SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM 10-K |
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(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
ACT OF 1934 |
For the fiscal year ended December 31, |
OR |
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
EXCHANGE ACT OF 1934 |
For the transition period from __________to _________ |
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Commission File Number 2-27985 |
1st FRANKLIN FINANCIAL CORPORATION |
(Exact name of registrant as specified in its charter) |
Georgia | 58-0521233 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
213 East Tugalo Street | |
Post Office Box 880 | |
Toccoa, Georgia | 30577 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (706) 886-7571 |
Securities registered pursuant to Section 12(b) of the Act: |
None |
Securities registered pursuant to Section 12(g) of the Act: |
None |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes __ No X | |
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes __ No X | |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ | |
(Cover page 1 of 2 pages) |
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X | |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated Filer __ Accelerated Filer __ Non Accelerated Filer X | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ No X |
State the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter: Not Applicable. | ||
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: | |
Class | Outstanding at February 28, |
Common Stock, $100 Par Value | 1,700 Shares |
Non-Voting Common Stock, No Par Value | 168,300 Shares |
DOCUMENTS INCORPORATED BY REFERENCE: |
Portions of the Registrant's Annual Report to security holders for the fiscal year ended December 31, |
(Cover page 2 of 2 pages) |
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PART I |
Item 1. BUSINESS: |
The Company, Page 1; Business, Pages |
Item 1A. RISK FACTORS: |
The |
Because we require a substantial amount of cash to service our debt, we may not be able to pay all of the obligations under our indebtedness. |
To service our indebtedness, we require a significant amount of cash. Our ability to generate cash depends on many factors, including our successful financial and operating performance. We cannot assure you that our business strategy will continue to succeed or that we will achieve our anticipated financial results. If we do not achieve our anticipated results, we may not be able to generate sufficient cash flow from operations or to obtain sufficient funding to satisfy all of our obligations. The failure to do this would result in a material adverse affect on our business. |
Because we depend on liquidity to operate our business, a decrease in the sale of our debt securities or an increase in requests for their redemption may make it more difficult for us to pay our obligations in a timely manner. |
Our liquidity depends on, and we fund our operations through, the sale of our debt securities, the continued availability of unused borrowings under our credit agreement and the collection of our receivables. Numerous existing investment alternatives have resulted in investors evaluating more critically their investment opportunities. We cannot assure you that our debt securities will offer interest rates and redemption terms which will generate sufficient sales to meet our liquidity requirements. As described more fully elsewhere in this Annual Report, our senior demand notes can be redeemed at any time without penalty. Our variable rate subordinated debentures are subject to redemption at the end of any interest adjustment period prior to their maturity at the option of the Debenture holder and may be requested to be redeemed during an interest adjustment period, although we are not obligated to accept requests for redemption of Debentures during any interest adjustment period, and any of those requests are subject to one-half the interest earned since the most recent interest adjustment date, if applicable, or the purchase date. It is possible that a significant number of redemption requests could adversely affect our liquidity. In either event, our reduced liquidity could negatively impact our ability to pay the principal and interest on any of our outstanding debt securities when due. |
All of our offers and sales of securities must comply with applicable securities laws, or we could be liable for damages, which could impact our ability to make payments on our outstanding debt securities. |
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Offers and sales of all of our securities must comply with all applicable federal and state securities laws, including Section 5 of the Securities Act of 1933. If any of our offers, including those made pursuant to newspaper or radio advertisements, or sales are found not to be in compliance with any of these laws, we could be liable to certain purchasers of the security, could be required to repurchase the security, or could be liable for damages or other penalties. If we are required to repurchase any of our securities other than in the ordinary course of our business as a result of any such violation, or otherwise are found to be liable for any damages or penalties as a result of any such violation, our financial condition could be materially adversely affected. Any such adverse affect on our financial condition could materially impair our ability to pay principal |
We depend on funds from our credit facility to meet our obligations and fund a portion of our general operations. If we are unable to continue to borrow under this credit facility, we may not be able to pay our obligations. |
We rely on borrowings under our revolving credit facility (the “Revolver”) to meet the redemption requests of our security holders and our other liquidity and operating requirements. |
Because our liquidity also depends on receivables collections, if our collections are reduced, it may make it more difficult for us to pay our obligations. |
Our liquidity is also dependent on, among other things, the collection of our receivables. Delinquencies in our consumer finance receivables are likely to be affected by worsening general economic conditions and, because we mainly make loans to individuals who depend on their earnings to make repayments, are often dependent upon the continued employment of those people. If general economic conditions worsen, or we are otherwise unable to collect on our receivables, we may not be able to make payments on our outstanding obligations. |
An increase in the interest we pay on our debt and borrowings can materially and adversely affect our net interest margin. |
