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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CFSB BANCORP, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
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(4) Date filed:
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[CFSB LETTERHEAD]
March 21, 1997
Dear Stockholder:
We invite you to attend the Annual Meeting of the Stockholders of CFSB
Bancorp, Inc. (the "Corporation"), the holding company of Community First Bank
("Community First"), to be held at the Sheraton Lansing Hotel, 925 South Creyts
Road, Lansing, Michigan on Tuesday, April 15, 1997 at 11:00 a.m., local time.
The Annual Meeting has been called to consider the election of four
directors of the Corporation. During the meeting, we will also report on the
operations of the Corporation during fiscal year 1996. Directors and officers
of the Corporation as well as representatives of KPMG Peat Marwick LLP, the
Corporation's independent auditors, will be present to respond to any questions
that stockholders may have.
You are cordially invited to attend the Annual Meeting. WE URGE YOU
TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE EVEN IF
YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING. This will not prevent you
from voting in person but will assure that your vote is counted if you are
unable to attend the meeting.
Sincerely,
Robert H. Becker
Robert H. Becker
President and Chief Executive Officer
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________________________________________________________________________________
CFSB BANCORP, INC.
112 EAST ALLEGAN STREET
LANSING, MICHIGAN 48933
(517) 371-2911
________________________________________________________________________________
NOTICE OF ANNUAL MEETING
TO BE HELD ON APRIL 15, 1997
________________________________________________________________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders for the
year ended December 31, 1996 (the "Annual Meeting") of CFSB Bancorp, Inc. (the
"Corporation"), the holding company of Community First Bank will be held at the
Sheraton Lansing Hotel, 925 South Creyts Road, Lansing, Michigan on Tuesday,
April 15, 1997 at 11:00 a.m., local time.
A Proxy Card and a Proxy Statement for the Annual Meeting are
enclosed.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of four directors of the Corporation; and
2. The transaction of such other matters as may properly come
before the Annual Meeting or any adjournments thereof.
Note: The Board of Directors is not aware of any other business to
come before the Annual Meeting.
Any action may be taken on any one of the foregoing proposals at the
Annual Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Annual Meeting may be adjourned.
Stockholders of record at the close of business on February 28, 1997 are the
stockholders entitled to vote at the Annual Meeting and any adjournments
thereof.
You are requested to complete and sign the enclosed Proxy Card which
is solicited by 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 Annual
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
John W. Abbott
John W. Abbott
Executive Vice President, Chief Operating Officer
and Secretary
Lansing, Michigan
March 21, 1997
________________________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
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________________________________________________________________________________
PROXY STATEMENT
OF
CFSB BANCORP, INC.
112 EAST ALLEGAN STREET
LANSING, MICHIGAN 48933
ANNUAL MEETING OF STOCKHOLDERS
APRIL 15, 1997
________________________________________________________________________________
________________________________________________________________________________
GENERAL
________________________________________________________________________________
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of CFSB Bancorp, Inc. (the "Corporation"),
the holding company of Community First Bank ("Community First" or the "Bank"),
to be used at the Annual Meeting of Stockholders of the Corporation for the
year ended December 31, 1996 (the "Annual Meeting") which will be held at the
Sheraton Lansing Hotel, 925 South Creyts Road, Lansing, Michigan on Tuesday,
April 15, 1997 at 11:00 a.m., local time. The accompanying Notice of Annual
Meeting and Revocable Proxy and this Proxy Statement are being first mailed to
stockholders on or about March 21, 1997.
________________________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
________________________________________________________________________________
Regardless of the number of shares of the Corporation's common stock,
par value $.01 per share (the "Common Stock"), owned, it is important
stockholders be represented by proxy or present in person at the Annual
Meeting. Stockholders are requested to vote by completing the enclosed Proxy
Card and returning it signed and dated in the enclosed postage-paid envelope.
Stockholders are urged to indicate their vote in the spaces provided on the
proxy card. PROXIES SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION
WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN. WHERE NO
INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED FOR EACH OF THE NOMINEES
STANDING FOR ELECTION AS DIRECTORS. Proxies marked as abstentions will not be
counted as votes cast. In addition, shares held in street name which have been
designated by brokers on proxy cards as not voted will not be counted as votes
cast. Proxies marked as abstentions or as broker no votes, however, will be
treated as shares present for purposes of determining whether a quorum is
present.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxyholders discretionary authority to vote
the shares in accordance with the determination of a majority of the Board of
Directors on such other business, if any, that may properly come before the
Annual Meeting or any adjournments thereof.
A proxy may be revoked at any time prior to its exercise by the filing
of a written notice of revocation with the Secretary of the Corporation, by
delivering a duly executed proxy bearing a later date to the Secretary of the
Corporation at the address listed above, or by attending the Annual Meeting and
voting in person.
