<PAGE>
<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Subsection 240.14a-11(c)
or Subsection 240.14a-12
[ ] Confidential, For use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
FIRST FEDERAL BANCORPORATION
- ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
____________________________________________<PAGE>
<PAGE>
[LETTERHEAD]
December 19, 1997
Dear Stockholder:
We invite you to attend the annual meeting of stockholders
of First Federal Bancorporation to be held at the main office of
First Federal Bank, 214 5th Street, Bemidji, Minnesota on
Tuesday, January 20, 1998 at 2:30 p.m.
The accompanying notice and proxy statement describe the
formal business to be transacted at the meeting. During the
meeting, we will also report on the operations of the Company's
subsidiary, First Federal Bank. Directors and officers of the
Company will be present to respond to any questions the
stockholders may have.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN,
DATE AND RETURN THE ACCOMPANYING FORM OF PROXY AS SOON AS
POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL
MEETING. Your vote is important, regardless of the number of
shares you own. This will not prevent you from voting in person
but will assure that your vote is counted if you are unable to
attend the meeting.
Sincerely,
/s/ William R. Belford
William R. Belford
President<PAGE>
<PAGE>
________________________________________________________________
FIRST FEDERAL BANCORPORATION
214 5th Street
Bemidji, Minnesota 56601
(218) 751-5120
________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on January 20, 1998
________________________________________________________________
NOTICE IS HEREBY GIVEN that the annual meeting of
stockholders (the "Annual Meeting") of First Federal
Bancorporation (the "Company") will be held at the main office
of First Federal Bank, 214 5th Street, Bemidji, Minnesota on
Tuesday, January 20, 1998 at 2:30 p.m.
A Proxy Statement and form of proxy for the Annual Meeting
accompany this notice.
The Annual Meeting is for the purpose of considering and
acting upon:
1. The election of two directors of the Company;
and
2. The transaction of such other matters as may
properly come before the Annual Meeting or any
adjournments thereof.
The Board of Directors is not aware of any other business
to come before the Annual Meeting.
Any action may be taken on any one of the foregoing
proposals at the Annual Meeting on the date specified above or
on any date or dates to which, by original or later adjournment,
the Annual Meeting may be adjourned. Stockholders of record at
the close of business on December 5, 1997 are the stockholders
entitled to vote at the Annual Meeting and any adjournments
thereof.
You are requested to fill in and sign the accompanying
form of proxy which is solicited by the Board of Directors and
to mail it promptly in the accompanying envelope. The proxy
will not be used if you attend and vote at the Annual Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Karen Jacobson
KAREN JACOBSON
SECRETARY
Bemidji, Minnesota
December 19, 1997
________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE
COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO
ENSURE A QUORUM. THE ACCOMPANYING FORM OF PROXY IS ACCOMPANIED
BY A SELF-ADDRESSED ENVELOPE FOR YOUR CONVENIENCE. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
________________________________________________________________
<PAGE>
<PAGE>
________________________________________________________________
PROXY STATEMENT
OF
FIRST FEDERAL BANCORPORATION
214 5th Street
Bemidji, Minnesota 56619
________________________________________________________________
ANNUAL MEETING OF STOCKHOLDERS
January 20, 1998
________________________________________________________________
________________________________________________________________
GENERAL
________________________________________________________________
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of First
Federal Bancorporation (the "Company") to be used at the annual
meeting of stockholders (the "Annual Meeting") which will be
held at the main office of First Federal Bank (the "Bank"), 214
5th Street, Bemidji, Minnesota on Tuesday, January 20, 1998 at
2:30 p.m. This proxy statement and the accompanying notice and
form of proxy are being first mailed to stockholders on or about
December 19, 1997.
________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
________________________________________________________________
Stockholders who execute proxies retain the right to
revoke them at any time. Unless so revoked, the shares
represented by properly executed proxies will be voted at the
Annual Meeting and all adjournments thereof. Proxies may be
revoked by written notice to Karen Jacobson, Secretary of the
Company, at the address shown above, by filing a later dated
proxy prior to a vote being taken on a particular proposal at
the Annual Meeting or by attending the Annual Meeting and voting
in person. The presence of a stockholder at the Annual Meeting
will not revoke such stockholder's proxy.
Proxies solicited by the Board of Directors of the Company
will be voted in accordance with the directions given therein.
WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED FOR
THE NOMINEES FOR DIRECTORS SET FORTH BELOW AND IN FAVOR OF EACH
OF THE OTHER PROPOSALS SET FORTH IN THIS PROXY STATEMENT FOR
CONSIDERATION AT THE ANNUAL MEETING. The proxy confers
discretionary authority on the persons named therein to vote
with respect to the election of any person as a director where
the nominee is unable to serve or for good cause will not serve,
and matters incident to the conduct of the Annual Meeting. If
any other business is presented at the Annual Meeting, proxies
will be voted by those named therein in accordance with the
determination of a majority of the Board of Directors. Proxies
marked as abstentions will not be counted as votes cast. In
addition, shares held in street name which have been designated
by brokers on proxies as not voted will not be counted as votes
cast. Proxies marked as abstentions or as broker non-votes,
however, will be treated as shares present for purposes of
determining whether a quorum is present.
________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
________________________________________________________________
The securities entitled to vote at the Annual Meeting
consist of the Company's common stock, $.01 par value per share
(the "Common Stock"). Stockholders of record as of the close of
business on December 5, 1997 (the "Record Date") are entitled to
one vote for each share of Common Stock then held. At the
Record Date, the Company had 665,538 shares of Common Stock
issued and outstanding. ALL SHARE NUMBERS IN THIS PROXY
STATEMENT ARE PREVIOUS TO, AND DO NOT REFLECT THE EFFECT OF THE
COMPANY'S THREE-FOR-TWO STOCK SPLIT, PAYABLE IN THE FORM OF A
50% STOCK DIVIDEND ON DECEMBER 18, 1997. The presence, in
person or by proxy, of at least a majority of the total number
of shares of Common Stock outstanding and entitled to vote will
be necessary to constitute a quorum at the Annual Meeting.
Persons and groups beneficially owning in excess of 5% of
the Common Stock are required to file certain reports regarding
such ownership pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
<PAGE>
<PAGE>
The following table sets forth, as of the Record Date, certain
information as to the Common Stock believed by management to be
beneficially owned by persons owning in excess of 5% of the
Common Stock and by all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Amount and Percent of
Nature of Shares of
Name and Address Beneficial Common Stock
of Beneficial Owners Ownership(1) Outstanding
- -------------------- ------------ -----------
<S> <C> <C>
William R. Belford
3309 Jackson Avenue, SW
Bemidji, Minnesota 56601 59,319 (2) 8.91%
First Federal Bancorporation
Employee Stock Ownership Plan ("ESOP")
214 5th Street
Bemidji, Minnesota 56601 68,225 (3) 10.26%
First Federal Bancorporation
Stock Option and Incentive Plan Trust
214 5th Street
Bemidji, Minnesota 56601 86,078 (4) 12.93%
John Hancock Advisors, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199 56,000 8.41%
All directors and executive
officers as a group (10 persons) 170,958 (5) 25.69%
<FN>
___________
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed
to be the beneficial owner, for purposes of this table, of any shares of
Common Stock if he or she has or shares voting or investment power with
respect to such Common Stock or has a right to acquire beneficial
ownership at any time within 60 days from the Record Date. As used
herein, "voting power" is the power to vote or direct the voting of
shares and "investment power" is the power to dispose or direct the
disposition of shares. Except as otherwise noted, ownership is direct,
and the named individuals and group exercise sole voting and investment
power over the shares of the Common Stock.
(2) Includes 8,624 shares which may be received pursuant to the exercise of
stock options which are exercisable within 60 days of the Record Date,
3,801 shares of Common Stock held in the ESOP and allocated to Mr.
Belford and 5,300 shares of Common Stock held for the benefit of Mr.
Belford in the Employee's Retirement Plan. Also includes 15,837 shares
held in the Option Plan Trust and 6,347 shares held in the MRP Trust, in
which Mr. Belford together with other Option Plan and MRP Plan
participants shares in the voting of allocated shares, and 15,460 shares
held in the Grantor Trust, as to which Mr. Belford has shared voting
power with the other Directors.