Net interest margin represents the difference between the amount that we earn on loans and investments and the amount that we pay on debt securities and other borrowings. The loans we make in the ordinary course of our business are subject to the interest rate and regulatory provisions of each applicable state's lending laws and are sometimes made at fixed rates which are not adjustable during the term of the loan. Since some loans are made at fixed interest rates and are made using the proceeds from the sale of our fixed and variable rate securities, |
Neither the Company nor any of its debt securities are or will be rated by any nationally recognized statistical rating agency, and this may increase the risk of your investment. |
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Neither 1st Franklin nor any of its debt securities are, or are expected to be, rated by any nationally recognized statistical rating organization. Typically, credit ratings assigned by such organizations are based upon an assessment of a company’s creditworthiness and are a measure used in establishing the interest rate that a company offers on debt securities it issues. Without any such rating, it is possible that fluctuations in general economic, or industry specific, business conditions, changes in results of operations, or other factors that affect the creditworthiness of a debt issuer may not be fully reflected in the interest rate on any outstanding indebtedness of that issuer. Investors in the Company’s securities must depend solely on the creditworthiness of 1st Franklin for the payment of principal and interest on those securities. In the |
Consumer finance companies such as the Company are subject to an increasing number of laws and government regulations, and if we fail to comply with these laws or regulations, our business may suffer and our ability to pay our obligations may be impaired. |
Our operations are subject to increasing focus by federal, state and local government authorities and state attorneys general and are subject to various laws and judicial and administrative decisions imposing various requirements and restrictions on certain lending practices by companies in the consumer finance industry, sometimes referred to as "predatory lending" practices. These requirements and restrictions, among other things: • require that we obtain and maintain certain licenses and qualifications; • limit the interest rates, fees and other charges that we are allowed to charge; • require specified disclosures to borrowers; • limit or prescribe other terms of our loans; • govern the sale and terms of insurance products that we offer and the insurers for which we act as agent; and • define our rights to repossess and sell collateral. In addition, other state and local laws, public policy and general principles of equity relating to the protection of consumers, unfair and deceptive practices and debt collection practices may apply to the loans we make. Although we believe that we are in compliance in all material respects with applicable federal, state and local laws, rules and regulations, there can be no assurance that a change in any of those laws, or in their interpretation, will not make our compliance therewith more difficult or expensive, restrict our ability to originate loans, further limit or restrict the amount of interest and other charges we earn under such loans, or otherwise adversely affect our financial condition or business operations. The burdens of complying with these laws and regulations, and the possible sanctions if we do not so comply, are significant, and may result in a downturn in our business or our inability to carry on our business in a manner similar to how we currently operate. |
If we experience unfavorable litigation results, our ability to pay our obligations may be impaired. |
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As a consumer finance company, we are subject to various consumer claims and litigation seeking damages and statutory penalties. The damages and penalties claimed by consumers and others can be substantial. The relief requested by the plaintiffs varies but generally includes requests for compensatory, statutory and punitive damages. Unfavorable outcomes in any of our current or future litigation proceedings could materially and adversely affect our results of operations, financial condition and cash flows and our ability to make payments on our outstanding obligations. While we intend to vigorously defend ourselves against any of these proceedings, there is a chance that our results of operations, financial condition and cash flows could be materially and adversely affected by unfavorable outcomes which, in turn, could affect our ability to make payments on, or repay, our outstanding obligations. |
We are |
In order to ensure compliance with the various provisions of the Sarbanes-Oxley Act, we are in the process of, among other things, evaluating our internal controls to allow management to report on, and our independent registered public accounting firm to attest to, our internal controls systems. We |
Item 1B. UNRESOLVED STAFF COMMENTS: |
Not Applicable. |
Item 2. PROPERTIES: |
Paragraph 1 of The Company, Page 1; paragraphs 1 and 2 of Footnote 7 (Commitments and Contingencies) of the Notes to Consolidated Financial Statements, Page |
Item 3. LEGAL PROCEEDINGS: |
1st Franklin Financial Corporation v. Locke D. Barkley, in her capacity as Standing Trustee of the Chapter 13 Estate of Eugene and Arleen Anthony, et al.(the “Trustee”), |
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Through the period ended December 2006, and subject to the prior order of the Northern District Court, the Court dismissed all the prior on-going adversary proceedings as an administrative matter to close the cases on the Northern District Court’s docket. |
To date, no demands for arbitration have been filed. The Company cannot predict whether any such claimants will commence arbitration proceedings and, if they do, what amounts the Company may be liable to pay, although the Company does not believe any such amounts would be, individually or in the aggregate, material. |
1st Franklin Financial Corporation v. Harold J. Barkley, Jr., in his capacity as Standing Trustee of the Chapter 13 Estate of Susan Ann Bozeman, et al.(the “Trustee”), in the United States Bankruptcy Court for the Southern District of Mississippi (the “Southern District Court”), Adversary Proceeding Nos., 02-000101, et al. |
The Company filed a complaint against |
Through December 2006, the Southern District Court had dismissed the claims of certain of the debtors and compelled the claims of the remaining debtors to arbitration. |
To date, no demands for arbitration have been filed. The Company cannot predict whether any such claimants will commence arbitration proceedings and, if they do, what amounts the Company may be liable to pay, although the Company does not believe any such amounts would be, individually or in the aggregate, material. |
