SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
First Federal Bancorp, Inc.
---------------------------
(Name of Registrant as Specified In Its Charter)
First Federal Bancorp, Inc.
---------------------------
(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)(4) 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:
FIRST FEDERAL BANCORP, INC.
505 Market Street
Zanesville, Ohio 43701
(740) 588-2222
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 2003 Annual Meeting of Shareholders
of First Federal Bancorp, Inc. ("Bancorp"), will be held at the Holiday
Inn, 4645 East Pike, Zanesville, Ohio, on February 19, 2003, at 2:00 p.m.,
Eastern Standard Time (the "Annual Meeting"), for the following purposes,
all of which are more completely set forth in the accompanying Proxy
Statement:
1. To re-elect four directors of Bancorp for terms expiring in
2005;
2. To consider and vote upon the adoption of amendments to the
existing Code of Regulations (the "Current Regulations") of
Bancorp to (i) restrict the removal of directors; (ii) expand
the indemnification of directors and officers; and (iii) make
technical changes to the Current Regulations and remove
obsolete provisions;
3. To consider and vote upon the ratification of the selection of
BKD LLP ("BKD") as the auditors of Bancorp for the current
fiscal year; and
4. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only shareholders of Bancorp of record at the close of business on
December 23, 2002, will be entitled to receive notice of and to vote at the
Annual Meeting. Whether or not you expect to attend the Annual Meeting, we
urge you to consider the accompanying Proxy Statement carefully and to
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES MAY
BE VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A QUORUM MAY BE
ASSURED. The giving of a Proxy does not affect your right to vote in
person in the event you attend the Annual Meeting.
Zanesville, Ohio J. William Plummer, President and
January 7, 2003 Chief Executive Officer
Ward D. Coffman, III, Secretary
FIRST FEDERAL BANCORP, INC.
505 Market Street
Zanesville, Ohio 43701
(740) 588-2222
PROXY STATEMENT
PROXIES
The enclosed Proxy is being solicited by the Board of Directors of
First Federal Bancorp, Inc. ("Bancorp"), for use at the 2003 Annual Meeting
of Shareholders of Bancorp to be held at the Holiday Inn, 4645 East Pike,
Zanesville, Ohio, on February 19, 2003, at 2:00 p.m., Eastern Standard
Time, and at any adjournments thereof (the "Annual Meeting"). Without
affecting any vote previously taken, the Proxy may be revoked by a
shareholder before exercise by giving notice of revocation to Bancorp in
writing or in open meeting. Attendance at the Annual Meeting will not, of
itself, revoke a Proxy.
Each properly executed Proxy received prior to the Annual Meeting and
not revoked will be voted as specified thereon or, in the absence of
specific instructions to the contrary, will be voted:
FOR the re-election of Ward D. Coffman, III, Robert D. Goodrich, II,
Patrick L. Hennessey and Connie Ayres LaPlante as directors of
Bancorp for terms expiring in 2005;
FOR the adoption of the Amended and Restated Code of Regulations of
Bancorp (the "New Regulations"), attached to this Proxy Statement as
Exhibit A, in its entirety. In connection with the vote upon the
adoption of the New Regulations, each properly executed Proxy
received before the Annual Meeting and not revoked will be voted as
specified on the Proxy, or, in the absence of specific voting
instructions on the Proxy, will be voted:
FOR the adoption of provisions in the New Regulations
restricting the removal of directors;
FOR the adoption of provisions in the New Regulations expanding
the indemnification of directors and officers; and
FOR the adoption of technical changes to the existing Code of
Regulations (the "Current Regulations") and the removal of
obsolete provisions.
FOR the ratification of the selection of BKD LLP ("BKD") as the
auditors of Bancorp for the current fiscal year.
None of the proposals described above related to the New Regulations
will be adopted unless all of the proposals are separately approved by the
required vote of the shareholders. See the section of this Proxy Statement
entitled "VOTES REQUIRED."
Proxies may be solicited by the directors, officers and other
employees of Bancorp in person or by telephone, telecopy, telegraph or
mail, only for use at the Annual Meeting and will not be used for any other
meeting. The cost of soliciting Proxies will be borne by Bancorp.
Only shareholders of record as of the close of business on December
23, 2002 (the "Voting Record Date"), are eligible to vote at the Annual
Meeting. Bancorp's records disclose that, as of the Voting Record Date,
there were 3,248,725 common shares of Bancorp (the "Shares") outstanding.
On all matters, shareholders are entitled to one vote for each Share held.
This Proxy Statement is first being mailed to the shareholders of
Bancorp on or about January 7, 2003. Bancorp may deliver to shareholders
that share an address one copy of this Proxy Statement and the 2002 Annual
Report to Shareholders. Bancorp will deliver promptly upon written or oral
request a separate copy of the Annual Report or Proxy Statement to a
Shareholder at a shared address to which a single copy was delivered.
VOTES REQUIRED
Quorum
A majority of the votes eligible to be cast at the Annual Meeting
must be present in person or by proxy to establish a quorum. Abstentions
and shares held by a nominee for a beneficial owner and which are
represented in person or by proxy at the Annual Meeting but not voted with
respect to one or more proposals ("Non-votes") will be counted as present
for purposes of establishing a quorum.
Proposals
Under Ohio law and the Current Regulations, the following matters
must receive the corresponding vote to adopt the following proposals:
Proposal Required Vote
-------- -------------
1. Election of directors The four nominees receiving the
greatest number of votes will be
elected to the Board of Directors.
2. Adoption of each of the Affirmative vote of the holders of
four proposals related to at least a majority of the
the New Regulations outstanding shares.
3. Ratification of the selection Affirmative vote of the holders of
of BKD as auditors at least a majority of the shares
represented in person or by proxy
at the Annual Meeting.
In compliance with the position of the Securities and Exchange
Commission on the adoption of the New Regulations, Bancorp is asking
shareholders to vote separately on three types of amendments to the New
Regulations. In addition to a vote on the adoption of the New Regulations,
therefore, shareholders will have an opportunity to vote separately on each
of the three proposals described below related to the New Regulations.
However, none of the proposals related to the New Regulations will be
adopted unless all of the proposals receive the required vote for adoption.
For example, if only two of the proposals related to the New Regulations
are approved by the affirmative vote of a majority of the outstanding
shares, then none of the proposals will be adopted. Even the first
proposal related to the New Regulations, which is to adopt the New
Regulations in their entirety, will not be adopted unless all four
proposals are approved by the affirmative vote of a majority of the
outstanding shares.
Brokers/dealers who hold outstanding shares of Bancorp in street name
for their customers may, under applicable rules of the exchange and other
self-regulatory organizations of which the broker/dealers are members, sign
and submit Proxies for such outstanding shares and may vote such shares on
some matters, but broker/dealers may not vote such shares on other matters
without specific instructions from the customer. Proxies signed and
submitted by broker/dealers which have not been voted on certain matters as
described in the previous sentence are Non-votes.
The effect of an abstention or a non-vote on proposals 2 and 3 above
will be the same as a vote against the adoption of such proposals.
2
VOTING SECURITIES AND OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to
the only persons known to Bancorp to own beneficially more than five
percent (5%) of the outstanding Shares as of December 15, 2002:
Amount and Nature of
Beneficial Ownership (2)
------------------------ Percent of
Name and Address (1) Sole Shared Shares Outstanding
- -------------------- ---- ------ ------------------
<s> <c> <c> <c>
Ward D. Coffman, III 180,320 (3) 14,000 5.93%
Connie Ayres LaPlante 92,440 (4) 142,048 7.16%
J. William Plummer 117,935 (5) 75,170 5.84%
MacNealy Hoover Investment
Management Inc.
4580 Stephen Circle, Suite 201
Canton, OH 44718 309,250 (6) - 9.52%
<FN>
___________________
<F1> Each of the individuals listed in this table may be contacted at the
address of Bancorp, 505 Market Street, Zanesville, Ohio 43701.
<F2> Includes Shares with respect to which the shareholder has sole or
shared voting or investment power as a fiduciary for a trust or
another person and Shares held by certain family members.
<F3> Includes 30,000 Shares subject to currently exercisable options
granted under the First Federal Bancorp, Inc., 1992 Stock Option Plan
for Non-Employee Directors (the "1992 Non-qualified Plan"), the First
Federal Bancorp, Inc., 1994 Stock Option Plan for Non-Employee
Directors (the "1994 Non-qualified Plan"), the First Federal Bancorp,
Inc., 1997 Performance Stock Option Plan for Senior Executive
Officers and Outside Directors (the "1997 Plan"), and the 2002 Stock
Option and Incentive Plan (the "2002 Plan").
<F4> Includes 24,000 Shares subject to currently exercisable options
granted under the First Federal Bancorp, Inc., 1992 Incentive Stock
Option Plan for Officers and Key Employees (the "1992 ISO Plan"), the
First Federal Bancorp, Inc., 1994 Stock Option Plan for Officers and
Key Employees (the "1994 ISO Plan"), the 1997 Plan and the 2002 Plan.
<F5> Includes 56,000 Shares subject to currently exercisable options
granted under the 1992 ISO Plan, the 1994 ISO Plan, the 1997 Plan,
and the 2002 Plan.
<F6> Based upon Schedule 13D filed with the Securities and Exchange
Commission on August 30, 2002.