(3) These shares are held in a suspense account for future allocation among
participating employees as the loan used to purchase the shares is
repaid. The ESOP trustees, currently Directors Smith, Sathre, Fankhanel
and Sharp, vote all allocated shares in accordance with instructions of
the participants. Unallocated shares and shares for which no
instructions have been received are voted by the ESOP trustees in the
same ratio as participants direct the voting of allocated shares or, in
the absence of such direction, the Company's Board of Directors shall
direct the voting of such stock, or in the absence of such direction from
the Company's Board of Directors, the trustees shall direct the voting of
such stock in their discretion. As of the Record Date, 19,955 shares had
been allocated, and 48,300 were unallocated.
(4) These shares are held in a trust account for future issuance to option
holders upon their exercise of stock options for Company Common Stock
under the First Federal Bancorporation Stock Option and Incentive Plan
(the "Option Plan"). The trustees for this trust are the same as the ESOP
trustees. The shares held in the Option Plan trust are voted in the same
way that unallocated ESOP shares are voted.
(5) Includes 42,706 shares held by the First Federal Banking & Savings, FSB
Grantor Trust (the "Grantor Trust"), the beneficiaries of which are
certain directors and executive officers. The beneficiaries have neither
voting nor dispositive power with respect to these shares. Does not
include the unallocated shares held by the ESOP trust or the shares held
by the Option Plan Trust. For more information, see Footnote (2).
</FN>
</TABLE>
-2-<PAGE>
<PAGE>
________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
________________________________________________________________
GENERAL
The Company's Board of Directors consists of six members.
The Company's Articles of Incorporation require that directors
be divided into three classes, as nearly equal in number as
possible, with approximately one-third of the directors elected
each year. At the Annual Meeting, two directors will be elected
for a term expiring at the 2001 Annual Meeting. The Board of
Directors has nominated Ralph T. Smith and William R. Belford to
serve as directors for a three-year period. All nominees are
currently members of the Board. Under Minnesota law and the
Company's Articles of Incorporation, directors are elected by a
majority of the votes cast at a meeting at which a quorum is
present.
It is intended that the persons named in the proxies
solicited by the Board of Directors will vote for the election
of the named nominees. If any nominee is unable to serve, the
shares represented by all valid proxies will be voted for the
election of such substitute as the Board of Directors may
recommend or the size of the Board may be reduced to eliminate
the vacancy. At this time, the Board knows of no reason why any
nominee might be unavailable to serve.
The following table sets forth, for each nominee for
director and continuing director of the Company, his age, the
year he first became a director of the Bank, which is the
Company's principal operating subsidiary, and the expiration of
his term as a director. All such persons were appointed as
directors in 1994 in connection with the incorporation and
organization of the Company. Each director of the Company also
is a member of the Board of Directors of the Bank.
<TABLE>
<CAPTION>
AGE AT YEAR FIRST ELECTED CURRENT
SEPTEMBER 30, AS DIRECTOR TERM
NAME 1997 OF THE BANK TO EXPIRE
- ---- ----------- ----------------- ------------
<S> <C> <C> <C>
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
Ralph T. Smith 64 1966 1998
William R. Belford 49 1987 1998
DIRECTORS CONTINUING IN OFFICE
Martin R. Sathre 72 1962 1999
Dean J. Thompson 41 1994 1999
Walter R. Fankhanel 60 1975 2000
James R. Sharp 62 1980 2000
</TABLE>
Set forth below is information concerning the Company's
directors for at least the past five years, unless otherwise
stated.
RALPH T. SMITH is a principal with the Smith Law Firm,
P.A., located in Bemidji, Minnesota. Mr. Smith has been on the
Board of Directors of various community organizations including:
North Country Regional Hospital (Past Chairman); Bemidji Area
Chamber of Commerce; Bemidji Jaycees and Headwaters Community
Music Center.
WILLIAM R. BELFORD has been President and Chief Executive
Officer of the Bank since 1987. Mr. Belford has served on the
Board of Directors and as Campaign Chairman of the United Way of
Bemidji, as President and board member for the Joint Economic
Development Commission, as Chairman and Secretary of the Savings
League of Minnesota, on the Board of Directors of the Chamber of
Commerce, as Treasurer and on the Board of the Visitors and
Convention Bureau. He is past Chairman of the Minnesota League
of Savings and Community Bankers.
-3-<PAGE>
<PAGE>
MARTIN R. SATHRE is an Abstracter and Title Insurance
Agent for Sathre Abstracters Incorporated of Bemidji, Minnesota.