Harold J. and Locke D. Barkley, in their respective capacities as Standing Chapter 13 Trustees of various debtor bankruptcy estates v. 1st Franklin Financial Corporation, et al., |
On February 13, 2004, various debtors that the Company had filed suit against in the Northern and Southern District |
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Harold J. and Locke D. Barkley, in their capacities as Standing Chapter 13 Trustees of various debtor bankruptcy estates v. 1st Franklin Financial Corporation, et al., in the Circuit Court of Holmes County, Mississippi, Civil Action No. 04-263 |
On February 17, 2004, various debtors that the Company had filed suit against in the Northern and Southern Bankruptcy Court cases discussed above sued the Company and approximately 20 current and former employees. The |
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From time to time, the Company is involved in various other claims and lawsuits incidental to its business. In the opinion of Management based on currently available facts, the ultimate resolution of such claims and lawsuits is not expected to have a material effect on the Company's financial position, liquidity, or results of operations. |
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Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: |
No matters were submitted to a vote of security holders during the quarter ended December 31, |
2006. |
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PART II |
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES: |
Source of Funds, Page |
Item 6. SELECTED FINANCIAL DATA: |
Selected Consolidated Financial Information, Page |
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: |
Management’s Discussion and Analysis of Financial Condition and Results of Operations, Pages |
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK: |
Management’s Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures About Market Risk sub-heading, Page |
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA: |
Report of Independent Registered Public Accounting Firm and the Company’s Consolidated Financial Statements and Notes thereto, Pages |
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE: |
Not applicable. |
Item 9A. CONTROLS AND PROCEDURES: |
We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. An evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chairman and Chief Executive Officer (“CEO”) and Executive Vice President and Chief Financial Officer ("CFO"), of the effectiveness of our disclosure controls and procedures. Based on that evaluation, the CEO and CFO have concluded that the Company's disclosure controls and procedures were effective as of December 31, |
There have been no changes in the Company’s internal control over financial reporting that occurred during the fourth quarter of |
Item 9B. OTHER INFORMATION: |
None. |
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Forward Looking Statements: |
Certain statements contained or incorporated by reference herein under the captions “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” and elsewhere in this Annual Report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, those set out under the caption “Risk Factors 48;, the ability to manage cash flow and working capital, the accuracy of Management’s estimates and judgments, adverse economic conditions including the interest rate environment, unfavorable |
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PART III |
Item 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
DIRECTORS |
Position(s) |
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Name of Director | Age | Director Since | with Company | Age | Director Since | with Company |
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Ben F. Cheek, III (3)(5) | 69 | 1967 | Chairman of Board / Chief Executive Officer | 70 | 1967 | Chairman of Board / Chief Executive Officer |
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Ben F. Cheek, IV (3)(4)(5) | 44 | 2001 | Vice Chairman | 45 | 2001 | Vice Chairman |
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A. Roger Guimond (3)(5) | 51 | 2004 | Executive Vice President / Chief Financial Officer | 52 | 2004 | Executive Vice President / Chief Financial Officer |
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John G. Sample, Jr. (1)(2)(5) | 49 | 2004 | None | 50 | 2004 | None |
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C. Dean Scarborough (1)(2)(5) | 51 | 2004 | None | 52 | 2004 | None |
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Jack D. Stovall (1)(2)(5) | 69 | 1983 | None | 70 | 1983 | None |
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Robert E. Thompson (1)(2)(5) | 73 | 1970 | None | 74 | 1970 | None |
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Keith D. Watson (1)(2)(5) | 48 | 2004 | None | 49 | 2004 | None |
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(1) | Member of Audit Committee. | ||||||
(2) | Mr. Sample has been the Senior Vice President and Chief Financial Officer of Atlantic American Corporation, an insurance holding company, since 2002. Prior thereto, he was a partner with Arthur Andersen LLP since 1990. For more than five years prior to 2006, Mr. Scarborough | ||||||
(3) | Reference is made to “Executive Officers” for a discussion of business experience. | ||||||
(4) | Son of Ben F. Cheek, III. | ||||||
(5) | The term of each director will expire when a successor to such director is elected and qualified. | ||||||
There was no, nor is there presently any, arrangement or understanding between any director and any other person (except directors and officers of the registrant acting solely in their capacities as such) pursuant to which the director was selected. | |||||||
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The Audit Committee is composed of Messrs. Sample, Scarborough, Stovall and Watson and Dr. Thompson. Notwithstanding the fact that the Company’s equity securities are not currently traded on any national securities exchange or with any national securities association, the Board of Directors has determined that Mr. Sample is “independent” (as such term is defined in the rules of the Securities and Exchange Commission (the “SEC”) and the National Association of Securities Dealers, Inc. (“NASDAQ”) Marketplace Rules) and is an “audit committee financial expert” as defined by the SEC in Rule 401(h) of Regulation S-K. In making such determination, the Board of Directors took into consideration, among other things, the express provision in Item 401(h) of Regulation S-K that the designation of a person as an | |||||||
