SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement [ ]Confidential, for Use of the
[x]Definitive Proxy Statement Commission Only (as permitted
[ ]Definitive Additional Materials by Rule 14a-6(e)(2))
[ ]Soliciting Material Under Rule 14a-12
FRANKFORT FIRST BANCORP, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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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:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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[FRANKFORT FIRST BANCORP, INC. LETTERHEAD]
October 12, 2001
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Frankfort First Bancorp, Inc. to be held at the main office of First Federal
Savings Bank of Frankfort, 216 West Main Street, Frankfort, Kentucky on Monday,
November 12, 2001 at 4:30 p.m., local time. Your Board of Directors and
management look forward to personally greeting those stockholders able to
attend.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. During the meeting, we will
also report on the operations of the Company. Directors and officers of the
Company as well as representatives of Grant Thornton LLP, the Company's
independent auditors, will be present to respond to any questions the
stockholders may have.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS
POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING. Your vote is
important, regardless of the number of shares you own. This will not prevent you
from voting in person but will assure that your vote is counted if you are
unable to attend the meeting. On behalf of your Board of Directors, thank you
for your interest and support.
Sincerely,
/s/ Don Jennings
Don Jennings
President and Chief Executive Officer
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FRANKFORT FIRST BANCORP, INC.
216 W. MAIN STREET
FRANKFORT, KENTUCKY 40602
(502) 223-1638
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 12, 2001
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Frankfort First Bancorp, Inc. (the "Company"), will be held at the
main office of First Federal Savings Bank of Frankfort, 216 West Main Street,
Frankfort, Kentucky at 4:30 p.m. on Monday, November 12, 2001.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. Election of two directors of the Company; and
2. Transaction of such other matters as may properly come before the
Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before
the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Stockholders of
record at the close of business on September 28, 2001, are the stockholders
entitled to notice of and to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Danny A. Garland
DANNY A. GARLAND
SECRETARY
Frankfort, Kentucky
October 12, 2001
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR 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. PLEASE ACT PROMPTLY.
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PROXY STATEMENT
OF
FRANKFORT FIRST BANCORP, INC.
216 W. MAIN STREET
FRANKFORT, KENTUCKY 40602
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 12, 2001
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Frankfort First Bancorp, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company (the
"Meeting") which will be held at the main office of First Federal Savings Bank
of Frankfort, 216 West Main Street, Frankfort, Kentucky on Monday, November 12,
2001, at 4:30 p.m., local time. The accompanying notice of meeting and this
Proxy Statement are being first mailed to stockholders on or about October 12,
2001.
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company, at the address shown above, by filing of
a later-dated proxy prior to a vote being taken on a particular proposal at the
Meeting or by attending the Meeting and voting in person. Proxies solicited by
the Board of Directors of the Company will be voted in accordance with the
directions given therein. WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE
VOTED FOR THE NOMINEES FOR DIRECTOR SET FORTH BELOW. The proxy confers
discretionary authority on the persons named therein to vote with respect to the
election of any person as a director where the nominee is unable to serve or for
good cause will not serve, and matters incident to the conduct of the Meeting.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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The securities entitled to notice of and to vote at the Meeting consist of
the Company's common stock, par value $.01 per share (the "Common Stock").
Stockholders of record as of the close of business on September 28, 2001 (the
"Record Date"), are entitled to one vote for each share of Common Stock then
held. As of the Record Date, there were 1,246,108 shares of Common Stock issued
and outstanding.
Persons and groups owning in excess of 5% of the Common Stock are required
to file certain reports regarding such ownership pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") with the Company and the
Securities and Exchange Commission ("SEC"). Based on such reports (and certain
other written information received by the Company), management knows of no
persons other than those set forth below who owned more than 5% of the
outstanding shares of Common Stock as of the Record Date. The following table
sets forth, as of the Record Date, certain information as to those persons who
were the beneficial owners of more than 5% of the Common Stock, the shares
beneficially owned by the Company's Chief Executive Officer and the shares
beneficially owned by all executive officers and directors of the Company as a
group.
PERCENT OF SHARES
NAME AND ADDRESS AMOUNT AND NATURE OF OF COMMON STOCK
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
------------------- -------------------- ------------------
T. Rowe Price Associates, Inc. 119,500 (1) 9.59%
100 E. Pratt Street
Baltimore, Maryland 21202
Dimensional Fund Advisors, Inc. 83,250 6.68%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
William C. Jennings 165,433 (2) 12.16%
Chairman of the Board
216 West Main Street
Frankfort, Kentucky 40602
Joyce H. Jennings 165,433 (3) 12.16%
216 West Main Street
Frankfort, Kentucky 40602
Don Jennings 12,245 0.98%
President and Chief
Executive Officer
216 West Main Street
Frankfort, Kentucky 40602
Danny A. Garland 84,252 (4) 6.46%
Vice President and Secretary
216 West Main Street
Frankfort, Kentucky 40602
All Executive Officers and 395,592 (5) 26.63%
Directors as a Group (11 persons)
<FN>
_______________
(1) These securities are owned by various individual and institutional
investors which T. Rowe Price Associates, Inc. ("Price Associates") serves
as investment adviser with power to direct investments and/or sole power to
vote the securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
(2) Includes 23,601 shares beneficially owned by Joyce Jennings, his spouse;
57,636 shares that Mr. Jennings has the right to purchase pursuant to the
exercise of stock options which are exercisable within 60 days of September
28, 2001; and 57,636 shares that Mr. Jennings' spouse has the right to
purchase pursuant to the exercise of stock options which are exercisable
within 60 days of September 28, 2001.