Mr. Sathre is Secretary of Bemidji Development Corporation, a
non-profit corporation that owns and operates a local industrial
park, and is Committee Chairperson and past President of the
Rotary Club of Bemidji.
DEAN J. THOMPSON is an owner of Ken K. Thompson Jewelry, a
retail jeweler located in Bemidji, Minnesota. Mr. Thompson was
previously on the Board of Directors of the Bemidji Area Chamber
of Commerce, former Chairman of the Downtown Bemidji Business
and Professional Association, and is a member of the Bemidji
Jaycees, Headwaters Chapter/Ducks Unlimited, Bemidji Elks Lodge
#1052, the Bemidji State University President's Club and the
Bemidji Downtown Development Authority.
WALTER R. FANKHANEL has served as General Manager of Dave
Walters, Inc., a dealer of automobiles, manufactured housing and
a developer of multi-family housing since 1957.
JAMES R. SHARP retired in 1993 after 34 years as a High
School Teacher, Counselor and Administrator in Bemidji,
Minnesota. Mr. Sharp has served as President of the Headwaters
Shrine Club, is a member of the Bemidji Town & Country Club, the
Bemidji Curling Club, the AAD Temple Shrine, the Scottish Rite,
the Masonic Lodge, the Eagles Club and the American Legion Club.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following table sets forth information regarding the
executive officers of the Company who do not serve on the Board
of Directors.
<TABLE>
<CAPTION>
AGE AT
SEPTEMBER 30,
NAME 1997 TITLE
- ---- ------------- -----
<S> <C> <C>
Dennis M. Vorgert 50 Treasurer
Karen Jacobson 55 Secretary
</TABLE>
The principal occupation of each executive officer of the
Company for the last five years, unless otherwise stated, is set
forth below.
DENNIS M. VORGERT has served as Treasurer of the Company
since its incorporation in 1994 and of the Bank since 1978. He
is a member of the Bemidji Curling Club, the Bemidji Rotary
Club, the Knights of Columbus, as well as Past Secretary of
Church Council.
KAREN JACOBSON has served as Secretary of the Company
since its incorporation in 1994, and of the Bank since 1990.
Ms. Jacobson is Treasurer of the local American Heart
Association, and a member of the United Way Communications
Committee.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company holds regular
monthly meetings and holds special meetings as needed. During
the year ended September 30, 1997, the Board met 12 times. No
director attended fewer than 75% in the aggregate of the total
number of Board meetings held while he was a member during the
year ended September 30, 1997 and the total number of meetings
held by committees on which he served during such fiscal year.
The Board of Directors has standing Audit, Loan and Investment
Committees. The full Board of Directors serves as the
Compensation Committee.
The Audit Committee consists of Directors Smith
(Chairman), Sathre and Thompson. The Audit Committee met one
time during fiscal year 1997 to examine and approve the
independent audit report prepared by the independent
-4-
<PAGE>
auditors, to review and recommend the independent auditors to be
engaged by the Company and to review the internal audit function
and internal audit controls.
The Company does not have a standing Nominating Committee.
Under the Company's current Bylaws, the full Board acts as a
Nominating Committee for selecting the management nominees for
election as directors. The Nominating Committee met one time
during fiscal 1997.
EXECUTIVE COMPENSATION
The following table sets forth cash and noncash
compensation for the fiscal year ended September 30, 1997
awarded to or earned by the Company's Chief Executive Officer
for services rendered in all capacities to the Company and its
subsidiaries during fiscal 1997.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION (1)
- ----------------- ---- ------ ----- -----------------
<S> <C> <C> <C> <C>
William R. Belford 1997 $115,000 $47,101 $18,466
Chief Executive Officer 1996 112,500 37,380 20,150
1995 108,000 21,800 19,796
<FN>
__________
(1) For 1997, includes a car allowance of $831 life insurance policy payments
of $895, a profit sharing contribution of $7,140, and a supplemental
executive retirement plan payment of $9,600; for 1996, includes a car
allowance of $770, life insurance policy payments of $895, a profit
sharing contribution of $8,885, and a supplemental executive retirement
plan payment of $9,600; and for 1995, includes a car allowance of $771,
life insurance policy payments of $895, a profit sharing contribution of
$8,530, and a supplemental executive retirement plan payment of $9,600.