The cost of solicitation of proxies in the form enclosed herewith will
be borne by the Corporation. Proxies may also be solicited personally or by
telephone or telegraph by directors, officers and regular employees of the
Corporation and the Bank, without additional compensation therefore. The
Corporation will also request persons, firms and corporations holding shares in
their names, or in the name of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners, and will reimburse such holders for their reasonable expenses in doing
so.
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________________________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
________________________________________________________________________________
The securities entitled to vote at the Annual Meeting consist of the
Common Stock. Stockholders of record as of the close of business on February
28, 1997 are entitled to one vote for each share then held. As of February 28,
1997, the Corporation had 4,697,486 shares of the Common Stock issued and
outstanding.
Persons and groups owning in excess of 5% of the Corporation's Common
Stock are required to file certain reports regarding such ownership pursuant to
the Securities Exchange Act of 1934. The following table sets forth, as of
February 28, 1997, the shares of Common Stock beneficially owned by the Chief
Executive Officer and Chief Operating Officer of the Corporation, the Chief
Lending Officer of the Bank, the Director of Operations of the Bank, all
directors and officers of the Corporation as a group and each person who was
the beneficial owner of more than 5% of the Corporation's outstanding shares of
Common Stock at February 28, 1997, based on information supplied by its
transfer agent and filings made pursuant to the Securities Exchange Act of 1934
as to which the Corporation had information on February 28, 1997. Management
knows of no person other than those set forth below who owned more than 5% of
the Corporation's outstanding shares of Common Stock at February 28, 1997.
Amount and Nature of Percent of Shares of
Beneficial Owner Beneficial Ownership(a) Common Stock Outstanding
- ---------------- ----------------------- ------------------------
CFSB Bancorp, Inc.
Employee Stock Ownership Plan
112 East Allegan Street
Lansing, Michigan 48933 102,731 (b) 2.19%
Robert H. Becker
President and
Chief Executive Officer 289,003 (c) 6.07%
John W. Abbott
Executive Vice President and
Chief Operating Officer 64,063 (d) 1.35%
Carl C. Farrar
Senior Vice President
Chief Lending Officer of the Bank 4,535 (e) 0.10%
Jack G. Nimphie
Senior Vice President
Director of Operations of the Bank 22,737 (f) 0.48%
All directors and executive
officers as a group (15 persons) 636,106 (g) 13.03%
____________________
(a) In accordance with Rule 13d-3 under the Securities Exchange Act of
1934, a person is deemed to be the beneficial owner, for purposes of
this table, of any shares of the Common Stock if he or she has sole or
shared voting or investment power with respect to such security, or has
a right to acquire beneficial ownership at any time within 60 days from
February 28, 1997. Except as otherwise noted, the named individuals and
each director or officer included in the group exercise sole voting and
investment power over the shares of the Common Stock.
(footnotes continued on following page)
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(footnotes continued from previous page)
(b) Includes 102,731 shares held in a suspense account for future
allocation pursuant to the terms of the Employee Stock Ownership Plan
("ESOP"), among participating employees as the loans used to purchase
the shares are repaid, and excludes 314,604 shares allocated to
participants. The ESOP Trustee votes all allocated shares as
instructed by the participants, and the ESOP Trustee votes all
unallocated shares and all shares for which no instructions have been
received as directed by the ESOP Committee or the Board of Directors.
See footnote (e) below.
(c) Includes 13,913 shares allocated to Mr. Becker under the ESOP as to
which he has voting power but no investment power. Includes 60,338
shares which may be received upon the exercise of stock options which
are exercisable within 60 days of February 28, 1997.
(d) Includes 10,071 shares allocated to Mr. Abbott under the ESOP as to
which he has voting power but no investment power. Includes 45,461
shares which may be received upon the exercise of stock options which
are exercisable within 60 days of February 28, 1997.
(e) Includes 1,873 shares allocated to Mr. Farrar under the ESOP as to
which he has voting power but no investment power. Includes 2,662
shares which may be received upon the exercise of stock options which
are exercisable within 60 days of February 28, 1997.
(f) Includes 5,922 shares allocated to Mr. Nimphie under the ESOP as to
which he has voting power but no investment power. Includes 13,607
shares which may be received upon the exercise of stock options which
are exercisable within 60 days of February 28, 1997.
(g) Includes 38,661 shares held by the ESOP but allocated to certain
directors and officers, and excludes 102,731 shares held by the ESOP,
which have not been allocated to any participating employees as of
February 28, 1997, and over which shares certain directors and
officers of the Corporation, as members of the ESOP Committee, and as
ESOP Trustee, exercise shared voting and investment power. See
footnote (2) in Director's table under "Proposal I -- Election of
Directors." Includes 184,571 shares which may be received upon the
exercise of stock options which are exercisable within 60 days of
February 28, 1997.
