SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
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
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
STATEFED FINANCIAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
________________________________________________________________________________
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:
(SC14A-07/98)
<PAGE>
September 25, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of StateFed Financial
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 2:00 p.m., Des Moines, Iowa time, on October 21, 1998, at the main office of
the Company located at 519 Sixth Avenue, Des Moines, Iowa.
In addition to the election of directors, stockholders are being asked to
ratify the appointment of Vroman, McGowen, Hurst, Clark & Smith, P.C. 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,
JOHN F. GOLDEN
President, Chief Executive Officer
and Chairman of the Board
<PAGE>
STATEFED FINANCIAL CORPORATION
519 Sixth Avenue
Des Moines, Iowa 50309
(515) 282-0236
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 21, 1998
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of StateFed Financial Corporation ("StateFed Financial" or the
"Company") will be held at the main office of the Company located at 519 Sixth
Avenue, Des Moines, Iowa, at 2:00 p.m. Des Moines, Iowa time, on October 21,
1998.
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 Vroman, McGowen, Hurst, Clark &
Smith, P.C. as auditors for the Company for the fiscal year ending June 30,
1999;
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 4, 1998,
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
John F. Golden
President, Chief Executive Officer
and Chairman of the Board
Des Moines, Iowa
September 25, 1998
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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.
<PAGE>
PROXY STATEMENT
STATEFED FINANCIAL CORPORATION
519 Sixth Avenue
Des Moines, Iowa 50309
(515) 282-0236
ANNUAL MEETING OF STOCKHOLDERS
October 21, 1998
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of StateFed Financial Corporation ("StateFed
Financial" 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 main
office of the Company, located at 519 Sixth Avenue, Des Moines, Iowa, on October
21, 1998, at 2:00 p.m., Des Moines, Iowa 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 25, 1998. Certain of the
information provided herein relates to State Federal Savings and Loan
Association of Des Moines ("State Federal" or the "Association"), 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 to ratify the
appointment of Vroman, McGowen, Hurst, Clark & Smith, P.C. as the Company's
auditors for the fiscal year ending June 30, 1999.
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 adoptions of the proposals set forth in this
Proxy Statement. 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.
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 shareholders.
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.
A proxy given pursuant to 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). Pursuant to the Company's Employee Stock Ownership Plan, unallocated
shares will be voted by the Trustee in the same proportion as allocated shares
voted by participants. Any written notice revoking a proxy should be delivered
to Andra K. Black, Secretary, StateFed Financial Corporation, 519 Sixth Avenue,
Des Moines Iowa 50309.
Voting Securities and Principal Holders Thereof
Stockholders of record as of the close of business on September 4, 1998,
will be entitled to one vote for each share then held. As of that date, the
Company had 1,554,392 shares of Common Stock issued and outstanding. The
<PAGE>
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, (ii) the Company's Chief Executive
Officer, and (iii) all directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares Percent
Beneficially of
Beneficial Owner Owned Class
- ------------------------------------------------------------------------------ ------------ -------
<S> <C> <C>
Krause Gentle Corporation(1) 149,000 9.59%
C/O James B. Langeness
Duncan, Green, Brown, Langeness & Eckley
380 Capital Square, 400 Locust Street
Des Moines, Iowa 50309
StateFed Financial Corporation Employee Stock Ownership Plan 136,048 8.75
519 Sixth Avenue
Des Moines, Iowa 50309(2)
John F. Golden, President and Chief Executive Officer(3) 92,002 5.79
Directors and executive officers of the Company and the Association as a group 243,120 14.86
(7 persons)(4)
</TABLE>
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(1) The above information is as reported by Krause Gentle Corporation in a
statement dated February 3, 1995 on Schedule 13-D filed pursuant to the
Securities Exchange Act of 1934. Krause Gentle Corporation reported sole
voting and dispositive power over 149,000 shares.
(2) The amount reported represents shares held by the Employee Stock Ownership
Plan ("ESOP"), of which 69,209 shares of Common Stock were allocated to
accounts of participants. First Bankers Trust Company, N.A., 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. Pursuant to
the terms of the ESOP, participants in the ESOP have the right to direct
the voting of shares allocated to participant accounts.