</FN>
</TABLE>
Employment Agreements. The Company and the Bank,
effective April 3, 1995, entered into separate employment
agreements (the "Employment Agreements") with Mr. William R.
Belford (the "Executive"), President and Chief Executive Officer
of the Bank and of the Company. In such capacities, the
Executive is responsible for overseeing all operations of the
Bank and the Company, and for implementing the policies adopted
by the Boards of Directors. Such Boards believe that the
Employment Agreements assure fair treatment of the Executive in
relation to his career with the Company and the Bank by assuring
him of some financial security.
The Employment Agreements provide for a term of three
years, with an annual base salary of $115,000 from the Bank, and
with the Company guaranteeing the Bank's obligations. On each
anniversary date from the date of commencement of the Employment
Agreements, the Executive's term of employment will be extended
for an additional one-year period beyond the then effective
expiration date, upon a determination by the Boards of Directors
that the performance of the Executive has met the required
performance standards and that such Employment Agreements should
be extended. The Employment Agreements provide the Executive
with a salary review by the Boards of Directors not less often
than annually, as well as with inclusion in any discretionary
bonus plans, retirement and medical plans, customary fringe
benefits and vacation and sick leave. The Employment Agreements
will terminate upon the Executive's death and may terminate due
to the Executive's disability. The Employment Agreements are
also terminable for "just cause" as defined in the Employment
Agreements. In the event of termination for just cause, no
severance benefits are available. If the Company or the Bank
terminates the Executive without just cause, the Executive will
be entitled to a continuation of his salary and benefits from
the date of termination through the remaining term of the
Employment Agreements, plus an additional 12-month period.
Severance benefits payable to the Executive will be paid in a
lump sum, or in installments, as he elects. If either
Employment Agreement is terminated due to the Executive's
"disability" (as defined in the Employment Agreements), the
Executive will not be entitled to a continuation of his salary
and benefits. In the event of the Executive's death during the
term of either Employment Agreement, his estate will be entitled
to receive the Executive's salary through the last day of the
calendar month in which his death occurred. The Executive is
able to voluntarily terminate his employment by providing 60
days' written notice to the Boards of Directors of the Bank and
the Company, in which case the Executive is entitled to receive
only his compensation, vested rights and benefits up to the date
of termination.
-5-<PAGE>
<PAGE>
The Employment Agreements contain provisions stating that
in the event of the Executive's involuntary termination of
employment in connection with, or within one year after, any
change in control of the Bank or the Company, other than for
"just cause," the Executive will be paid within 10 days of such
termination an amount equal to the difference between (i) 2.99
times his "base amount," as defined in Section 280G(b)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii)
the sum of any other parachute payments, as defined under
Section 280G(b)(2) of the Code, that the Executive receives on
account of the change in control (including but not limited to
parachute payments the Employee receives pursuant to his
employment agreement with the Company). "Control" generally
refers to the acquisition, by any person or entity, of the
ownership or power to vote more than 25% of the Bank's or
Company's voting stock, the control of the election of a
majority of the Bank's or the Company's directors, or the
exercise of a controlling influence over the management or
policies of the Bank or the Company. In addition, under the
Employment Agreements, a change in control occurs when, during
any consecutive two-year period, directors of the Company or the
Bank at the beginning of such period cease to constitute two-
thirds of the Board of Directors of the Company or the Bank,
unless the election of replacement directors was approved by a
two-thirds vote of the initial directors then in office. The
Employment Agreement with the Bank provides that within five
business days of a change in control, the Bank shall fund, or
cause to be funded, a trust in the amount of 2.99 times the
Executive's base amount, that will be used to pay the Executive
amounts owed to him upon termination, other than for just cause,
within one year of the change in control. The amount to be paid
to the Executive from this trust upon his termination is
determined according to the procedures outlined in the
Employment Agreement with the Bank, and any money not paid to
the Executive is returned to the Bank. The Employment Agreement
also provides for a similar lump sum payment to be made in the
event of the Executive's voluntary termination of employment
within one year following a change in control, upon the
occurrence, or within 90 days thereafter, of certain specified
events following the change in control, which have not been
consented to in writing by the Executive, including (i) the
requirement that the Executive move his personal residence or
perform his principal executive functions more than 35 miles
from the Bank's current primary office, (ii) a material
reduction in the Executive's base compensation as in effect on
the date of the change in control, (iii) the failure of the
Company or the Bank to maintain existing or substantially
similar employee benefit plans, including material vacation,
fringe benefits, stock option and retirement plans, (iv) the
assignment to the Executive of duties and responsibilities which
are materially different from those normally associated with his
position with the Bank, (v) a material reduction in the
Executive's authority and responsibility, and (vi) the failure
to re-elect the Executive to the Company's or the Bank's Board
of Directors. The aggregate payments that would be made to Mr.
