September 28, 1999
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 20, 1999, 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 McGowen, Hurst, Clark & Smith, P.C. as the
Company's auditors for the fiscal year ending June 30, 2000. Accordingly, your
Board of Directors unanimously recommends that you vote for each of the
proposals.
We encourage you to attend the Meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy and return it in the accompanying
postpaid return envelope as promptly as possible. This will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented at the Meeting.
Thank you for your attention to this important matter.
Very truly yours,
/s/ John F. Golden
-------------------------------
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 20, 1999
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 20,
1999.
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 McGowen, Hurst, Clark & Smith,
P.C. as auditors for the Company for the fiscal year ending June 30,
2000;
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 3, 1999,
are the stockholders entitled to vote at the Meeting, and any adjournments
thereof.
You are requested to complete and sign the enclosed form of proxy which
is solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The Proxy will not be used if you attend and vote at the
Meeting in person.
By Order of the Board of Directors:
/s/ John F. Golden
-------------------------------
JOHN F. GOLDEN
President, Chief Executive Officer
and Chairman of the Board
Des Moines, Iowa
September 28, 1999
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 20, 1999
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
20, 1999, 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 28, 1999. 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 McGowen, Hurst, Clark & Smith, P.C. as the Company's auditors for
the fiscal year ending June 30, 2000.
Vote Required and Proxy Information
All shares of Company common stock ("Common Stock") represented at the
Meeting by properly executed proxies received prior to or at the Meeting and not
revoked will be voted at the Meeting in accordance with the instructions
thereon. If no instructions are indicated, properly executed proxies will be
voted for the nominees and the adoption of the proposal set forth in this Proxy
Statement. The Company does not know of any matters, other than 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 3,
1999, will be entitled to one vote for each share then held. As of that date,
the Company had 1,509,100 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.
Shares Percent
Beneficially of
Beneficial Owner Owned Class
Krause Gentle Corporation(1) 149,000 9.81%
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 129,455 8.52
519 Sixth Avenue
Des Moines, Iowa 50309(2)
John F. Golden, President and Chief Executive Officer(3) 94,278 6.09
Directors and executive officers of the Company
and the Association as a group (7 persons)(4) 262,919 16.55
- -----------------------
(1) The above information is as reported by Krause Gentle Corporation in a
statement dated June 21, 1999 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 76,378 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 51,602 shares held directly, 14,676 shares allocated to Mr.
Golden's account pursuant to the ESOP and 28,000 shares subject to
options granted to Mr. Golden under the Stock Option Plan.
(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 14,676, 10,235 and 8,686
shares allocated to the accounts of officers Golden, Black and Wood,
respectively, pursuant to the Company's ESOP and 66,806 shares subject
to options granted to directors and executive directors under the
Company's Stock Option Plan.
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 3,
1999, 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
- ------------------------ ------ -------------------------------------- ---------- -------- ---------- ------
NOMINEES
<S> <C> <C> <C> <C> <C>
John F. Golden 70 Chairman of the Board, President and 1981 2002 94,278 6.09%
Chief Executive Officer
Kevin J. Kruse(4) 38 Director 1993 2002 21,504 1.41
DIRECTORS CONTINUING IN OFFICE
Eugene M. McCormick(5) 71 Director 1979 2000 39,866 2.62
Sidney M. Ramey(6) 58 Director 1987 2000 13,044 0.85
Andra K. Black 51 Executive Vice President and Director 1995 2000 31,871 2.08
Craig Wood 40 Senior Vice President and Director 1995 2001 17,314 1.14
Harry A. Winegar 70 Director 1977 2001 30,466 2.00
<FN>
(1) At June 30, 1999.
(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 7,744, 6,344 and 9,244
shares subject to options granted to Directors Ramey, Winegar and Kruse,
and 28,000, 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 3, 1999.
(4) Includes 19,816 shares held directly and 1,688 shares held by Mr. Kruse's
spouse.
(5) Includes 36,866 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.
