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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FIRSTFED AMERICA BANCORP, INC.
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(Name of Registrant as Specified in Its Charter)
FIRSTFED AMERICA BANCORP, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11 (a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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FIRSTFED AMERICA BANCORP, INC.
ONE FIRSTFED PARK
SWANSEA, MASSACHUSETTS 02777
(508) 679-8181
June 22, 2001
Fellow Shareholders:
You are cordially invited to attend the annual meeting of shareholders
of FIRSTFED AMERICA BANCORP, INC. The meeting will be held at The Westin Hotel,
One West Exchange Street, Providence, Rhode Island, on Thursday, July 26, 2001,
at 2:00 p.m., local time.
The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting. We
will also report on the operations of the Company. Directors and officers of the
Company, as well as a representative of KPMG LLP, the Company's independent
auditors, will be present to respond to appropriate questions of shareholders.
It is important that your shares are represented at this meeting,
whether or not you attend the meeting in person and regardless of the number of
shares you own. To make sure your shares are represented, we urge you to
complete and mail the enclosed proxy card. If you attend the meeting, you may
vote in person even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Robert F. Stoico
Robert F. Stoico
Chairman of the Board, President and
Chief Executive Officer
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FIRSTFED AMERICA BANCORP, INC.
ONE FIRSTFED PARK
SWANSEA, MASSACHUSETTS 02777
(508) 679-8181
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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FIRSTFED AMERICA BANCORP, INC. (the "Company") will hold its annual meeting
of shareholders at The Westin Hotel, One West Exchange Street, Providence, Rhode
Island, on Thursday, July 26, 2001, at 2:00 p.m., local time, for the following
purposes:
1. To elect two directors to serve for a term of three years;
2. To ratify the appointment of KPMG LLP as independent auditors for the
Company for the fiscal year ending March 31, 2002; and
3. To transact any other business that may properly come before the
meeting.
NOTE: The Board of Directors is not aware of any other business to come
before the meeting.
Only shareholders of record at the close of business on June 4, 2001 are
entitled to receive notice of the meeting and to vote at the meeting and any
adjournment or postponement of the meeting.
Please complete and sign the enclosed form of proxy, which is solicited by
the Board of Directors, and mail it promptly in the enclosed envelope. The proxy
will not be used if you attend the meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Cecilia R. Viveiros
Cecilia R. Viveiros
Corporate Secretary
Swansea, Massachusetts
June 22, 2001
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE 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
FIRSTFED AMERICA BANCORP, INC.
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ANNUAL MEETING OF SHAREHOLDERS
JULY 26, 2001
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This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of FIRSTFED AMERICA BANCORP, INC. (the
"Company") to be used at the annual meeting of shareholders of the Company. The
Company is the holding company for First Federal Savings Bank of America ("First
Federal" or the "Bank"), FIRSTFED INSURANCE AGENCY, LLC and FIRSTFED TRUST
COMPANY, NA. The annual meeting will be held at The Westin Hotel, One West
Exchange Street, Providence, Rhode Island, on Thursday, July 26, 2001, at 2:00
p.m., local time. This proxy statement and the enclosed proxy card are being
first mailed to shareholders on or about June 22, 2001.
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VOTING AND PROXY PROCEDURE
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WHO CAN VOTE AT THE MEETING
You are entitled to vote your Company common stock if the records of the
Company show that you held your shares as of the close of business on June 4,
2001. If your shares are held in a stock brokerage account or by a bank or other
nominee, you are considered the beneficial owner of shares held in "street
name," and these proxy materials are being forwarded to you by your broker or
nominee. As the beneficial owner, you have the right to direct your broker how
to vote. Your broker or nominee has enclosed a voting instruction card for you
to use in directing the broker or nominee how to vote your shares.
As of the close of business on June 4, 2001, a total of 6,220,249 shares of
Company common stock was outstanding. Each share of common stock has one vote.
As provided in the Company's Certificate of Incorporation, no record owner of
the Company's common stock which is beneficially owned, either directly or
indirectly, by a person who beneficially owns in excess of 10% of the Company's
outstanding shares, is entitled to any vote in respect of the shares held in
excess of that limit.
ATTENDING THE MEETING
If you hold your shares in street name, you will need proof of ownership to
be admitted to the meeting. A recent brokerage statement or letter from a bank
or broker are examples of proof of ownership. If you want to vote your shares of
Company common stock held in street name in person at the meeting, you will have
to get a written proxy in your name from the broker, bank or other nominee who
holds your shares.
VOTE REQUIRED
A majority of the outstanding shares of common stock entitled to vote is
required to be represented at the meeting in order to constitute a quorum for
the transaction of business. If you return valid proxy instructions or attend
the meeting in person, your shares will be counted for purposes of determining
whether there is a quorum, even if you abstain from voting. Broker non-votes
also will be counted for purposes of determining the existence of a quorum. A
broker non-vote occurs when a broker, bank or other nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not
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have discretionary voting power with respect to that item and has not received
voting instructions from the beneficial owner.
In voting on the election of directors, you may vote in favor of both
nominees, withhold votes as to both nominees, or withhold votes as to a specific
nominee. Directors are elected by a plurality of the votes cast. This means that
the nominees receiving the greatest number of votes will be elected. Votes that
are withheld and broker non-votes will have no effect on the outcome of the
election. In voting on the ratification of the appointment of KPMG LLP as
independent auditors, you may vote in favor of the proposal, vote against the
proposal or abstain from voting. The ratification of KPMG LLP as independent
auditors will be decided by the affirmative vote of a majority of the votes
cast. Broker non-votes and abstentions will not be counted as votes cast and
will have no effect on the voting on this matter.
VOTING BY PROXY
The Company's Board of Directors requests that you allow your shares of
Company common stock to be represented at the annual meeting by the persons
named in the enclosed proxy card. All shares of Company common stock represented
at the meeting by properly executed and dated proxies will be voted according to
the instructions indicated on the proxy card. If you sign, date and return a
proxy card without giving voting instructions, your shares will be voted as
recommended by the Company's Board of Directors. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" BOTH OF THE NOMINEES AND "FOR" RATIFICATION OF KPMG LLP
AS INDEPENDENT AUDITORS.
If any matters not described in this proxy statement are properly presented
at the annual meeting, the persons named in the proxy card will use their own
judgment to determine how to vote your shares. This includes a motion to adjourn
or postpone the meeting in order to solicit additional proxies. If the annual
meeting is postponed or adjourned, your Company common stock may be voted by the
persons named in the proxy card on the new meeting date as well, unless you have
revoked your proxy. The Company does not know of any other matters to be
presented at the meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Corporate Secretary of
the Company in writing before your common stock has been voted at the annual
meeting, deliver a later dated proxy, or attend the meeting and vote your shares
in person. Attendance at the annual meeting will not in itself revoke your
proxy.
If your Company common stock is held in street name, you will receive
instructions from your broker, bank or other nominee that you must follow in
order to have your shares voted. Your broker or bank may allow you to deliver
your voting instructions via the telephone or the Internet. Please see the
instruction form that is provided by your broker, bank or other nominee and
accompanies this proxy statement. If you wish to change your voting instructions
after you have returned your voting instruction form to your broker or bank, you
must contact your broker or bank.
The cost of solicitation of proxies on behalf of the Board will be borne by
the Company. In addition to the solicitation of proxies by mail, Georgeson
Shareholder Communications Inc., a proxy solicitation firm, will assist the
Company in soliciting proxies for the annual meeting. The Company will pay a fee
of $3,000, plus out-of-pocket expenses, for these services. Proxies may also be
solicited personally or by telephone by directors, officers and other employees
of the Company and the Bank without any additional compensation. The Company
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 material to, and obtain proxies from, the beneficial owners, and will
reimburse those record holders for their reasonable expenses in doing so.
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PARTICIPANTS IN FIRST FEDERAL'S ESOP AND 401(k) PLAN
If you are a participant in the First Federal Savings Bank of America
Employee Stock Ownership Plan and Trust (the "ESOP") or if you hold shares of
Company common stock through the Bank's 401(k) Plan, you will be receiving
voting instructions under separate cover. Through such voting instructions, you
will be able to direct the trustees for the plans as to the manner in which
shares of Company common stock allocated to your plan accounts are to be voted.
