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:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED
BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
FIRSTFEDERAL FINANCIAL SERVICES CORP
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(Name of Registrant as Specified in Its Charter)
FIRSTFEDERAL FINANCIAL SERVICES CORP
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14a.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
[LETTERHEAD OF FIRSTFEDERAL FINANCIAL SERVICES CORP. APPEARS HERE]
March 15, 1996
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of FirstFederal
Financial Services Corp, I cordially invite you to attend the Annual Meeting of
Stockholders of the Company to be held at 9:00 a.m. on April 17, 1996, at Black
Tie Affair Conference Center located at 50 Riffel Road, Wooster, Ohio. The
attached Notice of Annual Meeting of Stockholders and Proxy Statement discuss
the business to be conducted at the Meeting. We have also enclosed a copy of
FirstFederal's Annual Report. At the Meeting we shall, as in past years, report
on Company operations and the outlook for the year ahead.
I encourage you to attend the Meeting in person. Whether or not you plan
to attend, however, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN
IT IN THE ACCOMPANYING POSTPAID RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. This
will assure that your shares are represented at the Meeting.
If you have any questions concerning these matters, please do not hesitate
to contact me or L. Dwight Douce at (216) 264-8001.
Very truly yours,
FIRSTFEDERAL FINANCIAL SERVICES CORP
/s/ GARY G. CLARK
GARY G. CLARK
Chairman, President and
Chief Executive Officer
FIRSTFEDERAL FINANCIAL SERVICES CORP
135 EAST LIBERTY STREET
WOOSTER, OHIO 44691
(216) 264-8001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 17, 1996
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of FirstFederal Financial Services Corp (the "Company") will be held
at 9:00 a.m. Wooster, Ohio time, on April 17, 1996 at Black Tie Affair
Conference Center located at 50 Riffel Road, Wooster, Ohio.
A proxy card and a Proxy Statement for the Meeting are enclosed. The
Meeting is for the purpose of considering and acting upon the election of three
directors of the Company and such other matters as may properly come before the
Meeting or any adjournments or postponements thereof. The Board of Directors is
not aware of any other business to come before the Meeting.
Any action may be taken on the foregoing proposal at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned or postponed. Stockholders of record at the close of business on
March 6, 1996 are the stockholders entitled to vote at the Meeting, and any
adjournments or postponements thereof.
You are requested to complete and sign the enclosed proxy, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Meeting in person.
By Order of the Board of Directors
/s/ L. DWIGHT DOUCE
L. Dwight Douce
Secretary
Wooster, Ohio
March 15, 1996
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
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PROXY STATEMENT
FIRSTFEDERAL FINANCIAL SERVICES CORP
135 EAST LIBERTY STREET
WOOSTER, OHIO 44691
ANNUAL MEETING OF STOCKHOLDERS
APRIL 17, 1996
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of FirstFederal Financial Services
Corp (the "Company") to be used at the Annual Meeting of Stockholders of the
Company (the "Meeting"), to be held at Black Tie Affair Conference Center
located at 50 Riffel Road, Wooster, Ohio, on April 17, 1996 at 9:00 a.m.
Wooster, Ohio time, and at all adjournments or postponements of the Meeting.
The accompanying Notice of Meeting and this Proxy Statement are first being
mailed to stockholders on or about March 15, 1996. Certain of the information
provided herein relates to First Federal Savings and Loan Association of Wooster
("First Federal" or the "Association"), a wholly owned subsidiary and the
predecessor of the Company.
At the Meeting, the stockholders of the Company are being asked to consider
and vote upon one proposal to elect three directors of the Company. Thomas G.
Clark, a current director of the Company, will not seek re-election to the Board
of Directors at the upcoming Annual Meeting upon expiration of his term. Mr.
Clark was appointed to the Board of Directors of the Company in May 1994 to fill
a temporary vacancy, having retired from the Board of Directors of the Company
and First Federal in April 1993. The Board would like to express its gratitude
to Mr. Clark for his service. The Board would also like to announce that,
pursuant to the Agreement and Plan of Merger, dated February 26, 1996, by and
between the Company and Mobile Communications, Inc., Mr. Ronald A. James, Jr.
has been nominated as a new member of the Board of Directors. Mr. James'
business experience is detailed under "Election of Directors - General."
VOTING RIGHTS AND PROXY INFORMATION
All shares of common stock, par value $1.00 per share, of the Company (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for election of all nominees
for director named below. The Company does not know of any other matters that
are to come before the Meeting. If any other matters are properly presented at
the Meeting for action, the persons named in the enclosed form of proxy and
acting thereunder will have the discretion to vote on such matters in accordance
with their best judgment.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy, (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting, or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to L. Dwight
Douce, Secretary, FirstFederal Financial Services Corp, 135 East Liberty Street,
Wooster, Ohio 44691.
VOTE REQUIRED FOR APPROVAL
The presence, in person or by proxy, of any number of shares of Common
Stock entitled to vote will constitute a quorum at the Meeting. The three
nominees for election as directors who receive the greatest number of votes cast
for the election of directors at the Meeting by the holders of shares of Common
Stock shall become directors at the conclusion of the tabulation of votes.
