[Insert Company Logo]
October 13, 2003
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") of Frankfort First Bancorp, Inc. (the "Company") to be held at
the main office of First Federal Savings Bank of Frankfort, 216 West Main
Street, Frankfort, Kentucky 40602 on Thursday, November 13, 2003 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 Annual Meeting. During the Annual
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 Annual 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 13, 2003
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
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 40602 at 4:30 p.m., local time, on Thursday, November 13,
2003.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Company; and
2. The transaction of such other matters as may properly come before
the Annual Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before
the Annual Meeting.
Any action may be taken on any one of the foregoing proposals at the Annual
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Annual Meeting may be adjourned. Stockholders
of record at the close of business on September 30, 2003, are the stockholders
entitled to notice of and to vote at the Annual 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 Annual
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
DANNY A. GARLAND
SECRETARY
Frankfort, Kentucky
October 13, 2003
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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 13, 2003
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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
"Annual Meeting") which will be held at the main office of First Federal Savings
Bank of Frankfort, 216 West Main Street, Frankfort, Kentucky 40602 on Thursday,
November 13, 2003, at 4:30 p.m., local time. The accompanying notice of Annual
Meeting and this Proxy Statement are being first mailed to stockholders on or
about October 13, 2003.
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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 Annual 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 Annual Meeting or by attending the Annual 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 Annual 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 Annual 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 30,
2003 (the "Record Date"), are entitled to one vote for each share of Common
Stock then held. As of the Record Date, there were 1,256,540 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 Securities and
Exchange Commission ("SEC") and provide a copy to the Company. 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 of Common Stock 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. 110,700(1) 8.81%
100 E. Pratt Street
Baltimore, Maryland 21202
Dimensional Fund Advisors, Inc. 81,850(2) 6.51%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
William C. Jennings 102,719(3) 7.86%
Chairman of the Board
Joyce H. Jennings
216 West Main Street
Frankfort, Kentucky 40602
Don Jennings 12,440 0.99%
President and Chief
Executive Officer
216 West Main Street
Frankfort, Kentucky 40602
Danny A. Garland 84,252(4) 6.41%
Vice President and Secretary
216 West Main Street
Frankfort, Kentucky 40602
All Executive Officers and 310,264(5) 21.87%
Directors as a Group (11 persons)
- -------------------
(1) This information is based of the Amended Schedule 13G filed on January 31,
2003 by T. Rowe Price Associates, Inc. ("Price Associates"). These
securities are owned by various individual and institutional investors for
whom Price Associates serves as investment adviser with the power to direct
investments and/or sole power to vote the securities. For purposes of the
reporting requirements of the Exchange Act, 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) This information is based on the Schedule 13G filed on February 10, 2003 by
Dimensional Fund Advisors, Inc. ("Dimensional"). For purposes of the
reporting requirements of the Exchange Act, Dimensional is deemed to be a
beneficial owner of such securities; however, Dimensional expressly
disclaims that it is, in fact, the beneficial owner of such securities.
(3) Includes 21,133 shares beneficially owned by Joyce Jennings, 50,126 shares
that William C. Jennings has the right to purchase pursuant to the exercise
of stock options which are exercisable within 60 days of the Record Date
and 31,460 shares beneficially owned by William C. Jennings. Joyce and
William Jennings are married.
(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 the Record Date.
(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 161,981 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 the Record Date.
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 William M. Johnson, Frank McGrath and
Herman D. Regan, Jr., all of whom are currently members of the Board, to each
serve as a director 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 Annual Meeting.
Votes which are not cast at the Annual Meeting, either because of abstentions or
broker non-votes, 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 Annual 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 appointed as director in September 1996, and Mr.
Harrod who was appointed as a director on July 2003, all of the individuals were
initially appointed as a 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 2006
William M. Johnson 67 1984 2003 18,058 1.42%
Frank McGrath 77 1973 2003 18,058 1.42%
Herman D. Regan, Jr. 74 1988 2003 33,058 6.41%
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE ELECTION OF THE ABOVE NOMINEES FOR DIRECTOR.