(3) Includes 26,560 shares beneficially owned by William C. Jennings, her
spouse; 57,636 shares that Mrs. Jennings has the right to purchase pursuant
to the exercise of stock options which are exercisable within 60 days of
September 28, 2001; and 57,636 shares that Mrs. Jennings' spouse has the
right to purchase pursuant to the exercise of stock options which are
exercisable within 60 days of September 28, 2001.
(4) Includes 419 shares beneficially owned by his spouse's IRA and 57,636
shares which he has the right to purchase pursuant to the exercise of stock
options which are exercisable within 60 days of September 28, 2001.
(5) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; stock allocated through certain employee benefit plans of the
Company; and stock in which the individual otherwise has either sole or
shared voting and/or investment power. Includes 239,495 shares which all
executive officers and directors as a group have the right to purchase
pursuant to the exercise of stock options which are exercisable within 60
days of September 28, 2001.
</FN>
2
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Company's Board of Directors is composed of eight members. The
Company's Certificate of Incorporation requires that directors be divided into
three classes, as nearly equal in number as possible, each class to serve for a
three-year period, with approximately one third of the directors elected each
year. The Board of Directors has nominated Charles A. Cotton, III and Danny A.
Garland, each of whom are currently members of the Board, to serve as directors
for a three-year period.
If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend or the size of the Board may be reduced to eliminate the
vacancy. At this time, the Board knows of no reason why any nominee might be
unavailable to serve.
Under the Company's Bylaws, directors shall be elected by a plurality of
the votes of the shares present in person or by proxy at the Meeting. Votes
which are not cast at the Meeting, either because of abstentions or broker
nonvotes, are not considered in determining the number of votes which have been
cast for or against the election of a nominee.
Unless otherwise specified on the proxy, it is intended that the persons
named in the proxies solicited by the Board will vote for the election of the
named nominees.
The following table sets forth the names of the Board's nominees for
election as directors of the Company and of those directors who will continue to
serve as such after the Meeting. Also set forth is certain other information
with respect to each person's age as of the Record Date, the year he first
became a director of First Federal Savings Bank of Frankfort (the "Bank"), the
expiration of his term as a director and the number and percentage of shares of
the Common Stock beneficially owned as of the Record Date. With the exception of
Mr. Davenport, who was initially appointed as director in September 1996, all of
the individuals were initially appointed as director of the Company in 1995 in
connection with the Company's incorporation.
YEAR FIRST SHARES OF COMMON
AGE AS ELECTED AS CURRENT STOCK BENEFICIALLY
OF THE DIRECTOR OF TERM OWNED AS OF THE PERCENT
NAME RECORD DATE THE BANK TO EXPIRE RECORD DATE (1) OF CLASS
---- ----------- -------- --------- --------------- --------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2004
Charles A. Cotton, III 64 1974 2001 14,926 1.2%
Danny A. Garland 56 1981 2001 84,252 6.5%
DIRECTORS CONTINUING IN OFFICE
David G. Eddins 44 1993 2002 23,368 1.9%
William C. Jennings (2) 65 1973 2002 165,433 12.2%
C. Michael Davenport 42 1996 2002 24,747 2.0%
William M. Johnson 65 1984 2003 18,058 1.4%
Frank McGrath 75 1973 2003 18,058 1.4%
Herman D. Regan, Jr. 72 1988 2003 33,058 2.6%
<FN>
_______________
(1) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; stock allocated through certain employee benefit plans of the
Company; and stock in which the individual otherwise has either sole or
shared voting and/or investment power. Includes 12,368, 57,636, 12,368,
115,272, 4,747, 12,368, 12,368 and 12,368 shares which may be purchased
pursuant to options which are exercisable within 60 days of September 28,
2001 by Directors Cotton, Garland, Eddins, Jennings (and his spouse),
Davenport, Johnson, McGrath and Regan, respectively.
(2) Mr. Jennings is the father of Don Jennings who serves as President of the
Company and Executive Vice President of the Bank.
</FN>
3
The principal occupation of each director of the Company for the last five
years is set forth below.
CHARLES A. COTTON, III is retired, having served as the Commissioner of the
Department of Housing, Building & Construction of the Commonwealth of Kentucky
from 1981 to January 2000. He is the past president and a director of the
National Conference of States on Building Codes and Standards. He is also a past
member of the YMCA of Frankfort Board of Directors, a past Board member of
Galileans Home, President of the St. Vincent de Paul Society of Frankfort, and
President of the Coalition of Committed Christians Homeless Shelter and Soup
Kitchen.
DANNY A. GARLAND has been an employee of the Bank since 1975. Mr. Garland
currently serves as President and Chief Executive Officer of the Bank and Vice
President and Secretary of the Company. Mr. Garland currently serves on the
Board of the Kentucky Bankers Association and is Vice President of the Kentucky
Thrift Foundation. He also serves on the Board of the Kentucky Book Fair, is
President-Elect of the Frankfort Area Chamber of Commerce and is a member of the
Frankfort Optimist Club, the Bluegrass Striders, and the Frankfort Board of
Realtors. He is a former Frankfort City Commissioner, former president of the
Frankfort Red Cross Chapter, and a past chairman of the Multiple Sclerosis
Community Leaders Luncheon and received the Don C. Hulette Memorial Award from
that organization. He has also coached several youth basketball and baseball
teams in Frankfort.