(3) Includes 33,714 shares held directly, 12,836 shares allocated to Mr.
Golden's account pursuant to the ESOP, 34,262 shares subject to options
granted to Mr. Golden under the Stock Option Plan and 11,190 shares held
pursuant to the MRP over which Mr. Golden has voting and dispositive power
over all 11,190 shares.
(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 12,836, 8,680 and 7,294 shares allocated to the
accounts of officers Golden, Black and Wood, respectively, pursuant to the
Company's ESOP, 82,014 shares subject to options granted to directors and
executive directors under the Company's Stock Option Plan and 29,134 shares
of restricted stock awarded under the MRP to directors and executive
officers over which such individuals have voting and dispositive power over
all 29,134 shares.
2
<PAGE>
PROPOSAL I. ELECTION OF DIRECTORS
General
The Company's Board of Directors currently consists of seven members. 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 4, 1998,
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.
<TABLE>
<CAPTION>
Shares of
Common
Term Stock Percent
Director to Beneficially of
Name Age(1) Position(s) Held in the Company Since(2) Expire Owned(3) Class
- ---------------------- ------ --------------------------------------- ---------- -------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Craig Wood 40 Senior Vice President and Director 1995 2001 15,722 1.01%
Harry A. Winegar 70 Director 1977 2001 32,166 2.06
DIRECTORS CONTINUING IN OFFICE
John F. Golden 70 Chairman of the Board, President and 1981 1999 92,002 5.79
Chief Executive Officer
Kevin J. Kruse(4) 38 Director 1993 1999 23,004 1.47
Eugene M. McCormick(5) 71 Director 1979 2000 36,866 2.37
Sidney M. Ramey(6) 58 Director 1987 2000 13,044 0.84
Andra K. Black 51 Executive Vice President and Director 1995 2000 30,316 1.93
</TABLE>
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(1) At June 30, 1998.
(2) Includes service as a director of the Association.
(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 2,150, 7,744, 8,544,
and 10,744 shares subject to options granted to Directors McCormick, Ramey,
Winegar and Kruse, and 34,262, 15,474 and 3,096 shares subject to options
granted to Chairman Golden, Executive Vice President Black and Senior Vice
President Wood respectively, under the Stock Option Plan which options are
exercisable within 60 days of September 4, 1998.
(4) Includes 21,316 shares held directly and 1,688 shares held by Mr. Kruse's
spouse.
(5) Includes 35,866 shares held directly and 1,000 shares held by Mr.
McCormick's spouse.
(6) Includes 11,784 shares held directly and 1,260 shares held by Mr. Ramey's
spouse.
3
<PAGE>
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.
Craig Wood. Mr. Wood is Senior Vice President of the Association, a
position he has held since 1993. Mr. Wood oversees the mortgage lending and
regulatory compliance of the lending department of the Association. Mr. Wood
joined the Association in 1986 as a loan officer and was subsequently promoted
to his current position. Mr. Wood is the son-in-law of the Chairman, Chief
Executive Officer and President of the Association, John Golden.
Harry A. Winegar. Mr. Winegar is currently retired. Until his retirement in
1992, Mr. Winegar was a consultant and appraiser for Carlson, McClure &
McWilliams, Inc. a real estate appraisal firm located in Des Moines, Iowa.
John F. Golden. Mr. Golden is the Chairman of the Board, Chief Executive
Officer, and President of State Federal. Mr. Golden joined the Association in
1963 and served in various capacities until 1981 when he was promoted to
President and Chief Executive Officer. Mr. Golden is responsible for all
transactions of the Association and he reports directly to the Board of
Directors. Mr. Golden was appointed Chairman of the Board of Directors of the
Association and the Company in June, 1995.
Kevin J. Kruse. Mr. Kruse is the Senior Vice President and Corporate
Counsel for the Iowa's Community Backers/ Diversified Management Services, Inc.
a trade association headquartered in Des Moines, Iowa.
Eugene M. McCormick. Mr. McCormick is currently retired. Until 1993, he
practiced dentistry in Des Moines, Iowa.
Sidney M. Ramey. Since 1982, Mr. Ramey has been the President of Peoples
Abstract Company, a title search company located in Des Moines, Iowa.