The deadline for returning your voting instructions to either the ESOP plan
trustee or the Registrar and Transfer Company, as applicable, is July 19, 2001.
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STOCK OWNERSHIP
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The following table provides information as of June 4, 2001, with respect
to persons known by the Company to be the beneficial owners of more than 5% of
the Company's outstanding common stock. A person may be considered to own any
shares of common stock over which he or she has, directly or indirectly, sole or
shared voting or investing power.
NUMBER OF SHARES PERCENT OF COMMON
NAME AND ADDRESS OWNED STOCK OUTSTANDING
---------------- ---------------- -----------------
First Federal Savings Bank of America 678,351(1) 10.91%
Employee Stock Ownership Plan and Trust
ONE FIRSTFED PARK
Swansea, Massachusetts 02777
The FIRSTFED Charitable Foundation 601,972(2) 9.68%
(the "Foundation")
ONE FIRSTFED PARK
Swansea, Massachusetts 02777
Jeffrey L. Gendell 582,200(3) 9.36%
Tontine Management, L.L.C.
Tontine Financial Partners, L.P.
Tontine Overseas Associates, L.L.C.
Tontine Partners, L.P.
Tontine Associates, L.L.C.
200 Park Avenue, Suite 3900
New York, NY 10166
Robert F. Stoico 400,188(4) 6.25%
c/o FIRSTFED AMERICA BANCORP, INC.
ONE FIRSTFED PARK
Swansea, Massachusetts 02777
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NUMBER OF SHARES PERCENT OF COMMON
NAME AND ADDRESS OWNED STOCK OUTSTANDING
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Brandes Investment Partners, L.P. 392,149(5) 6.30%
Brandes Investment Partners, Inc.
Brandes Holdings, L.P.
Charles H. Brandes
Glenn R. Carlson
Jeffrey A. Busby
11988 El Camino Real
Suite 500
San Diego, California 92130
Wellington Management Company, LLP 319,400(6) 5.13%
75 State Street
Boston, Massachusetts 02109
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(1) Under the terms of the ESOP, the ESOP trustee will vote shares allocated to
participants' accounts in the manner directed by the participants. The ESOP
trustee, subject to its fiduciary responsibilities, will vote unallocated
shares and allocated shares for which no timely voting instructions are
received in the same proportion as shares for which the trustee has
received proper voting instructions from participants. As of June 4, 2001,
368,564 shares have been allocated to participants' accounts and 309,787
shares remain unallocated under the ESOP.
(2) The Foundation was established and funded in connection with the Bank's
conversion to stock form on January 15, 1997. As mandated by the Office of
Thrift Supervision, the terms of the gift instrument require that all
shares of common stock held by the Foundation must be voted in the same
ratio as all other shares of Company common stock on all proposals
considered by shareholders of the Company.
(3) Based on information disclosed by the group of reporting persons set forth
herein in a Schedule 13G filed with the Securities and Exchange Commission
("SEC") and most recently amended on February 14, 2001, the following
entities may be deemed to be the beneficial owners of the amount of common
stock indicated after their names: Jeffrey L. Gendell, 582,200 shares;
Tontine Management, L.L.C., 489,700 shares; Tontine Financial Partners,
L.P., 414,700 shares; Tontine Overseas Associates, L.L.C., 90,000 shares;
Tontine Partners, L.P., 65,000 shares; and Tontine Associates, L.L.C.,
10,000 shares.
(4) Includes 174,144 shares subject to options granted under the FIRSTFED
AMERICA BANCORP, INC. 1997 Stock Based Incentive Plan, which are currently
exercisable or will become exercisable within 62 days, and 13,061 shares
subject to options granted under the 1998 Stock Option Plan, which will
become exercisable within 62 days.
(5) Based on information disclosed by the group of reporting persons set forth
herein in a Schedule 13G filed with the SEC and most recently amended on
February 14, 2001 and a Form 13F filed on February 14, 2001.
(6) Based on information disclosed in a Schedule 13G filed with the SEC and
most recently amended on February 13, 2001.
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
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The two nominees proposed by the Board of Directors for election as
director were unanimously chosen by the Nominating Committee of the Board of
Directors. Neither of the nominees is being proposed according to an agreement
or understanding between either of them and the Company.
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PROPOSAL 1 -- ELECTION OF DIRECTORS
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The Company's Board of Directors consists of seven members. Six directors
are independent, and one director is a member of management. The Board is
divided into three classes with three-year staggered terms, with approximately
one-third of the directors elected each year. The nominees for election this
year are Robert F. Stoico and John S. Holden, Jr., each of whom is a director of
the Company and the Bank.
It is intended that the proxies solicited by the Board of Directors will be
voted for the election of the nominees named above. If any nominee is unable to
serve, the persons named in the proxy card would vote your shares to approve the
election of any substitute proposed by the Board of Directors. Alternatively,
the Board of Directors may adopt a resolution to reduce the size of the Board.
At this time, the Board of Directors knows of no reason why either nominee might
be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF BOTH OF THE
NOMINEES.
INFORMATION WITH RESPECT TO NOMINEES, CONTINUING DIRECTORS AND CERTAIN EXECUTIVE
OFFICERS
The following table sets forth, as of June 4, 2001, the names of nominees
and continuing directors and the Named Executive Officers, their ages, a brief
description of their recent business experience, including present occupations
and employment, the year in which each became a director of the Bank and the
year in which their terms (or, in the case of nominees, their proposed terms) as
director of the Company expire. This table also sets forth the amount of common
stock and the percent thereof beneficially owned by each director, each Named
Executive Officer and all directors and executive officers as a group as of June
4, 2001. Unless otherwise indicated, each of the named individuals has sole
voting and investment power with respect to the shares shown.
AMOUNT AND
EXPIRATION OF NATURE OF OWNERSHIP
NAME AND PRINCIPAL OCCUPATION AT PRESENT DIRECTOR TERM AS BENEFICIAL AS A PERCENT
AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNERSHIP OF CLASS
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NOMINEES
Robert F. Stoico 60 1980 2004 400,188(2)(3) 6.25%
Chairman of the Board of the
Company and President and Chief
Executive Officer of the Company
and the Bank
John S. Holden, Jr. 71 1982 2004 38,514(4)(5)(6) *
Chairman of the Board,
Chief Executive Officer and
Treasurer of Automatic
Machine Products Co.
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AMOUNT AND
EXPIRATION OF NATURE OF OWNERSHIP
NAME AND PRINCIPAL OCCUPATION AT PRESENT DIRECTOR TERM AS BENEFICIAL AS A PERCENT
AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNERSHIP OF CLASS
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CONTINUING DIRECTORS
Richard W. Cederberg 72 1982 2002 40,914(4)(5)(7) *
Retired, former Chairman of Larson
Tool and Stamping Co.
Gilbert C. Oliveira 76 1960 2002 64,914(4)(5) 1.04%
President and Treasurer of Gilbert
C. Oliveira Insurance Agency, Inc.
Paul A. Raymond, DDS 57 1981 2002 38,384(4)(5)(8) *
Dentist in town of Swansea,
Massachusetts
Thomas A. Rodgers, Jr. 87 1963 2003 75,914(4)(5) 1.22%
President and Chief Executive
Officer of Rodgers Family
Foundation and former Chairman
of Globe Manufacturing Co., Inc.
Anthony L. Sylvia 69 1984 2003 43,914(4)(5) *
President and Treasurer of The
Baker Manufacturing Co., Inc.
NAMED EXECUTIVE OFFICERS
(WHO ARE NOT ALSO DIRECTORS)
Edward A. Hjerpe, III 42 -- -- 108,440(2)(3) 1.72%
Executive Vice President, Chief
Operating Officer, and Chief
Financial Officer of the Company
and the Bank. (9)
Frederick R. Sullivan 59 -- -- 72,019(2)(3) 1.15%
Executive Vice President of the
Company and the Bank
Kevin J. McGillicuddy 61 -- -- 70,807(2)(3) 1.13%
Executive Vice President of the
Company and the Bank
All directors and executive officers as a
group (10 persons) -- -- -- 954,008(10) 14.27%
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* Does not exceed 1.0% of the Company's voting securities.
