Document:

EX-99.1

    

    
      	
              Exhibit
                10.1

            	 
	 	 
	
              PRESS
                RELEASE

            	 
	
              January
                30, 2007

            	 
	
              For
                Immediate Release

            	 
	 	 

    

    

    
      	
              For
                Further Information Contact:

            	
              Michael
                W. Dosland

            
	 	
              President
                and Chief Executive Officer

            
	 	
              First
                Federal Bankshares, Inc.

            
	 	
              329
                Pierce Street, P.O. Box 897

            
	 	
              Sioux
                City, IA 51102

            
	 	
              712.277.0222

            

    

    

     

    

      FIRST
        FEDERAL BANKSHARES, INC. DECLARES DIVIDEND

      

      

      Sioux
        City, Iowa. The Board of Directors of First Federal Bankshares, Inc. (the
        “Company”) (Nasdaq Global Market - “FFSX”) declared a quarterly cash dividend of
        $0.105 per share for the second quarter of the 2007 fiscal year. The dividend
        is
        payable on February 28, 2007 to stockholders of record on February 14,
        2007.

      

      The
        Company’s common stock is traded on the NASDAQ Global Market under the symbol
        FFSX. The Company is headquartered in Sioux City, Iowa and is the parent
        company
        of First Federal Bank. The Bank operates eight offices in northwest Iowa,
        an
        office in South Sioux City, Nebraska, and five offices in central Iowa.

    

     

     

     

     

     

     

    329
      Pierce Street  l  P.O. Box
      897  l 
Sioux City IA
      51102  l 
712-277-0200EX-10(a)

    First
      Bancorp

    

    Annual
      Incentive Plan

    

    

    

    Introduction

    

    The
      First
      Bancorp Annual Incentive Plan (“AIP”) is a cash bonus plan that links
      compensation to the achievement of performance goals. The performance goals
      will
      generally include business measures that improve both the short-term earnings
      and long-term earnings of the company and/or contribute to shareholder
      value.

    

    

    Plan
      Features

    

    
      	
              Measurement
                Period

            	
              Calendar
                Year

            

    

    

    
      	
              Eligible
                Participants

            	
              Executive
                officers, and other employees of the Company designated by the Chief
                Executive Officer

            

    

    

    
      	
              Participation
                Categories

            	
              Branch
                -
                includes branch employees and Regional Executives.
                

            

    

    

    
      	 	
              Corporate
                -
                includes all other individuals, including executive officers, the
                audit
                department, the deposit and loan operations departments, the credit
                card
                department, collections, human resources, Montgomery Data Services,
                First
                Bank Insurance Services, and the Appraisal
                Department.

            

    

    

    
      	
              Performance
                Goals

            	
              One
                or more performance goals will be established related to consolidated
                corporate performance (“Corporate Performance Goals”) and related to
                regional and branch specific performance (“Regional/Branch Performance
                Goals”) - collectively “Performance
                Goals.”

            

    

    

    
      	 	
              The
                Corporate Performance Goals will be determined annually by the Board
                of
                Directors, upon recommendation by the Compensation Committee. The
                specific
                Regional/Branch Performance Goals will be determined annually by
                the Chief
                Executive Officer. There may be Corporate Performance Goals that
                are
                measured differently for Branch participants than for Corporate
                participants, and certain Corporate Performance goals may apply to
                only
                one category of participants.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              Performance
                Goals may include, but are not limited to, the following business
                measures: net income, deposit growth, loan growth, noninterest income
                growth, and expense growth.

            

    

    

    
      	
              Calculation
                of Awards

            	
              Each
                participant is assigned a Target Award, which is expressed as a percent
                of
                their annual salary. The Compensation Committee determines the Target
                Award for the Company’s executive officers and officers classified as
                “Regional Executives.” The Company’s Chief Executive Officer establishes
                the Target Award for all other participants

            

    

    

    
      	 	
              The
                Target Award is then adjusted by multiplying it times the sum of
                the
                Performance Percentages (defined below) that apply to the individual.
                

            

    

    

    
      	
              Performance
                Goal Weight

            	
              Each
                Performance Goal will have an assigned weight (“Performance Goal Weight”)
                determined by the Compensation Committee and approved by the Board
                of
                Directors. The total of the assigned weights for all Performance
                Goals
                will be 100%. 

            

    

    

    
      	 	
              For
                Branch participants, the sum of the Performance Goal Weights related
                to
                Regional/Branch Performance Goals will generally total 75% and the
                sum of
                the Performance Goal Weights related to Corporate Performance Goals
                will
                be 25%. 

            

    

    

    
      	 	
              For
                Corporate participants, 100% of the Performance Goal Weights will
                be
                comprised of Corporate Performance
                Goals.

            

    

    

    

    
      	
              Performance
                Percentage

            	
              The
                Performance Percentage is a percentage reflecting actual performance
                in
                relation to the Performance Goal. 

            

    

    

    
      	 	
              For
                each Performance Goal, a threshold goal, target goal, and maximum
                goal
                will be set on an annual basis.

            

    

    
      	 	
              Achievement
                of less than the threshold goal will result in a zero percent Performance
                Percentage. Achievement of the goal at the threshold level will result
                in
                a 50% percent Performance Percentage for that goal. Achievement of
                the
                Target Goal will result in 100% being applied to
                the

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              Performance
                Goal Weight to determine the Performance Percentage, and achievement
                of
                the Maximum Goal will result in 200% being applied to the Performance
                Goal
                Weight to determine the Performance
                Percentage.

            

    

    

    
      	 	
              Pro-rata
                extrapolation will be utilized to determine a Performance Percentage
                that
                is between the Threshold Goal and the Target Goal or the Target Goal
                and
                the Maximum Goal. See Exhibit A for a table illustrating the extrapolation
                at various intervals of
                performance.

            

    

    

    
      	
              Discretionary
                Awards

            	
              The
                Compensation Committee shall have the ability to adjust any award
                paid
                under this plan upward or downward in its discretion at any time.
                Examples
                of factors that the Compensation Committee may consider when adjusting
                an
                award include, but are not limited to: unusual items of income or
                expense,
                results of internal audit reports, and regulatory exam reports.
                

            

    

    

    
      	
              Payment
                of Awards

            	
              All
                awards will be paid in cash within 90 days after each fiscal year
                end.

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Exhibit
      A

    

    First
      Bancorp Annual Incentive Plan

    

    

    

    
      	
              Performance
                Achieved in Relation

              to
                the Performance Goal

            	
               

              Performance
                Percentage

            
	
              At
                Threshold Goal

            	
              50

            
	
              Halfway
                Between Threshold Goal 

              and
                Target Goal

            	
               

              75

            
	
              At
                Target Goal

            	
              100

            
	
              Halfway
                Between Target Goal 

              and
                Maximum Goal

            	
               

              150

            
	
              At
                Maximum Goal

            	
              200

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