans by the Bank to its directors and executive
officers are subject to OTS regulations restricting loans and other
transactions with affiliated persons of the Bank. Since August 9, 1989,
federal law has required that all such loans be made on terms and conditions
comparable to those for similar transactions with non-affiliates (including
interest rates and loan fees).
All transactions between the Corporation or the Bank and its officers,
directors, holders of 10% or more of the shares of any class of its common
stock and affiliates thereof, other than those originated prior to August 9,
1989 or at a time when the borrower was not an executive officer or
director, were made in the ordinary course of business with substantially
the same terms, including interest rates and collateral as those prevailing
at the time for comparable transactions with other persons, do not involve
more than the normal risk of collectibility or present other unfavorable
features and are approved by a majority of disinterested directors of the
Corporation or Bank, if any.
The following table sets forth certain information as to loans made by
the Bank to any of its directors or executive officers on terms more
favorable than for similar loans to public borrowers and whose aggregate
indebtedness to First Federal exceeded $60,000 at any time since June 30,
1998. The loan listed is a residential first mortgage loan secured by the
borrower's principal place of residence.
<TABLE>
<CAPTION>
Largest
Amount Interest
Outstanding Balance as of Rate as of
Name and Position Date of Loan Type of Loan Since June 30, 1998 June 30, 1999 June 30, 1999
- ----------------- ------------ ------------ ------------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
David S. Hinkle 11/25/94 Residential(1) $128,193 $125,328 6.95%
Vice President
<FN>
<F1> This loan was made to an immediate family member of Mr. Hinkle who was
also a non-executive officer employee of the Bank entitled to receive a
1.0% reduction on the interest rate as well as reduced closing costs
consistent with the Bank's policy and Federal law.
</FN>
</TABLE>
II. RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has appointed KPMG LLP as the Corporation's
auditors for the 2000 fiscal year, subject to the ratification of such
appointment by the Corporation's stockholders at the Meeting. KPMG LLP has
been the Corporation's auditors since February, 1996. Representatives of
KPMG LLP are expected to attend the Meeting to respond to appropriate
questions and to make a statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE CORPORATION'S AUDITORS
FOR THE FISCAL YEAR ENDING JUNE 30, 2000.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the Corporation's proxy
materials for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the
Corporation's executive offices, 724 Boardman-Poland Road, Youngstown, Ohio,
no later than May 23, 2000. Any proposal submitted will be subject to the
requirements of the proxy rules adopted under the Securities Exchange Act of
1934 and, as with any stockholder proposal (regardless of whether included
in the Corporation's proxy materials), the Corporation's Certificate of
Incorporation and Bylaws and Delaware law. Under the proxy rules, in the
event that the Corporation receives notice of a stockholder proposal to take
action at the next Annual Meeting that is not submitted for inclusion in the
Corporation's proxy materials, or is submitted for inclusion but is properly
excluded from the Company's proxy materials, the persons named in the form
of proxy sent by the Corporation to its stockholders intend to exercise
their discretion to vote on the proposal in accordance with their best
judgment if notice of the proposal is not received at the main office of the
Corporation by the Deadline (as defined below). In addition to the
provision of the proxy rules regarding discretionary voting authority
described in the preceding sentence, the Corporation's Bylaws provide that
if notice of a stockholder proposal to take action at the next Annual
Meeting is not received at the main office of the Corporation by the
Deadline, the proposal will not be recognized as a matter proper for
submission to the Corporation's stockholders and will not be eligible for
presentation at such meeting. The "Deadline" means August 21, 2000;
however, in the event the next Annual Meeting is held before September 30,
2000 or after December 19, 2000, the "Deadline" means the close of business
on the later of the 60th day prior to the date of the next Annual Meeting or
the tenth day following the earlier of the day on which notice of the date
of the next Annual Meeting is first mailed or the day on which public
announcement of the date of the next Annual Meeting is first made.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who own more
than 10% of a registered class of the Corporation's equity securities, to
file with the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Corporation. Officers, directors and greater than
10% stockholders are required by SEC regulation to furnish the Corporation
with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such reports furnished to
the Corporation, or written representations that no other reports were
required, the Corporation believes that all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with during the fiscal year ended June 30,
1999, except for the inadvertent failure to timely report on Form 4 an
option exercise by Director Shaffer.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement.
However, if any other matters 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 Corporation.
The Corporation 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 Corporation Common Stock. In
addition to solicitation by mail, directors and officers of the Corporation
and regular employees of the Bank may solicit proxies personally or by
telegraph or telephone, without additional compensation.
By Order of the Board of Directors,
J. Craig Carr
Secretary
Youngstown, Ohio
September 20, 1999
15
REVOCABLE PROXY
FFY FINANCIAL CORP.
------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 20, 1999
------------------------------------------
The undersigned hereby appoints the Board of Directors of FFY
Financial Corp. (the "Company"), and its survivor, with full power 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 Wednesday, October 20, 1999 at The Holiday Inn, located at 7410 South
Avenue, Youngstown, Ohio, at 10:00 a.m., Youngstown, Ohio time, and at any
and all adjournments and postponements thereof, as follows:
I. The election as directors of all nominees listed below: FOR WITHHELD
[ ] [ ]
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW:
Jeffrey L. Francis Samuel A. Roth Ronald P. Volpe, Ph.D.
II. The ratification of the appointment of KPMG LLP as independent
Auditors for the Company for the fiscal year ending June 30, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the proxies are authorized to vote on any other
business that 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.
- ---------------------------------------------------------------------------
FFY Financial Corp.
c/o Corporate Trust Services
Mail Drop 10AT66-4129
38 Fountain Square Plaza
Cincinnati, OH 45263
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This Proxy may be revoked at any time before it is voted by: (i)
filing with the Secretary of the Company at or before the Meeting a written
notice of revocation bearing a later date than this 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 this Proxy). If
this Proxy is properly revoked as described above, then the power of the
Board of Directors to act as attorney or proxy for the undersigned shall be
deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of a Notice of the Meeting, a Proxy Statement and
the Company's Annual Report to Stockholders for the fiscal year ended June
30, 1999.
________________________________________________, 1999
_______________________________________________________
Print Name of Stockholder Print Name of Stockholder
_______________________________________________________
Signature of Stockholder Signature of Stockholder
Please sign exactly as your name appears 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.