DAVID G. EDDINS is a self-employed certified public accountant. He is
currently a member of the Frankfort Area Chamber of Commerce, the Kentucky
Chamber of Commerce, and the finance committee of the Frankfort Christian
Academy.
WILLIAM C. JENNINGS has been an employee of the Bank since 1963. Between
1980 and 1998, Mr. Jennings served as President and Chief Executive Officer of
the Bank. Mr. Jennings serves as Chairman of the Board of the Company and Bank.
His son, Don Jennings, serves as President of the Company. From June 1995
through December 2000 Mr. Jennings also served as President and Chief Executive
Officer of the Company.
C. MICHAEL DAVENPORT is an auctioneer, builder, developer, real estate
broker, and serves as President and CEO of Davenport Broadcasting, Inc., which
operates radio station WKYL 102.1 FM, and of C. Michael Davenport, Inc., which
is involved in a variety of real estate activities. He currently serves on the
Frankfort/Franklin County Planning and Zoning Commission. He is a co-founder of
L.I.F.E. House for Animals, a non-euthanasia adoption facility. He is currently
a member of the Frankfort Home Builders Association and has served previously on
the boards of P.U.S.H., the Kentucky Youth Association, the Franklin County
Humane Society, and the Frankfort Area Chamber of Commerce. He has served as
national director of the Home Builders and is a past president of the Frankfort
Area Chamber of Commerce.
WILLIAM M. JOHNSON is a self-employed attorney in Frankfort, Kentucky and
currently serves as the attorney for the Bank. He serves on the Board of
Directors of the YMCA of Frankfort, the Franklin County Development Corporation,
and the Frankfort Cemetery. Mr. Johnson is a member of the Kentucky Chamber of
Commerce, serves on the Board of Trustees of the Kentucky Bar Center
Headquarters and is Secretary of the Capital City Performing Arts Foundation.
FRANK MCGRATH has served as President of Frankfort Lumber Company since
1989. Prior to this date, Mr. McGrath was manager. He is a member of the
Kentucky Lumber and Building Material Association, the Frankfort/Franklin County
Chamber of Commerce, the Kentucky Chamber of Commerce and the Lawrenceburg First
Christian Church.
HERMAN D. REGAN, JR. served as Chairman of the Board and President of
Kenvirons, Inc., a civil and environmental engineering consulting firm, from
1975 until his retirement in August, 1994. He is a registered professional
engineer, a member of the Kentucky Society of Professional Engineers, and the
National Society of Professional Engineers. Mr. Regan is a past Director of the
Baptist Health Care Systems and is a member of the Kentucky-Tennessee Water
Environment Federation, the National Water Environment Federation, the American
Public Works Association, the First Baptist Church of Frankfort, Kentucky, and
the University of Kentucky Alumni Association.
4
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
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The Boards of Directors of the Company and the Bank hold regular
semi-monthly meetings and hold special meetings as needed. During the fiscal
year ended June 30, 2001, the Board of the Company met 12 times and the Board of
the Bank met 12 times. No director attended fewer than 75% in the aggregate of
the total number of Board meetings held while he was a member during the fiscal
year ended June 30, 2001 and the total number of meetings held by committees on
which he served during such fiscal year.
The Board of Directors of the Company has standing Audit and Compensation
Committees. (The Bank has standing Executive, Loan and Investment Committees.)
The Audit Committee for fiscal year 2001 consisted of Directors William M.
Johnson (Chairman), David Eddins and Herman D. Regan, Jr. All members of the
Audit Committee meet are deemed to be independent within the meaning of Rule
4200(a)(15) of the National Association of Securities Dealers' listing
standards. This committee's function is to approve the outside accounting firm
for use by the Company and to review regulatory examination reports. The Audit
Committee has adopted a written charter, a copy of which is attached as Exhibit
A to this Proxy Statement. The Audit Committee met three times during fiscal
year 2001.
For fiscal year 2001, the Compensation Committee consisted of non-employee
Directors Charles A. Cotton, III, William M. Johnson and Frank McGrath. The
Compensation Committee met one time during fiscal year 2001.
The Company does not have a standing Nominating Committee. Under the
Company's Bylaws, the Board of Directors or a committee appointed by the Board
acts as a nominating committee for selecting management's nominees for election
as directors. The full Board of Directors served as a nominating committee for
the nominees chosen for election as directors at the Meeting. While the Board of
Directors will consider nominees recommended by stockholders, it has not
actively solicited recommendations from the Company's stockholders for nominees
nor, subject to the procedural requirements set forth in the Company's
Certificate of Incorporation and Bylaws, established any procedures for this
purpose.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
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OVERVIEW AND OBJECTIVES. Composed of non-employee directors Charles A.
Cotton, III, William M. Johnson and Frank McGrath, the Compensation Committee
(the "Committee") of the Board of Directors establishes the Company's and the
Bank's executive compensation policies. The Committee is responsible for
developing the Company's and the Bank's executive compensation policies
generally, and for implementing those policies for the Company's and Bank's
executive officers, including the Chief Executive Officer. The Committee's
overall objectives in designing and administering the specific elements of the
Company's and the Bank's executive compensation program include providing
incentives for executive officers to promote the success of the Bank and the
Company; attracting, retaining and motivating executive officers for the
long-term success of the Bank and the Company; and aligning executive
compensation with increases in stockholder value.