Notwithstanding the fact that the Company’s equity securities are not currently traded on any national securities exchange or with any national securities association, the Company is in the process of evaluating the independence (as such term is defined in the rules of the SEC and the NASDAQ Marketplace Rules) of its remaining directors. | |||||||
EXECUTIVE OFFICERS |
Name, Age, Position(s) | |
and Family Relationship | Business Experience |
Ben F. Cheek, III, Chairman of Board and Chief Executive Officer | Joined the Company in 1961 as attorney and became Vice President in 1962, President in 1972 and Chairman of Board in 1989. |
Ben F. Cheek, IV, Vice Chairman Son of Ben F. Cheek, III | Joined the Company in 1988 working in Statistics and Planning. Became Vice Chairman in 2001. |
Virginia C. Herring, President Daughter of Ben F. Cheek, III | Joined the Company on a full time basis in April 1988 as Developmental Officer. Since then, she has worked throughout the Company in different departments on special assignments and consultant projects. Became President in 2001. |
A. Roger Guimond, Executive Vice President, Chief Financial Financial Officer and Director No Family Relationship | Joined the Company in 1976 as an accountant and became Chief Accounting Officer in 1978, Chief Financial Officer in 1991 and Vice President in 1992. Was appointed Secretary in 1990 and Treasurer in 1992. Became Executive Vice President in 2001. Elected a Director in 2004. |
Executive Vice President, Chief Operating Officer No Family Relationship | Joined the Company in |
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C. Michael Haynie, Executive Vice President - Human Resources No Family Relationship | Joined the Company in 2005 as Vice President - Human Resources. Became Executive Vice President - Human Resources on January 1, 2006. |
Name, Age, Position(s) | |
and Family Relationship | Business Experience |
Karen S. Lovern, Executive Vice President – Strategic and Organization Development No Family Relationship | Joined the Company in 2000 as Director of Training and Development. Became Executive Vice President – Strategic and Organization Development on January 1, 2006. |
Lynn E. Cox, Vice President - Secretary / Treasurer No Family Relationship | Joined the Company in 1983 and became Secretary in 1990. Appointed Treasurer in 2002. Became Area Vice President and Secretary in 2001. Promoted to Vice President in 2005. |
The term of office of each Executive Officer expires when a successor is elected and qualified. There was no, nor is there presently any, arrangement or understanding between any officer and any other person (except directors or officers of the registrant acting solely in their capacities as such) pursuant to which the officer was selected. |
The Company has adopted a code of ethics that applies to its principal executive |
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Item 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis Overall Philosophy: The overall objective of the Company is to achieve specific annual and long-term strategic goals while maintaining a healthy financial position. It is the overall responsibility of our executive officers to successfully manage the Company to reach this objective. Our compensation philosophy revolves around the achievement of these goals and is designed to incentivize and to reward the executive officers for their efforts and successes. Role of Executive Officers in Compensation Decisions: The Company does not have an official compensation committee (or other official committee of the Board of Directors performing equivalent functions). The Company is a family-owned business with Ben F. Cheek, III, Chairman and Chief Executive Officer, being the majority stockholder. The Executive Management Team (the “EMT”) establishes the bases for all executive officer compensation, which compensation is approved by Mr. Cheek, III. The EMT consists of Messrs. Cheek, III, Cheek IV, Guimond, Coffee (until his retirement in June 2006), Haynie and Culpepper, and Ms. Herring and Lovern. Components of Compensation: The principal components of the Company’s executive compensation program include base salary, discretionary bonus awards and non-equity incentive plan compensation. The Company also expects that earnings on non-qualified deferred compensation amounts and other compensation, as detailed below, will add to each executive officer’s overall total compensation each year. Base Salary: The Company provides executive officers, and other employees, with a base salary to compensate them for services rendered throughout the year. Salaries for all executive officers are established annually Messrs. Cheek III and Cheek, IV and Ms. Herring, based on the level of each executive officer’s responsibility, tenure with the Company and certain available market data with respect to salaries paid for like positions in comparable companies. Each executive officer has goals set annually which are reviewed with the officer by the President, Vice Chairman and Chief Executive Officer throughout the year. A formal individual performance and development review is also held each year with each executive officer and the Ms. Herring and Mr. Cheek, III. Merit based increases to salaries are based on the assessment of each executive’s performance review. Bonus Awards: Bonus amounts paid to the executive officers include discretionary bonuses and may include certain cash bonuses from time to time for special recognition, each determined at the discretion of the EMT and approved by the Chief Executive Officer. In November, 2006, the executive officers were paid a holiday bonus of 4% of their respective base salaries. In addition, Mr. Guimond was paid an additional bonus during 2006 as recognition for thirty years of service. Non-Equity Incentive Compensation: The Company’s stock is not traded or quoted on any national securities exchange or association, but rather is closely held by the Cheek family. As a result, the Company does not grant stock or other equity based awards. In March 2006, the EMT approved the Company’s 2006 Bonus Plan (the “2006 Bonus Plan”). The 2006 Bonus Plan was a cash-based incentive plan designed to promote high performance and the achievement of various corporate goals. Under the 2006 Bonus Plan, a minimum pre-tax income threshold for the Company was established as a baseline goal to be achieved in order for any payouts to be made under such Plan. If that threshold was met, payouts under the Plan were based on the number of other strategic goals met by the Company. For 2006, the EMT established three strategic goals in additional to the minimum pre-tax income goal. The goals were (i) corporate net receivables growth with corporate delinquency