Accordingly, abstentions and proxies returned by brokers as "non-votes" on
behalf of shares held in street name will not affect the outcome of the election
of directors. Abstentions and broker non-votes are counted for purposes of
determining a quorum.
VOTING SECURITIES AND CERTAIN HOLDERS THEREOF
Stockholders of record as of the close of business on March 6, 1996 will be
entitled to one vote for each share of Common Stock then held. As of that date,
the Company had 2,973,417 shares of Common Stock issued and outstanding.
The following table sets forth, as of December 31, 1995, certain
information as to those persons who were known by management to be beneficial
owners of more than 5% of the Company's outstanding shares of Common Stock and
as to the shares of Common Stock beneficially owned by all directors and
executive officers of the Company and the Association as a group.
SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- -------------------------------------- ------------------ ---------
The Belden Brick Company, Robert F.
Belden, Richard F. Belden, Sr. and
Joseph G. Belden, Sr.
700 Tuscarawas Street 589,155/(1)(5)/ 18.14%
Canton, Ohio 44702
Carret and Company, Inc.
560 Lexington Avenue
New York, New York 10022 442,733/(2)/ 13.61
Steven N. Stein
2211 Grandin Road
Cincinnati, Ohio 45208 252,153/(3)(5)/ 8.21
Directors and executive officers as a
group (14 persons) 970,037/(4)(5)/ 28.48
/(1)/ As reported by The Belden Brick Company ("Belden Brick"), Robert F.
Belden, Richard F. Belden, Sr. and Joseph G. Belden, Sr. Belden Brick
reported sole voting and investment power as to 566,568 of the total of
589,155 shares covered by the report and did not report shared voting or
investment power as to any shares. Robert F. Belden reported shared voting
and investment power as to 566,568 of such total number of shares and sole
voting and investment power as to 13,550 shares. Richard F. Belden, Sr.
reported shared voting and investment power as to 566,568 of such total
number of shares and sole voting and investment power as to 7,499 shares.
Joseph G. Belden, Sr. reported shared voting and investment power as to
566,568 of such total number of shares and sole voting and investment
power as to 1,538 shares. Of the total 566,568 shares, 190,790 represent
shares of Common Stock issuable upon conversion of 87,000 shares of the
Company's 7% Cumulative Convertible Preferred Stock, Series A (the "Series
A Preferred Stock") and 73,350 represent shares of Common Stock issuable
upon conversion of 60,000 shares of the Company's 6 1/2% Cumulative
Convertible Preferred Stock, Series B (the "Series B Preferred Stock").
Robert F., Richard F. and Joseph G. Belden disclaimed beneficial ownership
of the 566,568 shares of Common Stock owned by Belden Brick. Richard F.
Belden, Sr. disclaimed beneficial ownership of the 7,499 shares owned by
his wife. Robert F. Belden is a director of Belden Brick and of the
Company.
/(2)/ As reported by Carret and Company, Inc. ("Carret"). Carret reported sole
voting and investment power as to 46,690 and shared investment but no
voting power as to 396,043 of the total of 442,733 shares covered by
Carret's reports. Of such total, 230,944 represent shares of Common Stock
issuable upon conversion of 105,310 shares of the Company's Series A
Preferred Stock and 43,977 represent shares of Common Stock issuable upon
conversion of 35,900 shares of the Company's Series B Preferred Stock.
Carret disclaimed beneficial ownership as to 396,043 shares.
2
/(3)/ As reported by Steven N. Stein. Mr. Stein reported sole voting and
investment power as to 116,545 and shared voting and investment power as
to 135,608 of the total of 252,153 shares covered by the report. Of such
total, 63,046 represent shares of Common Stock issuable upon conversion of
28,750 shares of the Company's Series A Preferred Stock and 27,139
represent shares of Common Stock issuable upon conversion of 22,200 shares
of the Company's Series B Preferred Stock.
/(4)/ Includes shares held directly, as well as shares which are subject to
options granted under the 1987 Stock Option and Incentive Plan (the "Stock
Option Plan"), shares issuable upon conversion of shares of Preferred
Stock and shares which are held in retirement accounts or by certain
members of the named individuals' families, over which shares the
respective directors and officers may be deemed to have sole or shared
voting or investment power.
/(5)/ Includes shares held directly, as well as shares which are subject to
options granted under the Non-Employee Director Stock Option Plan (the
"Director Stock Option Plan").
3
I. ELECTION OF DIRECTORS
GENERAL
Directors of the Company are generally elected to serve for a three-year
term or until their respective successors are elected and qualified. One-third
of the directors are elected annually. It is intended that the proxies
solicited on behalf of the Board of Directors (other than proxies in which the
vote is withheld as to one or more nominees) will be voted at the Meeting for
the election of the nominees identified below. If any nominee is unable to
serve, the shares represented by all valid proxies will be voted for the
election of such substitute as the Board of Directors may recommend. At this
time, the Board of Directors knows of no reason why any of the nominees might be
unable to serve, if elected. There are no arrangements or understandings
between any director or nominee and any other person pursuant to which such
director or nominee was selected.