DIRECTORS CONTINUING IN OFFICE
Charles A. Cotton, III 66 1974 2004 14,926 1.18%
Danny A. Garland 58 1981 2004 84,252 6.41%
David Harrod 44 2003 2005 235 0.02%
William C. Jennings (2) 67 1973 2005 102,719 7.86%
C. Michael Davenport 44 1996 2005 24,747 1.96%
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(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, 12,368, 12,368,
12,368, 57,636, 0, 50,126 and 4,747 shares which may be purchased pursuant
to options which are exercisable within 60 days of September 30, 2003 by
Directors Johnson, McGrath, Regan, Cotton, Garland, Jennings and Davenport,
respectively.
(2) Mr. Jennings is the father of Don Jennings who serves as President of the
Company and Executive Vice President of the Bank.
The principal occupation of each director of the Company and Bank for the
last five years is set forth below.
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 is the retired President of Frankfort Lumber Company. He also
serves as a member of 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.
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
Galileons 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 Past President of the Kentucky
Thrift Foundation. He also serves on the Board of the Kentucky Book Fair, is
President 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 R. HARROD is a certified public accountant and is a principal of
Harrod and Associates, P.S.C., a Frankfort, Kentucky-based accounting firm. Mr.
Harrod graduated from the University of Kentucky in 1981 with a Bachelor's of
Science Degree in accounting. He has (22) twenty-two years experience in public
accounting. He has served or is currently serving as a board member and officer
on the Frankfort-Franklin County Area Chamber of Commerce, and the Franklin
County Industrial Development Authority, and has served on various committees
with the Kentucky Society of CPA's of which he is a member. Mr. Harrod is also a
member of the American Institute of Certified Public Accountants ("AICPA") as
well as a member of the AICPA's Division of CPA Firms.
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.
4
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 no-euthenasia adoption facility. He is currently a
member of the Frankfort Home Builders Association and the Kentucky History
Center Board of Directors 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.
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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 monthly
meetings and hold special meetings as needed. During the fiscal year ended June
30, 2003, the Board of Directors of the Company met 13 times and the Board of
the Bank met 13 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, 2003 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 2003 initially consisted of Directors
William D. Johnson, David Eddins and Herman D. Regan, Jr. Director Johnson
resigned in June, 2003, because director Johnson did not meet the new
independence criteria set forth in Section 10A(m) of the Exchange Act and Rule
10A-3 promulgated thereunder. Director Eddins died on July 4, 2003. The
vacancies on the committee were filled on July 8, 2003 by Directors Charles A.
Cotton, III, C. Michael Davenport and Frank McGrath. Upon his appointment to the
Board on July 29, 2003, David R. Harrod was also appointed to the Audit
Committee. All members of the Audit Committee as of April 25, 2003 are deemed to
be independent within the meaning of Rule 4200(a)(15) of the National
Association of Securities Dealers' listing standards. Additionally, Director
Harrod is an "audit committee financial expert" as defined by the SEC. The Audit
Committee's function is to hire, oversee and resolve disputes with the
independent accounting firm, which prepares and audits reports filed by the
Company with the SEC and other regulatory agencies. The Board of Directors has
adopted a new written charter for the Audit Committee on September 9, 2003,
which is attached hereto as Appendix A. The Audit Committee met four times
during fiscal year 2003.
For fiscal year 2003, the Compensation Committee consisted of nonemployee
Directors Charles A. Cotton, III, William M. Johnson and Frank McGrath. The
Compensation Committee met one time during fiscal year 2003.
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 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 Annual 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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DIRECTORS' COMPENSATION
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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.
5
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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 the Company and Bank's
President and Chief Executive Officer.
Annual Compensation
----------------------------------------
Fiscal Other Annual All Other
Name Year Salary Bonus Compensation(1) Compensation
- ---- ------ -------- ------ --------------- ------------
Don Jennings 2003 $ 80,000 $ 0 $ 7,200 $0
2002 $ 60,000 $ 0 $ 7,200 $0
2001 $ 56,250 $ 0 $ 7,200 $0
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(1) "Other Annual Compensation" represents director's fees.
The President and Chief Executive Officer did not hold any options at June
30, 2003 nor did he exercise any options during the fiscal year.
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 $80,000. 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'
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.
6
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, 2003 would have been approximately $239,200.
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.
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.
