SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
[X] Filed by the Registrant
[ ] 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 Section 240.14a-11(c) or
Section 240.14a-12
COMMUNITY FEDERAL 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 o-11.
(1) Title of each class of securities to which transaction
applies.
(2) Aggregate number of securities to which transaction
applies.
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11. (Set forth
the amount on which the filing fee is calculated and
state how it was determined.
(4) Proposed maximum aggregate value of transaction.
(5) Total fee paid.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or schedule and the date of its filing.
(1) Amount Previously Paid.
(2) Form, Schedule or Registration statement No.
(3) Filing Party:
(4) Date Filed:
December 21, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Community Federal Bancorp, Inc. The meeting will
be held at Community Federal Bancorp, Inc.'s office located at
333 Court Street, Tupelo, Mississippi, on Thursday, January 21,
1999 at 5:00 p.m., Central Time. The matters to be considered by
stockholders at the Annual Meeting are described in the
accompanying materials.
It is very important that you be represented at the Annual
Meeting regardless of the number of shares you own of whether you
are able to attend the meeting in person. We urge you to mark,
sign and date your proxy card today and return it in the envelope
provided, even if you plan to attend the Annual Meeting. This
will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
Your continued support of and interest in Community federal
Bancorp, Inc. are sincerely appreciated.
Sincerely,
Jim Ingram
President and Chief Executive Officer
COMMUNITY FEDERAL BANCORP, INC.
333 Court Street
Tupelo, Mississippi 38802
(601)842-3981
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 21, 1999
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of
Community Federal Bancorp, Inc.("Company") will be held at
Community Federal Bancorp, Inc.'s office located at 333 Court
Street, Tupelo, Mississippi, on Thursday, January 21, 1999, at
5:00 p.m., Central Time, for the following purposes, all of which
are more completely set forth in the accompanying Proxy
Statement:
1. To elect three directors of the Company for a three-year term
and until their successors are elected and qualified;
2. To ratify the appointment of Arthur Andersen, LLP as the
Company's independent auditors for the fiscal year ending
September 30, 1999; and
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors of the company has fixed December 10, 1998
as the voting record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting. Only
those stockholders of record as of the close of business on that
date will be entitled to vote at the Annual Meeting or at any
such adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
Judy Ballard, Secretary
December 21, 1998
Tupelo, Mississippi
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE
NUMBER YOU OWN. EVEN IF YOU PLAN TO BE PRESENT, YOU ARE URGED TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN
THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE
REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE
EXERCISE THEREOF.
COMMUNITY FEDERAL BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 21, 1999
General
This Proxy Statement is being furnished to the stockholders of
the Company in connection with the solicitation of proxies by the
Board of Directors for use at its Annual Meeting of Stockholders
("Annual Meeting") to be held at the Company's office located at
333 Court Street, Tupelo, Mississippi, on Thursday, January 21,
1999, at 5:00 p.m., Central Time, and at any adjournment thereof,
for the purposes set forth in the Notice of Annual Meeting of
Stockholders. This Proxy Statement is first being mailed to
stockholders on or about December 21, 1998.
Voting Rights
Only the holders of record of the outstanding shares of the
common stock, $0.01 par value per share, of the Company ("Common
Stock") at the close of business on December 10, 1998 ( the
Voting Record Date") will be entitled to notice of and to vote at
the Annual Meeting. At such date, there were 4,274,350 shares of
Common Stock issued and outstanding.
Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the meeting.
Directors are elected by a plurality of the votes cast with a
quorum present. The affirmative vote of the holders of a
majority of the total votes present, in person or by proxy, at
the Annual Meeting is required for approval of the proposal to
ratify the independent auditors. The presence, either in person
or by proxy, of the holders of a majority of the shares of Common
Stock outstanding on the Voting Record Date is necessary to
constitute a quorum at the Annual Meeting. Abstentions are
considered in determining the presence of a quorum, but
abstentions and broker non-votes will not effect the vote
required to approve the proposals presented at the Annual
Meeting.
Proxies
Shares of Common Stock represented by properly executed proxies,
if such proxies are received in time and not revoked, will be
voted in accordance with the instructions indicated on the
proxies. If no instructions are indicated, such proxies will be
voted for the matters described below and, in the discretion of
the proxy holder, as to any other matter which may properly come
before the Annual Meeting. Any holder of Common Stock who
returns a signed proxy but fails to provide instructions as to
the manner in which such shares are to be voted will be deemed to
have voted in favor of the matters set forth in the preceding
sentence.