(1) Includes years of service as a director of the Bank.
(2) Includes 87,072, 17,414, 17,414, and 17,414 shares awarded to Messrs.
Stoico, Hjerpe, Sullivan and McGillicuddy, respectively, under the FIRSTFED
AMERICA BANCORP, INC. 1997 Stock-Based Incentive Plan (the "Incentive
Plan"). Such awards commenced vesting at a rate of 20% per year beginning
August 5, 1998 but would vest immediately upon death, disability,
retirement or a change in control. Each participant presently has voting
power as to the shares awarded. In addition, Mr. Hjerpe received 8,707
additional shares awarded under the Incentive Plan, which commenced vesting
at a rate of 20% per year beginning June 29, 1999.
(3) Includes 174,144, 60,950, 34,829 and 34,829 options granted to Messrs.
Stoico, Hjerpe, Sullivan and McGillicuddy, respectively, under the
Incentive Plan, which are currently exercisable or will become exercisable
within 62 days, and excludes 43,536, 26,122, 8,707 and 8,707 shares for
Messrs. Stoico, Hjerpe, Sullivan and McGillicuddy, respectively, subject to
unexercisable options granted to each of these named executive officers
under the Incentive Plan. Also includes 13,061, 5,224, 2,612 and 2,612
options granted to Messrs. Stoico, Hjerpe, Sullivan and McGillicuddy,
respectively, under the 1998 Stock Option Plan, which are currently
exercisable or will become exercisable within 62 days and excludes 52,243,
20,896, 10,448 and 10,448 shares for Messrs. Stoico, Hjerpe, Sullivan and
McGillicuddy, respectively, subject to unexercisable options granted to
each of these named executive officers under the 1998 Stock Option Plan.
Shares subject to options granted under the Incentive Plan and the 1998
Stock Option Plan vest at a rate of 20% per year commencing on August 5,
1998 and July 18, 2001, respectively, but would vest immediately upon
death, disability, retirement or a change in control. Included in Mr.
Hjerpe's total are 26,122 additional options, which are currently
exercisable or will become exercisable within 62 days, and excludes 17,414
options which are unexercisable granted under the Incentive Plan, which
commenced vesting in five equal annual installments on June 29, 1999.
(4) Includes 10,449 shares awarded to each outside director under the Incentive
Plan. Such awards commenced vesting at a rate of 20% per year beginning
August 5, 1998 but would vest immediately upon death, disability,
retirement or a change in control.
(5) Includes 20,898 options granted to each outside director under the
Incentive Plan and 1,567 options under the 1998 Stock Option Plan, which
are currently exercisable or will become exercisable within 62 days, and
excludes 5,224 shares subject to unexercisable options granted to each
outside director under the Incentive Plan and 6,269 options granted under
the 1998 Stock Option Plan. Shares subject to options granted under the
Incentive Plan and the 1998 Stock Option Plan vest at a rate of 20% per
year commencing on August 5, 1998 and July 18, 2001, respectively, but
would vest immediately upon death, disability, retirement or a change in
control.
(6) Includes 200 shares held by Mr. Holden's spouse and 200 shares held by Mr.
Holden's son.
(7) Includes 4,000 shares held by Mr. Cederberg's spouse.
(8) Includes 470 shares held by Dr. Raymond's spouse's IRA.
(9) Prior to 1997, Mr. Hjerpe served as Executive Vice President/Chief
Financial Officer of the Federal Home Loan Bank of Boston.
(10) Includes all options currently exercisable or which will become exercisable
within 62 days under the Incentive Plan and the 1998 Stock Option Plan.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company and the Board of Directors of the
Bank conduct business through meetings of the Boards of Directors and through
activities of their respective committees. The Board of Directors of the Company
generally meets quarterly, while the Bank's Board of Directors generally meets
on a monthly basis, and both may have additional meetings as needed. During the
fiscal year ended March 31, 2001, the Board of Directors of the Company held 7
meetings. The Board of Directors of the Bank held 12 meetings during fiscal
2001. All of the directors of the Company and Bank attended at least 75%, with
the exception of Mr. Cederberg who attended 71%, of the total number of the
Company's Board meetings held and committee meetings on which such directors
served during the fiscal year ended March 31, 2001. The Board of Directors of
the Company and Bank maintain committees, the nature and composition of which
are described below:
AUDIT AND COMPLIANCE COMMITTEE. The Audit and Compliance Committee of the
Company consists of Messrs. Holden, Raymond and Sylvia, who are outside
Directors. The Audit and Compliance
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Committee of the Bank consists of Messrs. Holden, Raymond, Sylvia and Gerhard S.
Lowenstein, who are outside Directors. These committees generally meet on a
quarterly basis and are responsible for the review of audit reports and
management's actions regarding the implementation of audit findings and to
review compliance with all relevant laws and regulations. The internal audit
function, which is outsourced to The Harcourt Group, Ltd., reports to the Audit
and Compliance Committees of the Company and Bank. The Audit and Compliance
Committees of the Company and Bank met 4 times in fiscal 2001.
COMPENSATION COMMITTEE. The Compensation Committee of the Company consists
of Messrs. Stoico, Oliveira and Rodgers. The Management and Personnel Committee
of the Bank consists of Messrs. Stoico, Oliveira, Rodgers and Willard E.
Olmsted. Such Committees are responsible for all matters regarding compensation
and fringe benefits for officers and employees of the Company and the Bank and
meet on an as needed basis. See "Executive Compensation - Compensation Committee
Report on Executive Compensation." The Compensation Committee of the Company and
the Management and Personnel Committee of the Bank met jointly twice in fiscal
2001.
NOMINATING COMMITTEE. The Company's Nominating Committee for the 2001
Annual Meeting consists of Messrs. Stoico, Rodgers and Sylvia. The committee
considers and recommends the nominees for director to stand for election at the
Company's annual meeting of shareholders. The Company's Certificate of
Incorporation and Bylaws provide for shareholder nominations of directors. These
provisions require such nominations to be made pursuant to timely notice in
writing to the Secretary of the Company. The shareholder's notice of nomination
must contain all information relating to the nominee that is required to be
disclosed by the Company's Bylaws and by the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). See "Shareholder Proposals." The Nominating
Committee met on March 22, 2001.
DIRECTORS' COMPENSATION
DIRECTORS' FEES. Directors of the Company receive a $1,500 annual retainer,
with no additional compensation for Committee or Company meetings. Directors of
the Bank are currently paid an annual retainer of $11,000, except that the
Chairman of the Board of the Bank, an outside director, receives an annual
retainer of $25,000. Directors of the Bank also receive a fee of $800 for each
regular and special board meeting which they attend. Directors of the Company
and the Bank are not compensated for attending telephonic meetings. In addition,
members of the Bank's Executive Committee of the Board receive an annual
retainer of $5,000 and a fee of $550 for each Executive Committee meeting which
they attend. Members of the Bank's Audit and Compliance Committee and Management
and Personnel Committee receive a fee of $550 for each meeting which they
attend.
1998 STOCK OPTION PLAN. Under the FIRSTFED AMERICA BANCORP, INC. 1998 Stock
Option Plan, each member of the Company's and Bank's Board of Directors who is
not an officer or employee of the Company or the Bank received non-statutory
stock options during fiscal 2001 to purchase 7,836 shares of the Company's
common stock. The directors' awards vest equally over a five-year period but
would vest immediately upon death, disability, retirement or a change in
control.
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EXECUTIVE COMPENSATION
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SUMMARY COMPENSATION TABLE. The following information is furnished for the
Chief Executive Officer and the other executive officers of FIRSTFED AMERICA
BANCORP, INC. who received salary and bonus of $100,000 or more during the
fiscal year ended March 31, 2001 (the "Named Executive Officers").