COMPONENTS OF EXECUTIVE COMPENSATION. In furtherance of the objectives it
has established, the Company's and Bank's executive compensation program
consists of the following components.
o Base Salary. The Board of Directors of the Bank has approved the terms
of employment agreements for Don Jennings, President and Chief Executive Officer
of the Company and Executive Vice President of the Bank, and three other
executive officers of the Bank. The agreements set forth the base salaries of
such executive officers. In establishing base salaries, the Committee considered
a number of factors, including the officer's experience, tenure, abilities and
performance and reviews regional and national surveys of salaries paid to
executive officers of other savings and loan holding companies and other
financial institutions similar in size and other characteristics. The
Committee's objective is to provide for base salaries that are competitive with
the average salary paid by the Company's peers.
5
o Bonuses. From time to time, the Bank has paid bonuses on a regular
basis at the discretion of the Board. Bonus payments in the past have been less
than fifteen (15%) percent of the annual compensation of the employee. No
bonuses were paid in fiscal years 1998, 1999 or 2001. In fiscal year 2000,
bonuses were paid in the amounts of $2,625 and $1,890 to one Company officer and
one Bank officer in lieu of salary increases.
o Stock Option and Incentive Plan. The Company maintains the 1995 Stock
Option and Incentive Plan (the "Option Plan") as a means of providing directors
and key employees the opportunity to acquire a proprietary interest in the
Company and to align their interests with those of the Company's stockholders.
By encouraging stock ownership, the Company seeks to attract, retain and
motivate the best available personnel for positions of substantial
responsibility and to provide additional incentive to directors and employees of
the Company and the Bank to promote the success of the business of the Company.
Under this plan, participants are eligible to receive stock options and
stock appreciation rights ("SARs"). Awards under this plan are subject to
vesting and forfeiture as determined by the Committee. Options and SARs are
granted at the market value of the Common Stock on the date of the grant. Thus,
such awards have value only if the Company's stock price increases. The
Committee believes that this plan aligns stockholder and officer's interests and
helps to retain and motivate executive officers to improve long-term stockholder
value. No options were granted to executive officers during fiscal year 2001.
o Deferred Compensation Plan. The Bank maintains a deferred
compensation plan for the benefit of the directors and the President and Vice
Presidents of the Bank. Pursuant to the terms of this plan, eligible officers
may elect to defer receipt of up to 100% of their future compensation. Deferred
amounts are credited to a bookkeeping account in the individual's name. Such
accounts are credited quarterly with the investment return which would have
resulted if such amounts had been invested, based on the individual's choice, in
either the Common Stock or the Bank's rate of interest on one year certificates
of deposit. Among the purposes of this plan is to attract and retain directors
and executive officers by permitting them to elect to have Common Stock measure
the appreciation or depreciation of their deferred compensation and to provide
them with a direct equity interest in the Company and thereby strengthen the
connection between the interest of officers and directors and the interest of
the Company's stockholders. See "Executive Compensation -- Selected Benefit
Plans and Arrangements -- Deferred Compensation Plan."
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. William Jennings served as President and Chief Executive Officer of the
Company through December 2000 and as consideration for his serving in that
capacity Mr. Jennings received a base salary of $3,000 annually. Effective
December 13, 2000, Mr. Don Jennings was named President and Chief Executive
Officer of the Company. He also serves as Executive Vice President of the Bank.
In consideration for his service as such, Mr. Jennings receives a base salary of
$60,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee consists entirely of non-employee
directors.
THE COMPENSATION COMMITTEE
Charles A. Cotton, III
William M. Johnson
Frank McGrath
6
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EXECUTIVE COMPENSATION
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SUMMARY COMPENSATION TABLE
The following table sets forth cash and noncash compensation for each of
the last three fiscal years awarded to or earned by (i) the Chief Executive
Officer and (ii) the individual who served as Chief Executive Officer through
December 13, 2000.
LONG-TERM COMPENSATION
-------------------------
AWARDS
ANNUAL COMPENSATION -------------------------
--------------------------------------- RESTRICTED SECURITIES
FISCAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME YEAR SALARY BONUS COMPENSATION(2) AWARD(S) OPTIONS COMPENSATION
---- ---- ------ ----- --------------- ---------- ---------- ------------
Don Jennings (1) 2001 $ 56,250 $ 0 $ 7,200 $ 0 $ 0 $ 0
2000 53,125 0 7,200 0 0 0
1999 50,817 0 7,200 0 0 0
William C. Jennings (1) 2001 $ 3,000 $ 0 $ 6,800 $ 0 $ 0 $ 0
2000 3,000 0 7,200 0 0 0
1999 3,000 0 6,400 0 0 0
<FN>
_______________
(1) Effective December 13, 2000, Mr. Don Jennings was named President and Chief
Executive Officer of the Company. Mr. William C. Jennings, who served as
President through December 13, 2000 now serves as the Company's Chairman.
(2) "Other Annual Compensation" represents directors' fees.
</FN>
OPTION YEAR-END VALUE TABLE
The following table sets forth information concerning the value of options
held by the Company's Chief Executive Officer and former Chief Executive Officer
at June 30, 2001. Neither officer exercised any options during the year.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
-------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
Don Jennings 0/0 0
William C. Jennings 57,636/0 193,081/0
<FN>
_____________
(1) Represents the difference between the fair market value of the underlying
shares of Common Stock at June 30, 2001 and the exercise price ($13.80 per
share, as adjusted).
</FN>
7
PENSION PLAN
The Bank maintains the FIRF Pension Trust (the "Pension Plan") for the
benefit of all employees who are at least 21 years of age and have completed one
year of service. A participant becomes fully vested after six years of service.