</FN>
3
The following table sets forth certain information with respect to
the number of Shares beneficially owned by each director of Bancorp and by
all directors and executive officers of Bancorp as a group as of December
15, 2002:
Amount and Nature of
Beneficial Ownership (2)
------------------------ Percent of
Name and Address (1) Sole Shared Shares Outstanding
- -------------------- ---- ------ ------------------
<s> <c> <c> <c>
Ward D. Coffman, III 180,320 (3) 14,000 5.93%
Robert D. Goodrich, II 87,080 (4) - 2.66%
Patrick L. Hennessey 139,480 (5) 14,000 4.69%
Connie Ayres LaPlante 92,440 (6) 142,048 7.16%
John C. Matesich, III 67,480 (7) 14,000 2.49%
Don R. Parkhill 51,234 (8) 12,290 1.93%
J. William Plummer 117,935 (9) 75,170 5.84%
------- ------- -----
All directors and executive
officers of Bancorp as a
group (7 people) 735,969 229,508 (10) 27.68%
<FN>
___________________
<F1> Each of the individuals listed in this table may be contacted at the
address of Bancorp, 505 Market Street, Zanesville, Ohio 43701.
<F2> Includes Shares with respect to which the shareholder has sole or
shared voting or investment power as a fiduciary for a trust or
another person and Shares held by certain family members.
<F3> See footnote 3 to the preceding table for a description of Mr.
Coffman's beneficial ownership.
<F4> Includes 30,000 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified
Plan, the 1997 Plan, and the 2002 Plan.
<F5> Includes 22,000 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified
Plan, the 1997 Plan, and the 2002 Plan.
<F6> See footnote 4 to the preceding table for a description of Ms.
LaPlante's beneficial ownership.
<F7> Includes 30,000 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified
Plan, the 1997 Plan, and the 2002 Plan.
<F8> Includes 47,480 Shares subject to currently exercisable options
granted under the 1992 Non-qualified Plan, the 1994 Non-qualified
Plan, the 1997 Plan, and the 2002 Plan.
<F9> See footnote 5 to the preceding table for a description of Mr.
Plummer's beneficial ownership.
<F10> Messrs. Coffman, Hennessey, Matesich and Plummer share control as
Trustees over 14,000 shares held in the First Federal Savings Bank of
Eastern Ohio Defined Benefit Plan. The 14,000 shares are included in
each of their numbers of shares beneficially owned but are included
only once in the total number of shares held by all directors and
executive officers of Bancorp as a group.
</FN>
PROPOSAL ONE: RE-ELECTION OF DIRECTORS
In accordance with Article Two of the Current Regulations, four
directors are to be elected at the Annual Meeting, each for a term of two
years and until their successors are elected. Each holder of Shares is
entitled to one vote for each director position for each Share held. No
shareholder may cumulate votes in the election of directors.
In accordance with Section 2.03 of the Regulations, nominees for
election as a director may be proposed only by the directors or by a
shareholder entitled to vote for directors. The directors will consider
shareholder nominations in selecting nominees. A shareholder who wishes to
make a nomination must follow the procedures set forth in the Regulations.
Such procedures require the submission of a written nomination by the
shareholder to the Secretary of Bancorp by the later of the November 15th
immediately preceding the annual meeting of shareholders or the sixtieth
day before the first anniversary of the most recent annual meeting of
shareholders held for the election of directors. Each such written
nomination must state the name, age, business or residence address of the
nominee, the principal occupation or employment of the nominee, the
4
number of Shares owned either beneficially or of record by each such
nominee and the length of time such Shares have been so owned.
Unless otherwise directed, Proxies received pursuant to this
solicitation will be voted for the nominees listed below, each of whom has
been designated by the directors. In the event that any nominee listed
below fails to stand for election at the Annual Meeting, Proxies will be
voted for such other person as may be designated by the directors.
Management does not anticipate that any of the nominees listed below will
fail to stand for election at the Annual Meeting.
The Board of Directors proposes the re-election of the following
persons to terms which will expire in 2005:
Name Age Position(s) Held Director Since (1)
- ---- --- ---------------- ------------------
<s> <c> <c> <c>
Ward D. Coffman, III 49 Secretary and Director 1992
Robert D. Goodrich, II 56 Director 1992
Patrick L. Hennessey 52 Director 1992
Connie Ayres LaPlante 46 Treasurer and Director 1992
<FN>
___________________
<F1> Each of such directors became a director of Bancorp in connection
with the conversion of First Federal Savings Bank of Eastern Ohio,
Inc. ("First Federal"), from mutual to stock form (the "Conversion")
and the formation of Bancorp as the holding company of First Federal.
Each director nominee also serves as a director of First Federal.
</FN>
The following directors will continue to serve after the Annual
Meeting for the terms indicated:
Name Age Position(s) Held Director Since (1) Term Expires
- ---- --- ---------------- ------------------ ------------
<s> <c> <c> <c> <c>
John C. Matesich, III 59 Chairman and Director 1992 2004
Don R. Parkhill 44 Director 1995 2004
J. William Plummer 57 President, Chief Executive
Officer and Director 1992 2004
<FN>
___________________
<F1> Messrs. Matesich and Plummer became directors of Bancorp in
connection with the Conversion and the formation of Bancorp as the
holding company of First Federal. Each director also serves as a
director of First Federal.
</FN>
Ward D. Coffman, III, is an attorney who has been engaged in private
practice in the Zanesville area since 1978.
Robert D. Goodrich, II, is the Chairman of the Board and Chief
Executive Officer of Wendy's Management Group, Inc., a position he has held
since 1986.
Patrick L. Hennessey is currently the President of P & D
Transportation. Mr. Hennessey has been employed by P & D Transportation
since 1985.
Connie Ayres LaPlante is a Senior Vice President and the Treasurer of
First Federal. Ms. LaPlante commenced employment with First Federal in
1978.
John C. Matesich, III, is the President of Matesich Distributing Co.,
a beer distributor in Southeastern Ohio. Mr. Matesich has been the
President of Matesich Distributing Co. since 1990 and has been employed by
Matesich Distributing Co. since 1972.
Don R. Parkhill has been the President of Blackson-Parkhill Agency,
Inc., doing business as Parkhill Sedanko Insurance Agency, Inc., in
Coshocton, Ohio, since 1987. Mr. Parkhill is also the owner of Parkhill
Business and Estate Planning, which has sold life insurance and assisted
with other financial planning needs since 1987.
J. William Plummer is currently the President and Chief Executive
Officer of First Federal. Mr. Plummer has been employed by First Federal
since 1970 and has served as the President and the Chief Executive Officer
since 1979.
5
Meetings of Directors
The Board of Directors of Bancorp met 13 times for regularly
scheduled and special meetings during the fiscal year ended September 30,
2002. Each director attended at least 75% of the aggregate of such
meetings and all meetings of the committees of the Board of Directors of
which such director is a member.
The Board of Directors of First Federal met 18 times for regularly
scheduled and special meetings during the fiscal year ended September 30,
2002.
Committees of Directors
The Board of Directors of Bancorp has a Stock Option Committee, which
administers Bancorp's stock option plans. The Stock Option Committee is
comprised of Messrs. Coffman, Hennessey, Matesich, Parkhill, Goodrich and
Plummer and Ms. LaPlante. The Stock Option Committee met four times during
the fiscal year ended September 30, 2002.
The Board of Directors of Bancorp does not have a Nominating
Committee. Nominations for election to the Board of Directors of Bancorp
are determined by the entire Board of Directors of Bancorp. In addition,
the Current Regulations provide a procedure for shareholders to nominate
persons for election to the Board of Directors of Bancorp. See "PROPOSAL
ONE: RE-ELECTION OF DIRECTORS."
The Audit Committee and the Compensation Committee of the Board of
Directors of Bancorp meet in conjunction with the Audit Committee and the
Compensation Committee of the Board of Directors of First Federal. The
Audit Committee is comprised of Messrs. Coffman, Hennessey, Goodrich,
Matesich and Parkhill. See "AUDIT COMMITTEE REPORT" for a description of
the Audit Committee's responsibilities. The Audit Committee met six times
during the fiscal year ended September 30, 2002.
Messrs. Coffman, Hennessey and Matesich are the members of the
Compensation Committee. The Compensation Committee reviews and recommends
to the full Board of Directors salary levels for the executive officers of
First Federal and, in conjunction with management, for the other employees
of First Federal. The Compensation Committee met one time during the
fiscal year ended September 30, 2002.
The Board of Directors of First Federal also has a Loan Committee.
The function of the Loan Committee is to approve loans for amounts greater
than $300,700. Messrs. Plummer, Coffman and Hennessey are the members of
the Loan Committee. The Loan Committee met 10 times by telephone during
the fiscal year ended September 30, 2002.
6
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following Summary Compensation Table sets forth certain
information with respect to the compensation paid by First Federal to the
chief executive officer of Bancorp and the only other officer of Bancorp to
receive cash compensation in excess of $100,000 during fiscal year 2002.
Summary Compensation Table
--------------------------
Annual Compensation Long Term Compensation
--------------------------- ----------------------
Awards
-----------------
Name and Principal Position Year Salary ($)(1) Bonus ($) Options/ SARs (#)
- --------------------------- ---- ------------- --------- -----------------
<s> <c> <c> <c> <c>
J. William Plummer 2002 $159,598 $70,354 5,000 (2)
President and Chief 2001 154,607 47,009 15,000 (2)
Executive Officer 2000 151,328 44,313 -
Connie Ayres LaPlante 2002 106,909 42,730 5,000 (2)
Treasurer 2001 102,936 26,312 15,000 (2)
2000 97,758 24,331 -
<FN>
___________________
<F1> Does not include amounts attributable to other miscellaneous
benefits, the cost of which was less than 10% of the officer's cash
compensation.
<F2> Represents the number of Shares underlying options granted under the
1992, 1994, 1997 and 2002 Plans. Bancorp does not have a stock
benefit plan which provides for the grant of "SARs," an abbreviation
for "Stock Appreciation Rights."