Any Company stockholder who has given a proxy may revoke it at
any time prior to its exercise at the Annual Meeting by (i)
giving written notice of revocation to the Secretary of the
Company, (ii) properly submitting to the Company a duly-executed
proxy bearing a later date, or (iii) attending the Annual Meeting
and voting in person. All written notices of revocation and
other communications with respect to revocation of proxies should
be addressed as follows: Community Federal Bancorp, Inc., 333
Court Street, Tupelo, Mississippi 38802, Attention: Secretary.
Beneficial Ownership
The following table sets forth information as to the Common Stock
beneficially owned as of December 10, 1998, by (i) the only
persons or entities known to the Company to be the beneficial
owners of more than 5% of the Common Stock and (ii) all directors
and executive officers of the Company as a group.
Amount and
Nature Percent
Of Beneficial Of
Name and Address of Beneficial Owner Ownership Class
Community Federal Bancorp, Inc.,
Employee Stock Ownership Plan
333 Court Street
Tupelo, Mississippi 38802 363,200(2) 8.50%
All directors and executive officers
of the Company as a group (thirteen persons) 519,167(3) 12.15%
(1) Pursuant to rules promulgated by the Securities and Exchange
Commission ("SEC") under the Securities Exchange Act of 1934, as
amended ("Exchange Act"), a person or entity is considered to
beneficially own shares of Common Stock if the person or entity
has or shares (i) voting power, which includes the power to vote
or to direct the voting of the shares, or (ii) investment power,
which includes the power to dispose or direct the disposition of
the shares. Unless otherwise indicated, a person or entity has
sole voting and sole investment power with respect to the
indicated shares. Shares which are subject to stock options and
which may be exercised within 60 days of the Voting Record Date
are deemed to be outstanding for the purpose of computing the
percentage of Common Stock beneficially owned by such person.
(2) The Community Federal Bancorp, Inc. Employee Stock Ownership
Trust ("Trust") was established pursuant to the Community Federal
Bancorp, Inc. Employee Stock Ownership Plan ("ESOP") by an
agreement between the Company and Messrs, Ingram, Leake and
Johnson, who act as trustees of the plan ("Trustees"). As of the
Voting Record Date, 63,621 of the shares of Common Stock held in
the Trust had been allocated to the accounts of participating
employees. Under the terms of the ESOP, the Trustees must vote
all allocated shares held in the ESOP in accordance with the
instructions of the participating employees, and allocated shares
for which employees do not give instructions will be voted in the
same ratio on any matter as to those shares for which
instructions are given. Unallocated shares held in the ESOP will
be voted by the ESOP Trustees in accordance with their fiduciary
duties as trustees. The amount of Common Stock beneficially
owned by each individual trustee or all directors and executive
officers as a group does not include the shares held by the
Trust.
(3) Includes in the case of all directors and officers of the
Company as a group, (i) exercisable options to purchase 160,892
shares pursuant to the Company's 1997 Stock Option Plan; and (ii)
22,835 shares of Common Stock allocated to the account of the
executive officers in the ESOP.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
Election of Directors
The Bylaws of the Company provide that the Board of Directors
shall be divided into three classes which are as equal in number
as possible, and that the members of each class of directors are
to be elected for a term of three years and until their
successors are elected and qualified.
At the Annual Meeting, stockholders of the Company will be asked
to elect three directors of the Company for a three-year term and
until their successors are elected and qualified. The nominees
for election as directors were selected by the Nominating
Committee of the Board of Directors and, each nominee currently
serves as a director of the Company. There are no arrangements
or understandings between the persons named and any other person
pursuant to which such person was selected as a nominee for
election as a director at the Annual Meeting. No director or
nominee for director is related to any other director or
executive officer of the Company by blood, marriage or adoption.