--------------------------------
ANNUAL LONG-TERM COMPENSATION
COMPENSATION(1) AWARDS
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SECURITIES
RESTRICTED UNDERLYING
STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL FISCAL AWARDS SARS COMPENSATION
POSITIONS YEAR SALARY($) BONUS($) ($)(2) (#)(3) ($)(4)
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Robert F. Stoico, Chairman, 2001 $487,348 $187,997 - 65,304 $299,534
President and Chief Executive 2000 395,184 217,976 - - 260,327
Office 1999 382,128 180,736 - - 269,845
Edward A. Hjerpe, III 2001 229,025 71,593 - 26,120 56,054
Executive Vice President, 2000 210,661 94,706 - - 55,752
Chief Operating Officer and Chief 1999 203,140 78,006 167,610 43,536 51,761
Financial Officer
Frederick R. Sullivan 2001 160,000 39,988 - 13,060 27,975
Executive Vice President 2000 130,059 46,477 - - 39,480
1999 125,340 38,523 - - 42,961
Kevin J. McGillicuddy 2001 158,665 39,513 - 13,060 27,817
Executive Vice President 2000 130,059 46,477 - - 41,480
1999 125,340 38,523 - - 42,761
-----------------
(1) Under Annual Compensation, the column titled "Salary" includes directors'
fees for the Chairman, President and Chief Executive Officer.
(2) Includes stock awards of 8,707 shares granted to Mr. Hjerpe under the
Incentive Plan, which began vesting in five equal annual installments on
June 29, 1999. When shares become vested and are distributed, the recipient
also receives an amount equal to accumulated cash and stock dividends (if
any) with respect thereto plus earnings thereon. The awards vest
immediately upon termination of employment due to death, disability,
retirement or following a change in control. As of March 31, 2001, the
market value of the unvested restricted shares held by Mr. Hjerpe was
$130,692. The dollar amount set forth in the table represents the market
value of the shares awarded to Mr. Hjerpe as of the date of grant.
(3) Includes stock options granted to Messrs. Stoico, Hjerpe, Sullivan and
McGillicuddy, respectively, pursuant to the 1998 Stock Option Plan during
fiscal year 2001. See "Option Grants in Last Fiscal Year" table for
discussion of options granted under the 1998 Stock Option Plan. Mr. Hjerpe
received 43,536 additional options under the Incentive Plan, which
commenced vesting in five equal annual installments on June 29, 1999.
(4) Includes $26,252, $24,026, $23,016 and $22,906 representing the value of
shares allocated under the ESOP for the benefit of Messrs. Stoico, Hjerpe,
Sullivan and McGillicuddy, respectively, as of March 31, 2001. Also
includes employer contributions of $273,287, $32,028, $4,959 and $4,911 to
the Bank's non-qualified plans for Messrs. Stoico, Hjerpe, Sullivan and
McGillicuddy, respectively.
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EMPLOYMENT AGREEMENTS. The Bank and the Company have entered into
employment agreements with Messrs. Stoico, Hjerpe, Sullivan and McGillicuddy
(individually, the "Executive"). The employment agreements are intended to
ensure that the Bank and the Company maintain a stable and competent management
base. The continued success of the Bank and the Company depends to a significant
degree on the skills and competence of the above officers.
The Bank employment agreements provide for a three-year term for Mr. Stoico
and a two-year term for Mr. Hjerpe. The Company employment agreements for Mr.
Stoico and Mr. Hjerpe provide for a five- year term. The Bank and Company
employment agreements for Messrs. Sullivan and McGillicuddy provide for a
two-year term. The term of the Company employment agreements extend on a daily
basis and the Bank employment agreements are renewable on an annual basis unless
notice of non-renewal is given by the Board of Directors or the executive. The
employment agreements provide that the executive's base salary will be reviewed
annually. In addition to the base salary, the Agreements provide for, among
other things, participation in employee and executive benefits plans and other
employee and fringe benefits applicable to similarly-situated executive
personnel.
The employment agreements provide for termination by the Bank or the
Company for cause as defined in the employment agreements at any time. If the
Bank or the Company chooses to terminate the Executive's employment for reasons
other than for cause, or if the Executive resigns from the Bank or the Company
after specified circumstances that would constitute constructive termination,
the Executive or, if the Executive dies, his beneficiary would be entitled to
receive an amount equal to the remaining base salary payments due to the
Executive and the contributions that would have been made on the Executive's
behalf to any employee benefit plans of the Bank or the Company during the
remaining term of the agreement. The Bank and the Company would also continue
and pay for the Executive's life, health and disability coverage for the
remaining term of the employment agreement. Upon any termination of the
Executive for reasons other than a change in control, the Executive must comply
with a one-year non-competition agreement.
Under the employment agreements, if voluntary or involuntary termination
follows a change in control of the Bank or the Company (as defined in the
employment agreements), the Executive or, if the Executive dies, his beneficiary
would be entitled to a severance payment equal to the greater of: (i) the
payments due for the remaining terms of the Agreements; or (ii) five times the
average of the five preceding taxable years' annual compensation for Mr. Stoico
and Mr. Hjerpe under the Company employment agreements, three times for Mr.
Stoico and Mr. Hjerpe under the Bank employment agreements, and three times the
average of the five preceding years' taxable compensation for Messrs. Sullivan
and McGillicuddy under the Bank and Company employment agreements. In addition,
the Bank and the Company would continue Mr. Stoico's life, health and disability
coverage for thirty-six or sixty months, respectively. The Bank and the Company
would also continue the life, health and disability coverage for Mr. Hjerpe for
twenty-four or sixty months, respectively, and twenty-four months in the cases
of Messrs. Sullivan and McGillicuddy. Even though both the Company and the Bank
employment agreements provide for a severance payment if a change in control
occurs, the Executive would not receive duplicative payments or benefits under
the agreements.
Mr. Stoico and Mr. Hjerpe would be entitled to receive a tax
indemnification payment if payments under the employment agreements or otherwise
triggered liability under the Internal Revenue Code for the excise tax
applicable to "excess parachute payments." Under applicable law, the excise tax
is triggered by change in control-related payments that equal or exceed three
times the Executive's average annual compensation over the five years preceding
the change in control. The excise tax equals 20% of the amount of the payment in
excess of one times the Executive's average compensation over the preceding
five-year period.
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Payments to the Executive under the Bank's employment agreement will be
guaranteed by the Company in the event that payments or benefits are not paid by
the Bank. Payment under the Company's employment agreement would be made by the
Company. All reasonable costs and legal fees paid or incurred by the Executive
pursuant to any dispute or question of interpretation relating to the employment
agreements shall be paid by the Bank or Company, respectively, if the Executive
is successful on the merits pursuant to a legal judgment, arbitration or
settlement. The employment agreements also provide that the Bank and Company
shall indemnify the Executive to the fullest extent allowable under federal and
Delaware law, respectively.
RETIREMENT PLAN. The Bank participates in the Financial Institutions
Retirement Fund (the "Retirement Plan") to provide retirement benefits for
eligible employees. Employees become eligible to participate in the Retirement
Plan after the completion of 12 consecutive months of employment with the Bank
and the attainment of age 21. The Retirement Plan excludes hourly paid employees
from participation. Benefits under the Retirement Plan are based on the
participant's years of service and salary. A participant may elect early
retirement as early as age 45. However, a participant's normal retirement
benefits will be reduced by an early retirement factor based on age at early
retirement.
Participants generally have no vested interest in Retirement Plan benefits
prior to the completion of five years of service with the Bank. Following the
completion of five years of vesting service, or in the event of a participant's
attainment of age 65, a participant becomes 100% vested in his/her accrued
benefit under the Retirement Plan. The table below reflects the pension benefit
payable to a participant assuming various levels of earnings and years of
service. The amounts of benefits paid under the Retirement Plan are not reduced
for any social security benefit payable to participants. As of January 1, 2001,
Messrs. Stoico, Hjerpe, Sullivan and McGillicuddy had credited years of service
of 27 years 4 months, 13 years 6 months, 11 years 9 months, and 4 years 11
months, respectively. The Retirement Plan provides the participant portability
with another participating member. Mr. Hjerpe's credited years of service
include credited years of service with his former employer, a participant in the
same multiple employer retirement plan.