</FN>
Employment Agreements
In November 2002, First Federal entered into employment agreements
with Mr. Plummer and Ms. LaPlante, each with a term of three years. The
agreements provide for a salary review by the Board of Directors not less
often than annually and the inclusion of the employee in any formally
established employee benefit, bonus pension and profit-sharing plans for
which senior management personnel are eligible. Each employment agreement
may be terminated by First Federal at any time. In the event of
termination for "just cause," as defined in the employment agreement, the
employee will have no right to receive any compensation or other benefits
for any period after such termination. In the event of termination within
one year of any change in "control" (as defined below) of First Federal or
Bancorp, each employee will be entitled to receive (a) a payment in an
amount equal to the sum of (i) the amount of compensation to which the
employee is entitled for the remainder of the term of the agreement, plus
(ii) the difference between (x) the product of three multiplied by the
total compensation paid to the employee for the immediately preceding
calendar year less (y) the amount paid to the employee pursuant to (i); and
(b) continued health, life and disability insurance and other benefits
substantially equal to those which the employee was receiving at the time
the agreement was terminated until the earliest to occur of the end of the
term of the agreement, or the date the employee becomes employed by another
employer. "Control," as defined in the employment agreements, generally
refers to the acquisition by any person or entity of the ownership or power
to vote ten percent (10%) or more of the shares of either First Federal or
Bancorp, the control of the election of a majority of the directors of
either First Federal or Bancorp or the exercise of a controlling influence
over the management or policies of either First Federal or Bancorp.
In the event of termination other than for "just cause" (as defined
in the employment agreement) or in connection with a change of control, the
employee will be entitled to a continuation of salary payments for a period
of time equal to the term of the employment agreement, as well as a
continuation of benefits substantially equal to those being provided at the
date of termination of employment until the earlier to occur of the end of
the employment agreement term or the date the employee becomes employed
full-time by another employer.
7
Compensation of Directors
Each non-employee director of Bancorp receives a fee of $350 per
month and $50 for each meeting of the Board of Directors attended, with
payment for two excused absences per year. Each non-employee director of
First Federal receives a fee of $500 per month and $500 for each meeting of
the Board of Directors attended, with payment for two excused absences per
year. In addition to regular fees paid to the directors of First Federal,
members of the Compensation Committee and members of the Benefits Committee
who are not employees receive $150 for each meeting attended. Members of
the Loan Committee, other than the executive officers, receive $50 for each
meeting attended in person, although no fees were paid during the fiscal
year ended September 30, 2002, because only telephonic meetings were held
during the year. No committee fees are paid to members of the Audit
Committee.
Certain Transactions with First Federal
All loans by First Federal to executive officers and directors of
First Federal and Bancorp with outstanding balances during the fiscal year
ended September 30, 2002, were made in the ordinary course of business and
on the same terms and conditions, including interest rates and collateral,
as those of comparable loans to other persons. None of such loans involve
more than the normal risk of collectibility or present other unfavorable
features and are current in their payments.
During the fiscal year ended September 30, 2002, First Federal
retained the services of Ward D. Coffman, III, an attorney engaged in
private practice in the Zanesville area. Mr. Coffman is the Secretary and
a director of Bancorp and serves as general counsel to First Federal. From
time to time, Mr. Coffman will serve as general counsel to First Federal
during the fiscal year beginning October 1, 2002.
Stock Option Plans
The shareholders of Bancorp approved stock option plans for employees
(the "ISO Plans") and non-employee directors (the "Non-qualified Plans")
that were adopted by the Board of Directors in 1992 and 1995. In addition,
the shareholders approved additional plans for both employees and non-
employee directors in 1997 and 2002. The purposes of the stock option
plans include attracting and retaining the best available personnel as
officers, employees and directors of Bancorp and First Federal and
providing incentives to the officers, employees and directors of Bancorp
and First Federal by facilitating their purchases of an ownership interest
in Bancorp.
Bancorp currently has reserved 793,605 common shares for issuance
under the stock option plans, of which 392,656 were subject to outstanding
options on December 15, 2002. No more options may be granted under the
1992 ISO Plan, the 1992 Non-qualified Plan or the 1997 Plan.
Options granted under the ISO Plans and certain options granted under
the 1997 Plan and the 2002 Plan are intended to qualify as "incentive stock
options" ("ISOs") under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), which, if certain conditions are met, permits the
optionees to delay the recognition of federal taxable income on the Shares
received upon the exercise of options. The option exercise price for ISOs
is determined by the Stock Option Committee at the time of option grant.
The exercise price must not be less than 100% of the fair market value of
the Shares on the date of the grant.
The Non-qualified Plans provide for the grant of options that are not
intended to qualify as "incentive stock options" under Section 422 of the
Code ("Non-qualified Options"), and options awarded to non-employee
directors under the 1997 Plan and the 2002 Plan are also Non-qualified
Options. The exercise price for Non-qualified Options is at least the fair
market value of the Shares on the date of the grant.
Options granted under the 1992 Plan are first exercisable one year
after the date of grant. Options granted under the 1994 Plans and the 2002
Plan are immediately exercisable. Options granted pursuant to the 1997
Plan are, unless otherwise specified by the Stock Option Committee at the
time of grant, exercisable immediately after the date of grant, provided
that the optionee will have been a senior executive officer or non-employee
director of Bancorp or First Federal at all times during the period
beginning with the date of grant of any such option and ending on the date
which is three months before the date of exercise of the option.
All options are immediately exercisable in the event of a "change of
control," as defined in the plans. A "change of control" includes
execution of an agreement for a merger or acquisition or the acquisition of
the beneficial ownership of 25% or more of the voting shares of Bancorp by
any person or entity.
8
The following table sets forth information regarding all grants of
options to purchase Shares of Bancorp made to Mr. Plummer and Ms. Ayres
LaPlante during the fiscal year ended September 30, 2002:
Options/SAR Grants in Last Fiscal Year
--------------------------------------------------------------------------------------------
Individual Grants
--------------------------------------------------------------------------------------------
% of Total Options/
Number of Securities Underlying SARs Granted to Exercise or Expiration
Name Options/SARs Granted (#)(1) Employees in Fiscal Year Base Price ($/share) Date
- ---- ------------------------------- ------------------------ -------------------- ---------
<s> <c> <c> <c> <c>
J. William Plummer 5,000 4.49% $7.30 3/19/12
Connie Ayres LaPlante 5,000 4.49% $7.30 3/19/12
<FN>
___________________
<F1> Options granted were intended to qualify as incentive stock options
under the Internal Revenue Code of 1986, as amended. All options are
immediately exercisable.
</FN>
The following table sets forth information regarding the number and
value of unexercised options held by the persons listed in the Summary
Compensation Table:
Aggregated Option/SAR Exercises In Last Fiscal Year
---------------------------------------------------
and 9/30/02 Option/SAR Values
-----------------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
9/30/02 (#) 9/30/02 (1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
- ---- --------------- -------------- --------------- ---------------
<s> <c> <c> <c> <c>
J. William Plummer 36,440 $213,174 56,000/0 $177,135/0
Connie Ayres LaPlante 32,000 $117,600 24,000/0 $32,975/0
<FN>
___________________
<F1> An option is "in-the-money" if the fair market value of the
underlying Shares exceeds the exercise price of the option. The
figure represents the value of such unexercised options, determined
by multiplying the number of Shares subject to unexercised options by
the difference between the exercise prices of such options and the
closing sale price for the Shares on September 30, 2002 as reported
by The Nasdaq Stock Market.
</FN>
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, Bancorp's directors and executive
officers and persons holding more than ten percent of the common shares of
Bancorp are required to report their ownership of common shares and changes
in such ownership to the Securities and Exchange Commission (the "SEC") and
Bancorp. The SEC has established specific due dates for such reports.
Based upon a review of such reports, Bancorp must disclose any failures to
file such reports timely in Proxy Statements used in connection with annual
meetings of shareholders. Bancorp is not aware of any failures to file
such reports timely.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of Bancorp is comprised
of five directors, all of whom are considered "independent" under Rule
4200(a)(14) of the National Association of Securities Dealers' listing
standards. The Audit Committee is responsible for overseeing Bancorp's
accounting functions and controls, as well as recommending to the
9
Board of Directors an accounting firm to audit Bancorp's financial
statements. The Audit Committee has adopted a charter to set forth its
responsibilities (the "Charter").
As required by the Charter, the Audit Committee received and reviewed
the report of BKD LLP ("BKD") regarding the results of their audit, as well
as the written disclosures and the letter from BKD required by Independence
Standards Board Standard No. 1. The Audit Committee reviewed the audited
financial statements with the management of Bancorp. A representative of
BKD also discussed with the Audit Committee the independence of BKD from
Bancorp, as well as the matters required to be discussed by Statement of
Auditing Standards 61. Discussions between the Audit Committee and the
representative of BKD included the following:
* BKD's responsibilities in accordance with generally accepted
auditing standards
* The initial selection of, and whether there were any changes
in, significant accounting policies or their application
* Management's judgments and accounting estimates
* Whether there were any significant audit adjustments
* Whether there were any disagreements with management
* Whether there was any consultation with other accountants
* Whether there were any major issues discussed with management
prior to BKD's retention
* Whether BKD encountered any difficulties in performing the
audit
* BKD's judgments about the quality of Bancorp's accounting
principles
* BKD's responsibilities for information prepared by management
that is included in documents containing audited financial
statements
Based on its review of the financial statements and its discussions
with management and the representative of BKD, the Audit Committee did not
become aware of any material misstatements or omissions in the financial
statements. Accordingly, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Annual
Report on Form 10-KSB for the year ended September 30, 2002, to be filed
with the SEC.
Ward D. Coffman, III
Robert D. Goodrich, II
Patrick L. Hennessey
John C. Matesich, III
Don R. Parkhill
Audit Fees
During the year ended September 30, 2002, BKD billed Bancorp $43,125
for professional services in connection with the audit of Bancorp's annual
financial statements and the review of financial statements included in
Bancorp's Forms 10-QSB.