If any person named as nominee should be unable or unwilling to
stand for election at the time of the Annual Meeting, the proxies
will nominate and vote for any replacement nominee or nominees
recommended by the Board of Directors of the Company. At this
time, the Board of Directors know of no reason why any of the
nominees may not be able to serve as a director if elected.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
AND DIRECTORS WHOSE TERMS CONTINUE
The following tables present information concerning each nominee
for director and each director whose term continues and reflects
his tenure as a director of the Company, his principal occupation
during the past five years as well as the number of shares of
Common Stock beneficially owned by each such person as of the
Voting Record Date.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM
Common Stock
Position with Beneficially
the Company and Owned as of
Principal December
Age as of Occupation 10,
September During the 1998(1)
30 Past Five Director
Name 1998 Years Since No. %
J. Leighton
Pettis, Jr. 65 Ophthalmologist in 1977 52,421(2) 1.2
Tupelo, Mississippi,
since 1962.
Robert W. 43 Account executive 1995 18,484(2)(3) *
Reed, III and director of
Reed Manufacturing
since 1992; sales
representative of New
York life insurance
1990-1992.
H. Lewis 48 President of 1998 3,854(4) *
Whitfield Community Federal
Savings Bank since
July, 1998. President
of Deposit Guaranty
National Bank, Tupelo,
1987 and March, 1998.
DIRECTORS WITH TERMS EXPIRING IN 2000
Common Stock
Position with Beneficially
the Company and Owned as of
Principal December
Age as of Occupation 10,
September During the 1998(1)
30, Past Five Director
Name 1998 Years Since No. %
Robert R. 57 Periodontist with 1993 23,021(2) *
Black, Sr. practice in Tupelo,
Mississippi, retired
in 1995.
Jim Ingram 67 Chief executive 1973 88,302(5) 2.1
officer of the
Community Federal
Savings Bank since
1984 and of the Company
since 1996. President
of the Bank between 1984
and June, 1998 and of the
Company between 1996 and
June, 1998.
L. F. 59 Member of the law 1986 49,521(2)(6) 1.1
Sams, Jr. firm of Mitchell,
McNutt, Threadgill,
Smith & Sams since
1971.
DIRECTORS WITH TERMS EXPIRING IN 2001
Common Stock
Position with Beneficially
the Company and Owned as of
Principal December
Age as of Occupation 10,
September During the 1998(1)
30 Past Five Director
Name 1998 Years Since No. %
Charles V. 66 President and chief 1988 45,846(2) 1.1
Imbler, Sr. executive officer of
Truck Center, Inc.,
Tupelo, Mississippi,
since 1970.
Medford M. 70 Chairman of the 1974 44,521(2)(7) 1.0
Leake Board since 1995.
President of Steele
City Lumber Company,
Birmingham, Alabama,
from 1970 to 1996,
chairman of the board
since 1997.
Michael R. 49 President of 1994 53,351(2)(8) 1.2
Thomas Washington Furniture
Mfg. Co., Inc., Houlka,
Mississippi from 1988-
1993 and from 1996 to
present. Real estate
developer in Tupelo,
Mississippi from 1993
to 1996.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
NOMINEES BE ELECTED AS DIRECTORS
(1)Based on information furnished by the respective individuals.
Pursuant to rules promulgated by the SEC under the Exchange Act,
a person or entity is considered to beneficially own shares of
Common Stock if the person or entity has or shares (i) voting
power, which includes the power to vote or to direct the voting
of the shares, or (ii) investment power, which includes the power
to dispose or direct the disposition of the shares. Unless
otherwise indicated, a person or entity has sole voting and sole
investment power with respect to the indicated shares. Shares
which are subject to stock options and which may be exercised
within 60 days of the Voting Record Date are deemed to be
outstanding for the purpose of computing the percentage of Common
Stock beneficially owned by such person. An asterisk indicates
that the ownership interest is less than one percent.
(2)Also includes 7,934 shares which may be acquired upon the
exercise of stock options.
(3) Includes 6,019 shares held jointly with Mr. Reed's wife and
4,531 shares held in a trust.
(4) Includes 3,754 exercisable options.
(5) Includes 30,200 shares held jointly with Mr. Ingram's wife,
8,702 shares allocated to his account in the ESOP and 36,000
shares which may be acquired upon the exercise of stock options.
(6) Includes 1,587 shares held by Mr. Sams' wife.
(7) Includes 21,606 shares held jointly with Mr. Leake's wife.
(8) Includes 28,000 shares held jointly with Mr. Thomas' wife and
6,000 shares held in a trust.