control, (ii) corporate expense / revenue ratio and (iii) corporate return on assets. Bonus payouts under the Plan depended on the number of strategic goals met as follows: 1 Goal Met Bonus Payout as % of Salary 5% - 35% 2 Goals Met Bonus Payout as % of Salary 5% - 45% 3 Goals Met Bonus Payout as % of Salary 5% - 60% 4 Goals Met Bonus Payout as % of Salary 5% - 75% The Company met and/or exceeded all of the 2006 goals. Amounts paid varied within each range depending on personal performance milestones that were met as determined by the EMT. Amounts paid under the 2006 Bonus Plan are included in the Summary Compensation Table which follows, under the heading “Non-Equity Incentive Plan Compensation”. In January 2007, the EMT approved the Company’s 2007 Executive Bonus Plan (the “2007 Bonus Plan”). The purposes and operation of the 2007 Bonus Plan are similar to those of the 2006 Bonus Plan. The EMT also established the criteria for determining bonus awards under the 2007 Bonus Plan for the Company’s 2007 fiscal year. For 2007, the EMT determined that the threshold goal for any payouts under the Plan is the achievement of a minimum amount of pre-tax income by the Company. If that threshold is met, payouts under the 2007 Bonus Plan will be based on the number of other strategic goals met by the Company. For 2007, the EMT has identified three strategic goals in addition to the minimum pre-tax income goal. These are: 1. Corporate net receivables growth with Corporate delinquency control; 2. Corporate expense/revenue ratio; and 3. Corporate return on assets. Bonus payouts under the 2007 Bonus Plan will vary depending on the number of strategic goals met as follows: 1. Goal Met Bonus Payout as % of Salary 5% - 30% 2. Goals Met Bonus Payout as % of Salary 5% - 40% 3. Goals Met Bonus Payout as % of Salary 5% - 50% 4. Goals Met Bonus Payout as % of Salary 5% - 65% Amounts to be paid may vary within each range depending on personal performance milestones as determined by the EMT. |
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Name | Other | All | |||
And | Annual | Other | |||
Principal | Salary | Bonus | Compensation | Compensation | |
Position | Year | $ | $ | $ * | $ ** |
Ben F. Cheek, III | 2005 | $240,000 | $ 9,600 | $11,783 | $ 33,157 |
Chairman and | 2004 | $240,000 | $ 9,600 | $10,604 | $ 30,584 |
CEO | 2003 | $240,000 | $ 9,600 | $9,552 | $ 48,692 |
Ben F. Cheek, IV | 2005 | $131,000 | $ 52,973 | $16,661 | $ 6,624 |
Vice Chairman | 2004 | $119,333 | $ 82,473 | $3,431 | $ 8,222 |
2003 | $111,000 | $ 57,408 | $4,694 | $ 9,481 | |
Virginia C. Herring | 2005 | $131,000 | $ 52,973 | $3,409 | $ 6,624 |
President | 2004 | $119,333 | $ 82,473 | $2,400 | $ 8,222 |
2003 | $111,000 | $ 57,314 | $2,400 | $ 9,473 | |
A. Roger Guimond | 2005 | $250,966 | $188,135 | $16,359 | $ 20,368 |
Executive Vice President | 2004 | $237,462 | $158,618 | $2,400 | $ 21,598 |
and CFO | 2003 | $213,028 | $133,989 | $2,400 | $ 20,064 |
A. Jarrell Coffee | 2005 | $293,016 | $180,497 | $4,003 | $ 29,179 |
Executive Vice President | 2004 | $281,293 | $200,598 | $3,810 | $ 30,694 |
and COO | 2003 | $270,494 | $149,499 | $3,786 | $ 31,947 |
Compensation Committee Report: |
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In the absence of | |
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Ben F. Cheek, III | C. Dean Scarborough |
Ben F. Cheek, IV | Jack D. Stovall |
A. Roger Guimond | Robert E. Thompson |
John G. Sample, Jr. | Keith D. Watson |
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Summary Compensation Table | |||||||
Name and Principal Position | Year | Salary | Bonus(1) | Non-Equity Incentive Plan Compensation(2) | Change in Pension Value And Non-Qualified Deferred Compensation Earnings | All Other Compensation (3) | Total |
Ben F. Cheek, III Chairman and CEO | 2006 | $ 240,000 | $ 9,600 | $ - | $ - | $ 13,505 | $ 263,105 |
Ben F. Cheek, IV Vice Chairman | 2006 | $ 154,000 | $ 6,160 | $ 84,700 | $ - | $ 14,604 | $ 259,464 |
Virginia C. Herring President | 2006 | $ 154,000 | $ 6,160 | $ 84,700 | $ - | $ 2,953 | $ 247,813 |
A. Roger Guimond Executive Vice President and Chief Financial Officer | 2006 | $ 263,550 | $ 49,254 | $ 171,308 | $ - | $ 14,400 | $ 498,512 |
J. Michael Culpepper Executive Vice President and Chief Operating Officer | 2006 | $ 179,650 | $ 7,186 | $ 116,773 | $ - | $ 33,468 | $ 337,077 |
Karen S. Lovern Executive Vice President for Employee Development and Strategic Planning | 2006 | $ 165,000 | $ 6,600 | $ 90,750 | $ - | $ 5,236 | $ 267,586 |
C. Michael Haynie Executive Vice President of Human Resources | 2006 | $ 135,958 | $ 5,439 | $ 81,575 | $ - | $ 2,400 | $ 225,372 |
A. Jarrell Coffee Former Executive Vice President and Chief Operating Officer (Retired June 2006) | 2006 | $ 215,600 | $ - | $ 152,390 | $ 209,871 | $ 17,547 | $ 595,408 |
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(1) Consists of a bonus paid at the discretion of the EMT and approved by the Chief Executive Officer. The bonus was equal to 4% of salary. Mr. Guimond was also paid an additional discretionary bonus. | |||||||
(2) Consists of payouts under the Company’s 2006 Bonus Plan. Amounts were paid in 2007 but deemed earned in 2006 based on the Company’s 2006 performance. | |||||||
(3) All other compensation for executive officers is detailed as follows: |
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Name | Year | Personal Use of Company Auto | Travel Allowance | Director Fees | Relocation Reimbursement | Total |
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Ben F. Cheek, III | 2006 | $ 11,105 | $ 2,400 | $ - | $ - | $ 13,505 |
Ben F. Cheek, IV | 2006 | $ 204 | $ 2,400 | $ 12,000 | $ - | $ 14,604 |
Virginia C. Herring | 2006 | $ 553 | $ 2,400 | $ - | $ - | $ 2,953 |
A. Roger Guimond | 2006 | $ - | $ 2,400 | $ 12,000 | $ - | $ 14,400 |
J. Michael Culpepper | 2006 | $ 324 | $ 2,400 | $ - | $ 30,744 | $ 33,468 |
Karen S. Lovern | 2006 | $ 2,836 | $ 2,400 | $ - | $ - | $ 5,236 |
C. Michael Haynie | 2006 | $ - | $ 2,400 | $ - | $ - | $ 2,400 |
A. Jarrell Coffee | 2006 | $ 16,546 | $ 1,000 | $ - | $ - | $ 17,546 |
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The value attributable to personal use of Company-provided automobiles (calculated in accordance with Internal Revenue Service guidelines) is included as compensation on the W-2 of executive officers who receive such benefits. Each such executive officer is responsible for paying income tax on such amount. | ||||||
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Executive officers are provided with a travel allowance to cover certain travel costs on Company business trips when an overnight stay is not required. The travel allowance is included as compensation on the W-2 of each executive officer and each is responsible for paying income tax on such amount. | ||||||