Financial Information Systems Design and Implementation Fees
During the 2002 fiscal year, BKD did not perform professional
accounting services to design, implement or manage, hardware or software
that collects or generates information significant to BKD's financial
statements.
All Other Fees
During fiscal year 2002, Bancorp and First Federal were billed
$26,350 for services rendered by BKD other than for accounting services
discussed in "Audit Fees" or "Financial Information Systems Design and
Implementation Fees." The Audit Committee has determined that the
provision of these services is compatible with maintaining BKD's
independence.
PROPOSAL TWO: ADOPTION OF THE NEW REGULATIONS
The Board of Directors recommends that the shareholders adopt each of
the four proposals related to the New Regulations. The first of these
proposals is to adopt the New Regulations in their entirety, and the other
three proposals are to adopt specific provisions of the New Regulations.
Two of the three proposals to adopt specific provisions to the New
Regulations may have a material effect on the rights of shareholders, and
each of these provisions is described below in detail. The last proposal
includes several technical changes and the removal of obsolete provisions.
None of the proposals
10
related to the New Regulations, including the first proposal to adopt the
New Regulations in their entirety, will be adopted unless all four of the
proposals related to the New Regulations are approved by the affirmative
vote of the holders of a majority of the outstanding shares.
Adoption of the New Regulations in their Entirety
The New Regulations include several changes. These changes include:
(i) restricting the removal of directors; (ii) expanding the
indemnification of directors and officers; and (iii) making technical
changes to the Current Regulations and removing obsolete provisions.
The Board of Directors recommends that the shareholders vote FOR the
adoption of the New Regulations, attached hereto as Exhibit A, in their
entirety. Accordingly, the shareholders of Bancorp will be asked to adopt
the following resolution at the Annual Meeting:
RESOLVED, that the Amended and Restated Code of Regulations of First
Federal Bancorp, Inc., in substantially the form attached to the
Proxy Statement of Bancorp dated December 15, 2002, as Exhibit A, be,
and it hereby is, adopted to supersede and take the place of the Code
of Regulations of First Federal Bancorp, Inc., as amended; provided,
however, that the Amended and Restated Code of Regulations shall not
be adopted to supersede the Code of Regulations of First Federal
Bancorp, Inc., as amended, if any of the proposals related to the
Amended and Restated Code of Regulations of First Federal Bancorp,
Inc., to be voted on separately by the shareholders is not adopted at
the 2003 Annual Meeting of Shareholders.
Removal of Directors and Filling of Vacancies
The New Regulations place restrictions on the ability of shareholders
to remove members of the Board of Directors. The New Regulations provide
that directors may be removed only for cause. The Current Regulations
provide that a director, or the entire Board of Directors, may be removed
by the shareholders with or without cause.
The provisions relating to removal of a director will preclude a
third party from removing incumbent directors without cause and
simultaneously gaining control of the Board of Directors by filling the
vacancies created by removals with its nominees. The provisions also will
reduce the power of shareholders, even those with a majority interest in
Bancorp, to remove incumbent directors. Shareholders will have the power
to remove directors for cause with the affirmative vote of a majority of
the outstanding shares of Bancorp. The Board of Directors believes that
this provision enhances the likelihood of continuity with the Board of
Directors (although maintaining continuity has not been a problem in the
past), thereby facilitating long-range planning in the best interests of
shareholders.
The Board of Directors recommends that the shareholders vote FOR the
adoption of the provisions in the New Regulations restricting the removal
of directors. Accordingly, the shareholders of Bancorp will be asked to
adopt the following resolution at the Annual Meeting:
RESOLVED, that Article Two, Section 2.04, of the Amended and Restated
Code of Regulations of First Federal Bancorp, Inc., in substantially
the form attached to the Proxy Statement of First Federal Bancorp,
Inc., dated December 15, 2002, as part of Exhibit A, be, and it
hereby is, adopted; provided, however, that Article Two, Section
2.04, of the Amended and Restated Code of Regulations of First
Federal Bancorp, Inc., shall not be adopted if any of the proposals
related to the Amended and Restated Code of Regulations of First
Federal Bancorp, Inc., to be voted on separately by the shareholders
is not adopted at the 2003 Annual Meeting of Shareholders.
Director Liability and Indemnification
The New Regulations modify the indemnification provisions that
provide protection to the directors and officers of Bancorp in making
decisions relating to matters affecting the interests of Bancorp, including
takeover proposals. Under both the Current and New Regulations, directors
and officers are entitled to advancements for expenses and reimbursement
for any costs, judgments, fines and amounts paid in settlement in
connection with their actions as representatives of Bancorp. Under the
Current Regulations, directors and officers are entitled to be indemnified
by Bancorp as long as they have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of
Bancorp. Under the New Regulations, directors and officers are entitled to
indemnification from Bancorp as long as the act or omission giving rise to
any claim for indemnification was not occasioned by an intent to cause
injury to Bancorp or by the reckless disregard for the best interests of
Bancorp. Article Five of the New Regulations also contains a change to
conform the Current Regulations to
11
Ohio General Corporation Law by adding Section 5.05(B), which requires a
director or officer to agree to cooperate with Bancorp concerning any
action, suit or proceeding for which such director or officer seeks an
advancement of expenses.
The Board of Directors may be deemed to have a conflict of interest
in recommending the adoption of the new indemnification provisions by the
shareholders. If the members of the Board of Directors are sued in their
capacity as directors, they may be able to limit their liability by taking
advantage of the new indemnification provisions and the provisions of the
Ohio General Corporation Law. The Board of Directors believes, however,
that the broad right of indemnification is necessary to encourage and
retain capable persons to serve as directors. The qualify of a
corporation's board of directors is a major factor in its long-term
success, and any steps which improve the capacity of a corporation to
attract and retain the best possible directors is of considerable value to
the shareholders. The Board of Directors also believes that the broad
right of indemnification and limitations upon directors' liability for
monetary damages are necessary to promote the desirable end that directors
will resist vigorously what they consider unjustified suits and claims
brought against them in their representative capacities.
The Board of Directors recognizes that, despite any provision in the
New Regulations to the contrary, Bancorp's ability to indemnify directors
and officers pursuant to the New Regulations, or pursuant to any
indemnification agreement, at all times would be subject to federal and
state public policy limitations, which may prevent indemnification. The
Board of Directors believes that public policy would prevent
indemnification for egregious and intentional wrongdoing, such as self-
dealing or willful fraud. Insofar as indemnification for liabilities under
the Securities Act of 1933, as amended, may be permitted under the
indemnification provisions of the New Regulations, Bancorp understands that
the Securities and Exchange Commission believes such indemnification is
against public policy and is, therefore, unenforceable.
Bancorp is not aware of any current or past indemnification or
liability issues that will or could be presented to Bancorp in the event
that Article Five of the New Regulations is adopted.
The Board of Directors recommends that the shareholders vote FOR the
adoption of the provisions in the New Regulations expanding the
indemnification available to directors and officers of Bancorp.
Accordingly, the shareholders of Bancorp will be asked to adopt the
following resolution at the Annual Meeting:
RESOLVED, that Article Five of the Amended and Restated Code of
Regulations of First Federal Bancorp, Inc., in substantially the form
attached to the Proxy Statement of First Federal Bancorp, Inc., dated
December 15, 2002, as part of Exhibit A, be, and it hereby is,
adopted; provided, however that Article Five of the Amended and
Restated Code of Regulations of First Federal Bancorp, Inc., shall
not be adopted if any of the proposals related to the Amended and
Restated Code of Regulations of First Federal Bancorp, Inc., to be
voted on separately by the shareholders is not adopted at the 2003
Annual Meeting of Shareholders.
Technical Amendments
The Board of Directors also is recommending several technical
amendments to the Current Regulations and the removal of provisions that
are outdated or obsolete. The technical amendments include, but are not
limited to, allowing meetings to be held by use of communications
equipment, allowing shareholders to submit proxies electronically and
permitting notices to be delivered by overnight mail. All of the technical
amendments are permissible under Ohio law and have been deemed by the Board
of Directors to be in the best interests of the shareholders. In addition,
the Current Regulations use the male gender for all pronouns. The New
Regulations correct this by using both male and female pronouns or by
removing any gender reference.
Finally, Section 1.07 of the New Regulations clarifies that, unless a
different vote is required by law, Bancorp's Articles of Incorporation or
the New Regulations, every matter presented to the shareholders for
approval requires the affirmative vote of a majority of those shares
represented in person, by proxy or by means of communications equipment.
This addition is not a modification of the previous vote requirement, but
merely articulates, consistent with Ohio law and the Articles of
Incorporation, the vote required for all matters not otherwise specified in
the law, the Articles of Incorporation or the New Regulations as requiring
a different vote.
The Board of Directors recommends that the shareholders vote FOR the
adoption of the provisions in the New Regulations making technical changes
and removing outdated provisions. Accordingly, the shareholders of Bancorp
will be asked to adopt the following resolution at the Annual Meeting:
RESOLVED, that all of the provisions of the Amended and Restated Code
of Regulations of First Federal Bancorp, Inc., with the exception of
the provisions to be voted on separately by the shareholders, in
substantially the form attached to the Proxy Statement of First
Federal Bancorp, Inc., dated December 15, 2002, as part of Exhibit A,
be,
12
and they hereby are, adopted; provided, however, that these
provisions of the Amended and Restated Code of Regulations of First
Federal Bancorp, Inc., shall not be adopted if any of the proposals
related to the Amended and Restated Code of Regulations of First
Federal Bancorp, Inc., to be voted on separately by the shareholders
is not adopted at the 2003 Annual Meeting of Shareholders.