________________________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
________________________________________________________________________________
The Corporation's Board of Directors is currently composed of eight
members. The Corporation's Certificate of Incorporation requires directors be
divided into three classes, as nearly equal in number as possible. The
Corporation notes the number of directors in each class is not currently "as
nearly equal in number as possible." However, the Corporation's Certificate of
Incorporation also states no reduction in the number of directors shall have
the effect of shortening the term of any incumbent director. Therefore, any
imbalance in the number of directors in each class shall be addressed as the
terms of such director(s) expire. The members of each class serve for a term
of three years and until their successors are elected and qualified, with
approximately one-third of the directors elected each year. The Board of
Directors has nominated David H. Brogan, William C. Hollister and J. Paul
Thompson, Jr., each for a three-year period, and Henry W. Wolcott, IV for a
one-year period, all of whom are currently members of the Board of the
Corporation.
It is intended the proxies solicited by the Board of Directors will be
voted for the election of the named nominees. If any nominee is unable to
serve, the shares represented by all properly executed proxies which have not
been revoked will be voted for the election of such substitute as the Board of
Directors may recommend, or the size of the Board of Directors may be reduced
to eliminate the vacancy. At this time, the Board knows of no reason why any
nominee might be unavailable to serve.
The following table sets forth for each nominee and each continuing
director his name and age at February 28, 1997, the year he first became a
director of Capitol Federal Savings Bank ("Capitol Federal") or Union Federal
Savings ("Union Federal") (the savings institutions that combined to form
Community First in December 1991), the expiration of his term as a director of
the Corporation, and the number and percentage of shares of Common Stock
beneficially owned. The members of Capitol Federal's Board of Directors who
were members of the Board in 1989 were initially appointed as directors of the
Corporation in 1989 in connection with the incorporation and organization of
the Corporation. The former members of Union Federal's Board of Directors were
appointed as directors of the Corporation in January 1992 following the
completion of the combination. Each director of the Corporation is also a
member of the Board of Directors of the Corporation's principal subsidiary,
Community First.
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Shares of
Common Stock
Current Beneficially
Year First Term Owned at Percent
Elected to February 28, of
Name Age Director (1) Expire 1997 (2) Class
- ---- --- -------------- ------ -------------- -----
BOARD NOMINEES FOR TERM TO EXPIRE IN 2000
David H. Brogan 62 1981 1997 44,431 0.94%
William C. Hollister 56 1983 1997 59,012 1.25%
J. Paul Thompson, Jr. 63 1979 1997 8,755 0.19%
BOARD NOMINEE FOR TERM TO EXPIRE IN 1998
Henry W. Wolcott, IV 50 1983 1997 2,997 0.06%
DIRECTORS CONTINUING IN OFFICE
Robert H. Becker 61 1987 1998 289,003 (3) 6.07%
Cecil Mackey 68 1979 1999 17,629 0.37%
James L. Reutter 63 1976 1999 81,374 1.73%
Donald F. Wall 69 1994 1999 2,905 0.06%
____________________
(1) Represents the year first elected a director of Capitol Federal,
except for Mr. Thompson and Mr. Wolcott for whom it represents the
year first elected a director of Union Federal, and Mr. Wall, for whom
it represents the year first elected as director of the Corporation.
(2) For the definition of beneficial ownership, see footnote (a) to the
table in "Voting Securities and Principal Holders Thereof." Unless
otherwise indicated, the named individual exercises sole or shared
voting or investment power over the shares listed as beneficially
owned by such person. Excludes 102,731 shares held by the ESOP which
have not been allocated to participating employees as of February 28,
1997 and over which shares Directors Reutter, Brogan and Hollister, as
members of the ESOP Committee, and as ESOP Trustee, exercise shared
voting and investment power. Includes 10,882, 13,607, 11,444, 11,444,
2,928, 1,774 and 562 shares which may be received upon the exercise of
stock options which are exercisable within 60 days of February 28,
1997, for Directors Mackey, Reutter, Brogan, Hollister, Thompson, Wall
and Wolcott, respectively. For Mr. Becker, see footnote (3) below.
(3) Includes 13,913 shares allocated to Mr. Becker under the ESOP as to
which he has voting power but no investment power. Includes 60,338
shares which may be received upon the exercise of stock options
exercisable within 60 days of February 28, 1997.
The principal occupation of each director of the Corporation and the
Bank for the last five years is set forth below. All of the directors have
held their present position for at least five years unless otherwise stated.
All of the directors reside in Michigan.
DAVID H. BROGAN has worked in life insurance sales and financial
planning at Ohio National Life Insurance Company, a provider of insurance and
investment products, since 1956. Mr. Brogan is a member of the Lansing Lions
Club, and he is a Trustee and the Treasurer of the Capital Region Community
Foundation. He has previously served as the Chairman of the Board at St.
Lawrence Hospital, as President of the East Lansing Public Schools Board of
Education,
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as an officer in the Michigan State University Alumni Association, and as a
Director of the Lansing Community College Foundation.