Andra K. Black. Ms. Black is Executive Vice President of the Association, a
position she has held since 1986. Ms. Black is responsible for the operations
and savings departments, which include compliance with savings regulations and
disclosures, general office administration and reporting to the Office of Thrift
Supervision ("OTS") and the Internal Revenue Service ("IRS"). Ms. Black also
oversees the maintenance of the general ledger and monthly reporting.
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 1998. During fiscal 1998, 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 or she served.
The Board of Directors of the Company has standing Executive, Audit, and
Stock Option and MRP Committees.
The Executive Committee is comprised of Directors Golden, Wood and Black.
The Executive Committee meets on an as needed basis and exercises the power of
the Board of Directors between Board meetings. This Committee met 20 times
during fiscal 1998.
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 McCormick, Ramey, Winegar and Kruse. During the fiscal year ended June
30, 1998, this committee did not meet, however, the full Board did meet once
during the year to perform these duties.
4
<PAGE>
The Stock Option and MRP Committee is composed of Directors McCormick,
Ramey, Winegar and Kruse. This Committee is responsible for administering the
Company's Stock Option Plan and the MRP. This Committee did not meet during the
fiscal year ended June 30, 1998.
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.
Meetings and Committees of the Association. Meetings of the Association's
Board of Directors are generally held on a monthly basis. The Board of Directors
met 12 times during the fiscal year ended June 30, 1998. During fiscal 1998, no
incumbent director of the Association 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 or she served.
The Association has standing Executive, Outside Audit, Inspection, Loan,
Appraisal, Investment Environmental Risk, Insurance, Assets Management Budget
and Employee Salary and Benefit Committees. A description of each committee of
the Association is set forth below.
The Executive Committee of the Board of Directors generally acts in lieu of
the full Board of Directors between board meetings. The Executive Committee also
has responsibility for oversight of the Association's lending policies. This
committee consists of three persons including the Chairman of the Board and
Directors Black and Wood. During the fiscal year ended June 30, 1998, this
committee met 20 times.
The Outside Audit Committee is composed of Directors McCormick, Ramey,
Winegar and Kruse. The Outside Audit Committee meet on an annual basis and are
responsible for reviewing the annual audit report and making recommendations to
the Board of Directors with respect to the Association's independent auditors.
This committee met one time during the year ended June 30, 1998.
The Inspection Committee is responsible for review of construction loan
activity including on-site inspection of property. Members of this committee
include Chairman Golden and Director Wood. This committee meets on an as needed
basis and is usually combined with the Loan Committee meeting. The Inspection
Committee met 19 times during fiscal 1998.
The Loan Committee is responsible for evaluating and approving all loan
applications. The current members of this committee are Chairman Golden,
Directors Black and Wood and Vice Presidents Komma and Stravers. This committee
meets weekly and on an as needed basis. The committee met 36 times during the
year ended June 30, 1998.
The Appraisal Committee is comprised of Chairman Golden and Director Wood.
This committee evaluates appraisers' applications and recommends approval or
disapproval to the board. This committee is usually combined with the Loan
Committee meeting. The committee meets on an as needed basis and met 12 times
during the year ended June 30, 1998.
The Investment Committee meets on an as needed basis to review and approve
investments of the Association and set investment strategies. The meeting is
usually combined with the Executive Committee meeting. The members of this
committee are Chairman Golden and Directors Black and Wood. This committee held
15 meetings during the year ended June 30, 1998.
The Environmental Risk Committee is comprised of Chairman Golden and
Director Wood. This committee reviews the environmental risk regulations and the
impact of such regulations on loan applications. Meetings of this committee are
held on an as needed basis and are usually combined with the Loan Committee
meeting. The Environmental Risk Committee did not meet during fiscal 1998.
The Insurance Committee is comprised of President Golden and Director
Black. It meets annually to discuss renewal of existing insurance policies and
on an as needed basis. This committee met once during fiscal 1998.
5
<PAGE>
The Asset Management Committee meets annually and on an as needed basis to
discuss asset/liability strategy. The current members of the Asset Management
Committee are Chairman Golden and Directors Black and Wood. During fiscal 1998,
the Committee met five times.