The table below sets forth certain information regarding the Company's
Board of Directors, including members' terms of office, and their beneficial
ownership of the Company's Common Stock, Series A Preferred Stock or Series B
Preferred Stock at December 31, 1995. No director beneficially owned more than
1% of the Company's Common Stock or Preferred Stock outstanding at December 31,
1995 except that Mr. Stein beneficially owned 8.46%, 5.34% and 4.48% and Mr.
Belden beneficially owned 19.48%, 16.05% and 12.10% of the Common Stock, Series
A Preferred Stock and Series B Preferred Stock, respectively.
SHARES OF SHARES OF
COMMON STOCK PREFERRED STOCK
POSITIONS HELD DIRECTOR TERM TO BENEFICIALLY BENEFICIALLY
NAME AGE IN THE COMPANY SINCE/(1)/ EXPIRE OWNED/(2)(3)/ OWNED
- --------------------------- --- ------------------------------------------- ---------- ------- --------------- ---------------
NOMINEES
Gary G. Clark 46 Chairman of the Board, 1983 1999 22,802/(6)/ 200
President and Chief
Executive Officer
Steven N. Stein 40 Director 1989 1999 252,153/(5)(9)/ 50,950
Ronald A. James Jr. 46 Director Nominee 1996 1999 --- N/A
DIRECTORS CONTINUING IN OFFICE
R. Victor Dix 61 Director 1971 1998 7,669/(5)/ 160
Daniel H. Plumly 42 Director 1987 1998 8,328/(5)/ 800
L. Dwight Douce 47 Director, Executive Vice 1989 1998 16,270/(6)/ 220
President, Secretary and
Chief Financial Officer
Richard E. Herald 66 Director 1977 1997 39,327/(5)(7)/ 1,600
Robert F. Belden 48 Director 1989 1997 580,118/(5)(8)/ 146,500
Gust B. Geralis 39 Director 1988 1997 8,934/(5)/ 800
/(1)/ Includes service as a director of the Association.
/(2)/ Includes shares, as of December 31, 1995, held directly, as well as shares
which are held in retirement accounts or by certain members of the named
individuals' families, over which shares the respective directors may be
deemed to have sole or shared voting or investment power.
4
/(3)/ Includes with respect to Messrs. Clark, Stein, Herald, Belden, Geralis,
Dix, Plumly and Douce, 438, 90,185, 3,508, 263,044, 1,754, 253, 1,366 and
481 shares of Common Stock, respectively, issuable upon conversion of
shares of the Company's Series A and Series B Preferred Stock.
/(4)/ Includes shares of Series A and Series B Preferred Stock beneficially
owned. All directors and executive officers as a group (14 persons) own
120,330 shares of Series A Preferred Stock and 83,500 shares of the Series
B Preferred Stock, or 22.33% and 16.83% of such shares outstanding,
respectively.
/(5)/ Includes 4,537 shares of Common Stock each with respect to Messrs.
Belden, Dix, Geralis, Herald, Stein and Plumly, subject to presently
exercisable options granted under the Director Stock Option Plan.
/(6)/ Includes with respect to Messrs. Clark and Douce, 17,118 and 12,757 shares
of Common Stock, respectively, subject to presently exercisable options
granted under the Stock Option Plan.
/(7)/ Does not include 5,111 shares of Common Stock beneficially owned by Wayne
Mutual Insurance Co., of which Mr. Herald is a director, as to which
shares Mr. Herald disclaims beneficial ownership .
/(8)/ See also footnote (1) of "Voting Securities and Certain Holders Thereof"
above.
/(9)/ See also footnote (3) of "Voting Securities and Certain Holders Thereof"
above.
The business experience of each of the Company's directors for at least the
past five years is as follows:
Gary G. Clark. Mr. Clark succeeded Richard E. Herald as Chairman of the Board
of the Company and First Federal in April, 1994. On August 1, 1993, Mr. Clark
succeeded Richard E. Herald as Chief Executive Officer of the Company and First
Federal. Mr. Clark has served as a Director and President of the Company since
its formation in 1989. He has also been a Director of First Federal since 1983
and President and Chief Operating Officer of First Federal from 1989 until
reaching his current positions. Mr. Clark has 18 years of experience with First
Federal.
Steven N. Stein. Mr. Stein has served as the President of the Belvedere
Corporation, a real estate company, located in Cincinnati, Ohio, since April
1990 and, since August 1995, as Chairman of Financial Stock, Inc., the general
partner of an investment partnership. Prior thereto he was a partner in the law
firm of Taft, Stettinius & Hollister, also based in Cincinnati. Mr. Stein has
served as a Director of the Company and the Association since 1989.
Ronald A. James, Jr. Mr. James has served as President of Mobile Consultants,
Inc., a manufactured housing service company located in Alliance, Ohio since
1980. Mobile Consultants' principal business consists of placing consumer
loans, originating from the purchase of manufactured housing by individuals,
with financial institutions.