YEARS OF BENEFIT SERVICE
----------------------------------------------------------------------------------------
FINAL AVERAGE
EARNINGS(1)(2) 15 20 25 30 35
------------------- ------- ------- -------- -------- ---------
$ 50,000 $15,000 $20,000 $ 25,000 $ 30,000 $ 35,000
$ 75,000 $22,500 $30,000 $ 37,500 $ 45,000 $ 52,500
$100,000 $30,000 $40,000 $ 50,000 $ 60,000 $ 70,000
$125,000 $37,500 $50,000 $ 62,500 $ 75,000 $ 87,500
$150,000 $45,000 $60,000 $ 75,000 $ 90,000 $105,000
$200,000(3) $60,000 $80,000 $100,000 $120,000 $140,000
-------------------------
(1) The compensation utilized for formula purposes includes the salary reported
in the "Summary Compensation Table."
(2) The maximum annual benefit payable at age 65 for plan years beginning on or
after January 1, 2001 is $140,000/year.
(3) For 2001, Section 401(a)(17) of the Internal Revenue Code of 1986, as
amended (the "Code"), limited the amount of compensation the Bank may
consider in computing benefits under the Retirement Plan to $170,000.
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15
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. The Bank currently maintains a
supplemental executive retirement plan under which it annually credits a
specified amount of money to the account of plan participants. Benefits under
the plan become payable following a participant's termination of employment. The
Bank intends the benefits provided under the plan to make participants whole for
reductions in benefits payable under the terms of the Thrift and ESOP maintained
by the Bank, as a result of limitations imposed by the Code, and provide
additional retirement benefits for participants.
Participants generally vest in the amounts credited to the plan after
completing five years of employment with the Bank (the same time period over
which they become vested in benefits under the corresponding tax-qualified
retirement plans). However, participants vest immediately upon death or
disability. The Bank currently maintains an irrevocable grantor's trust (also
known as a "rabbi trust") to hold assets of the Bank for the exclusive purpose
of paying benefits under the plan. However, in the event of the insolvency of
the Bank, the assets of the trust are first subject to the claims of the Bank's
creditors. The assets of this trust may be used to acquire shares of common
stock to satisfy the obligations of the Bank for the payment of benefits under
the plan. As of March 31, 2001, only Mr. Stoico and Mr. Hjerpe participated in
the plan.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table lists all grants of options to the Named Executive
Officers for fiscal year 2001 and contains certain information about the
potential value of those options based upon certain assumptions as to the
appreciation of the Company's stock over the life of the option.
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
OPTION TERM (1)
------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE OR
OPTIONS GRANTED TO BASE PRICE
GRANTED EMPLOYEES IN PER EXPIRATION
NAME (#)(2) FISCAL YEAR SHARE DATE(3) 5% 10%
--------------------- ---------- ------------ ------------ ---------- -------- ----------
Robert F. Stoico 65,304 39.86% $12.94 7/18/10 $531,575 $1,346,568
Edward A. Hjerpe, III 26,120 15.94 12.94 7/18/10 212,617 538,594
Frederick R. Sullivan 13,060 7.97 12.94 7/18/10 106,308 269,297
Kevin J. McGillicuddy 13,060 7.97 12.94 7/18/10 106,308 269,297
-------------------------
(1) The dollar gains under these columns result from calculations required by
the Securities and Exchange Commission's rules and are not intended to
forecast future price appreciation of Company common stock. It is important
to note that options have value only if the stock price increases above the
exercise price shown in the table during the effective option period. In
order for the executive to realize the potential values set forth in the 5%
and 10% columns in the table, the price per share of the Company's common
stock would be approximately $21.08 and $33.56, respectively, as of the
expiration date of the options.
(2) Options granted pursuant to the 1998 Stock Option Plan are exercisable in
five equal annual installments commencing on July 18, 2001; provided,
however, options will be immediately exercisable in the event the optionee
terminates employment due to death, disability, retirement or change in
control. The purchase price may be made in whole or in part in cash or
common stock. Options include limited rights (SARs) pursuant to which the
options may be exercised in the event of a change in control of the
Company. Upon the exercise of a limited right, the optionee would receive a
cash payment equal to the difference between the exercise price of the
related option on the date of grant and the fair market value of the
underlying shares of common stock on the date the limited right is
exercised.
(3) The option term is ten years.
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FISCAL YEAR-END OPTION VALUES
The following table provides certain information with respect to the number
of shares of Company common stock represented by outstanding options held by
those individuals as of March 31, 2001. Also reported are the values for
"in-the-money" options, which represent the positive spread between the exercise
price of stock options and the year-end stock price.
VALUE OF
NUMBER UNEXERCISED
OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS
OPTIONS AT FISCAL YEAR-
NAME AT FISCAL YEAR-END(#)(1) END($)(3)
-------------------------- ---------------------------------- ----------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
Robert F. Stoico 187,205 95,779 - $135,179
Edward A. Hjerpe, III 66,174 47,018 - $54,068
Frederick R. Sullivan 37,441 19,155 - $27,034
Kevin J. McGillicuddy 37,441 19,155 - $27,034
------------------------------
(1) The Options in this table have an exercise price of $18.50 with the
exception of 43,536 options for Mr. Hjerpe which were awarded on June 29,
1998 which have an exercise price of $19.25. Also included are 65,304,
26,120, 13,060 and 13,060 options for Messrs. Stoico, Hjerpe, Sullivan and
McGillicuddy, respectively, which have an exercise price of $12.94.
(2) The Price of the Common Stock on March 31, 2001 was $15.01.
(3) Value of unexercised in-the-money stock options equals the market value of
shares covered by in-the-money options on March 31, 2001 less the option
exercise price. Options are in-the-money if the market value of shares
covered by the options is greater than the exercise price.
EXECUTIVE COMPENSATION
The report of the Compensation Committee and the stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act,
except as to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION. Under rules
established by the Securities and Exchange Commission, the Company is required
to provide certain data and information in regard to the compensation and
benefits provided to the Company's Chief Executive Officer and certain other
executive officers of the Company and the Bank for the fiscal year ended March
31, 2001. The following discussion addresses compensation information relating
to the Chief Executive Officer and the executive officers of the Bank and
Company for fiscal 2001 and sets forth the joint report of the Compensation
Committee of the Company and Management and Personnel Committee of the Bank
(collectively, the "Compensation Committee"). The disclosure requirements for
the Chief Executive Officer and other executive officers include the use of
tables and a report explaining the rationale and considerations that led to
fundamental compensation decisions affecting those individuals. In fulfillment
of this requirement, the Compensation Committee, at the direction of the Board
of Directors, has prepared the following report for inclusion in this proxy
statement.
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COMPENSATION POLICY. The Company and the Bank have engaged the services of
a nationally known executive compensation consultant, the I.F.M. Consulting
Group, to design the Executive Compensation Program to reflect the status of the
Bank as a stock institution and the Company as a publicly held entity and to
ensure competitive compensation levels in comparison to similarly situated
publicly held financial services institutions providing banking, mortgage
banking, insurance, trust and asset management services. The Executive
Compensation Program incorporates the consolidated financial results of the
Company as well as other factors related to the performance of the Company. For
fiscal 2001, the Executive Compensation Program was fully utilized to determine
compensation levels for base pay as well as incentive (bonus) compensation. The
Executive Compensation Program incorporates base salary and incentive
compensation based on measurable goal attainment and performance.
The Compensation Committee's responsibility is to recommend the amount and
composition of executive compensation paid to the executive officers. The Board
of Directors has the responsibility to review the report of the Compensation
Committee and approve such compensation. It is the policy of the Compensation
Committee to review executive compensation not less than annually and more often
if deemed necessary by the Compensation Committee. The process the Compensation
Committee utilized for fiscal 2001 involved a review of the Company's
compensation consultant's recommendations for a potential range for changes to
base salaries. This range reflected an appropriate change in percent based on
economic, competitive market, peer group analysis, and position
responsibilities. Recommended changes in base pay were made to compensation
levels established in fiscal 2001 by the Committee using peer group analysis and
compensation recommended by the consultant.