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Mr. Culpepper was promoted to Executive Vice President and Chief Operating Officer in 2006. Previously, he was Vice President our Louisiana/Mississippi division and was based in Jackson, Mississippi. His promotion required him to move to Toccoa, Georgia and the Company reimbursed him for relocation costs. |
Compensation Committee Interlocks and Insider Participation |
The Company does not have an official compensation committee (or other official committee of the Board of Directors performing equivalent functions). The Company is a family owned business with Ben F. Cheek, III being the majority shareholder. The |
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Executive Nonqualified Deferred Compensation Plan | |
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Any management or highly compensated employee (within the meaning of Section 201(2) of the Employee Retirement Income Security Act of 1974) of the Company who has been designated by the Board of Directors as and eligible employee, may participate in the Company’s Executive Nonqualified Deferred Compensation Plan (the “Plan”). In addition, any employee who receives annual compensation in excess of the amount provided in section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “Code”, from the Company during any calendar year preceding any Plan Year (as defined in the Plan) shall be a participant for such Plan Year. The Plan does not require any contribution to be made by a participant therein. The Company Interest is credited on the participant’s account on the last day of each quarter at an interest rate equal to the average of the interest rate during such quarter paid on the Company’s Variable Rate Subordinated Debentures with a Because amounts deemed “earned” under | |
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Nonqualified Deferred Compensation Table | |||||
Name | Executive Contributions In Last Fiscal Year | Registrant Contributions In Last Fiscal Year | Aggregate Earnings In Last Fiscal Year | Aggregate Withdrawals / Distributions | Aggregate Balance At Last Fiscal Year End |
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Ben F. Cheek, III | $ - | $ 1,886 | $ 35,771 | $ - | $ 571,882 |
Ben F. Cheek, IV | $ - | $ - | $ - | $ - | $ - |
Virginia C. Herring | $ - | $ - | $ - | $ - | $ - |
A. Roger Guimond | $ - | $ 10,916 | $ 6,249 | $ - | $ 99,909 |
J. Michael Culpepper | $ - | $ 502 | $ 52 | $ - | $ 827 |
Karen S. Lovern | $ - | $ 1,083 | $ 85 | $ - | $ 1,363 |
C. Michael Haynie | $ - | $ - | $ - | $ - | $ - |
A. Jarrell Coffee (1) | $ - | $ 12,556 | $ 10,124 | $ 209,871 | $ - |
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(1) The $209,871 paid to A. Jarrell Coffee at time of his retirement was reported as compensation in the Summary Compensation Table above. |
Director Compensation | |||
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Name | Fees Earned Or Paid In Cash | All Other Compensation | Total |
Ben F. Cheek, III | $ -- | $ -- | $ -- |
Ben F. Cheek, IV | $12,000 | $ -- | $12,000 |
A. Roger Guimond | $12,000 | $ -- | $12,000 |
John G. Sample, Jr. | $12,000 | $ 1,000 | $13,000 |
C. Dean Scarborough | $12,000 | $ -- | $12,000 |
Jack D. Stovall | $12,000 | $ -- | $12,000 |
Robert E. Thompson | $12,000 | $ -- | $12,000 |
Keith D. Watson | $12,000 | $ -- | $12,000 |
All directors of the Company, whether or not executive officers of the Company, are entitled to receive $12,000 per year for service as a member of the Board of Directors. In addition, Mr. Sample also receives $250 per quarter as travel expense to attend meetings. Mr. Cheek, III has elected to waive any fees otherwise due to him for his service as a director. |
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Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS: |
(a) Security Ownership of Certain Beneficial Owners as of December 31, | |
Information listed below represents ownership in the Company with respect to any person (including any “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) who is known to the Company to be the beneficial owner of more than five percent of any class of the Company’s voting securities. |
Name and Address of | Amount and Nature of | Percent | |
Beneficial Owner | Title of Class | Beneficial Ownership | Class |
Ben F. Cheek, III | Voting Common Stock | 1,160 Shares - Direct | 68.24% |
1855 Orchard Drive | |||
Clarkesville, Georgia 30523 | |||
Ben F. Cheek, IV | Voting Common Stock | 180 Shares - Direct | 10.59% |
3946 Beaver Dam Rd. | |||
Toccoa, Georgia 30577 | |||
Virginia C. Herring | Voting Common Stock | 180 Shares - Direct | 10.59% |
363 Summit Ridge Dr. | |||
Toccoa, Georgia 30577 | |||
David W. Cheek | Voting Common Stock | 180 Shares - Direct | 10.59% |
4500 Barony Dr. | |||
Suwanee, Georgia 30024 |
(b) Security Ownership of Management as of December 31, |
Ownership listed below represents ownership in each class of equity securities of the Company, by (i) Directors and Executive Officers of the Company named in the summary compensation table and (ii) all Directors and Executive Officers of the Company as a group: |
Amount and Nature of | Percent | ||
Name | Title of Class | Beneficial Ownership | Class |
Ben F. Cheek, III | Voting Common Stock | 1,160 Shares - Direct | 68.24% |
Non-Voting Common Stock | 574 Shares - Direct(1) | .34% | |
Ben F. Cheek, IV | Voting Common Stock | 180 Shares - Direct | 10.59% |
Non-Voting Common Stock | 18,011 Shares - Direct | 10.70% | |
Non-Voting Common Stock | 75,794 Shares - Indirect | 45.04% | |
Virginia C. Herring | Voting Common Stock | 180 Shares - Direct | 10.59% |
Non-Voting Common Stock | 18,012 Shares - Direct | 10.70% | |
Non-Voting Common Stock | 75,795 Shares - Indirect | 45.04% | |
A. Roger Guimond | Voting Common Stock | None | None |
Non-Voting Common Stock | None | None |
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Amount and Nature of | Percent | ||
Name | Title of Class | Beneficial Ownership |
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| Voting Common Stock | None | None |
Non-Voting Common Stock | None | None | |
Karen S. Lovern | Voting Common Stock | None | None |
Non-Voting Common Stock | None | None | |
C. Michael Haynie | Voting Common Stock | None | None |
Non-Voting Common Stock | None | None | |
John G. Sample, Jr. | Voting Common Stock | None | None |
Non-Voting Common Stock | None | None | |
C. Dean Scarborough | Voting Common Stock | None | None |
Non-Voting Common Stock | None | None | |
Jack D. Stovall | Voting Common Stock | None | None |
Non-Voting Common Stock | None | None | |
Robert E. Thompson | Voting Common Stock | None | None |
Non-Voting Common Stock | None | None | |