R. Victor Dix. Mr. Dix is the President and Publisher of The Daily Record and
----------------
a Vice President and Director of Wooster Republican Printing Company. Mr. Dix
has served as a Director of the Company since its formation in 1989 and as a
Director of First Federal since 1971.
Daniel H. Plumly. Mr. Plumly has been engaged in the private practice of law
with the firm of Critchfield, Critchfield & Johnston, Ltd. since 1978 and has
been a principal in the firm since 1981. Mr. Plumly has served as a Director of
the Company since its formation in 1989. Mr. Plumly has also served as a
Director of First Federal since 1987.
L. Dwight Douce. In April, 1994, Mr. Douce was named Executive Vice President
of the Company. Mr. Douce has served as a Director and as Secretary and
Treasurer of the Company since its formation in 1989. He has also served as
Executive Vice President of First Federal since August 1993, a Director of First
Federal since 1989, and Chief Financial Officer of First Federal since 1983.
Mr. Douce has 12 years of experience with First Federal.
5
Richard E. Herald. Mr. Herald served as Chairman of the Board of the Company
and First Federal from 1989 until his retirement from such positions in April,
1994. Mr. Herald retired from his position as Chief Executive Officer of the
Company and First Federal in 1993. From 1977 to February 1989, Mr. Herald was
President and Chief Executive Officer of First Federal.
Robert F. Belden. Mr. Belden is a Director and the President of The Belden
Brick Company, located in Canton, Ohio. Mr. Belden has served as a Director of
the Company and First Federal since 1989.
Gust B. Geralis. Mr. Geralis is a certified public accountant and the
President of Mighty Associates Inc., an automotive service company located in
Medina, Ohio. Mr. Geralis has served as a Director of the Company since its
formation in 1989. Mr. Geralis has also served as a Director of First Federal
since 1988.
BOARD OF DIRECTORS MEETINGS, COMMITTEES AND COMPENSATION
BOARD AND COMMITTEE MEETINGS OF THE COMPANY. The Board of Directors of the
Company held 12 meetings during the fiscal year ended December 31, 1995. No
incumbent director attended fewer than 75% of the total number of meetings held
by the Company's Board of Directors and all committees of the Board on which he
served during the year.
Directors of the Company are not paid fees in their capacity as members of the
Board of Directors of the Company, except with respect to non-employee members
of the Mergers and Acquisitions Committee, described below. Each non-employee
director of the Association receives a monthly retainer of $850 and a fee of
$500 for each Association Board meeting attended. Thomas G. Clark, director
emeritus of the Association, receives 75% of the non-employee director retainer
and fees for each monthly meeting he attends.
The Company has no standing compensation, audit or nominating committees. The
full Board of Directors of the Company acts as a Nominating Committee for the
annual selection of its nominees for election as directors. Pursuant to the
Company's Code of Regulations, nominations for directors by stockholders must be
made in writing and delivered to the Secretary of the Company at least 30 days
prior to the meeting and such written nomination of stockholders must contain
certain information as provided in the Code of Regulations. While the Board of
Directors will consider nominees recommended by stockholders, it has not
actively solicited nominations. The Company has a standing Mergers and
Acquisitions Committee, as described below.
Mergers and Acquisitions Committee. The Mergers and Acquisitions Committee is
responsible for advising the Board as to matters pertaining to merger and
acquisition opportunities. The present members of this Committee are Directors
Gary G. Clark, Chairman, Daniel H. Plumly, Steven N. Stein and L. Dwight Douce.
Non-employee members are compensated at the rate of $300 for each meeting
attended. This Committee met five times in 1995.
BOARD AND COMMITTEE MEETINGS OF THE ASSOCIATION. During the fiscal year ended
December 31, 1995, the Board of Directors of the Association held 12 meetings.
No incumbent director of the Association attended fewer than 75% of the total
number of meetings held by the Association's Board of Directors and all
committees of the Board of Directors of the Association on which he served
during the year. The Association has standing Compensation and Benefits and
Audit and Compliance Committees, as described below.
Compensation and Benefits Committee. The Compensation and Benefits Committee
is charged with the responsibility of reviewing and maintaining the various
items related to compensation, and other types of benefits such as health and
medical insurance, life insurance, long-term disability insurance, and such
other benefits that may, from time to time, be authorized by the Board of
Directors. Members of this Committee are outside directors. The present
members of this Committee are Steven N. Stein, Chairman, Robert F. Belden and
Daniel H. Plumly. Committee members are appointed by Board action each year at
the reorganizational meeting of the Board and are compensated at the rate of
$400 for the Chairman and $300 for each member for attendance at Compensation
and Benefits Committee meetings. This Committee met three times in 1995.