The following table briefly summarizes the foregoing material changes
and some of the technical changes contained in the New Regulations.
PROVISIONS UNDER THE PROVISIONS UNDER THE
CURRENT REGULATIONS NEW REGULATIONS
- ------------------------------------ ------------------------------------
1. Indemnification required where 1. Indemnification required if the
the director acted in good faith act or omission giving rise to the
and in a manner he reasonably claim for indemnification was not
believed to be in or not opposed to occasioned by the director's intent
the best interests of Bancorp. to cause injury to Bancorp or
reckless disregard for the best
interests of Bancorp.
2. Directors may be removed, with 2. Directors may be removed only
or without cause, by a majority, for cause by the affirmative vote
provided that no individual of a majority of the voting power
director may be removed if the of Bancorp.
votes cast against such director's
removal, if cumulatively voted,
would be sufficient to elect one
director.
3. Amendments to the Current 3. Amendments to the New
Regulations may be adopted by the Regulations must be adopted in
affirmative vote of a majority of accordance with the provisions of
the voting power of Bancorp. the Articles of Incorporation or, if
not specified in the Articles, by
the affirmative vote of a majority
of the voting power of Bancorp.
Under the Articles currently, (a)
amendments approved by the Board of
Directors may be adopted by the
affirmative vote of at least a
majority of the voting power of
Bancorp, and (b) if the Board of
Directors recommends against the
approval of an amendment, the
affirmative vote of at least three-
fourths of the voting power of
Bancorp is required for adoption of
the amendment.
4. Meetings may be held in person 4. Meetings may be held in person,
or by proxy. by proxy or by the use of
communications equipment.
5. Use of male gender pronouns 5. Use of gender neutral pronouns
such as "he," "his" and "him." or both male and female pronouns.
6. The vote required for all 6. The affirmative vote of a
matters shall be as required by majority of shares represented
Ohio law, the Articles of in person, by proxy or by use of
Incorporation or the Current communications equipment is required
Regulations. to approve any matters not specified
by Ohio law, the Articles of
Incorporation or the New Regulations
as requiring a different vote.
7. Proxies must be submitted in 7. Proxies must be submitted in
writing. writing or by any other verifiable
communication.
13
PROPOSAL THREE: RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of Bancorp has selected BKD as the auditors of
Bancorp and its subsidiary for the current fiscal year and recommends that
the shareholders ratify such selection. Management expects that a
representative of BKD will be present at the Annual Meeting, will have the
opportunity to make a statement if he or she so desires and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE RATIFICATION OF THE SELECTION OF BKD AS THE AUDITORS OF BANCORP FOR THE
CURRENT FISCAL YEAR.
PROPOSALS OF SECURITY HOLDERS AND OTHER MATTERS
Any proposals of security holders intended to be included in
Bancorp's Proxy Statement for the 2004 Annual Meeting of Shareholders
should be sent to Bancorp by certified mail and must be received by Bancorp
not later than September 10, 2003. In addition, if a shareholder intends
to present a proposal at the 2004 Annual Meeting and the proposal is not
received by November 24, 2003, then the proxies designated by the Board of
Directors of Bancorp for the 2004 Annual Meeting of Shareholders of Bancorp
may vote in their discretion on any such proposal any shares for which they
have been appointed proxies without mention of such matter in the proxy
statement or on the proxy card for such meeting.
Management knows of no other business that may be brought before the
Annual Meeting, including matters incident to the conduct of the Annual
Meeting. If, however, other matters are brought before the Annual Meeting,
the persons named in the enclosed Proxy intend to vote such Proxy in
accordance with their best judgment.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN
AND RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
Zanesville, Ohio J. William Plummer, President and
December 15, 2002 Chief Executive Officer
Ward D. Coffman, III, Secretary
14
EXHIBIT A
AMENDED AND RESTATED
CODE OF REGULATIONS
OF
FIRST FEDERAL BANCORP, INC.
ARTICLE ONE
MEETINGS OF SHAREHOLDERS
Section 1.01. Annual Meetings. The annual meeting of the
shareholders for the election of directors, for the consideration of
reports to be laid before such meeting and for the transaction of such
other business as may properly come before such meeting, shall be held
during the first calendar quarter of each year on a date designated by the
directors.
Section 1.02. Calling of Meetings. Meetings of the shareholders may
be called only by the chairman of the board, the president, or, in case of
the president's absence, death, or disability, the vice president
authorized to exercise the authority of the president; the secretary; the
directors by action at a meeting or a majority of the directors acting
without a meeting; or the holders of at least twenty-five percent of all
shares outstanding and entitled to vote thereat.
Section 1.03. Place of Meetings. All meetings of shareholders shall
be held at the principal office of the corporation, unless otherwise
provided by action of the directors. Meetings of shareholders may be held
at any place within or without the State of Ohio. If authorized by the
directors, meetings of shareholders may be held solely by means of
communications equipment as permitted by law.
Section 1.04. Notice of Meetings.
(A) Written notice stating the time, place, if any, and purposes of
a meeting of the shareholders, and the means, if any, by which shareholders
can be present and vote at the meeting through the use of communications
equipment, shall be given either by personal delivery or by mail, overnight
delivery service, or any other means of communication authorized by the
shareholder to whom the notice is given not less than seven nor more than
sixty days before the date of the meeting, (1) to every shareholder of
record entitled to notice of the meeting, (2) by or at the direction of the
president or the secretary. If mailed or sent by overnight delivery
service, such notice shall be sent to the shareholder at the shareholder's
address as it appears on the records of the corporation. If sent by
another means of communication authorized by the shareholder, the notice
shall be sent to the address furnished by the shareholder for those
transmissions. Notice of adjournment of a meeting need not be given if the
time, place, if any, to which it is adjourned and the means, if any, by
which shareholders can be present and vote at the meeting through the use
of communications equipment are fixed and announced at the meeting. In the
event of a transfer of shares after the record date for determining the
shareholders who are entitled to
A-1
receive notice of a meeting of shareholders, it shall not be necessary to
give notice to the transferee. Nothing herein contained shall prevent the
setting of a record date in the manner provided by law, the Articles or the
Regulations for the determination of shareholders who are entitled to
receive notice of or to vote at any meeting of shareholders or for any
purpose required or permitted by law.
(B) Following receipt by the president or the secretary of a
request in writing, specifying the purpose or purposes for which the
persons properly making such request have called a meeting of the
shareholders, delivered either in person or by registered mail to such
officer by any persons entitled to call a meeting of shareholders, such
officer shall cause to be given to the shareholders entitled thereto notice
of a meeting to be held on a date not less than seven nor more than sixty
days after the receipt of such request, as such officer may fix. If such
notice is not given within fifteen days after the receipt of such request
by the president or the secretary, then, and only then, the persons
properly calling the meeting may fix the time of meeting and give notice
thereof in accordance with the provisions of the Regulations.
(C) Any authorization by a shareholder to send notices given
pursuant to this Section 1.04 by any means other than in person or by mail
or overnight delivery service is revocable by written notice to the
corporation either by personal delivery or by mail, overnight delivery
service, or any other means of communication authorized by the corporation.
If sent by another means of communication authorized by the corporation,
the notice shall be sent to the address furnished by the corporation for
those transmissions. Any authorization by a shareholder to send notices
given pursuant to this Section 1.04 by any means other than in person or by
mail or overnight delivery service will be deemed to have been revoked by
the shareholder if (1) the corporation has attempted to make delivery of
two consecutive notices in accordance with that authorization, and (2) the
secretary or an assistant secretary of the corporation, or other person
responsible for giving notice, has received notice that, or otherwise
believes that, delivery has not occurred. Notwithstanding the foregoing,
an inadvertent failure to treat the inability to deliver notice as a
revocation will not invalidate any meeting of shareholders or other action.
Section 1.05. Waiver of Notice. Notice of the time, place, if any,
and purpose or purposes of any meeting of shareholders may be waived in
writing, either before or after the holding of such meeting, by any
shareholder, which writing shall be filed with or entered upon the records
of such meeting. The attendance of any shareholder, in person, by proxy or
by the use of communications equipment, at any such meeting without
protesting the lack of proper notice, prior to or at the commencement of
the meeting, shall be deemed to be a waiver by such shareholder of notice
of such meeting. A telegram, cablegram, electronic mail, or any electronic
or other transmission capable of authentication that appears to have been
sent by a shareholder and that contains a waiver by such shareholder is a
writing for the purposes of this Section 1.05.
Section 1.06. Quorum. At any meeting of shareholders, the holders
of a majority of the voting shares of the corporation then outstanding and
entitled to vote thereat, present in person, by proxy or by the use of
communications equipment, shall constitute a quorum for such meeting. The
holders of a majority of the voting shares represented at a meeting,
whether or not a quorum is present, or the chairman of the board, the
president, or the officer of the corporation acting as chairman of the
meeting, may adjourn such meeting from time to time, and if a quorum is
present at such adjourned meeting, any business may be transacted as if the
meeting had been held as originally called.
A-2
Section 1.07. Votes. At all elections of directors, the candidates
receiving the greatest number of votes shall be elected. Unless otherwise
required by law, the Articles or these Regulations, any matter submitted to
the shareholders at a meeting for their vote shall be decided by a majority
of the shares of the corporation that are present in person, by proxy or by
the use of communications equipment and constitute a quorum for such
meeting.
Section 1.08. Order of Business. The order of business at any
meeting of shareholders shall be determined by the officer of the
corporation acting as chairman of such meeting unless otherwise determined
by a vote of the holders of a majority of the voting shares of the
corporation then outstanding, present in person, by proxy or by the use of
communications equipment, and entitled to vote at such meeting.