Keith D. Watson | Voting Common Stock | None | None |
Non-Voting Common Stock | None | None | |
All Directors and | |||
Executive Officers | Voting Common Stock | 1,520 Shares - Direct | 89.41% |
as a Group | Non-Voting Common Stock | 574 Shares - Direct (1) | .34% |
(12 persons) | Non-Voting Common Stock | 151,589 - Indirect (1) | 90.07% |
(1) |
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Ben F. Cheek, III and Elizabeth Cheek were the original grantors of the six trusts referred to above, which are irrevocable trusts. Two trusts were established for the benefit of each of Ben F. Cheek, IV, Virginia C. Herring and David W. Cheek, children of Ben F. Cheek, III and Elizabeth Cheek. The trustees of each of the trusts, who by virtue of dispositive power over the assets thereof, are deemed to be the beneficial owners of shares of the Company’s non-voting common stock contained therein, are the two children named above who are not the named beneficiaries of each of the respective trusts. | ||
(c) | The Company knows of no contractual arrangements which may at a subsequent date result in a change in control of the Company. | |
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Item 13. CERTAIN RELATIONSHIPS AND RELATED AND DIRECTOR INDEPENDENCE: |
The Company leases its home office building and print shop for a total of $12,600 per month from Franklin Enterprises, Inc. under leases which expire December 31, 2010. Franklin Enterprises, Inc. is 66.67% owned by Ben F. Cheek, III, a Director and Executive Officer of the Company. In Management's opinion, these leases are at rates and on terms which approximate those obtainable from independent third parties. |
The Company leases its Clarkesville, Georgia branch office for a total of |
During 1999, a loan was extended to a real estate development partnership of which one of the Company’s beneficial owners (David W. Cheek) is a partner. David Cheek (son of Ben F. Cheek, III) owns 10.59% of the Company’s voting stock. The loan was renewed on November 27, 2006. The balance on this commercial loan (including principal and accrued interest) was |
Effective September 23, 1995, the Company and Deborah A. Guimond, Trustee of the Guimond Trust (an irrevocable life insurance trust, the “Trust”) entered into a Split-Dollar Life Insurance Agreement. The life insurance policy insures A. Roger Guimond, Executive Vice President and Chief Financial Officer of the Company. As a result of certain changes in tax regulations relating to split-dollar life insurance policies, the agreement was amended effectively making the premium payments a loan to the Trust. The interest on the loan is a variable rate adjusting monthly |
Notwithstanding the fact that the Company’s equity securities are not currently traded on any national securities exchange or with any national securities association, the Company is in the process of evaluating the independence (as such term is defined in the rules of the SEC and the NASDAQ Marketplace Rules) of its remaining directors. |
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Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES: |
The Company was billed for professional services provided during fiscal years |
Fee |
| Fee | ||||
Amount |
| Amount | ||||
2005 | 2004 |
| 2006 | 2005 | ||
Services Provided: | Services Provided: | Services Provided: | ||||
Audit Fees (1) | Audit Fees (1) | $ 194,972 | $ 168,653 | Audit Fees (1) | $ 264,100 | $ 242,000 |
Tax Fees (2) | Tax Fees (2) | 66,699 | 67,155 | Tax Fees (2) | 55,000 | 50,000 |
All Other Fees | All Other Fees | -- | All Other Fees | -- | ||
Total | Total | $ 261,671 | $ 235,808 | Total | $ 319,100 | $ 292,000 |
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(1) | Fees in connection with the audit of the Company’s annual financial statements for the fiscal years ended December 31, 2005 and December 31, 2004, and reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q during the 2005 and 2004 fiscal years. | Fees in connection with the audit of the Company’s annual financial statements for the fiscal years ended December 31, 2006 and December 31, 2005, and reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q during the 2006 and 2005 fiscal years. Included are fees of $13,100 and $22,000 in 2006 and 2005, respectively, related to review of registrations statements. | ||||
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(2) | Fees billed by Deloitte & Touche LLP for professional services rendered for tax compliance, tax advice and tax planning. The services included the preparation of the Company’s and its subsidiaries’ tax returns. |
All audit and non-audit services to be performed by the Company’s independent registered public accounting firm must be approved in advance by the Audit Committee. Pursuant to the Audit Committee Pre-Approval Policy (the “Policy”), and as permitted by Securities and Exchange Commission rules, the Audit Committee may delegate pre-approval authority to any of its members, provided that any service approved in this manner is reported to the full Audit Committee at its next meeting. The Policy provides for a general pre-approval of certain specifically enumerated services that are to be provided within specified fee levels. With respect to requests to provide services not specifically pre-approved pursuant to the general grant, such requests must be submitted to the Audit Committee by the Company’s independent registered |
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PART IV | |||
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES: | |||
(a) (1) Financial Statements: | |||
Incorporated by reference from the Annual Report: | |||
Report of Independent Registered Public Accounting Firm. | |||
Consolidated Statements of Financial Position at December 31, | |||
Consolidated Statements of Income for the three years ended December 31, | |||
Consolidated Statements of Stockholders’ Equity for the three years ended December 31, | |||
Consolidated Statements of Cash Flows for the three years ended December 31, | |||
Notes to Consolidated Financial Statements. | |||
(2) Financial Statement Schedule: | |||
Report of Independent Registered Public Accounting Firm. | |||
Condensed Statements of Financial Position at December 31, | |||
Condensed Statements of Income for the three years ended December 31, | |||
Condensed Statements of Cash Flows for the three years ended December 31, | |||
(3) Exhibits: | |||
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3. | (a) | Restated Articles of Incorporation as amended January 26, 1996 (incorporated herein by reference to Exhibit 3(3)(a) to Form 10-K for the fiscal year ended December 31, 1995). | |
(b) | Bylaws (incorporated herein by reference to Exhibit 3(3)(b) to Form 10-K for the fiscal year ended December 31, 1995). | ||