The following table illustrates annual pension benefits at age 65 under the
Pension Plan at various levels of compensation and years of service, assuming
100% vesting of benefits. All retirement benefits illustrated in the table below
are without regard to any Social Security benefits to which a participant might
be entitled.
YEARS OF SERVICE
AVERAGE -----------------------------------------------------------------------
COMPENSATION 15 20 25 30 35
------------ ------- -------- -------- -------- --------
$ 20,000 $ 3,750 $ 5,000 $ 6,250 $ 7,500 $ 8,750
40,000 7,500 10,000 12,500 15,000 17,500
60,000 11,250 15,000 18,750 22,500 26,250
80,000 15,000 20,000 25,000 30,000 35,000
100,000 18,750 25,000 31,250 37,500 43,750
Participants in the Pension Plan will receive an annual benefit based on
average salary and years of service at the time of retirement, which is not
subject to offset for social security payments. Average salary for purposes of
determining a participant's benefit consists of salary only, exclusive of
overtime, bonuses and other special payments. At June 30, 2001, Mr. Don Jennings
and Mr. William C. Jennings had 10 and 36 years of credited service,
respectively, under the Pension Plan.
SELECTED BENEFIT PLANS AND ARRANGEMENTS
Deferred Compensation Plan. In 1994, the Bank established the First Federal
Savings Bank of Frankfort Deferred Compensation Plan (the "Deferred Compensation
Plan") for the exclusive benefit of members of the Bank's Board of Directors and
the President and Vice Presidents of the Bank. Pursuant to the terms of the
Deferred Compensation Plan, directors may elect to defer the receipt of all or
part of their future fees, and eligible officers may elect to defer receipt of
their future compensation. Deferred amounts are credited to a bookkeeping
account in the participant's name, which will also be credited quarterly with
the investment return which would have resulted if such deferred amounts had
been invested, based upon the participant's choice in either the Common Stock or
the Bank's highest annual rate of interest on certificates of deposit,
regardless of their term. Participants may cease future deferrals any time. The
Bank contributes to the Deferred Compensation Plan on a quarterly basis.
Employment Agreement with Company President. The Bank has entered into an
employment agreement (the "Employment Agreement") with Don Jennings, President
of the Company and Executive Vice President of the Bank. In such capacity, Mr.
Jennings is responsible for overseeing all operations of the Bank and for
implementing the policies adopted by the Company's Boards of Directors. The
Board believes that the Employment Agreement assures fair treatment of Mr.
Jennings in relation to his career with the Bank by assuring him of some
financial security. The Company has entered into a Guaranty Agreement with Mr.
Jennings whereby the Company agrees that to the extent permitted by law, it will
be jointly and severally liable with the Bank for payment of all amounts due
under the Employment Agreement.
The Employment Agreement became effective June 30, 1999, and provides for a
term of three years, with an annual base salary for Mr. Jennings of $60,000. On
each anniversary date from the date of commencement of Mr. Jennings' Employment
Agreement, the term of his employment will be extended for an additional
one-year period beyond the then-effective expiration date, upon a determination
by the Boards of Directors, who have no personal interest in the Employment
Agreement, that the performance of Mr. Jennings has met the required performance
standards and that such Employment Agreement should be extended. The Employment
Agreement provides Mr. Jennings with a salary review by the Board of Directors
not less often than annually, as well as with inclusion in any discretionary
bonus plans, retirement and medical plans, customary fringe benefits and
vacation and sick leave and reimbursement for reasonable out-of-pocket expenses.
Mr. Jennings' Employment Agreement will terminate upon death or disability, and
is terminable by the Bank for "just cause" as defined in Mr. Jennings'
8
Employment Agreement. In the event of termination for just cause, no severance
benefits are available. If the Bank terminates Mr. Jennings' employment without
just cause, then he will be entitled to a continuation of his salary and
benefits from the date of termination through the remaining term of his
Employment Agreement plus an additional 12-month period. If the Employment
Agreement is terminated due to the Mr. Jennings' "disability" (as defined in the
Employment Agreement), he will be entitled to a continuation of his salary and
benefits for (i) any period during the term of the Employment Agreement and
prior to the establishment of Mr. Jennings' "disability" during which Mr.
Jennings is unable to work, and (ii) any period of "disability" which is prior
to Mr. Jennings' termination of employment. In the event of Mr. Jennings' death
during the term of his Employment Agreement, his estate will be entitled to
receive his salary through the end of the month of his death. Severance benefits
payable to Mr. Jennings (or to his estate) will be paid in a lump sum or in
installments, as he (or his estate) elects. Mr. Jennings is able to voluntarily
terminate his Employment Agreement by providing 90 days' written notice to the
Bank's Board of Directors, in which case he is entitled to receive only his
compensation, vested rights and benefits up to the date of termination.
Mr. Jennings' Employment Agreement contains a provision stating that in the
event of Mr. Jennings' involuntary termination of employment in connection with,
or within one year after, any change in control of the Bank or the Company,
other than for "just cause," Mr. Jennings will be paid within 10 days of such
termination an amount equal to the difference between (i) 2.99 times his "base
amount," as defined in Section 280G(b)(3) of the Internal Revenue Code, and (ii)
the sum of any other parachute payments, as defined under Section 280G(b)(2) of
the Internal Revenue Code, that he receives on account of the change in control.