WILLIAM C. HOLLISTER is the President of Basic Insight, a firm engaged
in performing consulting services related to recruitment and selection and
strategic planning. He was formerly President of Manpower Health Care,
Lansing, Michigan, President of Coil Center Corporation, Howell, Michigan, and
Vice President of Kasle International Michigan, Dearborn, Michigan. Mr.
Hollister is a member of the Board of Trustees of Edward W. Sparrow Hospital in
Lansing and the Michigan Manufacturers Association. He has also served as
Chairman, Treasurer and Trustee of Lansing Community College and served as a
Director of D&F Corporation of Sterling Heights, Michigan, an automotive
tooling design firm.
J. PAUL THOMPSON, JR. has been in the environmental engineering field
since 1957, has been a Registered Professional Engineer in Michigan since 1960
and was a principal in Fishbeck, Thompson, Carr and Huber, Inc., until 1985.
Since that time, he has been President of Computer Graphics, Inc., a consultant
to municipalities in the area of water and sewer systems. He is a retired U.S.
Air Force Major, a member and Past President of the Lansing-Waverly Rotary Club
and is presently a Trustee of Central United Methodist Church, Lansing. He is
also the Treasurer of Memorial Nature Preserve of Shelby, Michigan.
HENRY W. WOLCOTT, IV is a certified public accountant and a
shareholder in the firm of Kutas, Hawes, Wolcott & Bergman, P.C., of Lansing,
Michigan.
ROBERT H. BECKER joined Community First (formerly Capitol Federal
Savings) in November 1987 as the President and Chief Executive Officer. Mr.
Becker also serves as the Corporation's President and Chief Executive Officer.
Mr. Becker began his banking career in 1957, and from 1976 to 1987, he served
as President and Chief Executive Officer of MetroBanc in Grand Rapids,
Michigan. Mr. Becker is a past Director of the Federal Home Loan Bank of
Indianapolis and a past Chairman of the Michigan League of Savings
Institutions. He is also past Chair of the Lansing Community College
Foundation, a Board member of the Rotary Club of Lansing, and a member of the
Finance Committee of the Capital Region Community Foundation.
CECIL MACKEY has been a professor of economics at Michigan State
University since 1985. From 1979 to 1985, he was the President of Michigan
State University. Dr. Mackey serves as Chairman of the Board of Directors of
the Debt-for-Development Coalition, is an associate of the National China
Council, and a member of the Michigan China Council and the Joint
Yugoslav-American Advisory Council. He previously served as a member of the
Board of Directors of the Michigan State University Foundation and the Michigan
Biotechnology Institute, and as a member of the Governor's Commission on Jobs
and Economic Development and the Michigan High Technology Task Force. Dr.
Mackey is a consultant to the University of the United Arab Emirates.
JAMES L. REUTTER is the President of Lansing Ice and Fuel Company,
Lansing, Michigan, and Chairman of O'Dell Ice Company, Coleman, Michigan. Mr.
Reutter has been the Chairman of Community First's (formerly Capitol Federal's)
Board of Directors since 1988. Mr. Reutter also serves as a Director of
Michigan Millers Insurance Company. He is currently serving on the Board of
the Potter Park Zoological Society, Capital Area Health Alliance, and Lansing
Community College Foundation, and is a Trustee and the Treasurer of the Thoman
Foundation. Mr. Reutter was also the past Chairman and a Trustee of Lansing
Community College.
DONALD F. WALL is the President of Compass Management Inc., a
management consulting firm. Mr. Wall also is the retired Chief Executive
Officer of the Michigan League of Savings Institutions. He has been a Director
of the Bank since February 1993.
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________________________________________________________________________________
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
________________________________________________________________________________
The Corporation's and the Bank's Boards of Directors conduct their
business through meetings of the Boards and through activities of their
committees. During fiscal year 1996, the Corporation's Board of Directors held
10 meetings and the Bank's Board of Directors held 12 meetings. No director
attended fewer than 75% of the total meetings of the Board of Directors and
committees on which such Board member served during this period.
The Board of Directors of the Corporation has an Executive Committee,
which also serves as the Executive Committee of the Bank's Board of Directors,
and meets as considered necessary by the Chairman. The Executive Committee met
four times during fiscal 1996. The Executive Committee is made up of Directors
Reutter (Chairman), Becker, Brogan, Hollister and Thompson.
The Bank's Audit Committee also serves as the Audit Committee of the
Corporation, and consists of Directors Mackey (Chairman), Hollister, Wall and
Wolcott. These committees recommend an audit firm to the full Board of
Directors and meet with the outside auditors to discuss the results of the
annual audit and any related matters. These committees also receive and review
all the reports and findings and other information presented to them by the
Corporation's and the Bank's officers regarding financial reporting policies
and practices. The Corporation's Audit Committee and the Bank's Audit
Committee met three times during fiscal 1996.
The Bank's Compensation and Personnel Committee also serves as the
Compensation and Personnel Committee for the Corporation, and consists of
Directors Brogan (Chairman), Hollister, Mackey and Thompson. This committee
meets periodically to review the performance of the Corporation's and the
Bank's Executive Officers and to recommend compensation and benefit programs.