</FN>
</TABLE>
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 1999. During fiscal 1999, 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 22
times during fiscal 1999.
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, 1999, 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, 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 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 60 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 13 times during the fiscal year ended June 30, 1999.
During fiscal 1999, 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 four persons including the Chairman of the
Board, Directors Black and Wood, and Vice President Komma. During the fiscal
year ended June 30, 1999, this committee met 22 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, 1999.
The Inspection Committee is responsible for review of construction loan
activity including on-site inspection of property. Members of this committee
include Chairman Golden, Director Wood and Director of Development Sinnwell.
This committee meets on an as needed basis and is usually combined with the Loan
Committee meeting. The Inspection Committee met 15 times during fiscal 1999.
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, and Director of
Development Sinnwell. This committee meets weekly and on an as needed basis. The
committee met 23 times during the year ended June 30, 1999.
The Appraisal Committee is comprised of Chairman Golden, Directors
Black and Wood, and Director of Development Sinnwell. 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, 1999.
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 11 meetings during the year ended June 30, 1999.
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 1999.
5
<PAGE>
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 one time during fiscal 1999.
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 1999, the Committee met one time.
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, 1999.
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 1999.
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 $600 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, 1999. No executive officer made
in excess of $100,000 during the fiscal year ended June 30, 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
- --------------------------------------------------------------------------------------------------------------------
Long Term Compensation
Annual Compensation Awards
------------------------------------- ----------------------------
Name and Principal Fiscal Other Annual Restricted Stock Options/ All Other
Position Year Salary($)(1) Bonus($) Compensation($) Award ($) SARs (#) Compensation($)
- ------------------------- ------ ------------ -------- --------------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
John F. Golden, President
and Chief Executive 1999 $90,744 $1,610 N/A --- --- $---
Officer 1998 $89,844 $1,595 N/A --- --- ---
1997 $88,435 $1,580 N/A --- --- ---
- ------------------------- ------ ------------ -------- --------------- ---------------- ----------- ----------------
<FN>
(1) Amount includes directors fees of $6,390, $6,600 and $6,900 for fiscal
years 1997, 1998 and 1999, respectively.
</FN>
</TABLE>
6
<PAGE>
The following table sets forth information regarding the number and
value of stock options at June 30, 1999 held by the Company's Chief Executive
Officer.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#)(1) FY-End ($)(2)
Shares Acquired Value
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
======================= ================= ============ ============= =============== ============= =================
<S> <C> <C> <C> <C> <C> <C>
John F. Golden 6,262 $34,908 28,000 N/A $309,750(2) N/A
<FN>
- -------------------
(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 $11.0625 per share of the common stock as
reported on the NASDAQ system on June 30, 1999.
</FN>
</TABLE>
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, $61,100 and $57,520, 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, 1999, under circumstances entitling him to severance
pay as described above, he would have been entitled to receive a lump sum cash
payment of approximately $245,000.
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 $1.9 million at June 30, 1999,
which was 12.04% 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
McGowen, Hurst, Clark & Smith, P.C. to be its auditors for the 2000 fiscal year,
subject to the ratification of the appointment by the Company's stockholders. A
representative of 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 MCGOWEN, HURST, CLARK & SMITH, P.C. AS THE
COMPANY'S AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 2000.
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 1, 2000. 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 August 21, 2000;
provided, however, that in the event that the date of the annual meeting is held
before September 20, or after November 9, 2000, 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.
8
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or the Association
may solicit proxies personally or by telegraph or telephone without additional
compensation.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ John F. Golden
-------------------------------
John F. Golden
Chairman of the Board
Des Moines, Iowa
September 28, 1999
9
<PAGE>
STATEFED FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
October 20, 1999
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 20, 1999 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.
JOHN F. GOLDEN KEVIN J. KRUSE
2. The ratification of the appointment of McGowen, Hurst, Clark & Smith, P.C.
as auditors for the Company for the fiscal year ending June 30, 2000.
FOR AGAINST ABSTAIN
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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)
<PAGE>
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: , 1999
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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