6
Audit and Compliance Committee. The Audit and Compliance Committee is
responsible for monthly review of reports developed by the internal audit
department and compliance department and for follow-up to determine that
adequate action is taken to ensure correction of any problems that have been
identified. Other responsibilities of this Committee are to recommend annually
to the Board the engagement of an independent auditing firm, to review the scope
and results of the audit with the independent auditors and to meet with internal
and independent auditors as appropriate. Monthly reports are made to the full
Board by this Committee. Current Committee members are Gust B. Geralis,
Chairman, Richard E. Herald, R. Victor Dix and Daniel H. Plumly. Committee
members are compensated at the rate of $300 and the Chairman receives $400 for
attendance at Audit and Compliance Committee meetings. The Audit and Compliance
Committee met 11 times during 1995.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid or
granted to the Company's Chief Executive Officer and to the other executive
officer of the Company and the Association whose aggregate cash compensation
exceeded $100,000 in fiscal 1995.
=====================================================================================
SUMMARY COMPENSATION TABLE
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LONG TERM
ANNUAL COMPENSATION COMPENSATION
- -----------------------------------------------------------------------
NAME AND ALL OTHER
PRINCIPAL SALARY BONUS OPTIONS COMPENSATION
POSITION YEAR ($) ($) (#)/(1)/ ($)/(2)/
- -------------------------------------------------------------------------------------
Gary G. Clark 1995 180,000 67,500 10,000 5,786
Chairman, President and Chief 1994 165,000 --- 11,000 3,780
Executive Officer 1993 130,885 49,082 4,125 4,398
- -------------------------------------------------------------------------------------
L. Dwight Douce 1995 115,000 34,500 6,000 4,718
Executive Vice President, 1994 105,000 --- 6,600 3,454
Secretary and Treasurer 1993 90,577 27,173 3,093 2,297
=====================================================================================
/(1)/ Options granted prior to 1995 have been adjusted for the 10% stock
dividend paid on May 22, 1995 (the "Stock Dividend").
/(2)/ Represents matching contributions under the Association's 401(k) Savings
and Investment Plan (the "401(k) Plan"), which was adopted in April 1992
and $870 in life insurance premiums paid by the Association on behalf of
each of Messrs. Clark and Douce in 1995.
7
The following table sets forth certain information concerning stock options
granted pursuant to the Stock Option Plan to the named executive officers in
1995. No stock appreciation rights have been granted pursuant to the Stock
Option Plan.
======================================================================================================================
OPTION GRANTS IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ----------------------------------------------------------------------------------------------------------------------
NUMBER OF % of Total
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
(#)/(1)/ IN FISCAL PRICE EXPIRATION
NAME YEAR ($/SH) DATE 5% ($) 10% ($)
- ----------------------------------------------------------------------------------------------------------------------
Gary G. Clark 10,000 20.41 20.25 06/20/05 127,400 322,700
- ----------------------------------------------------------------------------------------------------------------------
L. Dwight Douce 6,000 12.24 20.25 06/20/05 76,400 193,620
======================================================================================================================
/(1)/ Mr. Clark's and Mr. Douce's options become exercisable on June 20, 1998.
The following table sets forth certain information concerning the number and
value of stock options at December 31, 1995 held by the named executive
officers, with adjustments for those options awarded prior to the Stock
Dividend.
===================================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------------------
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
-----------------------------------------------------------
SHARES ACQUIRED
NAME ON EXERCISE (#) VALUE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Gary G. Clark -0- N/A 17,118 25,125 327,503 136,118
- ----------------------------------------------------------------------------------------------------------------------------------
L. Dwight Douce -0- N/A 12,757 15,693 247,205 86,800
==================================================================================================================================
EMPLOYMENT AGREEMENTS. The Association has entered into employment agreements
with Messrs. Clark and Douce. The employment agreements provide for an annual
base salary in an amount not less than each individual's respective current
salary and provide for a salary review by the Board of Directors not less often
than annually. The agreements also provide for termination upon the employee's
death, for cause or in certain events specified by OTS regulations. The
employment agreements are also terminable by the employee upon 90 days written
notice to the Association.
8
The employment agreements provide for payment (in lieu of salary) to Messrs.
Clark and Douce of an amount equal to 299% of their five year average base
compensation, respectively, in the event there is a "change in control" of the
Association where employment terminates in connection with such change in
control or within 12 months thereafter. For the purposes of the employment
agreements, a "change in control" is defined as any event which would require
the filing of an application for acquisition of control or notice of change in
control pursuant to 12 C.F.R. (S) 574.3 or 4. Such events are generally
triggered prior to the acquisition or control of 10% of the Company's Common
Stock. If the employment of Messrs. Clark and Douce had been terminated as of
December 31, 1995 under circumstances entitling them to severance pay as
described above, they would have been entitled to receive a lump sum cash
payment of approximately $403,000 and $278,000, respectively.
PENSION PLAN
The Association maintains a non-contributory insured defined benefit pension
plan, the First Federal Savings and Loan Association of Wooster Pension Plan
(the "Pension Plan"), for all covered employees who complete one year of service
and have attained the age of 21. Benefits are based upon length of service and
compensation as described below. The Pension Plan is administered by the
Pension Plan Committee whose members include the President and Chief Executive
Officer, the Executive Vice President and Chief Financial Officer and the Vice
President and Director of Personnel.