Belford, assuming his termination of employment under the
foregoing circumstances and based on Mr. Belford's salary
through the year ended September 30, 1997, would have been
approximately $391,755. In the event that the Executive
prevails over the Company or the Bank in a legal dispute as to
the Employment Agreements, he will be reimbursed for his legal
and other expenses.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-
END OPTION VALUES
The following table sets forth the 1997 fiscal year-end
value of unexercised in-the-money options held by the Company's
Chief Executive Officer. No new options were granted in fiscal
1997.<PAGE>
<TABLE>
<CAPTION>
VALUE OF SECURITIES
SHARES NUMBER OF SECURITIES UNDERLYING UNEXERCISED
ACQUIRED ON VALUE UNDERLYING UNEXERCISED IN-THE MONEY
EXERCISE REALIZED OPTIONS AT FY-END (1) OPTIONS AT FY-END (1)
------------------------- -------------------------
(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
William R. Belford -- $ -- 8,625 12,938 $71,695 $107,547
<FN>
_________
(1) Consists of options granted under the Option Plan. Option grant was
effective as of October 17, 1995, upon stockholder approval of the Option
Plan. Exercise price is the market price of the Common Stock of $13.6875
as of the date of the grant. At September 30, 1997, the fair market
value of the Common Stock was $22.00 per share.
</FN>
</TABLE>
-6-<PAGE>
<PAGE>
DIRECTOR COMPENSATION
The Company's directors receive fees of $1,000 per monthly
meeting attended. This fee includes any Executive Committee
meetings. During fiscal 1997, the Company's directors' fees
totaled $66,000.
Director Retirement Plan. The Bank's Board of Directors
has adopted the First Federal Banking & Savings, FSB Retirement
Plan for Non-Employee Directors (the "Directors' Plan"),
effective October 1, 1993, for its directors (i) who are members
of the Bank's Board of Directors on or after October 1, 1993,
and (ii) who are not employees on the date of being both
nominated and elected (or re-elected) to the Board. A
participant in the Directors' Plan will receive, on each of the
three annual anniversary dates of his retirement, an amount
equal to one-third of the product of his"Benefit Percentage,"
times his"Vested Percentage," times $6,000. A participant's
"Benefit Percentage" is based on his overall years of service on
the Board of Directors of the Bank, and increases in increments
of 33-1/3% from 0% for less than six years of service, to 33-
1/3% for six to eleven years of service, to 66-2/3% for twelve
to seventeen years of service, to 100% for eighteen or more
years of service. A participant's "Vested Percentage" equals
33-1/3% if the participant serves on the Board as a non-employee
director for one or fewer years of service after the effective
date of the Directors' Plan, increases to 66-2/3% if the
participant completes two years of service following the plan's
effective date, and becomes 100% if the participant completes
three or more years of service following the plan's effective
date. However, in the event a participant terminates service on
the Board at or after his attainment of age 70, or due to
"disability", or in the event of a "change in control" (as such
terms are defined in the Directors' Plan), the participant's
Vested Percentage becomes 100% regardless of his years of
service. A participant's "Vested Percentage" will also
accelerate to 100% upon such participant's termination of
service on the Board due to his death. This provision may have
the effect of deferring a hostile change in control by
increasing the costs of acquiring control. If a participant
dies before collecting any retirement benefits, his surviving
beneficiary (or, if no surviving beneficiary, the participant's
estate) will receive a lump sum payment having a present value
equal to 100% of the benefits that would have been paid to the
participant under the Directors' Plan if the participant had
(i) terminated service on the Board on the date of his death,
(ii) survived to collect the full benefits payable for
retirement or disability, and (iii) a Vested Percentage equal to
100%. In the event that a participant dies after beginning to
receive retirement benefits, the Bank shall pay to the
participant's surviving beneficiary (or, if none, to the
participant's estate) a lump sum payment having a present value
equal to 100% of the aggregate remaining payments that the
participant would have received had he survived to collect all
retirement benefits payable under the Directors' Plan. Trust
assets will be subject to the claims of the Bank's general
creditors.