In making its compensation determinations, the Compensation Committee also
considers the evaluations of executive officers performed by the Chief Executive
Officer and recommendations made by the Chief Executive Officer, except in the
case of its compensation deliberations regarding the Chief Executive Officer.
The performance of the Chief Executive Officer and other executive officers are
evaluated by the Compensation Committee and a recommendation is made to the
Board. Upon review, the Board sets all executive compensation within the
parameters of compensation policy as defined within the Executive Compensation
Program. The Chief Executive Officer, a member of the Board of Directors,
abstains from voting on matters related to his compensation.
STOCK-BASED COMPENSATION. The Company maintains the FIRSTFED AMERICA
BANCORP, INC. 1998 Stock Option Plan under which executive officers were granted
options to purchase common stock from that plan. The Compensation Committee
believes that stock ownership is a significant incentive in building shareholder
value and aligning the interests of employees with shareholders as the value of
this component increases as the common stock of the Company appreciates in
value.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. The Chief Executive Officer
was evaluated on his performance in managing the Company during fiscal 2001,
including the effort related to operating the Company in its fourth year as a
public company, fiscal performance, and earnings per share. Certain quantitative
and qualitative factors were reviewed to determine the Chief Executive Officer's
compensation. Following a review of the Chief Executive Officer's performance,
it was determined that the total cash compensation for the Chief Executive
Officer would be established according to the compensation philosophy as stated
in the executive compensation plan. In reaching its determination regarding the
Chief Executive Officer's base salary, the Compensation Committee utilized the
report of the executive compensation consultant and recommended to the Board of
Directors a base salary substantially equivalent to the amount recommended by
the executive compensation consultant. The Committee's determination of the
Chief Executive Officer's incentive compensation for fiscal 2001 also was
determined by the Committee following a review of the Chief Executive Officer's
performance. In reaching its determination regarding the recommended level of
the Chief Executive Officer's cash incentive compensation for fiscal 2001, the
Committee utilized the Incentive Compensation Program guidelines, approved by
the Board the prior year,
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and recommended to the Board an amount of incentive compensation within the
guidelines of the Incentive Compensation Program for certain goal attainment.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
OF THE COMPANY
Robert F. Stoico Gilbert C. Oliveira
Thomas A. Rodgers, Jr.
THE MANAGEMENT AND PERSONNEL COMMITTEE
OF THE BOARD OF DIRECTORS OF THE BANK
Robert F. Stoico Gilbert C. Oliveira
Thomas A. Rodgers, Jr. Willard E. Olmsted
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. No executive
officer of the Company or the Bank serves as a member of the compensation
committee of another entity, one of whose executive officers serves on the
Compensation Committee of the Company or the Bank. No executive officer of the
Company or the Bank served as a director of another entity, one of whose
executive officers serves on the Compensation Committee of the Company or the
Bank. No executive officer of the Company or the Bank served as a member of the
compensation committee of another entity, one of whose executive officers serves
as a director of the Company or the Bank. With the exception of Mr. Stoico, who
serves as Chairman, President and Chief Executive Officer of the Company, and
President and Chief Executive Officer of the Bank, none of the members of the
Company's Compensation Committee is an officer or employee of the Company.
16
20
--------------------------------------------------------------------------------
STOCK PERFORMANCE GRAPH
--------------------------------------------------------------------------------
The following graph compares the cumulative total shareholder return on the
Company common stock with the cumulative total return on the American Stock
Exchange Index and with the Media General Financial Services Index for Savings
and Loans. The graph assumes that $100 was invested at the close of business on
January 15, 1997, the initial day of trading of the Company's common stock.
Total return assumes the reinvestment of all dividends.
[GRAPH]
Summary
1/15/97 3/31/98 3/31/99 3/31/00 3/30/01
------- ------- ------- ------- -------
FIRSTFED AMERICA BANCORP, INC. 100.00 211.30 120.00 107.50 150.10
American Stock Exchange 100.00 126.88 120.07 169.79 143.24
MG Index for Savings and Loans 100.00 169.42 137.57 105.99 175.81
Notes:
(1) The lines represent annual index levels derived from compounded daily
returns that include all dividends.
(2) The indexes are reweighted daily, using the market capitalization on
the previous trading day.
(3) If the monthly interval, based on the fiscal year-end is not a trading
day, the preceding trading day is used.
(4) The index level for all series was set to $100.00 on 1/15/97.
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21
AUDIT AND COMPLIANCE COMMITTEE REPORT
The Audit and Compliance Committee of the Board of Directors is responsible
for assisting the Board of Directors in fulfilling its responsibility to the
stockholders relating to corporate accounting, reporting practices and the
quality and integrity of the financial reports of the Company. Additionally, the
Audit and Compliance Committee selects the auditors and reviews their
independence and their annual audit. The Audit and Compliance Committee is
comprised of three directors, each of whom is independent under the American
Stock Exchange's listing standards. The Audit and Compliance Committee acts
under a written charter adopted by the Board of Directors, a copy of which is
attached to this proxy statement as Appendix A.
The Audit and Compliance Committee reviewed and discussed the annual
financial statements with management and the independent accountants. As part of
this process, management represented to the Audit and Compliance Committee that
the financial statements were prepared in accordance with the generally accepted
accounting principles. The Audit and Compliance Committee also received and
reviewed written disclosures and a letter from the accountants concerning their
independence as required by Independence Standard No. 1. The Audit and
Compliance Committee discussed with the accountants the contents of such
materials, the accountants' independence and the additional matters required
under Statement on Auditing Standards No. 61. Based on such review and
discussions, the Audit and Compliance Committee recommended that the Board of
Directors include the audited consolidated financial statements in the Company's
Annual Report on Form 10-K for the year ended March 31, 2001 for filing with the
Securities and Exchange Commission.
THE AUDIT AND COMPLIANCE COMMITTEE OF THE COMPANY
John S. Holden, Jr. Paul A. Raymond
Anthony L. Sylvia
--------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
--------------------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and persons who own more than
10% of any registered class of the Company's equity securities, to file reports
of ownership and changes in ownership with the SEC. Executive officers,
directors and greater than 10% shareholders are required by regulation to
furnish the Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of the reports it has received and
written representations provided to the Company from the individuals required to
file the reports, the Company believes that each of its executive officers,
directors and greater-than-10% shareholders has complied with applicable
reporting requirements for transactions in Company common stock during the
fiscal year ended March 31, 2001, except for one late Form 4 filed by Mr. Stoico
with respect to two purchase transactions, one late Form 4 filed by Mr. Sylvia
with respect to one purchase transaction, both filings delayed one day due to a
weather emergency, and one late Form 3 filed by the FIRSTFED Charitable
Foundation upon becoming a greater-than-10% shareholder.
--------------------------------------------------------------------------------
TRANSACTIONS WITH MANAGEMENT
--------------------------------------------------------------------------------
18
22
Federal regulations require that all loans or extensions of credit to
executive officers and directors must be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with the general public and must not involve more than
the normal risk of repayment or present other unfavorable features. In addition,
loans made to a director or executive officer in excess of the greater of
$25,000 or 5% of the Bank's capital and surplus (up to a maximum of $500,000)
must be approved in advance by a majority of the disinterested members of the
Board of Directors.
The Bank makes loans to its executive officers and directors on the same
terms and conditions offered to the general public. The Bank's policy provides
that all loans made by the Bank to its executive officers and directors be made
in the ordinary course of business, on substantially the same terms, including
collateral, as those prevailing at the time for comparable transactions with
other persons and may not involve more than the normal risk of collectibility or
present other unfavorable features. At March 31, 2001, the Bank had five loans
outstanding to executive officers and directors totaling $338,429. All such
loans were made by the Bank in the ordinary course of business, on substantially
the same terms, including interest rates and collateral prevailing at the time
for comparable transactions with other persons and do not involve more than the
normal risk of collectibility or present unfavorable features.