Average Years of Service
--------------------------------------------------------------------------
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, 2003, Mr. Don Jennings
had 12 years of credited service under the Pension Plan.
SELECTED BENEFIT PLANS AND ARRANGEMENTS
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 2003.
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.
Junior Officer Recognition Plan. During fiscal 2003, the Company instituted
a plan to reward, recognize, and retain certain officers of the Company and/or
the Bank. The plan is designed for those officers below the senior officer
level. The award is in the form of Company stock. A maximum of 2,000 shares are
awarded to be vested and
8
received over five years. A total of 8,000 shares are allotted to this plan, and
award of 2,000 shares each have been made to R. Clay Hulette, Vice President and
Chief Financial Officer of the Company and the Bank and Teresa Kuhl, Vice
President of the Bank.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
STOCK PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
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, 1998, 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, 1998 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.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Frankfort First Bancorp, Inc., The NASDAQ Stock Market (U.S. Index
And the NASDAQ Bank Index
[STOCK GRAPH OMITTED]
FRANKFORT FIRST BANCORP, INC.
Cumulative Total Return
---------------------------------------------------------------------------
6/98 6/99 6/00 6/01 6/02 6/03
FRANKFORT FIRST BANCORP, INC. 100.00 102.56 91.58 136.38 151.75 199.78
NASDAQ STOCK MARKET (U.S.) 100.00 143.67 212.43 115.46 78.65 87.33
NASDAQ BANK 100.00 98.77 80.98 112.34 125.92 127.79
9
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AUDIT COMMITTEE REPORT
- --------------------------------------------------------------------------------
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.
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.
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-KSB for the year
ended June 30, 2003, for filing with the Securities and Exchange Commission.
THE AUDIT COMMITTEE
-------------------
Charles A. Cotton, III
C. Michael Davenport
David R. Harrod
Frank McGrath
Herman D. Regan, Jr.
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.
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RELATIONSHIP WITH INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
Grant Thornton LLP was the Company's independent certified public auditors
for the fiscal year ended June 30, 2003. The Audit Committee of the Board of
Directors has renewed the Company's arrangement with Grant Thornton LLP to be
independent certified public auditors for the Company for the 2004 fiscal year.
A representative of Grant Thornton LLP is expected to be present at the Annual
Meeting to respond to appropriate questions and to make a statement, if so
desired.
10
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AUDIT AND OTHER FEES PAID TO INDEPENDENT ACCOUNTANT
- --------------------------------------------------------------------------------
AUDIT FEES
During the fiscal year ended June 30, 2003, 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, 2003
were $32,585.
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, 2003.
ALL OTHER FEES
For the fiscal year ended June 30, 2003, 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
$3,675.
The Audit Committee of the Board of Directors has determined that the
"other fees" paid by the Company to Grant Thornton LLP is compatible with
maintaining the accountants' independence.
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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, 2003, 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
Annual 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.
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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
11
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.
- --------------------------------------------------------------------------------
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
July 16, 2004. 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 13, 2003
- --------------------------------------------------------------------------------
FORM 10-KSB
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR ENDED JUNE 30, 2003
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.
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12
APPENDIX A
AUDIT COMMITTEE
CHARTER
The Board of Directors of Frankfort First Bancorp, Inc. (the "Company") has
constituted and established an audit committee (the "Committee") with authority,
responsibility, and specific duties as described in this Audit Committee
Charter.
Committee Mission: The primary responsibility of the Committee is to
oversee the Company's financial reporting process on behalf of the Board of
Directors and report the results of these activities to the Board. Management of
the Company is responsible for preparing the Company's financial statements, and
the independent auditors retained by the Committee are responsible for auditing
those financial statements. The Committee in carrying out its responsibilities
believes its policies and procedures should remain flexible, in order to best
react to overall changing conditions and circumstances. The Committee should
take the appropriate actions to set the overall corporate policy for quality
financial reporting, sound business risk management policies and ethical
behavior.
A. COMPOSITION
The Committee shall consist of three or more directors, each of whom is
"independent" as such term is defined in Section 10A(m)(3) of the Securities
Exchange Act of 1934, as amended (the "Act") and regulations promulgated
thereunder by the Securities and Exchange Commission (the "SEC"), the ("SEC
Regulations "), or whose failure to be "independent" shall fall within one of
the exemptions set forth in the Act and SEC Regulations, and is independent
under the rules of The Nasdaq Stock Market ("Nasdaq") as set forth in the
National Association of Securities Dealers' Manual (the "Manual").