"Control" generally refers to the acquisition, by any person or entity, of the
ownership or power to vote more than 25% of the Bank's or Company's voting
stock, the control of the election of a majority of the Bank's or the Company's
directors, or the exercise of a controlling influence over the management or
policies of the Bank or the Company. In addition, under Mr. Jennings' Employment
Agreement, a change in control occurs when, during any consecutive two-year
period, directors of the Company or the Bank at the beginning of such period
cease to constitute at least a majority of the Board of Directors of the Company
or the Bank, unless the election of replacement directors was approved by at
least a majority vote of the Continuing Directors, as defined in the Employment
Agreement, then in office. Mr. Jennings' Employment Agreement also provides for
a similar lump sum payment to be made in the event of (a) Mr. Jennings'
voluntary termination of employment within the 30-day period beginning on the
date of a change in control, (b) the Bank or the Company or their successor(s)
in interest terminate Mr. Jennings' employment without his written consent and
for any reason other than just cause during the Protected Period, as defined in
the Employment Agreement, or (c) within 90 days of certain specified events
following the change in control (that occur during the Protected Period), which
have not been consented to in writing by Mr. Jennings, including (i) the
requirement that Mr. Jennings move his personal residence, or perform his
principal executive functions, more than 30 miles from his primary office as of
the later of the Effective Date and the most recent voluntary relocation by Mr.
Jennings; (ii) a material reduction in Mr. Jennings' base compensation under
this Agreement as the same may be increased from time to time; (iii) the failure
by the Bank or the Company to continue to provide Mr. Jennings with compensation
and benefits provided under this Agreement as the same may be increased from
time to time, or with benefits substantially similar to those provided to him
under any of Mr. Jennings' benefit plans in which Mr. Jennings now or hereafter
becomes a participant, or the taking of any action by the Bank or the Company
which would directly or indirectly reduce any of such benefits or deprive Mr.
Jennings of any material fringe benefit enjoyed by him under this Agreement;
(iv) the assignment to Mr. Jennings of duties and responsibilities materially
different from those normally associated with his position; (v) a failure to
reelect Mr. Jennings to the Board of Directors of the Bank or of the Company, if
Mr. Jennings has served on such Board at any time during the term of the
Agreement; or (vi) a material diminution or reduction in Mr. Jennings'
responsibilities or authority (including reporting responsibilities) in
connection with his employment with the Bank. The aggregate payments that would
be made to Mr. Jennings assuming his termination of employment under the
foregoing circumstances at June 30, 2001 would have been approximately $
179,400. This provision may have an anti-takeover effect by making it more
expensive for a potential acquirer to obtain control of the Company. Under the
terms of Mr. Jennings' Employment Agreement, in the event that Mr. Jennings
prevails over the Company and the Bank in a legal dispute as to his Employment
Agreement, he will be reimbursed for his legal and other expenses.
9
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DIRECTORS' COMPENSATION
--------------------------------------------------------------------------------
Fees. The Bank's directors receive fees of $600 per month and $100 per
meeting for certain committee meetings. Directors do not receive separate
compensation for service on the Board of Directors of the Company.
--------------------------------------------------------------------------------
TRANSACTIONS WITH MANAGEMENT
--------------------------------------------------------------------------------
The Bank offers loans to its directors, officers, and employees. These
loans currently are made in the ordinary course of business with the same
collateral, interest rates and underwriting criteria as those of comparable
transactions prevailing at the time and to not involve more than the normal risk
of collectibility or present other unfavorable features.
10
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STOCK PERFORMANCE GRAPH
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The graph and table which follow show the cumulative total return on the
Common Stock for the past five fiscal years compared with the cumulative total
return of (i) the Nasdaq Stock Market Index -- U.S.; and (ii) the Nasdaq Stock
Market Bank Index. Cumulative total return on the stock or the index equals the
total increase in value since June 30, 1996, assuming reinvestment of all
dividends paid on the Common Stock or the index, respectively. The graph and
table were prepared assuming that $100 was invested at the closing price on July
1, 1996 in the Common Stock and in each of the indices. The stockholder returns
shown on the performance graph are not necessarily indicative of the future
performance of the Common Stock or of any particular index.
[Line graph appears here depicting the cumulative total shareholder return
of $100 invested in the Common Stock compared to $100 invested in the Nasdaq
Stock Market Index-U.S. and the Nasdaq Stock Market Bank Index. Line graph
begins at June 30, 1996 and plots the cumulative total return at June 30, 1997,
1998, 1999, 2000 and 2001. Plot points are provided below.]
6/30/96 6/30/97 6/30/98 6/30/99 6/30/00 6/30/01
------- ------- ------- ------- ------- -------
Frankfort First Bancorp, Inc. 100.00 109.29 103.81 106.46 95.07 141.57
Nasdaq Stock Market Index - U.S. 100.00 121.60 160.06 230.22 340.37 184.51
Nasdaq Stock Market Bank Index 100.00 156.28 216.77 214.11 175.56 243.49
11
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AUDIT COMMITTEE REPORT
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The Audit Committee of the Board of Directors is entirely made up of
independent directors as defined in the Nasdaq Stock Exchange listing standards.
It operates pursuant to a charter, which appears in exhibit A.
The Audit Committee has reviewed and discussed the audited financial
statements of the Company with management and has discussed with Grant Thornton
LLP, the Company's independent auditors, the matters required to be discussed
under Statements on Auditing Standards NO. 61 ("SAS 61"). In addition, the Audit
Committee has received from Grant Thornton LLP the written disclosures and the
letter required to be delivered by Grant Thornton LLP under Independence
Standards Board Standard No. 1 ("ISB Standard No. 1") addressing all
relationships between the auditors and the Company that might bear on the
auditors' independence. The Audit Committee has reviewed the materials to be
received from Grant Thornton LLP and has met with representatives of Grant
Thornton LLP to discuss the independence of the auditing firm.