4. | (a) | Indenture dated October 31, 1984, between the Company and The First National Bank of Gainesville, Trustee (incorporated by reference to Exhibit 4(a) to the Company’s Amendment No. 1 dated April 24, 1998 to the Registration Statement on Form S-2, File No. 333-47515). | |
(b) | Form of Series 1 Variable Rate Subordinated Debenture (incorporated by reference to Exhibit 4(b) to Amendment No. 3 to the Registration Statement on Form S-2 dated November 14, 2005, File No. 333-126589). | ||
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(c) | Agreement of Resignation, Appointment and Acceptance dated as of May 28, 1993 between the Company, The First National Bank of Gainesville, and Columbus Bank and Trust Company (incorporated by reference to Exhibit 4(c) to the Company’s Post-Effective Amendment No. 1 dated June 8, 1993 to the Registration Statement on Form S-2, File No. 33-49151). | |||
(d) | Modification of Indenture, dated March 30, 1995, by and among Columbus Bank and Trust Company, Synovus Trust Company and the Company (incorporated by reference to Exhibit 4(b) to the Company’s Form 10-K for the year ended December 31, 1994). | |||
(e) | Second Modification of Indenture dated December 2, 2004 by and among Synovus Trust Company and the Company (incorporated by reference to Exhibit 4(e) to the Registration Statement on Form S-2 dated July 14, 2005, File No. 333-126589). | |||
9. | Not applicable | |||
10. | (a) | Credit Agreement, dated | ||
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| (b) | Form of the Company’s | ||
| (c) | Director Compensation Summary Term | ||
11. | Computation of Earnings per Share is self-evident from the Consolidated Statement of Income and Retained Earnings in the Annual Report, incorporated by reference herein. | |||
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12. | Ratio of Earnings to Fixed Charges. | ||
13. |
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15. | Financial Statement Schedules. | ||
18. | Not applicable. | ||
19 | Not applicable. | ||
21. | Subsidiaries of the Company. | ||
22. | Not applicable. | ||
23. | Consent of Independent Registered Public Accounting Firm. | ||
24. | Not applicable. | ||
27. | Not applicable. | ||
28. | Not applicable. | ||
31.1 | Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934. | ||
31.2 | Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934. | ||
32.1 | Certification of Principal Executive Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
32.2 | Certification of Principal Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
* | Management contract or compensatory plan or arrangement filed pursuant to Item 601(b)(10)(iii) of Regulation S-K. | ||
(b) | See “Index to Exhibits”. | ||
(c) | Not applicable. |
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SIGNATURES |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized: |
1st FRANKLIN FINANCIAL CORPORATION | |
March | By: /s/ Ben F. Cheek, III |
Date | Ben F. Cheek, III |
Chairman of Board |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: |
Signatures | Title | Date |
/s/ Ben F. Cheek, III | March | |
(Ben F. Cheek, III) | Chairman of Board; | |
Chief Executive Officer | ||
/s/ Ben F. Cheek, IV | ||
(Ben F. Cheek, IV) | Vice Chairman | March |
/s/ Virginia C. Herring | ||
(Virginia C. Herring) | President | March |
/s/ A. Roger Guimond | ||
(A. Roger Guimond) | Executive Vice President; | March |
Principal Financial Officer | ||
Principal Accounting Officer; Director | ||
/s/ John G. Sample, | ||
(John G. Sample, Jr.) | Director | March |
/s/ C. Dean Scarborough | ||
(C. Dean Scarborough) | Director | March |
/s/ Jack D. Stovall | ||
(Jack D. Stovall) | Director | March |
/s/ Robert E. Thompson | ||
(Robert E. Thompson) | Director | March |
/S/ Keith D. Watson | ||
(Keith D. Watson) | Director | March |
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Supplemental Information to be Furnished with Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act. | |||
(a) | Except to the extent that the materials enumerated in (1) and/or (2) below are specifically incorporated into this Form by reference (in which case see Rule 12b-23(b), every registrant which files an annual report on this Form pursuant to Section 15(d) of the Act shall furnish to the Commission for its information, at the time of filing its report on this Form, four copies of the following: | ||
(1) | Any annual report to security holders covering the registrant's last fiscal year; and | ||
(2) | Every proxy statement, form of proxy or other proxy soliciting material sent to more than ten of the registrant's security holders with respect to any annual or other meeting of security holders. | ||
(b) | The foregoing material shall not be deemed to be "filed" with the Commission or otherwise subject to the liabilities of Section 18 of the Act, except to the extent that the registrant specifically incorporates it in its annual report on this Form by reference. | ||
(c) | This Annual Report on Form 10-K incorporates by reference portions of the Registrant's Annual Report to security holders for the fiscal year ended December 31, |
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1st FRANKLIN FINANCIAL CORPORATION INDEX TO EXHIBITS | 1st FRANKLIN FINANCIAL CORPORATION INDEX TO EXHIBITS | 1st FRANKLIN FINANCIAL CORPORATION INDEX TO EXHIBITS | ||
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Exhibit No. | Description | Page No. | Description | Page No. |
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10 | Form of the Company’s 2006 Executive Bonus Plan | 26 | Form of the Company’s 2007 Executive Bonus Plan | 28 |
10(i) | Director Compensation Summary Term Sheet | 28 | ||
12 | Ratio of Earnings to Fixed Charges | 29 | Ratio of Earnings to Fixed Charges | 30 |
13 | The Company’s Annual Report to security holders for the fiscal year ended December 31, 2005 | 30 | Annual Report | 31 |
15 | Financial Statement Schedule | 75 | Financial Statement Schedule | 77 |
21 | Subsidiaries of Registrant | 80 | Subsidiaries of Registrant | 82 |
23 | Consent of Independent Registered Public Accounting Firm | 81 | Consent of Independent Registered Public Accounting Firm | 83 |
31.1 | Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934 | 82 | Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934 | 84 |
31.2 | Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934 | 83 | Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934 | 85 |
32.1 | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | 84 | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | 85 |
32.2 | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | 85 | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | 87 |
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