The Compensation and Personnel Committee met one time during fiscal 1996.
The Corporation's Nominating Committee comprised of the full Board of
Directors recommends nominees for election to the Board of Directors. During
1996, this committee met one time to make the nominations for election set
forth herein.
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________________________________________________________________________________
EXECUTIVE COMPENSATION
________________________________________________________________________________
COMPENSATION SUMMARY
The following table sets forth all cash and noncash compensation for
each of the last three fiscal years awarded to or earned by (i) the Chief
Executive Officer, and (ii) the other executive officers of the Corporation or
the Bank whose salary and bonus earned in 1996 exceeded $100,000 for services
rendered in all capacities to the Corporation and its subsidiaries.
ANNUAL COMPENSATION
-----------------------------------------------
NAME AND FISCAL OTHER ANNUAL LONG-TERM ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION COMPENSATION COMPENSATION (2)
- ------------------ ---- --------- ----- ------------ ------------ ----------------
Robert H. Becker 1996 $ 253,000 $ 80,596 $ -- $ -- $ 10,424
President and Chief 1995 236,500 46,388 -- -- 14,691
Executive Officer 1994 215,000 -- -- -- 21,122
John W. Abbott 1996 155,000 37,776 -- -- 6,000
Executive Vice 1995 145,000 20,836 -- -- 10,233
President and Chief 1994 135,000 -- -- -- 14,997
Operating Officer
Carl C. Farrar (3) 1996 114,000 27,876 -- -- 5,675
Senior Vice President 1995 107,000 11,576 -- -- 8,089
Chief Lending Officer 1994 80,769 -- -- -- --
of the Bank
Jack G. Nimphie 1996 87,500 14,763 -- -- 4,091
Senior Vice President 1995 81,900 8,902 -- -- 6,194
Director of Operations 1994 76,900 -- -- -- 8,543
of the Bank
____________________
(1) Does not include perquisites which in the aggregate do not exceed 10%
of the cash compensation of the named executive officers.
(2) For 1996, includes funds contributed by the Bank to each individual's
account under the deferred savings 401(k) plan and, in the case of Mr.
Becker, an additional $4,424 in automobile expenses. For 1995,
includes contributions to ESOP in the following amounts for payment of
shares allocated to the following individuals: $4,233 for Mr. Becker;
$4,233 for Mr. Abbott; $3,346 for Mr. Farrar; and $2,562 for Mr.
Nimphie. For 1994, includes contributions to ESOP in the following
amounts for payment of shares allocated to the following individuals:
$10,664 for Mr. Becker; $9,597 for Mr. Abbott; $0 for Mr. Farrar; and
$5,467 for Mr. Nimphie. Information regarding contributions to the
ESOP for 1996 on behalf of these individuals was not available as of
the date of this Proxy Statement and will be reported in next year's
Proxy Statement.
(3) Mr. Farrar joined the Bank in March 1994.
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OPTION/SAR EXERCISES AND YEAR-END VALUES
The following table sets forth information concerning exercises of
options during the year ended December 31, 1996, by the named executive
officers, as well as the value of options held by such persons at the end of
the fiscal year. No options were granted during the year ended December 31,
1996 and no SARs were outstanding at December 31, 1996.
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY
SHARES ACQUIRED VALUE FISCAL YEAR-END OPTIONS/SARS AT
NAME ON EXERCISE REALIZED (EXERCISABLE) FISCAL YEAR-END
- -------------- ---------------- -------- ----------------- ---------------
Robert H. Becker -- $ -- 60,338 $ 947,307 (1)(3)
John W. Abbott 800 12,960 (4) 45,461 713,738 (1)(3)
Carl C. Farrar -- -- 16,528 (5) 16,132 (1)
12,479 (2)
Jack G. Nimphie -- -- 26,807 (6) 213,630 (1)
8,448 (2)
____________________
(1) Exercisable.
(2) Unexercisable.
(3) Represents market price per share at end of year ($19.50 on December
31, 1996) less average option exercise price per share ($3.80).
(4) Represents difference between exercise price per share ($3.80) and
market price per share on date of exercise ($20.00).
(5) Mr. Farrar has options for 2,662 shares which are exercisable at an
exercise price per share of $13.44 and options for 13,866 shares
which are unexercisable and have a weighted average exercisable price
of $18.60 per share.
(6) Mr. Nimphie has options for 13,607 shares which are exercisable at an
exercise price of $3.80 per share and options for 13,200 shares which
are unexercisable and have an exercise price of $18.86 per share.