Each director shall be free from any relationship that, in the opinion of
the Board of Directors, as evidenced by its annual selection of such Committee
members, would interfere with the exercise of independent judgment as a
Committee member. Each Committee member shall be able to read and understand
financial statements (including the Company's balance sheet, income statement
and cash flow statement). So long as the Company qualifies as a small business
issuer under the Act and SEC Regulations, it shall not be subject to the
following Nasdaq requirement, but shall use its best efforts to ensure that at
least one Committee member shall have past employment experience in finance or
accounting, requisite professional certification in accounting, or other
comparable experience or background resulting in the individual's financial
sophistication, including having been a chief executive officer, chief financial
officer or other senior officer with financial oversight responsibilities, such
that he or she would fulfill such requirement in the Manual applicable to Nasdaq
listed companies who are not small business issuers.
These requirements are intended to satisfy the Act and the Nasdaq listing
requirements relating to the composition of audit committees, and shall be
construed accordingly.
B. MISSION STATEMENT AND PRINCIPAL FUNCTIONS
The Committee shall have access to all records of the Company and shall
have and may exercise such powers as are appropriate to its purpose. The
Committee shall perform the following functions:
(1) Understand the accounting policies used by the Company for financial
reporting and tax purposes and approve their application; it shall also consider
any significant changes in accounting policies that are proposed by management
or required by regulatory or professional authorities.
(2) Review the Company's audited financial statements and related footnotes
and the "Management's Discussion and Analysis" portion of the annual report on
Form 10-KSB prior to the filing of such report with the SEC.
A-1
(3) Review the Company's unaudited financial statements and related
footnotes and the "Management Discussion and Analysis" portion of the Company's
Form 10-QSB for each interim quarter and instruct management of the Company to
ensure that the independent auditors also review the Company's interim financial
statements before the Company files its quarterly reports on Form 10-QSB with
the SEC.
(4) Study the format and timeliness of financial reports presented to the
public or used internally and, when indicated, recommend changes for appropriate
consideration by management.
(5) Meet and discuss with the Company's legal counsel, as appropriate,
legal matters that may have a significant impact on the Company or its financial
reports.
(6) Ensure that management has been diligent and prudent in establishing
accounting provisions for probable losses or doubtful values and in making
appropriate disclosures of significant financial conditions or events.
(7) Review and reassess the adequacy of this Charter annually.
(8) Discuss generally with management the Company's earnings press
releases.
(9) Be directly responsible for the appointment, compensation, retention
and oversight of the work of the independent auditors employed for the purpose
of preparing or issuing an audit report with respect to the Company or preparing
other audit, review or attest services for the Company; such independent
auditors shall be duly registered with the Public Accounting Oversight Board
following its establishment; and, such independent auditors shall be instructed
to report directly to the Committee.
(10) Approve in advance any non-audit service permitted by the Act,
including tax services, that its independent auditors renders to the Company,
unless such prior approval may be waived because of permitted exceptions under
the Act, including but not limited to the 5% de minimis exception.
(11) To the extent required by applicable regulations, disclose in periodic
reports filed by the Company with the SEC, approval by the Committee of
allowable non-audit services to be performed for the Company by its independent
auditors.
(12) Delegate to one or more members of the Committee the authority to
grant pre-approvals for auditing and allowable non-auditing services, which
decision shall be presented to the full Committee at its next scheduled meeting
for ratification.
(13) Receive a timely report from its independent auditors performing the
audit of the Company, which details: (1) all "critical accounting policies and
practices" to be used in the audit; (2) all alternate presentation and
disclosure of financial information within generally accepted accounting
principles that have been discussed with management officials of the Company,
ramifications of the use of such alternative disclosure and the treatment
preferred by the independent auditors; and (3) other material written
communications between the independent auditors and the management of the
Company, including, but not limited to, any management letter or scheduled or
unadjusted differences.