TRANSACTIONS WITH MANAGEMENT
The Bank offers loans to its directors, officers, and
employees. These loans currently are made in the ordinary
course of business with the same collateral, interest rates and
underwriting criteria as those of comparable transactions
prevailing at the time and to not involve more than the normal
risk of collectibility or present other unfavorable features.
Under current law, the Bank's loans to directors and executive
officers are required to be made on substantially the same
terms, including interest rates, as those prevailing for
comparable transactions and must not involve more than the
normal risk of repayment or present other unfavorable features.
Furthermore, loans above the greater of $25,000 or 5% of the
Bank's capital and surplus (i.e., up to $536,370) to such
persons must be approved in advance by a disinterested majority
of the Board of Directors. At September 30, 1997, the Bank's
loans to directors and executive officers totaled $185,344, or
1.73% of the Bank's retained earnings at that date.
-7-<PAGE>
<PAGE>
________________________________________________________________
SECURITY OWNERSHIP OF MANAGEMENT
________________________________________________________________
The following table sets forth, as of the Record Date, the
beneficial ownership of the Common Stock of each of the
Company's directors and nominees, the sole executive officer
named in the Summary Compensation Table and by all directors and
executive officers as a group.
<TABLE>
<CAPTION>
PERCENT OF SHARES
TOTAL BENEFICIAL OF COMMON STOCK
OWNERSHIP (1) OUTSTANDING
---------------- -----------------
<S> <C> <C>
William R. Belford(2). . . . . 59,319 8.91%
Ralph T. Smith(3). . . . . . . 31,181 4.69
Martin R. Sathre(4). . . . . . 16,957 2.55
Walter R. Fankhanel(4) . . . . 24,297 3.65
James R. Sharp(4). . . . . . . 18,857 2.83
Dean J. Thompson(5). . . . . . 15,001 2.25
All Executive Officers and
Directors as a Group
(10 persons) (6) . . . . . . 170,958 25.69%
<FN>
__________
(1) For the definition of beneficial ownership, see Footnote (1) to the table
in "Voting Securities and Principal Holders Thereof." Does not include
the unallocated shares held by the ESOP Trust or the Grantor Trust. For
more information, see "Voting Securities and Principal Holders Thereof --
Footnotes (2) and (3)."
(2) For Mr. Belford, includes 8,624 shares which may be received pursuant to
the exercise of stock options which are exercisable within 60 days of the
Record Date, 3,801 shares of Common Stock held in the ESOP and allocated
to Mr. Belford and 5,300 shares of Common Stock held for the benefit of
Mr. Belford in the Employee's Retirement Plan. Also includes 15,837
shares held in the Option Plan Trust and 6,347 shares held in the MRP
Trust, in which Mr. Belford together with other Option Plan and MRP Plan
participants shares in the voting of allocated shares, and 15,460 shares
held in the Grantor Trust, as to which Mr. Belford has shared voting
power with the other Directors.
(3) For Mr. Smith includes 1,000 shares held in family trusts, 1,216 shares
held in his grantor trust account, 1,725 shares pursuant to vested
options exercisable within 60 days of the Record Date, and 6,300 shares
held in Mr. Smith's IRA.
(4) For each of Messrs. Sathre, Fankhanel and Sharp, includes 8,102 shares
held in their respective grantor trust accounts and 1,725 shares pursuant
to vested options exercisable within 60 days of the Record Date. Mr.
Sharp's total also includes 2,472 shares held in his IRA.
(5) For Mr. Thompson, includes 1,724 shares held in his grantor trust account
and 1725.2 shares pursuant to vested options exercisable within 60 days
of the Record Date.
(6) For "All Executive Officers and Directors as a Group" includes, 12,972
shares and 42,706 shares held in 401(k) plan and grantor trust accounts,
respectively, 9,706 shares held in ESOP accounts, 21,045 shares pursuant
to options exercisable within 60 days of the Record Date and 1,000 shares
held in family trusts.