Section 1.09. Shareholders Entitled to Vote. Each shareholder of
record on the books of the corporation on the record date for determining
the shareholders who are entitled to vote at a meeting of shareholders
shall be entitled at such meeting to one vote for each share of the
corporation standing in such shareholder's name on the books of the
corporation on such record date. The directors may fix a record date for
the determination of the shareholders who are entitled to receive notice of
and to vote at a meeting of shareholders, which record date shall not be a
date earlier than the date on which the record date is fixed and which
record date may be a maximum of sixty days preceding the date of the
meeting of shareholders.
Section 1.10. Cumulative Voting. No shareholder of the corporation
shall have the right to vote cumulatively in the election of directors.
Section 1.11. Proxies. At meetings of the shareholders, any
shareholder of record entitled to vote thereat may be represented and may
vote by a proxy or proxies appointed by an instrument in writing signed by
such shareholder or appointed by a verifiable communication authorized by
such shareholder, but such instrument shall be filed with the secretary of
the meeting before the person holding such proxy shall be allowed to vote
thereunder. No proxy shall be valid after the expiration of eleven months
after the date of its execution, unless the shareholder executing it shall
have specified therein the length of time it is to continue in force.
Section 1.12. Inspectors of Election. In advance of any meeting of
shareholders, the directors may appoint inspectors of election to act at
such meeting or any adjournment thereof; if inspectors are not so
appointed, the officer of the corporation acting as chairman of any such
meeting may make such appointment. In case any person appointed as
inspector fails to appear or act, the vacancy may be filled only by
appointment made by the directors in advance of such meeting or, if not so
filled, at the meeting by the officer of the corporation acting as chairman
of such meeting. No other person or persons may appoint or require the
appointment of inspectors of election.
A-3
ARTICLE TWO
DIRECTORS
Section 2.01. Authority and Qualifications. Except where the law,
the Articles or the Regulations otherwise provide, all authority of the
corporation shall be vested in and exercised by its directors. Directors
need not be shareholders of the corporation.
Section 2.02. Number of Directors and Term of Office.
(A) Until changed in accordance with the provisions of the
Regulations, the number of directors of the corporation shall be seven. The
number of directors shall be divided into two classes as nearly equal in
number as possible. The members of each class shall be elected for a term
of two years and until their successors are duly elected and qualified or
until their earlier resignation, removal from office, or death. One class
of directors shall be elected annually.
(B) The number of directors may be fixed or changed at a meeting of
the shareholders called for the purpose of electing directors at which a
quorum is present, only by the affirmative vote of the holders of not less
than a majority of the voting shares which are represented at the meeting,
in person, by proxy or by the use of communications equipment, and entitled
to vote on such proposal.
(C) The directors may fix or change the number of directors and may
fill any director's office that is created by an increase in the number of
directors; provided, however, that the directors may not increase the
number of directors to more than fifteen nor reduce the number of directors
to less than three.
(D) No reduction in the number of directors shall of itself have
the effect of shortening the term of any incumbent director.
Section 2.03. Election.
(A) Any nominee for election as a director of the corporation may
be proposed only by the directors or by any shareholder entitled to vote
for the election of directors. No person, other than a nominee proposed by
the directors, may be nominated for election as a director of the
corporation unless such person shall have been proposed in a written
notice, delivered or mailed by first class United States mail, postage
prepaid, to the Secretary of the corporation at the principal offices of
the corporation. In the case of a nominee proposed for election as a
director at an annual meeting of shareholders, such written notice of a
proposed nominee shall be received by the Secretary of the corporation on
or before the later of (i) the November 15th immediately preceding such
annual meeting, or (ii) the sixtieth (60th) day before the first
anniversary of the most recent annual meeting of shareholders of the
corporation held for the election of directors; provided, however, that if
the annual meeting for the election of directors in any year is not held on
or before the thirty-first (31st) day next following such anniversary, then
the written notice required by this subparagraph (A) shall be received by
the Secretary within a reasonable time prior to the date of such annual
meeting. In the case of a nominee proposed for election as a director at a
special meeting of shareholders at which directors are to be elected,
A-4
such written notice of a proposed nominee shall be received by the
Secretary of the corporation no later than the close of business on the
seventh day following the day on which notice of the special meeting was
mailed to shareholders. Each such written notice of a proposed nominee
shall set forth (1) the name, age, business or residence address of each
nominee proposed in such notice, (2) the principal occupation or employment
of each such nominee, and (3) the number of common shares of the
corporation owned beneficially and/or of record by each such nominee and
the length of time any such shares have been so owned.
(B) If a shareholder shall attempt to nominate one or more persons
for election as a director at any meeting at which directors are to be
elected without having identified each such person in a written notice
given as contemplated by, and/or without having provided therein the
information specified in subparagraph (A) of this Section, each such
attempted nomination shall be invalid and shall be disregarded unless the
presiding officer of the meeting determines that the facts warrant the
acceptance of such nomination.
(C) The election of directors shall be by ballot whenever requested
by the presiding officer of the meeting or by the holders of a majority of
the voting shares outstanding, entitled to vote at such meeting and present
in person, by proxy or by the use of communications equipment, but unless
such request is made, the election shall be by voice vote.
Section 2.04. Removal. A director or directors may be removed from
office by shareholders only for cause and only by the vote of the holders
of shares entitling them to exercise not less than a majority of the voting
power of the corporation to elect directors in place of those to be
removed. In case of any such removal, a new director may be elected at the
same meeting for the unexpired term of each director removed. Failure to
elect a director to fill the unexpired term of any director removed shall
be deemed to create a vacancy in the board.
Section 2.05. Vacancies. The remaining directors, though less than
a majority of the whole authorized number of directors, may, by the vote of
a majority of their number, fill any vacancy in the board for the unexpired
term. A vacancy in the board exists within the meaning of this Section
2.05 in case the shareholders increase the authorized number of directors
but fail at the meeting at which such increase is authorized, or an
adjournment thereof, to elect the additional directors provided for, or in
case the shareholders fail at any time to elect the whole authorized number
of directors.
Section 2.06. Meetings. A meeting of the directors shall be held
immediately following the adjournment of each annual meeting of
shareholders at which directors are elected, and notice of such meeting
need not be given. The directors shall hold such other meetings as may
from time to time be called, and such other meetings of directors may be
called only by the chairman of the board, the president, or any two
directors. All meetings of directors shall be held at the principal office
of the corporation or at such other place as the directors may from time to
time determine by resolution. Meetings of the directors may be held through
any communications equipment if all persons participating can hear each
other and participation in a meeting pursuant to this provision shall
constitute presence at such meeting.
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Section 2.07. Notice of Meetings. Notice of the time and place, if
any, of each meeting of directors for which such notice is required by law,
the Articles, the Regulations or the By-Laws shall be given to each of the
directors by at least one of the following methods:
(A) In a writing mailed not less than three days before such
meeting and addressed to the residence or usual place of business of a
director, as such address appears on the records of the corporation; or
(B) In a writing sent by overnight delivery service not less than
two days before such meeting and addressed to the residence or usual place
of business of a director, as such address appears on the records of the
corporation; or
(C) By telegraph, cable, radio, wireless, or any other means of
communication authorized by the director to the address furnished by the
director for those transmissions, not later than the day before the date on
which such meeting is to be held; or
(D) Personally or by telephone not later than the day before the
date on which such meeting is to be held.
Notice given to a director by any one of the methods specified in the
Regulations shall be sufficient, and the method of giving notice to all
directors need not be uniform. Notice of any meeting of directors may be
given only by the chairman of the board, the president or the secretary of
the corporation. Any such notice need not specify the purpose or purposes
of the meeting. Notice of adjournment of a meeting of directors need not
be given if the time and place to which it is adjourned are fixed and
announced at such meeting.
Section 2.08. Waiver of Notice. Notice of any meeting of directors
may be waived in writing, either before or after the holding of such
meeting, by any director, which writing shall be filed with or entered upon
the records of the meeting. The attendance of any director, in person or
by the use of communications equipment, at any meeting of directors without
protesting, prior to or at the commencement of the meeting, the lack of
proper notice, shall be deemed to be a waiver by such director of notice of
such meeting. A telegram, cablegram, electronic mail, or an electronic or
other transmission capable of authentication that appears to have been sent
by a director and that contains a waiver by such director is a writing for
the purposes of this Section 2.08.
Section 2.09. Quorum. A majority of the whole authorized number of
directors shall be necessary to constitute a quorum for a meeting of
directors, except that a majority of the directors in office shall
constitute a quorum for filling a vacancy in the board. The act of a
majority of the directors present at a meeting at which a quorum is present
is the act of the board, except as otherwise provided by law, the Articles
or the Regulations.
Section 2.10. Executive Committee. The directors may create an
executive committee or any other committee of directors, to consist of not
less than three directors, and may authorize the delegation to such
executive committee or other committees of any of the authority of the
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directors, however conferred, other than that of filling vacancies among
the directors or in the executive committee or in any other committee of
the directors.
Such executive committee or any other committee of directors shall
serve at the pleasure of the directors, shall act only in the intervals
between meetings of the directors, and shall be subject to the control and
direction of the directors. Such executive committee or other committee of
directors may act by a majority of its members at a meeting or by a writing
or writings signed by all of its members. A telegram, cablegram,
electronic mail, or an electronic or other transmission capable of
authentication that appears to have been sent by a director is a writing
for the purposes of this Section 2.10.
Any act or authorization of any act by the executive committee or any
other committee within the authority delegated to it shall be as effective
for all purposes as the act or authorization of the directors. No notice
of a meeting of the executive committee or of any other committee of
directors shall be required. A meeting of the executive committee or of
any other committee of directors may be called only by the president or by
a member of such executive or other committee of directors. Meetings of
the executive committee or of any other committee of directors may be held
through any communications equipment if all persons participating can hear
each other and participation in such a meeting shall constitute presence
thereat.