(14) Meet with management and independent auditors to (a) discuss the scope
of the annual audit, (b) discuss the annual audited financial statements
including disclosures made in "Management's Discussion and Analysis" portion of
the Company's annual report on Form 10-KSB, (c) discuss any significant matter
arising from
A-2
the audit or report as disclosed to the Committee by management or the
independent auditors, (d) review the form of opinion the independent auditors
propose to render with respect to the audited annual financial statements, (e)
discuss significant changes to the Company's auditing and accounting principles,
policies, or procedures proposed by management or the independent auditors, (f)
inquire of the independent auditors of significant risks or exposures, if any,
that have come to the attention of the independent auditors and any difficulties
encountered in conducting the audit, including any restrictions on the scope of
activities or access to requested information and any significant disagreement
with management.
(15) Ensure that the independent auditors submit to the Committee written
disclosures and the letter from the independent auditors required by
Independence Standards Board Standard No. 1 Independence Discussions with Audit
Committees, and discuss with the independent auditors their independence.
(16) Discuss with the independent auditors the matters required to be
discussed by SAS 61 Communication with Audit Committees and SAS 90 Audit
Committee Communications, which include:
(a) methods used to account for significant unusual transactions;
(b) the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance or
consensus;
(c) the process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditor's conclusions
regarding the reasonableness of those estimates;
(d) disagreements with management over the application of accounting
principles, the basis for management's accounting estimates, and the
disclosures in the financial statements; and
(e) information regarding the auditor's judgment about quality, not just
acceptability, of the Company's auditing principles.
(17) Engage independent counsel and other advisers, as the Committee may
determine in its sole discretion to be necessary and appropriate, to carry out
the Committee's duties.
(18) Be provided with appropriate funding by the Company, as determined by
the Committee, for payment of:
(a) compensation to any independent auditors engaged for the purpose of
preparing or issuing an audit report or performing other audit, review
or attest services for the Company;
(b) compensation to any advisers employed by the audit committee under
Section 17 above; and
(c) ordinary administrative expenses of the audit committee that are
necessary or appropriate in carrying out its duties.
(19) Obtain from the independent auditors, at least annually, a formal
written statement delineating all relationships between the independent auditors
and the Company, and at least annually discuss with the independent auditors any
relationship or services which may impact the independent auditors' objectivity
or independence, and take appropriate actions to ensure such independence.
(20) Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls or auditing matters.
(21) Review management's assessment of the effectiveness of internal
control over financial reporting and the attestation report submitted by the
independent auditors to ensure that appropriate suggestions for improvement are
promptly considered with respect to the Company's internal control over
financial reporting.
(22) Establish procedures for the confidential, anonymous submission by
employees of the Company of concerns regarding questionable accounting or
auditing matters.
A-3
(23) Have the authority to investigate allegations of managerial misconduct
by its executives or any other matters related to the financial operations of
the Company.
C. MEETINGS
Meetings of the Committee will be held at least quarterly and such other
times as shall be required by the Chairman of the Board, or by a majority of the
members of the Committee. All meetings of the Committee shall be held pursuant
to the Bylaws of the Company with regard to notice and waiver thereof. The
Chairman of the Audit Committee shall be responsible for meeting with or
designating another Committee member to meet with the Company's independent
auditors either in person or by telephone at their request to discuss their
interim financial statements. Written minutes pertaining to each meeting shall
be filed with the Company's Secretary and an oral report shall be presented by
the Committee at each Board meeting.
At the invitation of the Chairman of the Committee, the meetings shall be
attended by the President and Chief Executive Officer, the Chief Financial and
Accounting Officer, the representatives of the independent auditors, and such
other persons whose attendance is appropriate to the matters under
consideration.
Approved by Committee and the Board of the Company on September 9, 2003.
A-4
REVOCABLE PROXY
FRANKFORT FIRST BANCORP, INC.
FRANKFORT, KENTUCKY
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 13, 2003
The undersigned hereby appoints C. Michael Davenport and William C.
Jennings, 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 40602 on
Thursday, November 13, 2003 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).
William M. Johnson
Frank McGrath
Herman D. Regan, Jr.
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" each of the nominees
listed above.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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 13, 2003 and an annual report.
Dated: , 2003
------------------------
- ----------------------------- ------------------------------------
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.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------