The Budget Committee is comprised of Chairman Golden and Director Black.
The Budget Committee meets annually to determine the budget and at least
quarterly to review the budget. The Budget Committee met one time during the
year ended June 30, 1998.
The Employee Salary and Benefit Committee determines the salaries and
benefits of the employees of the Association. Chairman Golden and Directors
McCormick, Wood and Black comprise the committee. The committee meets once a
year and met one time during fiscal 1998.
Director Compensation
Cash Compensation. The Company's directors do not receive a fee 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 Association's Board of Directors. All Association
directors receive a fee of $550 per month. No fee is paid to directors of the
Association for committee membership.
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 Association.
The following table sets forth information regarding compensation paid by
the Company and the Association to their Chief Executive Officer for services
rendered during the fiscal year ended June 30, 1998. No executive officer made
in excess of $100,000 during the fiscal year ended June 30, 1998.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Summary Compensation Table
- -----------------------------------------------------------------------------------------------------------------------
Long Term Compensation
Annual Compensation Awards
- -----------------------------------------------------------------------------------------------------------------------
Name and Principal Fiscal Other Annual Restricted Stock Options/ All Other
Position Year Salary($)(1) Bonus($) Compensation($) Award ($) SARs (#) Compensation($)
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
John F. Golden, President
and Chief Executive Officer 1996 $87,625 $1,565 N/A --- --- $---
1997 $88,435 $1,580 N/A --- --- ---
1998 $89,844 $1,595 N/A --- --- ---
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Amount includes directors fees of $6,180, $6,390 and $6,600 for fiscal
years 1996, 1997 and 1998, respectively.
6
<PAGE>
The following table sets forth information regarding the number and value
of stock options at June 30, 1998 held by the Company's Chief Executive Officer.
<TABLE>
<CAPTION>
====================================================================================================================
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
- -------------------------------------------------------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#)(1) FY-End ($)(2)
------------------------------------------------------------
Shares Acquired Value
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
John F. Golden 3,000 $25,125 23,946 10,316 $335,244(2) $144,424(2)
====================================================================================================================
</TABLE>
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(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 will be exercisable upon the receipt of
stockholder approval of the Stock Option Plan.
(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 $14.00 per share of the common stock as
reported on the NASDAQ system on June 30, 1998.
Employment Agreements and Salary Continuation Plan
Employment Agreements. Effective upon completion of the Association's
conversion to stock form (the "Conversion"), the Association entered into
employment agreements with Mr. Golden, President of the Association and officers
Black and Wood. The employment agreements are designed to assist the Association
in maintaining a stable and competent management team after the Conversion. The
continued success of the Association 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 ("OTS"). The employment agreements
provide for an annual base salary in an amount not less than the employee's
current salary and an initial term of three years. On the effective date of the
contracts, the current base salaries of Messrs. Golden and Wood and Ms. Black
were $83,844, $54,520 and $58,100, respectively. 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 agreement, subject
to a formal performance evaluation performed by disinterested members of the
Board of Directors of the Association. The agreements provide for termination
upon the employee's death, for cause or in certain events specified by OTS
regulations. The employment agreements are also terminable by the employee upon
90-days' notice to the Association.
The employment agreements provide for payment to the employee of his or her
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
Association where employment terminates involuntarily in connection with such
change in control or within 12 months thereafter. This termination payment is
subject to reduction by the amount of all other compensation to the employee
deemed for purposes of the Code to be contingent on a "change in control," and
may not exceed three times the employee's average annual compensation over the
most recent five-year period or be non-deductible by the Association 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. ss. 574.3 or 4. Such events are generally triggered prior to the
acquisition or control of 10% of the Common Stock. See "Restrictions on
Acquisitions of Stock and Related Takeover Defensive Provisions." The agreements
guarantee participation in an equitable manner in employee benefits applicable
to executive personnel.
Based on his current salary, if Mr. Golden's employment had been terminated
as of June 30, 1998, under circumstances entitling him to severance pay as
described above, he would have been entitled to receive a lump sum cash payment
of approximately $241,000.