The following table illustrates annual pension benefits payable to all
participants under the Pension Plan assuming retirement at age 65 at various
levels of average compensation, years of service and Social Security covered
compensation for an individual reaching age 65 in 1996. The annual benefit
under the Pension Plan is based on a participant's average W-2 earnings for the
36 highest paid consecutive months during his last ten years before retirement
or employment termination, and on total years of credited service at retirement
or employment termination, up to a maximum of 25 years and is payable in the
form of a ten year certain and life annuity. The benefits listed in the Pension
Plan table are not subject to any deduction for Social Security amounts. As of
December 31, 1995, Messrs. Clark and Douce had 17 and 11 years of credited
service under the Pension Plan, respectively.
=========================================================================================
PENSION PLAN TABLE
- -----------------------------------------------------------------------------------------
YEARS OF CREDITED SERVICE
- -----------------------------------------------------------------------------------------
FINAL AVERAGE COMPENSATION 10 15 20 25 OR MORE
- -----------------------------------------------------------------------------------------
$30,000 $ 4,350 $ 6,525 $ 8,701 $10,876
- -----------------------------------------------------------------------------------------
40,000 6,370 9,555 12,741 15,926
- -----------------------------------------------------------------------------------------
50,000 8,390 12,585 16,781 20,976
- -----------------------------------------------------------------------------------------
60,000 10,410 15,615 20,821 26,026
- -----------------------------------------------------------------------------------------
70,000 12,430 18,645 24,861 31,076
- -----------------------------------------------------------------------------------------
80,000 14,450 21,675 28,901 36,126
- -----------------------------------------------------------------------------------------
90,000 16,470 24,705 32,941 41,176
- -----------------------------------------------------------------------------------------
100,000 18,490 27,735 36,981 46,226
- -----------------------------------------------------------------------------------------
110,000 20,510 30,765 41,021 51,276
- -----------------------------------------------------------------------------------------
120,000 22,530 33,795 45,061 56,326
- -----------------------------------------------------------------------------------------
130,000 24,550 36,825 49,101 61,376
- -----------------------------------------------------------------------------------------
140,000 26,570 39,855 53,141 66,426
- -----------------------------------------------------------------------------------------
150,000 28,590 42,885 57,181 71,476
(1996 IRS Maximum)
=========================================================================================
9
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Benefits Committee has furnished the following report on
executive compensation:
The Company has not paid any cash compensation to its executive officers since
its formation. All executive officers of the Company also currently hold
positions with the Association and receive cash compensation from the
Association. Decisions on cash compensation of the Association's executives are
made by the three member Compensation and Benefits Committee of the
Association's Board of Directors. All decisions by the Compensation and
Benefits Committee relating to the cash compensation of the Association's
executive officers are reviewed by the full Board, except that Board members who
are also executive officers do not participate in deliberations regarding their
respective compensation. In addition, Mr. Douce did not participate in
deliberations regarding Mr. Clark's compensation.
The Company has adopted the Stock Option Plan, awards under which are made
solely by a three member Stock Option Committee.
Pursuant to rules adopted in 1993 designed to enhance disclosure of companies'
policies toward executive compensation, set forth below is a report prepared by
Messrs. Stein, Belden and Plumly in their capacities as the Association Board's
Compensation and Benefits Committee and the Company Board's Stock Option
Committee (collectively hereafter referred to as the "Compensation Committee").
This report addresses the compensation policies for 1995 as they affected the
Chief Executive Officer and other executive officers of the Company and the
Association.
Compensation Policies Toward Executive Officers Generally. The Compensation
Committee's executive compensation policies are designed to provide competitive
levels of compensation that integrate pay with the Company's annual and long-
term performance goals, reward above-average Company performance, recognize
individual initiative and achievements, and assist the Company in attracting and
retaining qualified executives. Target levels of the executive officers'
overall compensation are intended to be competitive with the compensation being
paid to executive officers of a peer group of publicly traded thrifts in Ohio
and the Midwest. The Company's and Association's officers also are eligible for
selection as participants in the Association's incentive compensation plans,
although the executive officers other than Messrs. Clark and Douce typically
receive a larger percentage of their compensation in the form of salary.
The Compensation Committee also endorses the position that stock ownership by
management and stock-based performance compensation arrangements are beneficial
in aligning management's and shareholders' interests in the enhancement of
shareholder value. Thus, the Compensation Committee has also utilized these
elements in the compensation packages for its executive officers.
Relationship of Performance Under Compensation Plans. Compensation paid to
Messrs. Clark and Douce in 1995, as reflected in the foregoing tables, and to
the Association's other executive officers, consisted of the following elements:
base salary, awards accrued pursuant to the Management Incentive Compensation
Plan (the "Incentive Plan") and matching contributions to the 401(k) Plan. In
addition (as indicated in the foregoing tables), in 1995 the Compensation
Committee awarded stock options under the Company's Stock Option Plan to certain
other executives.