--------------------------------------------------------------------------------
PROPOSAL 2 -- RATIFICATION OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
The Board of Directors has appointed KPMG LLP to be its auditors for the
2002 fiscal year, subject to the ratification by shareholders. A representative
of KPMG LLP is expected to be present at the annual meeting to respond to
appropriate questions from shareholders and will have the opportunity to make a
statement should he or she desire to do so.
If the ratification of the appointment of the auditors is not approved by a
majority of the votes cast by shareholders at the annual meeting, other
independent public accountants may be considered by the Board of Directors. THE
BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF THE INDEPENDENT AUDITORS.
AUDIT FEES
KPMG LLP billed the Company aggregate fees of $128,000 for professional
services rendered for the audit of the Company's annual financial statements and
for the reviews of the financial statements included in the Company's Forms 10-Q
for the fiscal year-ended March 31, 2001.
ALL OTHER FEES
KPMG LLP billed the Company aggregate fees of $38,450 for professional
services rendered for audits of 2000 Employee Benefit Plans and tax filing
preparation for the year ended March 31, 2001. The Audit and Compliance
Committee believes that the non-audit fees paid to KPMG LLP are compatible with
maintaining KPMG's independence.
--------------------------------------------------------------------------------
MISCELLANEOUS
--------------------------------------------------------------------------------
The Company's Annual Report to Shareholders has been mailed to shareholders
of record as of the close of business on June 4, 2001. Any shareholder who has
not received a copy of the Annual Report may
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23
obtain a copy by writing to the Secretary of the Company. The Annual Report is
not to be treated as part of the proxy solicitation material or as having been
incorporated in this proxy statement by reference.
A COPY OF THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31, 2001,
AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS AS OF
THE CLOSE OF BUSINESS ON JUNE 4, 2001 UPON WRITTEN REQUEST TO PHILIP G.
CAMPBELL, FIRSTFED AMERICA BANCORP, INC., ONE FIRSTFED PARK, SWANSEA,
MASSACHUSETTS 02777.
--------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
--------------------------------------------------------------------------------
To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 2002 Annual Meeting of Shareholders, a shareholder
proposal must be received by the Secretary of the Company at the address set
forth on the Notice of Annual Meeting of Shareholders not later than February
22, 2002. If such annual meeting is held on a date more than 30 calendar days
from July 26, 2002, a shareholder proposal must be received by a reasonable time
before the Company begins to print and mail its proxy materials for such annual
meeting. Any such proposal will be subject to the proxy rules of the Securities
and Exchange Commission.
The Bylaws of the Company set forth the procedures by which a shareholder
may properly bring business before a meeting of shareholders, including director
nominations. Pursuant to the Bylaws, only business brought by or at the
direction of the Board of Directors may be conducted at a special meeting. The
Bylaws of the Company provide an advance notice procedure for a shareholder to
properly bring business before an annual meeting. The shareholder must give
written advance notice to the Secretary of the Company not less than ninety (90)
days before the date originally fixed for such meeting; provided, however, that
in the event that less than one hundred (100) days notice or prior public
disclosure of the date of the meeting is given or made to shareholders, notice
by the shareholder to be timely must be received not later than the close of
business on the tenth day following the date on which the Company's notice to
shareholders of the annual meeting date was mailed or such public disclosure was
made. In order for a shareholder to bring business before the Company's 2002
Annual Meeting of Shareholders, the Company would have to receive notice of such
business no later than April 29, 2002 assuming the 2002 Annual Meeting is held
on July 26, 2002 and that the Company provides at least 100 days notice of the
date of the meeting. The advance notice by shareholders must include certain
information required by the Bylaws. In the case of nominations to the Board of
Directors, certain information regarding the nominee must be provided. A copy of
the Bylaws may be obtained from the Company. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement or the proxy
relating to any Annual Meeting any shareholder proposal which does not meet all
of the requirements for inclusion established by the Securities and Exchange
Commission in effect at the time such proposal is received.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Cecilia R. Viveiros
Cecilia R. Viveiros
Corporate Secretary
Swansea, Massachusetts
June 22, 2001
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APPENDIX A
FIRSTFED AMERICA BANCORP, INC.
AUDIT AND COMPLIANCE COMMITTEE CHARTER
I. AUDIT AND COMPLIANCE COMMITTEE
There shall be a Committee of the Board of Directors to be known as the
Audit and Compliance Committee (the "Audit Committee"). The Audit Committee
shall be composed of at least three Directors who are independent of the
management of the Company and are free of any relationship that, in the opinion
of the Board of Directors, would interfere with their exercise of independent
judgment as a Committee Member. Each Audit Committee member must be able to read
and understand fundamental financial statements. At least one Committee Member
must have past employment experience in finance or accounting, requisite
professional certification in accounting, or other comparable experience or
background, including a current or past position as a chief executive or
financial officer or other senior officer with financial oversight
responsibilities. Audit Committee members may enhance their familiarity with
finance and accounting by participating in educational programs conducted by the
Company or outside programs.
INDEPENDENCE
A Director will not be considered "Independent" if, among other things, the
Director has:
* Been employed by the Company or its affiliates in the current year or
past three years.
* Accepted any compensation from the Company or its affiliates in excess
of $60,000 during the previous fiscal year (except for board services,
retirement plan benefits, or non-discretionary compensation).
* An immediate family member who is, or has been in the past three
years, employed by the Company or its affiliates as an executive
officer.
* Been a partner, controlling shareholder or an executive officer of any
for profit business to which the Company made or from which it
received payments (other than those which arise solely from
investments in the Company's securities) that exceed five percent of
the Company's consolidated gross revenues for that year, or $200,000,
whichever is more, in any of the past three years.
* Been employed as an executive of another entity where any of the
Company's executives serve on that entity's compensation committee.
II. STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Company's Directors in
fulfilling their responsibilities to shareholders and the investment community
relating to the Company's accounting, reporting practices of the Company and
quality and integrity of the financial reports of the Company. In so doing, it
is the responsibility of the Audit Committee to maintain free and open means of
communications between the Board of Directors, the independent auditors, the
internal auditors, and the financial management of the Company.
III. MEETINGS
The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee will meet at least
annually in a separate executive session with management,
A-1
25
the independent auditors, and the internal auditors to discuss any matters that
the Audit Committee or each of these groups believe should be discussed
privately.
IV. RESPONSIBILITIES
1. Review and update this Charter at least annually or as conditions
dictate and ascertain that this charter is reported in the Company's
proxy statement at least once every three years.
2. Report periodically to the Board of Directors.
3. Review and recommend to the Board of Directors the independent
auditors to be selected to audit the financial statements of the
Company and subsidiaries.
4. Meet with the independent auditors and management of the Company to
review the scope of the proposed audit for the current year and the
audit procedures to be used, and at the conclusion review audit
findings, including comments or recommendations of the independent
auditors.
5. Review the Internal Audit function of the Company including the
independence and authority of its reporting obligations, the proposed
audit plan for the current year and the coordination of such plans
with the independent auditors.
6. Consult with the independent and internal auditors regarding the
integrity of the Company's financial reporting processes (Internal and
External).
7. Inquire as to the independent auditors' judgments about the quality
and appropriateness of the Company's accounting principles as applied
in its financial statements.
8. Consider and approve, if appropriate, major changes to the Company's
auditing and accounting principles and practices as suggested by the
independent auditors, management or the internal auditors.
9. While the Audit Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Audit Committee to
plan or conduct audits or to determine that the Company's financial
statements are complete and accurate and are in accordance with
generally accepted accounting principles. This is the responsibility
of management and the independent auditor.
"WHEN NECESSARY" ACTIVITIES:
1. Review and concur in the appointment, replacement, reassignment, or
dismissal of the Internal Auditor.
2. Review and approve requests for any management consulting engagement
to be performed by the Company's independent auditors and be advised
of any other study undertaken at the request of management that is
beyond the scope of the audit engagement letter.
3. Review periodically with general counsel legal and regulatory matters
that may have a material impact on the AICPA's position regarding
financial statements and compliance policies and programs.
A-2
26
4. Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities. The Committee shall be
empowered to retain Independent Counsel and other professionals to
assist in the conduct of any investigation.