EMPLOYMENT AGREEMENTS
Effective upon Capitol Federal's conversion from mutual to stock form
on June 29, 1990, the Bank and Robert H. Becker and John W. Abbott entered
into employment agreements, each for terms of three years with specified annual
base salaries. These agreements provide (i) that at each anniversary date of
their commencement the Board of Directors may act to approve one-year
extensions, (ii) for a salary review by the Board of Directors not less often
than annually, and (iii) for the inclusion of the named individuals in any
discretionary bonus plans, customary fringe benefits and for vacation and sick
leave. Messrs. Becker's and Abbott's annual base salaries at December 31,
1996, were $253,000 and $155,000, respectively. Each agreement will be
terminated upon death, and will be terminable by Community First for "just
cause" as defined in the agreement. If Community First terminates one of these
employees without just cause, the employee will be entitled to a continuation
of his salary and benefits up to the date of termination of the term of the
agreement. Each employee will be able to terminate his agreement by providing
60 days' written notice to the Board of Directors.
The employment agreements contain provisions stating that in the event
of the voluntary or involuntary termination of employment in connection with,
or within one year after, any change in control of the Corporation or the Bank
not approved in advance by the vote of two-thirds of the full Boards of
Directors of the Corporation or the Bank, the employee will be paid within 30
days of such termination a sum equal to 2.99 times the average annual
compensation he received during the five-year period immediately prior to the
date of change in control. "Control" generally refers to the acquisition by
any person or entity of the ownership or power to vote more than 25% of the
Corporation's or the Bank's stock, the control of the election of a majority of
Directors or the exercise of a controlling influence over the management or
policies of the Corporation and the Bank. The agreements also provide for a
similar lump sum payment to be made to Mr. Becker or Mr. Abbott in the event of
his voluntary termination of employment upon the occurrence, or within 60 days
thereafter, of certain specified events following any change in control,
whether approved by the Board of Directors or
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otherwise, including (i) requiring the employee to move his personal residence
or perform his principal executive functions more than 35 miles from the Bank's
current principal office, (ii) requiring the employee to report to a person or
persons other than the Board of Directors or President, respectively, of the
Corporation or the Bank, (iii) the failure to maintain existing employee
benefit plans, including material vacation, fringe benefits, stock option and
retirement plans; (iv) assigning duties and responsibilities to the employee
which are other than those normally associated with his position with Community
First; (v) a material diminution of his authority and responsibility; and for
Mr. Becker (vi) failure to elect him to the Board of Directors. The aggregate
payments that would be made to Messrs. Becker and Abbott assuming the
termination of employment under the foregoing circumstances at December 31,
1996 would have been approximately $743,000 and $442,000, respectively.
DIRECTORS' COMPENSATION
Each non-employee member of the Boards of Directors of the Corporation
and the Bank receives a fee of $900 per month, except the President and Chief
Executive Officer, who does not receive any director's fees, and the Chairman
of the Board, who receives $2,200 per month. In addition, each director,
except the President and Chief Executive Officer, receives a fee of $400 per
monthly meeting attended. The Chairman of each committee, except the Executive
Committee, receives a fee of $100 per month. Directors of the Corporation and
the Bank receive one fee for serving as directors of both entities, plus
applicable committee chairman fees.
COMPENSATION AND PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL. The function of administering the Corporation's and
Community First's Executive Compensation Policies is currently performed by the
Compensation and Personnel Committee of the Board of Directors of Community
First which is composed of four directors. The Committee is responsible for
developing and making recommendations to the Board concerning compensation paid
to the executive officers and for administering all aspects of the
Corporation's and Community First's Executive Compensation Program including
employee benefit plans. It is the responsibility of this Committee to develop
and make recommendations to the Board concerning compensation paid to the Chief
Executive Officer.
The Committee makes its recommendations to the Board concerning
executive compensation on the basis of its annual review and evaluation of the
Corporation's corporate performance, and the compensation of its executive
officers as compared with other savings and loan holding companies similar in
size and market capitalization. To assist in this review, the Committee
obtains survey data prepared by independent compensation consulting firms.
EXECUTIVE COMPENSATION PROGRAM. The Corporation's and Community
First's Executive Compensation Program which was developed with the objective
of attracting and retaining highly qualified and motivated executives and
recognizing and rewarding outstanding performance has the following components:
(i) base salaries, (ii) stock options, (iii) a management incentive
compensation plan and (iv) miscellaneous other fringe benefits.
MANAGEMENT'S ROLE AND THE BUSINESS PLAN. The Administrative Committee
of the Bank, which consists of its executive officers, annually develops a
Business Plan. The Plan includes objectives, goals and strategies which
management intends to achieve over a one- to three-year period. The Plan is
reviewed and updated annually and approved by the Board of Directors of the
Bank. Each objective, goal and strategy is assigned to a member of the
Administrative Committee. The goals, objectives and strategies may be monetary
or non-monetary in nature. The Chief Executive Officer has the overall
responsibility for the successful implementation of the Plan.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. Compensation for the Chief
Executive Officer is based on the Compensation and Personnel Committee's
evaluation of Management's successful implementation of the Business Plan.