Section 2.11. Compensation. Directors shall be entitled to receive
as compensation for services rendered and expenses incurred as directors,
such amounts as the directors may determine.
Section 2.12. By-Laws. The directors may adopt, and amend from time
to time, By-Laws for their own government, which By-Laws shall not be
inconsistent with the law, the Articles or the Regulations.
ARTICLE THREE
OFFICERS
Section 3.01. Officers. The officers of the corporation to be
elected by the directors shall be a president, a secretary, a treasurer,
and, if desired, one or more vice presidents and such other officers and
assistant officers as the directors may from time to time elect. The
directors may elect a chairman of the board, who must be a director.
Officers need not be shareholders of the corporation, and may be paid such
compensation as the board of directors may determine. Any two or more
offices may be held by the same person, but no officer shall execute,
acknowledge, or verify any instrument in more than one capacity if such
instrument is required by law, the Articles, the Regulations or the By-Laws
to be executed, acknowledged, or verified by two or more officers.
Section 3.02. Tenure of Office. The officers of the corporation
shall hold office at the pleasure of the directors. Any officer of the
corporation may be removed, either with or without cause, at any time, by
the affirmative vote of a majority of all the directors then in office;
such
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removal, however, shall be without prejudice to the contract rights, if
any, of the person so removed.
Section 3.03. Duties of the Chairman of the Board. The chairman of
the board, if any, shall preside at all meetings of the directors. The
chairman shall have such other powers and duties as the directors shall
from time to time assign.
Section 3.04. Duties of the President. The president shall be the
chief executive officer of the corporation and shall exercise supervision
over the business of the corporation and shall have, among such additional
powers and duties as the directors may from time to time assign, the power
and authority to sign all certificates evidencing shares of the corporation
and all deeds, mortgages, bonds, contracts, notes and other instruments
requiring the signature of the president of the corporation. It shall be
the duty of the president to preside at all meetings of shareholders.
Section 3.05. Duties of the Vice Presidents. In the absence of the
president or in the event of the president's inability or refusal to act,
the vice president, if any (or in the event there be more than one vice
president, the vice presidents in the order designated, or in the absence
of any designation, then in the order of their election), shall perform the
duties of the president, and when so acting, shall have all the powers of
and be subject to all restrictions upon the president. The vice presidents
shall perform such other duties and have such other powers as the directors
may from time to time prescribe.
Section 3.06. Duties of the Secretary. It shall be the duty of the
secretary, or of an assistant secretary, if any, in case of the absence or
inability to act of the secretary, to keep minutes of all the proceedings
of the shareholders and the directors and to make a proper record of the
same; to perform such other duties as may be required by law, the Articles
or the Regulations; to perform such other and further duties as may from
time to time be assigned to the secretary by the directors or the
president; and to deliver all books, paper and property of the corporation
in the secretary's possession to the successor, or to the president.
Section 3.07. Duties of the Treasurer. The treasurer, or an
assistant treasurer, if any, in case of the absence or inability to act of
the treasurer, shall receive and safely keep in charge all money, bills,
notes, choses in action, securities and similar property belonging to the
corporation, and shall do with or disburse the same as directed by the
president or the directors; shall keep an accurate account of the finances
and business of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, stated capital and
shares, together with such other accounts as may be required and hold the
same open for inspection and examination by the directors; shall give bond
in such sum with such security as the directors may require for the
faithful performance of the treasurer's duties; shall, upon the expiration
of the treasurer's term of office, deliver all money and other property of
the corporation in the treasurer's possession or custody to the successor
or the president; and shall perform such other duties as from time to time
may be assigned by the directors.
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ARTICLE FOUR
SHARES
Section 4.01. Certificates. Certificates evidencing ownership of
shares of the corporation shall be issued to those entitled to them. Each
certificate evidencing shares of the corporation shall bear a
distinguishing number; the signatures of the chairman of the board, the
president, or a vice president, and of the secretary or an assistant
secretary, or the treasurer or an assistant treasurer (except that when any
such certificate is countersigned by an incorporated transfer agent or
registrar, such signatures may be facsimile, engraved, stamped or printed);
and such recitals as may be required by law. Certificates evidencing
shares of the corporation shall be of such tenor and design as the
directors may from time to time adopt and may bear such recitals as are
permitted by law.
Section 4.02. Transfers. Where a certificate evidencing a share or
shares of the corporation is presented to the corporation or its proper
agents with a request to register transfer, the transfer shall be
registered as requested if:
(A) An appropriate person signs on each certificate so presented or
signs on a separate document an assignment or transfer of shares evidenced
by each such certificate, or signs a power to assign or transfer such
shares, or when the signature of an appropriate person is written without
more on the back of each such certificate; and
(B) Reasonable assurance is given that the endorsement of each
appropriate person is genuine and effective; the corporation or its agents
may refuse to register a transfer of shares unless the signature of each
appropriate person is guaranteed by a commercial bank or trust company
having an office or a correspondent in the City of New York, by a firm
having membership in the New York Stock Exchange, or by an "eligible
guarantor institution" as defined in Rule 17ad-15 under the Securities
Exchange Act of 1934 or any successor rule or regulation; and
(C) All applicable laws relating to the collection of transfer or
other taxes have been complied with; and
(D) The corporation or its agents are not otherwise required or
permitted to refuse to register such transfer.
Section 4.03. Transfer Agents and Registrars. The directors may
appoint one or more agents to transfer or to register shares of the
corporation, or both.
Section 4.04. Lost, Wrongfully Taken or Destroyed Certificates.
Except as otherwise provided by law, where the owner of a certificate
evidencing shares of the corporation claims that such certificate has been
lost, destroyed or wrongfully taken, the directors must cause the
corporation to issue a new certificate in place of the original certificate
if the owner:
(A) So requests before the corporation has notice that such
original certificate has been acquired by a bona fide purchaser; and
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(B) Files with the corporation, unless waived by the directors, an
indemnity bond, with surety or sureties satisfactory to the corporation, in
such sums as the directors may, in their discretion, deem reasonably
sufficient as indemnity against any loss or liability that the corporation
may incur by reason of the issuance of each such new certificate; and
(C) Satisfies any other reasonable requirements which may be
imposed by the directors, in their discretion.
Section 4.05. Uncertificated Shares. Anything contained in this
Article Four to the contrary notwithstanding, the directors may provide by
resolution that some or all of any or all classes and series of shares of
the corporation shall be uncertificated shares, provided that such
resolution shall not apply to (A) shares of the corporation represented by
a certificate until such certificate is surrendered to the corporation in
accordance with applicable provisions of Ohio law or (B) any certificated
security of the corporation issued in exchange for an uncertificated
security in accordance with applicable provisions of Ohio law. The rights
and obligations of the holders of uncertificated shares and the rights and
obligations of the holders of certificates representing shares of the same
class and series shall be identical, except as otherwise expressly provided
by law.
ARTICLE FIVE
INDEMNIFICATION AND INSURANCE
Section 5.01. Indemnification. The corporation shall indemnify any
officer or director of the corporation who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, any action threatened or
instituted by or in the right of the corporation), by reason of the fact
that he or she is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee, member, manager or agent of another
corporation (domestic or foreign, nonprofit or for profit), limited
liability company, partnership, joint venture, trust or other enterprise,
against expenses (including, without limitation, attorneys' fees, filing
fees, court reporters' fees and transcript costs), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such officer
or director in connection with such action, suit or proceeding if such
officer or director's act or omission giving rise to any claim for
indemnification under this Section 5.01 was not occasioned by such officer
or director's intent to cause injury to the corporation or by his or her
reckless disregard for the best interests of the corporation, and in
respect of any criminal action or proceeding, if he or she had no
reasonable cause to believe his or her conduct was unlawful. It shall be
presumed that no act or omission of a person claiming indemnification under
this Section 5.01 that gives rise to such claim was occasioned by an intent
to cause injury to the corporation or by a reckless disregard for the best
interests of the corporation, and with respect to any criminal matter, the
person claiming indemnification shall be presumed to have had no reasonable
cause to believe his or her conduct was unlawful. The presumption recited
in this Section 5.01 can be rebutted only by clear and convincing evidence,
and the termination of any action, suit or proceeding by judgment, order,
settlement or
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conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself, rebut such presumption.
Section 5.02. Court-Approved Indemnification. Anything contained in
the Regulations or elsewhere to the contrary notwithstanding:
(A) the corporation shall not indemnify any officer or director of
the corporation who was a party to any completed action or suit instituted
by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he or she is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, trustee, officer, employee, member, manager or
agent of another corporation (domestic or foreign, nonprofit or for
profit), limited liability company, partnership, joint venture, trust or
other enterprise, in respect of any claim, issue or matter asserted in such
action or suit as to which he or she shall have been adjudged to be liable
for an act or omission occasioned by his or her deliberate intent to cause
injury to the corporation or by his or her reckless disregard for the best
interests of the corporation, unless and only to the extent that the Court
of Common Pleas of Muskingum County, Ohio or the court in which such action
or suit was brought shall determine upon application that, despite such
adjudication of liability, and in view of all the circumstances of the
case, he or she is fairly and reasonably entitled to such indemnity as such
Court of Common Pleas or such other court shall deem proper; and
(B) the corporation shall promptly make any such unpaid
indemnification as is determined by a court to be proper as contemplated by
this Section 5.02.
Section 5.03. Indemnification for Expenses. Anything contained in
the Regulations or elsewhere to the contrary notwithstanding, to the extent
that an officer or director of the corporation has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred
to in Section 5.01, or in defense of any claim, issue or matter therein, he
or she shall be promptly indemnified by the corporation against expenses
(including, without limitation, attorneys' fees, filing fees, court
reporters' fees and transcript costs) actually and reasonably incurred by
such officer or director in connection therewith.