</FN>
</TABLE>
________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________
Pursuant to regulations promulgated under the Exchange
Act, the Company's officers and directors and all persons who
own more than ten percent of the Common Stock ("Reporting
Persons") are required to file reports detailing their ownership
and changes of ownership in the Common Stock and to furnish the
Company with copies of all such ownership reports that are
filed. Based solely on the Company's review of the copies of
such ownership reports which it has received in the past fiscal
year or with respect to the past fiscal year, or written
representations that no annual report of changes in beneficial
ownership were required, the Company believes that during fiscal
year 1997 and prior fiscal years all Reporting Persons have
complied with these reporting requirements.
-8-<PAGE>
<PAGE>
________________________________________________________________
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________________________________
McGladrey & Pullen LLP, was the Company's independent
certified public accounting firm for the 1997 fiscal year. A
representative of McGladrey & Pullen LLP is expected to be
present at the Annual Meeting and will have the opportunity to
make a statement if he or she so desires.
________________________________________________________________
OTHER MATTERS
________________________________________________________________
The Board of Directors is not aware of any business to
come before the Annual Meeting other than those matters
described above in this proxy statement and matters incident to
the conduct of the Annual Meeting. However, if any other
matters should properly come before the Annual Meeting, it is
intended that proxies in the accompanying form will be voted in
respect thereof in accordance with the determination of a
majority of the Board of Directors.
________________________________________________________________
MISCELLANEOUS
________________________________________________________________
The cost of soliciting 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 solicitations by mail,
directors, officers and regular employees of the Company may
solicit proxies personally or by telegraph or telephone without
additional compensation.
The Company's 1998 Annual Report to Stockholders,
including financial statements, is being mailed to all
stockholders of record as of the close of business on the Record
Date. Any stockholder who has not received a copy of such
Annual Report may obtain a copy by writing to the Secretary of
the Company. Such Annual Report is not to be treated as a part
of the proxy solicitation material or as having been
incorporated herein by reference.
________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________
In order to be eligible for inclusion in the Company'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 Company's main office at 214 5th Street,
Bemidji, Minnesota 56601, no later than August 24, 1998. Any
such proposal shall be subject to the requirements of the proxy
rules adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Karen Jacobson
KAREN JACOBSON
SECRETARY
Bemidji, Minnesota
December 19, 1997
________________________________________________________________
ANNUAL REPORT ON FORM 10-KSB
________________________________________________________________
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB OR
THE FISCAL YEAR ENDED SEPTEMBER 30, 1997 AS FILED WITH THE
SECURITIES EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE
TO EACH STOCKHOLDER AS OF THE RECORD DATE UPON WRITTEN REQUEST
TO CORPORATE SECRETARY, FIRST FEDERAL BANCORPORATION, 214 5TH
STREET, BEMIDJI, MINNESOTA 56601.
________________________________________________________________
-9-<PAGE>
<PAGE>
REVOCABLE PROXY
________________________________________________________________
FIRST FEDERAL BANCORPORATION
Bemidji, Minnesota
________________________________________________________________
ANNUAL MEETING OF STOCKHOLDERS
January 20, 1998
The undersigned hereby appoints James Sharp and Martin
Sathre with full powers of substitution, to act as proxies for
the undersigned, to vote all shares of Common Stock of First
Federal Bancorporation (the "Company") which the undersigned is
entitled to vote at the Annual Meeting of Stockholders, to be
held at the main office of First Federal Bank, 214 5th Street,
Bemidji, Minnesota on Tuesday, January 20, 1998 at 2:30 p.m.,
and at any and all adjournments thereof, as follows:
VOTE
FOR WITHHELD
--- --------
1.The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ]
Ralph T. Smith
William R. Belford
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR
ANY INDIVIDUAL NOMINEE, INSERT THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
_____________________
The Board of Directors recommends a vote "FOR" the listed
proposition.
________________________________________________________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED.
IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS
PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN ACCORDANCE
WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS.
AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS PROXY
CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO VOTE
WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE
NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND
MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL MEETING.
________________________________________________________________
<PAGE>
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at
the Annual Meeting or at any adjournment thereof and after
notification to the Secretary of the Company at the Annual
Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies 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 notice of the annual
meeting, a Proxy Statement dated December 19, 1997 and an Annual
Report to Stockholders.
Dated: _______________________, 199_
__________________________ __________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________ __________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope
in which this form of proxy was mailed. 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 ACCOMPANYING POSTAGE-PREPAID ENVELOPE.