Executive Officers Who Are Not Directors
The following table sets forth certain information with respect
to the persons who currently serve as executive officers of the
community Federal Savings Bank (the "Savings Bank") and who also
serve as executive officers of the Company and who are not
directors. There are no arrangements or understandings between
the Savings Bank and/or the Company and any such person pursuant
to which such person was or will be elected an executive officer
of the Savings Bank or the Company and no such officer is related
to any director or other officer of the Savings Bank or the
Company by blood, marriage or adoption.
Age as of
Name September 30, 1998 Position
Gill Simmons 64 Vice President -
Mortgage Loans
Jack Johnson 59 Vice President -
Operations and
Compliance
Mark Burleson 32 Vice President -
Consumer/Commercial
Lending
Sherry McCarty 49 Chief Financial Officer
Set forth below is a brief description of the background of each
person who serves as an executive officer of the Company and the
Savings Bank and who is not a director.
Gill Simmons is Vice President for Mortgage Loans. Mr. Simmons
joined the Savings Bank in 1955 and during his tenure also has
served as Secretary/Treasurer.
Jack Johnson is Vice President for Operations and Compliance.
Mr. Johnson joined the Savings Bank in 1958 and during his tenure
also has served as cashier.
Mark Burleson is Vice President for Consumer/Commercial Lending.
Mr. Burleson joined the Savings Bank in 1994 after being employed
at a Tupelo-area commercial bank for five years where he served,
among other positions, as an assistant vice president and a
branch manager.
Sherry McCarty is Chief Financial Officer. Ms. McCarty joined
the Savings Bank in 1967 and during her tenure has also served as
Controller.
The Board of Directors and Its Committees
Regular meetings of the Board of Directors of the Company are
held quarterly and special meetings of the Board of Directors of
the company are held from time-to-time as needed. There were ten
meetings of the Board of Directors of the Company held during
fiscal 1998. No director attended fewer than 75% of the total
number of meetings of the Board of Directors of the Company held
during fiscal 1998 and the total number of meetings held by all
committees of the Board on which the director served during such
year.
The Company's business is primarily conducted through the Savings
Bank, a federally chartered saving bank and a wholly owned
subsidiary of the Company. The Board of Directors of the Savings
Bank has established various committees, including an Executive
Committee.
The Executive Committee generally has the power and authority to
act on behalf of the Board of Directors on important matters
between scheduled directors meetings unless specific Board of
Directors action is required or unless otherwise restricted by
the Savings Bank's charter or bylaws or its Board of Directors.
The Executive Committee also serves as the Savings Bank's
Compensation Committee. The Executive Committee is currently
chaired by Mr. Ingram with Messrs. Whitfield, Leake and Imbler as
members. The Executive Committee met six times in fiscal 1998.
The Audit Committee reviews (i) the independent auditors' reports
and results of their examination, prior to review by and with the
entire Board of Directors and (ii) the Office of Thrift
Supervision ("OTS") and Federal Deposit Insurance
Corporation("FDIC") and other regulatory reports, prior to review
by and with the entire Board of Directors. Currently, Mr. Pettis
serves as chairman of the Audit Committee and Messrs. Black and
Reed serve as members. The Audit Committee met two times during
fiscal 1998.
The full Board of Directors also serves as the Loan Committee
which meets monthly to review the loans requiring committee
approval pursuant to the Savings Bank's loan policy statement.
The Savings Bank has not established a permanent nomination
committee pursuant to the Bylaws of the Savings Bank but names
such a committee prior to each annual meeting.
Other Committees
In addition to committees of the Board of Directors, the Savings
Bank has also established other committees composed of officers
and key personnel, as set forth below.
The Asset/Liability Management Committee meets on an as needed
basis, no less than quarterly, and is responsible for reviewing
pricing strategies and the Savings Bank's investment results,
preparing various analyses and discussing possible transactions.
In addition, on a quarterly basis, the committee examines the
recording and reporting of securities activities to ensure
consistency with policies set forth in the Savings Bank's
Portfolio and Investment Policy Statement. Currently, Mr. Ingram
serves as chairman of the Investment Committee with Messrs.
Black, Leake, Whitfield, Simmons, Johnson, and Burleson and Ms.
McCarty, as members. The Asset/Liability Management Committee
met four times in fiscal 1998.