Their evaluation also takes into consideration events and general economic
trends that are outside management's control and the level of compensation of
other thrift chief executive officers in the same geographic area, the Midwest,
managing institutions with assets sizes of between $500 million and $1 billion,
some of which are included in the peer line of the stock performance graph
below. In 1996, the Committee reviewed reports from Ben E. Cole Financial,
Inc. and the SNL
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Executive Compensation Review. These reports, which were analyzed by the
Committee, included comprehensive financial performance comparisons of the Bank
relative to those of peer group thrift institutions and commercial banks
throughout the country. The Committee also reviewed the information in the
reports relating to compensation levels and practices of its peer institutions
relative to the Bank's compensation levels for its senior executive officers.
The SNL Report reflects that Mr. Becker's compensation is comparable with that
paid to chief executive officers of thrifts with assets of $500 million to $1
billion nationwide and is comparable to Chief Executive Officers of a selected
peer group of 20 Midwest Thrifts. The Committee also considered the three
recommendations in the Cole Report, as described below.
Given the findings of the reports and the Bank's record improvement in
profitability, accompanied by a steady rise in assets, the Cole Report
recommended: (i) the Board raise Mr. Becker's base salary to keep pace with the
growth of banks of similar size; (ii) the Board provide for a CEO cash bonus
award opportunity based on Board-approved, predetermined quantitative
objectives; and (iii) the Board consider including stock awards in competitive
amounts on an annual basis, and that the awards be related to the achievement
of Board and shareholder strategic goals. It is the Compensation and Personnel
Committee's intent to maintain compensation levels comparable to compensation
levels of chief executive officers of the Bank's peer group.
COMPENSATION OF OTHER EXECUTIVE OFFICERS. The Chief Executive Officer
determines the base salary compensation paid to other members of the
Administrative Committee, after review with the Compensation and Personnel
Committee. The determination is discretionary based on his evaluation of each
Administrative Committee member's contribution to the implementation of the
Business Plan, general trends and events outside the control of each member of
the Committee and independent studies of compensation levels of similar
positions in other financial institutions. Bonuses were paid in 1996 based on
the Management Incentive Compensation Plan which evaluates the Corporation's
performance as measured by "Return on Average Equity" and "Return on Average
Assets" in comparison to other publicly-traded thrifts and thrift holding
companies, nationally, with assets between $500 million and $1 billion, as
published by the SNL Securities Thrift Performance Report.
David H. Brogan (Chairman) Cecil Mackey
William C. Hollister J. Paul Thompson, Jr.
Members of the Compensation and Personnel Committee
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STOCK PERFORMANCE
The graph and table which follow show the cumulative total return on
the Common Stock of the Corporation since December 31, 1991, compared with the
cumulative total return of other publicly traded savings institutions and
savings institution holding companies (the "Industry Index") and the National
Association of Securities Dealers, Inc. Automated Quotation System Market Index
(the "Market Index") over the same period. Cumulative total return on the
stock or the index equals the total increase in value since December 31, 1991,
assuming reinvestment of all dividends paid on the stock or the index,
respectively. The graph and table were prepared assuming $100 was invested on
December 31, 1991, in the Common Stock of the Corporation and in the indexes.
[LINE GRAPH]
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
CFSB Bancorp, Inc. 100 176 256 258 367 375
NASDAQ Bank Stocks 100 146 166 165 246 326
NASDAQ Stock Market - U.S. 100 116 134 131 185 227
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________________________________________________________________________________
TRANSACTIONS WITH MANAGEMENT
________________________________________________________________________________
At the time of the enactment of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 ("FIRREA"), Capitol Federal had a policy
of offering loans to directors, officers and employees on terms substantially
equivalent to those offered to the public, with the exception of waiving
certain loan origination fees. In addition, prior to 1985 eligible directors,
officers and employees of Union Federal were granted loans for the financing of
their personal residences at as much as 1% less than the market rate depending
on length of service.
Under FIRREA, Community First's loans to directors and executive
officers must be made on substantially the same terms, including interest rates
and loan origination fees, as those prevailing for comparable transactions and
must not involve more than the normal risk of repayment or present other
unfavorable features. Furthermore, loans above the greater of $25,000 or 5% of
Community First's capital and surplus (up to $500,000) to such persons must be
approved in advance by a disinterested majority of the Board of Directors. In
compliance with FIRREA, Community First does not offer favorable terms on loans
to directors or executive officers.
________________________________________________________________________________
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________________________________________________
KPMG Peat Marwick LLP was the Corporation's independent auditing firm
for the 1996 fiscal year. A representative of KPMG Peat Marwick LLP is
expected to be present at the Annual Meeting to respond to stockholders'
questions and will have the opportunity to make a statement if he or she so
desires.
________________________________________________________________________________
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________________________
Pursuant to regulations promulgated under the Exchange Act, the
Company's officers and directors and all persons who own more than ten percent
of the Common Stock ("Reporting Persons") are required to file reports
detailing their ownership and changes of ownership in the Common Stock and to
furnish the Company with copies of all such ownership reports that are filed.