Management Incentive Compensation Plan. The Incentive Plan is a cash bonus
plan under which awards may be authorized on an annual basis by the Compensation
Committee to participants if certain performance goals are met by the
Association.
Awards under the Incentive Plan have been based upon (i) the Association's
success in attaining a targeted return on average assets (net earnings divided
by average assets) in excess of a minimum threshold goal established annually in
advance by the Board of Directors, and (ii) with respect to executives other
than Messrs. Clark and Douce, individual performance.
10
One hundred percent of the incentive awards for Messrs. Clark and Douce in
1995 were based upon the Association's attainment of a targeted return on
average assets.
Stock Incentive Plan. The long-term incentive component of the executive
officers' 1995 compensation arose under the Company's Stock Option Plan. Awards
of stock options are designed to promote the alignment of long-term interests
between the Company's executive officers and its shareholders and assist in the
retention of executives.
The Stock Option Plan provides for awards in the form of stock options, stock
appreciation rights, limited stock appreciation rights and restricted stock.
Each award is made on such terms and conditions, consistent with the Stock
Option Plan, as the Committee administering the Stock Option Plan may determine.
No awards of stock appreciation rights, limited stock appreciation rights or
restricted stock have been made. The stock options granted to date generally
have been exercisable in three years, and in no event later than ten years, from
the date of the grant. The Committee may grant either "Incentive Stock
Options", as defined under section 422 of the Internal Revenue Code, or stock
options not intended to qualify as such. The Company does not receive any cash
consideration for the granting of options under the Stock Option Plan. Shares
may be either authorized but unissued shares or reacquired shares held by the
Company in its treasury. Any shares subject to an award which expires or is
terminated unexercised will again be available for issuance under the Stock
Option Plan. No award or any right or interest therein is assignable or
transferable except by will or the laws of descent and distribution.
Messrs. Clark and Douce have received annual awards of stock options since
1987. During 1995, the Stock Options Committee granted to Messrs. Clark and
Douce options to purchase the number of shares of Company Common Stock as
indicated in the "Option Grants in Last Fiscal Year" table above.
Other Compensation Plans. At various times in the past, the Association has
adopted certain broad-based employee benefit plans in which the executive
officers are permitted to participate on the same terms as non-executive
employees who meet applicable eligibility criteria, subject to any legal
limitations on the amounts that may be contributed or the benefits that may be
payable under the plans.
Pursuant to the 401(k) Plan, participants are permitted to make annual salary
reduction contributions to the 401(k) Plan in amounts of from 1% to 15% of their
salary. The participant's salary reduction contribution is matched by
contributions in Common Stock based on a formula up to a maximum of 2% of the
participant's salary for those participants who qualify. Supplemental matching
contributions may be contributed from time to time, in Common Stock, upon
approval of the Association's Board of Directors.
For 1995, the Association's matching contributions to the 401(k) Plans for
Messrs. Clark and Douce were $4,916 and $3,848, respectively.
Determination of Chief Executive Officer's Compensation. The Compensation
Committee based the Chief Executive Officer's 1995 compensation on the policies
described above for executive officers generally. A significant portion of the
Chief Executive Officer's potential compensation is tied to the Company's
performance. In targeting compensation for the Chief Executive Officer, the
Compensation Committee also seeks to be competitive with the total compensation
being paid to the Chief Executive Officers of comparable publicly traded
thrifts. The Compensation Committee has targeted the Chief Executive Officer's
total compensation at or slightly above the median total compensation paid to
Chief Executive Officers of these comparable companies. The members of the
Compensation Committee are Steven N. Stein, Chairman, Robert F. Belden and
Daniel H. Plumly.
Steven N. Stein
Robert F. Belden
Daniel H. Plumly
11
PERFORMANCE GRAPH
The line graph below compares the cumulative total stockholder return on the
Company's Common Stock to the cumulative total return of a broad index of The
Nasdaq Stock Market and a savings and loan industry index for the period
December 29, 1990 through December 31, 1995.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG FIRSTFEDERAL SERVICES CORP,
NASDAQ INDEX AND SNL INDEX
[PERFORMANCE GRAPH APPEARS HERE]
FIRSTFEDERAL
Measurement Period SERVICES
(Fiscal Year Covered) CORP NASDAQ INDEX SNL INDEX
- --------------------- --------------- ------------ ---------
Measurement Pt-12/31/1990 $100.00 $100.00 $100.00
FYE 12/31/1991 $168.00 $161.00 $157.00
FYE 12/31/1992 $338.00 $187.00 $218.00
FYE 12/31/1993 $528.00 $215.00 $278.00
FYE 12/31/1994 $517.00 $210.00 $276.00
FYE 12/31/1995 $675.00 $296.00 $431.00
- --------
CERTAIN TRANSACTIONS
Effective August 9, 1989, FIRREA requires that all transactions with senior
policy-making officers and directors be on terms and conditions comparable to
those for similar transactions with non-affiliates. In addition, all loans and
other transactions between the Company and such officers and directors will be
subject to approval by a majority of the directors of the Company, including a
majority of its disinterested directors. The Association continues to follow a
policy, as permitted under FIRREA, of granting to employees, who are not senior
policy-making officers, loans for the financing and improvement of their
personal residences as well as consumer loans on substantially the same terms
and collateral, except for interest rates and waiver of certain fees, as those
of comparable transactions prevailing at the time.