Directors' Compensation
Beginning January 1, 1998, each outside member of the Board of
Directors was paid $137 for each Board meeting attended. During
the first quarter of fiscal 1998, they were paid $130.50 for each
meeting attended. In addition, in fiscal year 1998 prior to
January 1, 1998, each outside director was paid a $535 monthly
fee and thereafter were paid a $561.75 monthly fee. In fiscal
1998, prior to January, 1998, Mr. Leake, as Chairman of the
Board, received a monthly fee of $640 and thereafter was paid a
monthly fee of $672. During the same period, each member of a
Board Committee described above, who is an outside director was
paid an attendance fee at the same rate as the Board meeting
attendance fee. Committee members otherwise do not receive fees
for committee meetings. Each of the Company's outside directors
also received a bonus of $963 during fiscal 1998.
EXECUTIVE COMPENSATION
Summary
The following table sets forth a summary of certain information
concerning the compensation awarded to or paid by the Savings
Bank for services rendered in all capacities during the last two
fiscal years to the President and Chief Executive Officer of the
Savings Bank and any other executive officer of the Savings Bank
who received salary and bonuses aggregating more than $100,000
during the last fiscal year.
Summary Compensation Table
Annual Compensation
Other
Name and Annual
Principal Position Year Salary Bonus Compensation(1)
Jim Ingram 1998 $141,225 $31,763 ---
President and 1997 130,069 56,885 ---
Chief Executive 1996 119,407 30,000 ---
Officer (2)
Long Term Compensation
Awards Payouts
Restricted Number of All Other
Stock Options(3)
Year Awards(2)
Name and
Principal Position
Jim Ingram 1998 $ - $ - -----
President and 1997 $755,188 90,000 -----
Chief Executive 1996 --- ---- -----
Officer (2)
All Other Compensation (4)
Name and
Principal Position Year
Jim Ingram 1998 $76,430 (5)
President and 1997 61,699 (6)
Chief Executive 1996 ---
Officer
(1) Does not include amount attributable to miscellaneous
benefits received by the named executive officer, including the
payment of club membership dues. The cost to the Savings Bank of
providing such benefits to the named executive officer during the
year ended September 30, 1998 did not exceed the lesser of
$50,000 or 10% of the total of annual salary and bonus reported
for such individual.
(2) Mr. Ingram resigned from his position as president of the
Savings Bank, effective June 30, 1998, but continues to serve as
Chief Executive Officer.
(3) Consists of awards of 43,000 restricted shares granted
pursuant to the Company's MRP, which had a fair market value of
$628,875 at September 30, 1998. The shares will vest at the rate
of 20% per year over a five-year period commencing on March 31,
1998.
(4) Consists of awards granted pursuant to the Company's 1997
Stock Option Plan which options vest and are exercisable at the
rate of 20% per year over a five-year period commencing on
September 30, 1997.
(5) Consists of amount allocated during fiscal 1998 pursuant to
the ESOP based on a per share price of $14.625 at September 30,
1998.
(6) Consists of amount allocated during fiscal 1997 pursuant to
the ESOP based on a per share price of $17.75 at September 30,
1997.
Stock Options
The following table sets forth certain information concerning
exercises of stock options granted pursuant to the Company's 1997
Stock Option Plan by the named executive officer during the year
ended September 30, 1998 and options held at September 30, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
Shares Number of Value of
Acquired Exercisable Exercisable
On Value Options at Options at
Name Exercise Realized Year End(1) Year End(2)
Jim Ingram $--- $----- 36,000 $526,500
(1) 18,000 options became exercisable on September 30, 1997 and
18,000 became exercisable on September 30, 1998.
(2) Based on a per share market price of $14.625 as of September
30, 1998.
Compensation Committee
The Compensation Committee determines executive compensation and
its members include Messrs. Leake and Imbler as well as Messrs.
Ingram and Whitfield, who are executive officers of the Company
and do not participate in decisions regarding their compensation.
The report of the Compensation Committee with respect to
compensation for the chief executive officer and all other
executive officers is set forth below.
Report of the Compensation Committee
The goals of the Committee are to assist the Savings Bank in
attracting and retaining qualified management, motivating
executives to achieve performance goals, rewarding management for
outstanding performance and to ensure that the financial
interests of the Company's management and shareholders are
satisfied.