The Audit Committee has reviewed the non-audit services currently provided
by the Company's independent auditor and has considered whether the provision of
such services is compatible with maintaining the independence of the Company's
independent auditors.
Based on the Audit Committee's review of the financial statements, its
discussion with Grant Thornton LLP regarding SAS 61, and the written materials
provided by Grant Thornton LLP under ISB Standard No. 1 and the related
discussion with Grant Thornton LLP of their independence, the Audit Committee
has recommended to the Board of Directors that the audited financial statements
of the Company be included in its Annual Report on Form 10-K for the year ended
June 30, 2001, for filing with the Securities and Exchange Commission.
THE AUDIT COMMITTEE
William M. Johnson (Chairman)
David Eddins
Herman D. Regan, Jr.
--------------------------------------------------------------------------------
RELATIONSHIP WITH INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
Grant Thornton LLP were the Company's independent certified public auditors
for the fiscal year ended June 30, 2001. The Board of Directors presently
intends to renew the Company's arrangement with Grant Thornton LLP to be its
independent certified public auditors for the 2002 fiscal year. A representative
of Grant Thornton LLP is expected to be present at the Meeting to respond to
appropriate questions and to make a statement, if so desired.
--------------------------------------------------------------------------------
AUDIT AND OTHER FEES PAID TO INDEPENDENT ACCOUNTANT
--------------------------------------------------------------------------------
AUDIT FEES
During the fiscal year ended June 30, 2001, the aggregate fees paid for
professional services rendered for the audit of the Company's annual financial
statements and the reviews of the financial statements included in the Company's
Quarterly Reports on Form 10-Q filed during the fiscal year ended June 30, 2001
were $ 30,030.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not engage Grant Thornton LLP to provide advice to the
Company regarding financial information systems design and implementation during
the fiscal year ended June 30, 2001.
12
ALL OTHER FEES
For the fiscal year ended June 30, 2001, the aggregate fees paid by the
Company to Grant Thornton LLP for all other services (other than audit services
and financial information systems design and implementation services) were
$1,550.
--------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
--------------------------------------------------------------------------------
Pursuant to regulations promulgated under the Exchange Act, the Company's
officers, directors and persons who own more than ten percent of the outstanding
Common Stock are required to file reports detailing their ownership and changes
of ownership in such Common Stock, and to furnish the Company with copies of all
such reports. Based solely on its review of the copies of such reports received
during the past fiscal year or with respect to the past fiscal year, the Company
believes that, during the fiscal year ended June 30, 2001, all of its officers,
directors and stockholders owning in excess of 10% of the Company's outstanding
Common Stock complied with these requirements.
--------------------------------------------------------------------------------
OTHER MATTERS
--------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the determination of the Board of Directors.
--------------------------------------------------------------------------------
MISCELLANEOUS
--------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
The Company's Annual Report to Stockholders, including financial
statements, is being mailed to all stockholders of record as of the Record Date.
Any stockholder who has not received a copy of such Annual Report may obtain a
copy by writing to the Secretary of the Company. Such Annual Report is not to be
treated as a part of the proxy solicitation materials or as having been
incorporated herein by reference.
13
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STOCKHOLDER PROPOSALS
--------------------------------------------------------------------------------
In order to be eligible to be considered for inclusion in the Company's
proxy materials for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the Company's
executive office at 216 W. Main Street, Frankfort, Kentucky 40602, no later than
June 14, 2002. Any such proposal shall be subject to the requirements of the
proxy rules adopted under the Exchange Act.
Stockholder proposals, other than those submitted pursuant to the Exchange
Act, must be submitted in writing to the Secretary of the Company at the address
given in the preceding paragraph not less than thirty days nor more than sixty
days prior to the date of any such meeting; provided, however, that if less than
forty days' notice of the meeting is given to stockholders, such written notice
shall be delivered or mailed, as prescribed, to the Secretary of the Company not
later than the close of business on the tenth day following the day on which
notice of the meeting was mailed to stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Danny A. Garland
DANNY A. GARLAND
SECRETARY
Frankfort, Kentucky
October 12, 2001
--------------------------------------------------------------------------------
FORM 10-K
--------------------------------------------------------------------------------
A COPY OF THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 2001
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT
CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE
SECRETARY, FRANKFORT FIRST BANCORP, INC., 216 W. MAIN STREET, FRANKFORT,
KENTUCKY 40602.
--------------------------------------------------------------------------------
14
EXHIBIT A
CHARTER OF THE AUDIT COMMITTEE OF FRANKFORT FIRST BANCORP, INC.
The Board of Directors of Frankfort First Bancorp, Inc. (the "Company") has
determined that the Audit Committee of the Board shall assist the Board in
fulfilling certain oversight responsibilities. The Board hereby adopts this
charter to establish the governing principles of the Audit Committee.
I. Role of the Audit Committee
The role of the Audit Committee is to act on behalf of the Board in fulfilling
the following responsibilities of the Board:
A. To oversee all material aspects of the Company's reporting, control, and
audit functions, except those that are specifically related to the
responsibilities of another committee of the Board;
B. To monitor the independence and performance of the Company's independent
accountants; and
C. To provide a means for open communication among the Company's independent
accountants, management, and the Board.