Director Dix indirectly owns approximately 20% of each of the Wooster Daily
Record, The Ashland Times Gazette and the WQKT/WKYX radio stations. During
fiscal 1995, the Association paid $24,180 at market rates in advertising fees to
these newspapers and radio stations.
Daniel H. Plumly is a principal in the law firm of Critchfield, Critchfield &
Johnston, Ltd., Wooster, Ohio. Critchfield, Critchfield & Johnston, Ltd. has
provided legal services to the Association for many years and to the Company
since its inception in 1989. During 1995, the Association and the Company paid
$66,557 and $10,854, respectively, to Critchfield, Critchfield & Johnston, Ltd.
for legal services. In addition, Critchfield, Critchfield &
12
Johnston, Ltd. received $216,807 during 1995 from borrowers of the Association
and the sellers of real estate in connection with the closing of real estate
loans made by the Association.
Mr. Plumly is also a partner in Heartland Title Agency. During 1995,
Heartland Title Agency received $108,080 from borrowers of the Association and
the sellers of real estate for escrow services, premiums for title insurance,
title search fees and other matters relating to closing real estate loans.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive offices, 135
East Liberty Street, Wooster, Ohio 44691, no later than November 16, 1996. Any
such proposals shall be subject to the requirements of the proxy rules adopted
under the Securities Exchange Act of 1934.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the Meeting
other than the matters described above in this Proxy Statement. However, if any
other matters should properly come before the Meeting, it is intended that
holders of the proxies will act in accordance with their best judgment.
To the Company's knowledge, based solely upon information provided to the
Company during fiscal 1995 by the officers and directors subject to Section 16
of the Securities Exchange Act of 1934, no such officer or director failed to
timely report a transaction in Company securities as required by Section 16.
The cost of solicitation of proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Company Common Stock. In addition to solicitation by mail,
directors and officers of the Company and regular employees of the Association
may solicit proxies personally or by telegraph or telephone, without additional
compensation.
By Order of the Board of Directors
/s/ L. DWIGHT DOUCE
L. Dwight Douce
Secretary
Wooster, Ohio
March 15, 1996
13
REVOCABLE
PROXY
FIRSTFEDERAL FINANCIAL SERVICES CORP
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 17, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the Board of Directors of FirstFederal
Financial Services Corp (the "Company"), with full powers of substitution, to
act as attorneys and proxies for the undersigned to vote all shares of capital
stock of the Company which the undersigned is entitled to vote at the Annual
Meeting of Stockholders (the "Meeting") to be held at the Black Tie Affair
Conference Center, 50 Riffel Road, Wooster, Ohio, on April 17, 1996 at 9:00 a.m.
Wooster, Ohio time, and at any and all adjournments and postponements thereof.
Should the undersigned be present and elect to vote at the Meeting or at
any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Meeting of the stockholder's decision to
terminate this proxy, then the power of such attorneys or proxies shall be
deemed terminated and of no further force and effect. This proxy may also be
revoked by filing a written notice of revocation with the Secretary of the
Company or by duly executing a proxy bearing a later date.
(Continued and to be SIGNED on Reverse Side)
FOLD AND DETACH HERE
[ROAD CHART APPEARS HERE] ANNUAL
MEETING OF
STOCKHOLDERS
APRIL 17, 1996, 9:00 A.M.
BLACK TIE AFFAIR CONFERENCE CENTER
50 RIFFEL ROAD
WOOSTER, OHIO
FIRSTFEDERAL FINANCIAL SERVICES CORP
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED Please mark
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED your votes as
SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY indicated in
WILL BE VOTED FOR THE NOMINEES LISTED BELOW. this example [X]
1. ELECTION OF DIRECTORS NOMINEES: GARY G. CLARK, STEVEN N.
FOR all nominees WITHHOLD STEIN AND RONALD A. JAMES JR.
listed to the right AUTHORITY (INSTRUCTION: To withhold authority to
(except as marked to vote for all vote for any individual
to the countrary) nominees listed nominee while nominee's
to the right name in the space
provided below.)
[ ] [ ]
----------------------------------
2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature(s) Signature(s) Date , 1996
------------- ----------------- ---------
FOLD AND DETACH HERE
FIRSTFEDERAL FINANCIAL SERVICES CORP
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, APRIL 17, 1996
9:00 A.M.
BLACK TIE AFFAIR CONFERENCE CENTER
50 RIFFEL ROAD
WOOSTER, OHIO
- --------------------------------------------------------------------------------
AGENDA
------
. Election of Directors
. Report on the progress of the Company
. Discussion on matters of current interest
- -------------------------------------------------------------------------------