The Committee considered several financial and non-financial
accomplishments in setting the compensation of the Chief
Executive Officer and other executive officers, including but not
limited to, net income of the Savings Bank, profitability ratios,
satisfactory regulatory examinations, and market value of the
Savings Bank. The Committee reviewed and considered the SNL
Executive Compensation Review and Mississippi Bankers' Survey for
a comparison of compensation paid by the Savings Bank's peer
group.
The compensation set by the Committee includes a base salary and
a bonus component. Based upon the above factors, the Committee
(with Mr. Ingram not participating in the decision) on behalf of
the Company offered an employment agreement to Mr. Ingram which
provided for a rolling three-year term of employment commencing
on March 25, 1996 and set his fiscal 1998 salary at $141,225.
The Committee (with Mr. Whitfield not participating in the
decision) on behalf of the Company also offered an employment
agreement to Mr. Whitfield which provided for a rolling three-year
term of employment commencing on July 1, 1998 and set his
fiscal 1998 salary at $140,000 (annualized). In addition, the
Committee provided for salary increases for the other executive
officers and determined their respective bonuses for fiscal 1998.
Medford M. Leake
Charles V. Imbler, Sr.
Jim Ingram
H. Lewis Whitfield
Performance Graph
The following graph compares the yearly cumulative total return
on the Common Stock during fiscal 1998 with (i) the yearly
cumulative total return on the stocks included in the Standard
and Poor's 500 Market Index and (ii) the yearly cumulative total
return on the stocks included in the SNL Securities Thrift Stock
Index.
[GRAPH]
Directors' Retirement Plan
In order to secure the continuing service of members of the Board
of Directors and to recognize the contributions of such
individuals to the Savings Bank, the Savings Bank established a
Directors' Retirement Plan ("DRP") in fiscal 1993. A director
becomes eligible to receive benefits from the DRP upon completion
of ten years of continuous service as a director of the Savings
Bank, including service as such prior to the adoption of the DRP.
Under the DRP, a retired director or his beneficiary would
receive for a ten-year period annual retirement benefits equal to
100% of the annual directors' fees being paid to the Savings Bank
directors on the date of the director's retirement. Payments
under the DRP will terminate if a retired director becomes
affiliated with another financial institution that is a
competitor of the Savings Bank. Any claim under the DRP by a
participant is that of an unsecured creditor. Seven members of
the Savings Bank's current Board of Directors qualify to receive
benefits under the DRP at retirement.
Employment Agreements
During fiscal 1996 and fiscal 1998, the Company entered into an
employment agreement with Messrs. Ingram and Whitfield,
respectively (individually the "Executive" or jointly
"Executives") which provides for an annual salary, subject to
annual adjustments by the Board of Directors. At September 30,
1998, the annual salary plus an annual bonus determined at year
end by the Board of Directors was $141,225 for Mr. Ingram and
$140,000 (annualized) for Mr. Whitfield. The form of employment
agreement provides for a rolling three-year term of employment,
which term is automatically extended each day for an additional
day such that the remaining term of the agreement continues to be
for three years. Mr. Ingram's agreement commended on March 25,
1996 and Mr. Whitfield's agreement commenced on July 1, 1998.
However, each year the Board of Directors of the Savings Bank is
required to consider and review extension of the terms of each
agreement and is required to continue to extend under such terms
unless either party gives notice of non-renewal to the other
party so that the term of employment under the agreement would
not be less than three years unless such notice had been given.
The employment agreement is terminable with or without cause by
the Savings Bank. The Executive has no right to compensation or
other benefits pursuant to the employment agreement for any
period after voluntary termination or termination by the Savings
Bank for cause, disability, retirement or death. However, in the
event that (i) the Executive terminates his employment because of
failure of the Savings Bank to comply with any material provision
of the employment agreement or (ii) the employment agreement was
terminated by the Executive for Good Reason, as defined, the
Executive would be entitled to 2.99 times the average annual
compensation paid to him by the Savings Bank during the five most
recent taxable years ending during the calendar year in which the
notice of termination occurs or such portion of such period in
which the Executive served as senior officer of the Savings Bank
as well as continued participation in employee benefit plans of
the Savings Bank (other than retirement plans and stock
compensation plans) until the expiration of the remaining term of
employment. "Good Reason" is generally defined in the employment
agreement to include the assignment by the Savings Bank to the
Executive of any duties which, in the Executive's good faith
determination, are materially inconsistent with the Executive's
positions, duties, responsibilities and status with the Savings
Bank prior to such assignment or prior to a change in control of
the Savings Bank. The employment agreement would not be
automatically terminated upon a change in control. If the
employment agreements had been terminated for Good Reason during
fiscal 1998, Mr. Ingram would have been entitled to a payment of
$477,356 and Mr. Whitfield (assuming he had been employed with
the Savings Bank for the entire fiscal year) would have been
entitled to a payment of $418,600.