7
<PAGE>
Certain Transactions
The Association has followed a policy of granting consumer loans and loans
secured by the borrower's personal residence to officers, directors and
employees. The loans to employees, executive officers and directors are made in
the ordinary course of business and on the same terms and conditions as those of
comparable transactions prevailing at the time, in accordance with the
Association's underwriting guidelines, and do not involve more than the normal
risk of collectibility or present other unfavorable features. Loans to executive
officers and directors must be approved by a majority of the disinterested
directors and loans to other officers and employees must be approved by the
Association's Loan Committee.
All loans by the Association to its directors and executive officers are
subject to OTS regulations restricting loan and other transactions with
affiliated persons of the Association. Loans to all directors, executive
officers, employees and their associates totaled $1.7 million at June 30, 1998,
which was 10.48% of the Holding Company's stockholders' equity at that date. All
of such loans were made on the same terms, including interest rates, as those of
comparable transactions prevailing at the time.
PROPOSAL II -- RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has renewed the Company's arrangement for Vroman,
McGowen, Hurst, Clark & Smith, P.C. to be its auditors for the 1999 fiscal year,
subject to the ratification of the appointment by the Company's stockholders. A
representative of Vroman, McGowen, Hurst, Clark & Smith, P.C. is expected to
attend the Annual 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 VROMAN, MCGOWEN, HURST, CLARK & SMITH, P.C.
AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1999.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at the Company's executive office at 519
Sixth Avenue, Des Moines, Iowa 50309, no later than June 23, 1999. Any such
proposal shall be subject to the requirements of the proxy rules adopted under
the Securities Exchange Act of 1934, as amended. Otherwise, any shareholder
proposal to take action at such meeting must be received at the Company's
executive office at 519 Sixth Avenue, Des Moines, Iowa 50309 by September 12,
1999; provided, however, that in the event that the date of the annual meeting
is held before September 22, or after November 21, 1999, the shareholder
proposal must be received not later than the close of business on the later of
the 40th day prior to such annual meeting or the tenth day following the day on
which notice of the date of the annual meeting was mailed or public announcement
of the date of such meeting was first made. All shareholder proposals must also
comply with the Company's bylaws and Delaware law.
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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 Association
may solicit proxies personally or by telegraph or telephone without additional
compensation.
BY ORDER OF THE BOARD OF DIRECTORS
John F. Golden
Chairman of the Board
Des Moines, Iowa
September 25, 1998
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STATEFED FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
October 21, 1998
The undersigned hereby appoints the Board of Directors of StateFed
Financial Corporation (the "Company"), with full powers of substitution, to act
as attorneys and proxies for the undersigned to vote all shares of capital stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting") to be held at the main office of the Company
located at 519 Sixth Avenue, Des Moines, Iowa on October 21, 1998 at 2:00 p.m.
and at any and all adjournments and postponements thereof.
1. The election as directors of all nominees listed below (except as marked to
the contrary):
|_| FOR |_| VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual nominee, strike a
line in that nominee's name below.
CRAIG WOOD HARRY A. WINEGAR
2. The ratification of the appointment of Vroman, McGowen, Hurst, Clark &
Smith, P.C. as auditors for the Company for the fiscal year ending June 30,
1999.
|_| FOR |_| AGAINST |_| VOTE WITHHELD
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment or
postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSAL AND EACH OF THE NOMINEES LISTED ABOVE.
IF ANY OTHER BUSINESS IS PRESENTED AT THE 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.
The Board of Directors recommends a vote "FOR" the proposal
and the election of the nominees listed above.
(Continued and to be SIGNED on Reverse Side)
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and choose to vote at the Meeting or at
any adjournments or postponements 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 or proxies shall be
deemed terminated and of no further force and effect. This proxy may also be
revoked by filing a written notice of revocation with the Secretary of the
Company or by duly executing a proxy bearing a later date.
The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of notice of the Meeting, a Proxy Statement and an
Annual Report to Stockholders.
Dated: , 1998
------------------------------- ----------------------------------
Signature of Stockholder
Please sign exactly as your
name(s) appear(s) to the left.
When signing as attorney,
executor, administrator, trustee
or guardian, please give your
full title. If shares are held
jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
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