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
or are in accordance with generally accepted accounting principles. The
responsibility to plan and conduct audits is that of the Company's independent
accountants. The Company's management has the responsibility to determine that
the Company's financial statements are complete and accurate and in accordance
with generally accepted accounting principles. Nor is it the duty of the Audit
Committee to assure the Company's compliance with laws and regulations. The
primary responsibility for these matters also rests with the Company's
management.
II. Composition of the Audit Committee
A. The Board shall designate the members of the Audit Committee at the Board's
annual organizational meeting and the members shall serve until the next such
meeting or until their successors are designated by the Board.
B. The Audit Committee will consist of at least three members who are free of
any relationship, that in the opinion of the Board, would interfere with their
exercise of independent judgment as committee members. Committee members shall
have a basic understanding of finance and accounting and shall be able to read
and understand financial statements. One member of the Committee shall have
accounting or related financial management experience. In addition, the members
of the Audit Committee shall meet the requirements of the Nasdaq Stock Market. A
Company officer may be designated to attend Committee meetings but will have no
voting authority in an ex-officio capacity.
III. Meetings of the Audit Committee
The Audit Committee shall meet at least annually, or more frequently as
circumstances may require. The Chair of the Audit Committee shall be responsible
for meeting with or designating another committee member to meet with the
independent accountants either in person or by telephone at their request to
discuss the interim financial statements.
IV. Responsibilities of the Audit Committee
The Audit Committee shall have the responsibility with respect to:
A. The Company's Risks and Control Environment
A-1
--To discuss with the Company's management and independent accountants the
integrity of the Company's financial reporting processes and controls,
particularly the controls in areas representing significant financial and
business risks;
--To investigate any matter brought to its attention within the scope of its
duties.
B. The Company's Independent Accountants:
--To have a relationship with the independent accountants because of the
ultimate responsibility of the independent accountants to the Board and the
Audit Committee, as representatives of the shareholders;
--To evaluate annually the effectiveness and objectivity of the Company's
independent accountants and recommend to the Board the engagement or replacement
of the independent accountants;
--To ensure that the Audit Committee receives annually from the Company's
independent accountants the information about all of the relationships between
the independent accountants and the Company that the independent accountants are
required to provide to the Audit Committee, to actively engage in a dialogue
with the independent accountants about any relationships between the independent
accountants and the Company or any services that the independent accountants
provide or propose to provide that may impact upon the objectivity and
independence of the independent accountants and to take, or recommend that the
Board take, any appropriate action to oversee the independence of the
independent accountants.
--To review the fees and other compensation paid to the independent accountants.
C. The Company's Financial Reporting Process:
--To oversee the Company's selection of and major changes to its accounting
policies;
--To meet with the Company's independent accountants and financial management
both to discuss the proposed scope of the audit and to discuss the conclusions
of the audit, including any items that the independent accountants are required
by generally accepted auditing standards to discuss with the Audit Committee,
such as any significant changes to the Company's accounting policies, the
integrity of the Company's financial reporting process, and any proposed changes
or improvements in financial, accounting, or auditing practices;
--To discuss with the Company's management and independent accountants the
Company's annual results and, when appropriate, the interim results before they
are made public.
--To review and discuss with the Company's management and independent
accountants the Company's audited financial statements and, when appropriate,
the Company's interim financial statements, before they are made public; and
--To issue for public disclosure by the Company the report required by the rules
of the Securities and Exchange Commission (beginning with the proxy statement
for the Company's 2001 Annual Meeting.)
D. Other Matters
--To review and reassess the adequacy of this charter on an annual basis;
--To report to the Board at its next regularly scheduled meeting the matters
discussed at each meeting of the Audit Committee;
--To keep an open line of communication with management, the independent
accountants, and the Board; and
--To retain, at the Company's expense and with Board approval, special legal,
accounting, or other consultants or experts it deems necessary in the
performance of its duties.
A-2
REVOCABLE PROXY
FRANKFORT FIRST BANCORP, INC.
FRANKFORT, KENTUCKY
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 12, 2001
The undersigned hereby appoints Frank McGrath, Herman D. Regan, Jr., and
William M. Johnson, with full powers of substitution, to act as proxies for the
undersigned, to vote all shares of common stock of Frankfort First Bancorp, Inc.
(the "Company") which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting"), to be held at the main office of First Federal
Savings Bank of Frankfort, 216 West Main Street, Frankfort, Kentucky, on Monday,
November 12, 2001 at 4:30 p.m., local time, and at any and all adjournments
thereof, as follows:
VOTE
FOR WITHHELD
--- --------
I. The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ]
Charles A. Cotton, III
Danny A. Garland
INSTRUCTION: TO WITHHOLD YOUR VOTE
FOR ANY INDIVIDUAL NOMINEE, INSERT THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
______________________________________
The Board of Directors recommends a vote "FOR" the nominees listed above.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED ABOVE. IF ANY
OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE
NAMED IN THIS PROXY IN ACCORDANCE WITH THE DETERMINATION OF THE BOARD OF
DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY ON THE HOLDERS THEREOF TO VOTE WITH RESPECT TO THE ELECTION OF ANY
PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL
NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the Meeting of the stockholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated and of no further
force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy
Statement dated October 12, 2001 and an annual report.
Dated: ________________________, 2001
----------------------------------- -----------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
----------------------------------- -----------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears above. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
--------------------------------------------------------------------------------