Section 5.04 Determination Required. Any indemnification required
under Section 5.01 and not precluded under Section 5.02 shall be made by
the corporation only upon a determination that such indemnification is
proper in the circumstances because the officer or director has met the
applicable standard of conduct set forth in Section 5.01. Such
determination may be made only (A) by a majority vote of a quorum
consisting of directors of the corporation who were not and are not parties
to, or threatened with, any such action, suit or proceeding, or (B) if such
a quorum is not obtainable or if a majority of a quorum of disinterested
directors so directs, in a written opinion by independent legal counsel
other than an attorney, or a firm having associated with it an attorney,
who has been retained by or who has performed services for the corporation,
or any person to be indemnified, within the past five years, or (C) by the
shareholders, or (D) by the Court of Common Pleas of Muskingum County, Ohio
or (if the corporation is a party thereto) the court in which such action,
suit or proceeding was brought, if any; any such determination may be made
by a court under division (D) of this Section 5.04 at any time (including,
without limitation, any time before, during or after the time when any such
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determination may be requested of, be under consideration by or have been
denied or disregarded by the disinterested directors under division (A) or
by independent legal counsel under division (B) or by the shareholders
under division (C) of this Section 5.04); and no failure for any reason to
make any such determination, and no decision for any reason to deny any
such determination, by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by the shareholders under
division (C) of this Section 5.04 shall be evidence in rebuttal of the
presumption recited in Section 5.01. Any determination made by the
disinterested directors under division (A) or by independent legal counsel
under division (B) of this Section 5.04 to make indemnification in respect
of any claim, issue or matter asserted in an action or suit threatened or
brought by or in the right of the corporation shall be promptly
communicated to the person who threatened or brought such action or suit,
and within ten (10) days after receipt of such notification such person
shall have the right to petition the Court of Common Pleas of Muskingum
County, Ohio or the court in which such action or suit was brought, if any,
to review the reasonableness of such determination.
Section 5.05. Advances for Expenses. The provisions of Section
1701.13(E)(5)(a) of the Ohio Revised Code do not apply to the corporation.
Expenses (including, without limitation, attorneys' fees, filing fees,
court reporters' fees and transcript costs) incurred in defending any
action, suit or proceeding referred to in Section 5.01 shall be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding to or on behalf of the officer or director promptly as such
expenses are incurred by such officer or director, but only if such officer
or director shall first agree, in writing:
(A) to repay all amounts so paid in respect of any claim, issue or
other matter asserted in such action, suit or proceeding in defense of
which he or she shall not have been successful on the merits or otherwise
if it is proved by clear and convincing evidence in a court of competent
jurisdiction that, in respect of any such claim, issue or other matter his
or her relevant action or failure to act was occasioned by his or her
deliberate intent to cause injury to the corporation or his or her reckless
disregard for the best interests of the corporation, unless and only to the
extent that the Court of Common Pleas of Muskingum County, Ohio or the
court in which such action or suit was brought shall determine upon
application that, despite such determination, and in view of all the
circumstances, he or she is fairly and reasonably entitled to all or part
of such indemnification; and
(B) to reasonably cooperate with the corporation concerning the
action, suit or proceeding.
Section 5.06. Article Five Not Exclusive. The indemnification
provided by this Article Five shall not be deemed exclusive of any other
rights to which any person seeking indemnification may be entitled under
the Articles, the Regulations, any agreement, a vote of disinterested
directors, or otherwise, both as to action in such person's official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be an officer or
director of the corporation and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
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Section 5.07. Insurance. The corporation may purchase and maintain
insurance for or on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, trustee, officer, employee, member,
manager or agent of another corporation (domestic or foreign, nonprofit or
for profit), limited liability company, partnership, joint venture, trust
or other enterprise, against any liability asserted against such person and
incurred by him or her in any such capacity, or arising out of his or her
status as such, whether or not the corporation would have the obligation or
the power to indemnify him or her against such liability under the
provisions of this Article Five. Insurance may be purchased from or
maintained with a person in which the corporation has a financial interest.
Section 5.08. Certain Definitions. For purposes of this Article
Five, and as an example and not by way of limitation:
(A) A person claiming indemnification under this Article Five shall
be deemed to have been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Section 5.01, or in defense
of any claim, issue or other matter therein, if such action, suit or
proceeding shall be terminated as to such person, with or without
prejudice, without the entry of a judgment or order against such person,
without a conviction of such person, without the imposition of a fine upon
such person and without his or her payment or agreement to pay any amount
in settlement thereof (whether or not any such termination is based upon a
judicial or other determination of the lack of merit of the claims made
against him or her or otherwise results in a vindication of such person);
and
(B) References to an "other enterprise" shall include employee
benefit plans; references to a "fine" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in
a manner he or she reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
corporation" within the meaning of that term as used in this Article Five.
Section 5.09. Venue. Any action, suit or proceeding to determine a
claim for, or for repayment to the corporation of, indemnification under
this Article Five may be maintained by the person claiming such
indemnification, or by the corporation, in the Court of Common Pleas of
Muskingum County, Ohio. The corporation and (by claiming or accepting such
indemnification) each such person consent to the exercise of jurisdiction
over them by the Court of Common Pleas of Muskingum County, Ohio in any
such action, suit or proceeding.
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ARTICLE SIX
MISCELLANEOUS
Section 6.01. Amendments. Except as set forth in the Articles of
Incorporation, the Regulations may be amended, or new regulations may be
adopted, at a meeting of shareholders held for such purpose, only by the
affirmative vote of the holders of shares entitling them to exercise not
less than a majority of the voting power of the corporation on such
proposal, or without a meeting by the written consent of the holders of
shares entitling them to exercise not less than a majority of the voting
power of the corporation on such proposal.
Section 6.02. Action by Shareholders or Directors Without a Meeting.
Anything contained in the Regulations to the contrary notwithstanding,
except as provided in Section 6.01, any action which may be authorized or
taken at a meeting of the shareholders or of the directors or of a
committee of the directors, as the case may be, may be authorized or taken
without a meeting with the affirmative vote or approval of, and in a
writing or writings signed by, all the shareholders who would be entitled
to notice of a meeting of the shareholders held for such purpose, or all
the directors, or all the members of such committee of the directors,
respectively, which writings shall be filed with or entered upon the
records of the corporation. A telegram, a cablegram, electronic mail, or
an electronic or other transmission capable of authentication that appears
to have been sent by a shareholder or a director, as the case may be, and
that contains an affirmative vote or approval of such shareholder or
director is a writing for the purposes of this Section 6.02. The date on
which that telegram, cablegram, electronic mail, or electronic or other
transmission is sent is the date on which the writing is signed.
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REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FIRST FEDERAL BANCORP, INC.
THE FIRST FEDERAL BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 19, 2003
The undersigned shareholder of First Federal Bancorp, Inc. ("Bancorp")
hereby constitutes and appoints John C. Matesich, III, Don R. Parkhill and
Larry W. Snode, or any one of them, the Proxy or Proxies of the undersigned
with full power of substitution and resubstitution, to vote at the Annual
Meeting of Shareholders of Bancorp to be held at the Holiday Inn, 4645 East
Pike, Zanesville, Ohio, on February 19, 2003, at 2:00 p.m., Eastern
Standard Time (the "Annual Meeting"), all of the shares of Bancorp that the
undersigned is entitled to vote at the Annual Meeting, or at any
adjournment thereof, on each of the following proposals, all of which are
described in the accompanying Proxy Statement:
1. To re-elect four directors of Bancorp for terms expiring in 2005;
[ ] FOR all nominees listed [ ] WITHHOLD authority to vote
below (except as marked for all nominees listed
to the contrary below): below:
Ward D. Coffman, III
Robert D. Goodrich, II
Patrick L. Hennessey
Connie Ayres LaPlante
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
_____________________________________________________________
2. Proposals related to the Amended and Restated Code of Regulations:
NOTE: None of the proposals in item 2 will be adopted unless all of
the proposals in item 2 are approved by a majority of the outstanding
common shares. Use the following lines to vote separately for each
proposal: FOR AGAINST ABSTAIN
(a) adoption of the Amended and
Restated Code of Regulations
in its entirety; [ ] [ ] [ ]
(b) adoption of provisions in the
Amended and Restated Code of
Regulations restricting the
removal of directors; [ ] [ ] [ ]
(c) adoption of provisions in the
Amended and Restated Code of
Regulations expanding the
indemnification of directors
and officers; and [ ] [ ] [ ]
(d) adoption of technical changes
to the existing Code of
Regulations and the removal
of obsolete provisions. [ ] [ ] [ ]
3. To ratify the selection of BKD LLP as the auditors of Bancorp for the
current fiscal year; and
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. UNLESS OTHERWISE SPECIFIED, THE
SHARES WILL BE VOTED FOR PROPOSALS 1, 2(a), 2(b), 2(c) AND 2(d) AND 3 AND
IN THE DISCRETION OF THE PROXIES ON ANY OTHER BUSINESS PROPERLY BROUGHT
BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
Important: Please sign and date this proxy on the reverse side.
(OVER)
All Proxies previously given by the undersigned are hereby revoked.
Receipt of the Notice of the Annual Meeting of Shareholders of Bancorp and
of the accompanying Proxy Statement is hereby acknowledged.
Please sign exactly as your name appears on your Stock Certificates(s).
Executors, Administrators, Trustees, Guardians, Attorneys and Agents should
give their full titles.
___________________________________ ____________________________________
Signature Signature
___________________________________ ____________________________________
Print or Type Name Print or Type Name
___________________________________ ____________________________________
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BANCORP.
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