The employment agreement provides that in the event that any of
the payments to be made thereunder or otherwise upon termination
of employment are deemed to constitute "excess parachute
payments" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), then such payments
and benefits received thereunder would be reduced, in the manner
determined by the Savings Bank, by the amount, if any, which is
the minimum necessary to result in no portion of the payments and
benefits being nondeductible by the Savings Bank for federal
income tax purposes. Excess parachute payments generally are
defined as payments in excess of three times the recipient's
average annual compensation from the Savings Bank includable in
the recipient's gross income during the most recent five taxable
years ending before the date on which a change in control of the
Savings Bank or other triggering events occurred ("base amount").
A recipient of excess parachute payments is subject to a 20%
excise tax on the amount by which such payments exceed the base
amount, in addition to regular income taxes, and payments in
excess of the base amount would not be deductible by the Savings
Bank as compensation expense for federal income tax purposes.
Retirement Plan
The Savings Bank has a defined benefit pension plan ("Retirement
Plan") for all employees who have attained the age of 21 years
and have completed one year of service with the Savings Bank. In
general, the Retirement Plan provides for annual benefits payable
monthly upon retirement at age 65 in an amount equal to
approximately 1.667% of the "Average Compensation" of the
employee (which is equal to the average of the compensation paid
to him or her during the five successive calendar years within
the final ten calendar years of service affording the highest
average, excluding bonuses, commissions, overtime pay and other
special compensation) for each year of service, not in excess of
40 years. Under the Retirement Plan, an employee's benefits are
fully vested after six years of qualifying service. A year of
service is any year in which an employee works a minimum of 1,000
hours. The Retirement Plan provides for an early retirement
option with reduced benefits for participants who are age 55 and
who have 15 years of service.
The following table illustrates annual pension benefits for
retirement at age 65 under various levels of compensation and
years of service. The figures in the table assume that the
Retirement Plan continues in its present form and that the
participants elect a straight life annuity form of benefit.
Five Year
Average 10 Years of 15 Years of 20 Years of
Compensation Service Service Service
$40,000 $7,314 $10,970 $14,627
50,000 9,145 13,717 18,290
60,000 10,965 16,448 21,930
70,000 12,796 19,194 25,592
80,000 14,627 21,941 29,255
90,000 16,448 24,671 32,895
100,000 18,279 27,418 36,557
110,000 20,110 30,165 40,220
120,000 21,930 32,895 43,860
Five Year
Average 25 Years of 30 Years of 35 Years of
Compensation Service Service Service
$40,000 $18,284 $21,941 $25,598
50,000 22,862 27,434 32,007
60,000 27,413 32,895 38,378
70,000 31,990 38,388 44,787
80,000 36,568 43,882 51,196
90,000 41,119 49,343 57,566
100,000 45,697 54,836 63,975
110,000 50,275 60,329 70,384
120,000 54,825 65,790 76,755
At September 30, 1998, Mr. Ingram had 37 years of credited
service under the Retirement Plan.
Indebtedness of Management
All of the savings Bank's outstanding loans to its directors and
executive officers were originally made with (i) in the ordinary
course of business at substantially the same terms, including
interest rates and collateral, as those prevailing at the time of
the loans for comparable transactions with other persons and did
not involve more than the normal risk of collectability or other
unfavorable features or (ii) pursuant to a benefit or
compensation program that is widely available to the employees of
the Savings Bank and that does not give preference to any insider
of the Savings Bank over other employees of the Savings Bank.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Arthur
Andersen LLP as independent auditors for the Company for the year
ending September 30, 1999, and further directed the selection of
auditors be submitted for ratification by the stockholders at the
Annual Meeting. The Company has been advised by Arthur Andersen
LLP that neither the firm nor any of its associates has any
relationship with the Company other than the usual relationship
that exist between independent public accountants and clients.