V. INDEPENDENT AUDITORS
1. Each year the Independent Auditing Firm will present their Audit Plan
and the estimated fees for performing the annual audit and quarterly
reviews of Form 10-Q in the form of an engagement letter. This
engagement letter will be presented to the Audit Committee for their
approval.
2. The Audit Committee will meet with the independent auditors to review
the Audit Plan and results of their annual audit and to discuss any
concerns of the independent auditors including those items cited in
the management letter on the Company's internal control function.
3. Will discuss with the Audit Committee the matters required to be
discussed by Generally Accepted Auditing Standards (GAAS).
VI. INTERNAL AUDITORS
The objective of the Company's internal audit function is to determine that
the Company has established effective internal controls and compliance with
managerial policies, laws, regulations and generally accepted accounting
principles.
1. Internal audit responsibilities will be fulfilled by either an
employee of the Company or an outside firm that provides internal
audit services. On an annual basis, senior management and the Audit
Committee will evaluate whether the internal audit function should be
fulfilled by a Company employee or employees or an outside firm which
provides internal audit services.
2. The internal auditors will use follow-up procedures to ensure that
exceptions noted during regulatory exams, independent audits and
internal audits are addressed in a satisfactory manner.
3. The President/Chief Executive Officer and the Audit Committee will
have authority to approve internal audit special investigations which
have not been included as part of the current Audit Plan.
A-3
27
June 22, 2001
Dear Stock Award Recipient:
As a participant in the FIRSTFED AMERICA BANCORP, INC. 1997 Stock-Based
Incentive Plan (the "Incentive Plan") you are entitled to vote all of the
unvested shares of restricted stock awarded to you under the Incentive Plan as
of June 4, 2001. To do so, please complete and sign the attached Vote
Authorization form and return it in the accompanying envelope by July 19, 2001.
This Vote Authorization form allows you to convey your voting instructions to
the Incentive Plan Trustee on the proposals presented at the Annual Meeting of
Stockholders of FIRSTFED AMERICA BANCORP, INC. (the "Company") to be held on
July 26, 2001. Also enclosed please find a Notice and Proxy Statement for the
Company's Annual Meeting of Stockholders and the FIRSTFED AMERICA BANCORP, INC.
Annual Report to Stockholders.
Your voting instructions will not be revealed, directly or indirectly, to
any officer, employee or director of the Company or First Federal Savings Bank
of America other than Anthony Weatherford, Vice President and Director of Human
Resources. Mr. Weatherford will tally the voting instructions and use the
instructions he receives by July 19, 2001 to vote the 144,180 shares of Company
common stock held in the Incentive Plan Trust.
Please note that if you are an employee of First Federal Savings Bank of
America you may receive several voting cards/forms due to your participation in
various employee benefit plans. Please complete and return all voting
cards/forms that you receive.
Sincerely,
/s/ Robert F. Stoico
Robert F. Stoico
Chairman of the Board of Directors
of FIRSTFED AMERICA BANCORP, INC.
28
VOTE AUTHORIZATION FORM
FIRSTFED AMERICA BANCORP, INC.
1997 STOCK-BASED INCENTIVE PLAN
In connection with the Annual Meeting of the Shareholders of FIRSTFED
AMERICA BANCORP, INC. to be held on July 26, 2001, at 2:00 p.m. Eastern Time at
the Westin Hotel, One West Exchange Street, Providence, Rhode Island 02903, and
at any and all adjournments thereof, with all of the powers the undersigned
would possess if personally present at such meeting as follows:
1. The election as directors of all nominees listed (except as marked to
the contrary below).
Robert F. Stoico
John S. Holden, Jr.
FOR VOTE WITHHELD FOR ALL EXCEPT
[ ] [ ] [ ]
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name on the line provided below.
----------------------------
2. The ratification of the appointment of KPMG, LLP as independent
auditors of FIRSTFED AMERICA BANCORP, INC. for the fiscal year ending
March 31, 2002.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I UNDERSTAND THAT MY VOTING INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE
INCENTIVE PLAN TRUSTEE FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON JULY 26,
2001. I UNDERSTAND THAT IF I SIGN THIS FORM WITHOUT INDICATING SPECIFIC
INSTRUCTIONS, MY SHARES WILL BE VOTED "FOR" THE LISTED PROPOSALS AND "FOR" OTHER
MATTERS RECOMMENDED BY THE BOARD OF DIRECTORS.
-------------- ------------------------------
DATE SIGNATURE
29
From: Anthony Weatherford
To: All Employees
Date: 6/22/01 11:00 a.m.
Subject: Proxy Ballot Voting for FAB Shareholders
All employees who are shareholders of FIRSTFED AMERICA BANCORP, INC stock
through either the 401k or ESOP plans will begin receiving their ballots, proxy
statements, and annual report today. Shareholders who own FAB stock as of the
June 4, 2001 record date will be eligible to vote their shares at the July 26,
2001 Annual Meeting of Shareholders.
If you own FAB through the ESOP or the 401k plan, you will receive an individual
ballot and envelope for each of these two plans. IT IS VERY IMPORTANT TO RETURN
EACH BALLOT IN THE CORRECT ENVELOPE FOR THAT PLAN TO THE PLAN TABULATOR.
The 401k ballot is marked 401k (in vertical letters at the top of the ballot),
and will have an envelope to be sent to:
FIRSTFED AMERICA BANCORP, INC
c/o Registrar and Transfer Company
10 Commerce Drive
Cranford, N.J. 07016-3572
The ESOP ballot is marked ESOP (in vertical letters at the top of the ballot),
and will have an envelope to be sent to:
FIRST BANKERS TRUST
P.O. Box 3566
Quincy, Illinois 62305
Again, it is very important to send each ballot in the correct envelope when
casting your vote.
If you do not have FIRSTFED AMERICA BANCORP, INC STOCK in either the 401k plan
or are not a participant in the ESOP plan, you will not be receiving a ballot
for these two plans.
If you own FAB stock held by a stockbroker, you will receive the proxy and
annual report directly from the broker.
As an employee/owner of FIRSTFED AMERICA BANCORP, INC, you will have the right
to vote any shareholder ballot questions. Your vote is confidential and will not
be revealed to any employee or director. You are urged to exercise your right to
vote as soon as you receive your ballots.
If you have any questions, please feel free to contact me.
30
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE FIRSTFED AMERICA BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
JULY 26, 2001
2:00 P.M. LOCAL TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert F. Stoico, Thomas A. Rodgers, Jr.
and Anthony L. Sylvia or any one or more of them acting in the absence of
others each with full power of substitution, to act as proxy for the
undersigned, and to vote all shares of Common Stock of FIRSTFED AMERICA BANCORP,
INC. (the "Company") which the undersigned is entitled to vote only at the
Annual Meeting of Shareholders, to be held on July 26, 2001, at 2:00 p.m. Local
Time, at The Westin Hotel, One West Exchange Street, Providence, Rhode Island
02903, and at any and all adjournments thereof, with all of the powers the
undersigned would possess if personally present at such meeting as follows:
COMMON
VOTE FOR
WITH- ALL
FOR HELD EXCEPT
1. The election as directors of all nominees listed
(except as marked to the contrary below). [ ] [ ] [ ]
ROBERT F. STOICO AND JOHN S. HOLDEN, JR.
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR ALL
EXCEPT" AND WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. The ratification of the appointment of KPMG LLP
as independent auditors of FIRSTFED AMERICA [ ] [ ] [ ]
BANCORP, INC. for the fiscal year ending
March 31, 2002.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS
LISTED. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, INCLUDING
WHETHER OR NOT TO ADJOURN THE MEETING, THIS PROXY WILL BE VOTED BY THE PROXIES
IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
---------------------------
Please be sure to sign and date Date
this Proxy in the box below.
--------------------------------------------------------------------------------
------- Shareholder sign above--------Co-holder (if any) sign above-------------
--------------------------------------------------------------------------------
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
FIRSTFED AMERICA BANCORP, INC.
--------------------------------------------------------------------------------
The above signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Shareholders and of a
Proxy Statement dated June 22, 2001 and of the Annual Report to Shareholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
--------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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