Based solely on the Company's review of the copies of such ownership reports
which it has received in the past fiscal year or with respect to the past
fiscal year, or written representations from such persons that no annual report
of changes in beneficial ownership were required, the Company believes during
fiscal year 1996 and prior fiscal years all Reporting Persons have complied
with these reporting requirements.
________________________________________________________________________________
OTHER MATTERS
________________________________________________________________________________
The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described above in this Proxy
Statement. However, if any other matters should properly come before the
Annual Meeting, it is intended proxies in the accompanying form will be voted
in respect thereof in accordance with the determination of a majority of the
Board of Directors.
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________________________________________________________________________________
MISCELLANEOUS
________________________________________________________________________________
The cost of soliciting proxies will be borne by the Corporation. The
Corporation will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by
mail, directors, officers and regular employees of the Corporation may solicit
proxies personally or by telegraph or telephone without additional
compensation.
The Corporation's 1996 Annual Report to Stockholders, including
financial statements, has been mailed to all stockholders of record as of the
close of business on February 28, 1997. Any stockholder who has not received a
copy of such Annual Report may obtain a copy by writing to the Secretary of the
Corporation. Such Annual Report is not to be treated as a part of the proxy
solicitation material or as having been incorporated herein by reference.
THE CORPORATION IS REQUIRED TO FILE AN ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1996, WITH THE SECURITIES AND EXCHANGE COMMISSION.
STOCKHOLDERS OF RECORD AS OF FEBRUARY 28, 1997, MAY OBTAIN, WITHOUT CHARGE, A
COPY OF SUCH REPORT UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION,
112 EAST ALLEGAN STREET, LANSING, MICHIGAN 48933.
________________________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________________________
In order to be eligible for inclusion in the Corporation'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 Corporation's
office at 112 East Allegan Street, Lansing, Michigan 48933, no later than
November 21, 1997. Any such proposals shall be subject to the requirements of
the proxy rules adopted under the Securities Exchange Act of 1934.
BY ORDER OF THE BOARD OF DIRECTORS
John W. Abbott
John W. Abbott
Executive Vice President,
Chief Operating Officer and Secretary
Lansing, Michigan
March 21, 1997
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REVOCABLE PROXY
CFSB BANCORP, INC.
LANSING, MICHIGAN
/x/ PLEASE MARK VOTES FOR ALL
AS IN THIS EXAMPLE FOR WITHHELD EXCEPT
1. The election as directors of all / / / / / /
ANNUAL MEETING OF STOCKHOLDERS nominees listed below (except as
APRIL 15, 1997 marked to the contrary below).
This proxy will be voted as directed, but, if no FOR THREE YEAR TERMS:
instructions are specified, this proxy will be voted for
each of the listed nominees. If any other business is David H. Brogan
presented at the Annual Meeting, this proxy will be voted by William C. Hollister
those named in this proxy in accordance with the J. Paul Thompson, Jr.
determination of a majority of the Board of Directors. At
the present time, the Board of Directors knows of no other
business to be presented at the Annual Meeting. This proxy FOR ONE YEAR TERM:
confers discretionary authority on the holders thereof to
vote with respect to the election of any person as director Henry W. Wolcott, IV
where the nominee is unable to serve or for good cause will
not serve and matters incident to the conduct of the Annual THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
Meeting. LISTED NOMINEES.
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE,
INSERT THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
______________________________________________________
Please sign exactly as your name appears on
the envelope in which this card was mailed. Date
When signing as attorney, executor,
administrator, trustee or guardian, please ___________ If you are planning to attend the Annual / /
give your full title. If shares are held Meeting please check this box.
jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
Stockholder sign above Co-holder (if any) sign above
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
CFSB BANCORP, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The stockholder named above hereby appoints Robert H. Becker, Cecil Mackey and Donald F. Wall with full powers of substitution to
act, as attorneys and proxies for the undersigned, to vote all shares of Common Stock of CFSB Bancorp Inc. which the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held at the Sheraton Lansing Hotel, 925 South Creyts Road, Lansing,
Michigan on Tuesday, April 15, 1997 at 11:00 a.m., local time, and at any and all adjournments thereof, as indicated below and in
accordance with the determination of a majority of the Board of Directors with respect to other matters which come before the
Annual Meeting.
Should the stockholder named above be present and elect to vote at the Annual Meeting or at any adjournment thereof and after
notification to the Secretary of the Corporation at the Annual Meeting of the stockholder's decision to terminate this proxy, then
the power of said attorneys and proxies shall be deemed terminated and of no further force and effect. The undersigned hereby
revokes any and all proxies heretofore given with respect to the shares of Common Stock held of record by the undersigned.
The stockholder named above acknowledges receipt from the Corporation prior to the execution of this proxy of a Notice of Annual
Meeting, a Proxy Statement and an Annual Report.