Arthur Andersen LLP will have representatives at the Annual
Meeting who will have an opportunity to make a statement, if they
so desire, and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP, AS
INDEPENDENT AUDITORS FOR THE YEAR ENDING SEPTEMBER 30,1999.
OTHER MATTERS
Management is not aware of any business to come before the Annual
Meeting other than those matters described in this Proxy
Statement. However, if any other matters should properly come
before the Annual Meeting, it is intended that the proxies
solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the
proxies.
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 the Common
Stock. In addition to solicitations by mail, directors, officers
and employees of the Company may solicit proxies personally or by
telephone without additional compensation.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the
proxy solicitation materials to be used in connection with the
next Annual Meeting of Stockholders of the Company must be
received at the office of the Company no later than August 23,
1999. If such proposal is in compliance with all of the
requirements of Rule 14a-8 under the Exchange Act, it will be
included in the Proxy Statement and set forth on the form of
proxy issued for the next Annual Meeting of Stockholders, It is
urged that any such proposals be sent by certified mail, return
receipt requested.
ANNUAL REPORTS AND FINANCIAL STATEMENTS
Stockholders of the Company as of the record date for the Annual
Meeting have been forwarded under separate cover a copy of the
Company's Annual Report to Stockholders for the year ended
September 30, 1998, prepared in accordance with GAAP, and the
related report of the Company's independent public accountants.
The Annual Report is not a part of this Proxy Statement.
Upon receipt of a written request, the Company will furnish to
any stockholder without charge a copy of its Annual Report on
Form 10-K (and Amendment No. 1 thereto) filed with the SEC under
the Exchange Act for the year ended September 30, 1998. Upon
written request, the Company will furnish to any such stockholder
a copy of the exhibits to the Annual Report on Form 10-K. Such
written request should be directed to Community Federal Bancorp,
Inc., 333 Court Street, Tupelo, Mississippi 38802, Attention:
Investor Relations. The Annual Report on Form 10-K is not a part
of this Proxy Statement.
REVOCABLE PROXY
COMMUNITY FEDERAL BANCORP, INC.
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
COMMUNITY FEDERAL BANCORP, INC. FOR USE AT THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JANUARY 21, 1999 AND AT ANY
ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of
Community Federal Bancorp, Inc. (the "Company"), as proxies, each
with power to appoint his substitute, and hereby authorizes them
to represent and vote, as designated below, all the shares of
Common Stock of the Company held of record by the undersigned on
December 10, 1998 at the Annual Meeting of shareholders to be
held at the Company's offices, located at 333 Court Street,
Tupelo, Mississippi, on Thursday, January 21, 1999, at 5:00 p.m.,
Central Time, or at any adjournment thereof.
Please be sure to sign and date this Proxy in the box below.
Date
Shareholder sign above - Co-holder(if any) sign above
1. ELECTION OF DIRECTORS FOR THREE-YEAR TERM.
For Withhold For all Except
Nominees for three-year term expiring in 2002:
J. Leighton Pettis, Jr., Robert W. Reed, III, and
H. Lewis Whitfield
Instruction: To withhold authority to vote for any individual
nominee, mark "For All Except" and write that nominee's name in
the space provided below.
2. PROPOSAL TO RATIFY THE APPOINTMENT by the Board of Directors
of Arthur Andersen, LLP as the Company's independent auditors for
the year ending September 30, 1999.
For Against Abstain
3. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. THE SHARES OF
THE COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF NOT
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE BOARD OF DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS, FOR
THE PROPOSAL SPECIFIED IN ITEM 2 AND OTHERWISE AT THE DISCRETION
OF THE PROXIES. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO
THE TIME IT IS VOTED AT THE ANNUAL MEETING.
Please sign the proxy exactly as your name(s) appear on this
proxy. When signing in a representative capacity, please give
title. When shares are held jointly, only one holder need sign.
Detach above card, sign, date and mail in postage paid envelope
provided.
COMMUNITY FEDERAL BANCORP, INC.
PLEASE MARK, SIGN, DATE & RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.