SCHEDULE 14A
(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 Commission
Only (as permitted by Rule 14a 6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant toss.240.14a-11(c) orss.240.14a-12
First Kansas Financial Corporation
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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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FIRST KANSAS FINANCIAL CORPORATION
600 MAIN STREET
OSAWATOMIE, KANSAS 66064
March 18, 2003
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of First Kansas
Financial Corporation, I cordially invite you to attend the annual meeting of
stockholders to be held at the Company's offices at 600 Main Street, Osawatomie,
Kansas, on April 15, 2003, at 1:00 p.m. The attached Notice of Annual Meeting
and Proxy Statement describe the formal business to be transacted at the
meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID RETURN
ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you from voting in
person at the meeting, but will assure that your vote is counted if you are
unable to attend.
Sincerely,
/s/Larry V. Bailey
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Larry V. Bailey
President
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FIRST KANSAS FINANCIAL CORPORATION
600 MAIN STREET
OSAWATOMIE, KANSAS 66064
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 15, 2003
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NOTICE IS HEREBY GIVEN that the 2003 Annual Meeting of Stockholders (the
"Meeting") of First Kansas Financial Corporation (the "Company"), will be held
at the Company's offices at 600 Main Street, Osawatomie, Kansas on April 15,
2003, at 1:00 p.m.
The Meeting is for the purpose of considering and acting upon the
following matters:
1. The election of two directors of the Company;
2. The ratification of the appointment of KPMG LLP as the Company's
independent auditor for the fiscal year ending December 31, 2003; and
3. 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. Action may be taken on the election of directors 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. Pursuant to the Company's Bylaws, the
Board of Directors has fixed the close of business on March 10, 2003, as the
record date for determination of the stockholders entitled to vote at the
Meeting and any adjournments thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN, DATE
AND RETURN THE ENCLOSED PROXY WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. ANY SIGNED PROXY GIVEN BY YOU MAY BE REVOKED BY FILING WITH THE
SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A
LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS PROXY AND VOTE
PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU ARE A
STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED
ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE PERSONALLY AT THE
MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Galen E. Graham
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Galen E. Graham
Secretary
Osawatomie, Kansas
March 18, 2003
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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PROXY STATEMENT
OF
FIRST KANSAS FINANCIAL CORPORATION
600 MAIN STREET
OSAWATOMIE, KANSAS 66064
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ANNUAL MEETING OF STOCKHOLDERS
April 15, 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 First Kansas Financial Corporation (the
"Company") to be used at the Annual Meeting of Stockholders of the Company which
will be held at the Company's offices at 600 Main Street, Osawatomie, Kansas on
April 15, 2003, at 1:00 p.m. The accompanying Notice of Annual Meeting of
Stockholders and this proxy statement are being first mailed to stockholders on
or about March 18, 2003. The Company is the parent corporation of First Kansas
Federal Savings Bank (the "Bank").
At the meeting, stockholders will consider and vote upon (i) the
election of two directors and (ii) the ratification of the appointment of KPMG
LLP as the Company's independent auditor for the fiscal year ending December 31,
2003. The Board of Directors knows of no additional matters that will be
presented for consideration at the meeting. Execution of a proxy, however,
confers on the designated proxyholder the discretionary authority to vote the
shares represented by such proxy in accordance with his best judgment on such
other business, if any, that may properly come before the meeting or any
adjournment thereof.
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies may revoke them at any time. Unless so
revoked, the shares represented by 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 above or by the filing of a later dated proxy
prior to a vote being taken on a particular proposal at the meeting. A proxy
will not be voted if a stockholder attends the meeting and votes in person.
Proxies solicited by the Board of Directors will be voted in accordance with the
directions given therein. Where no instructions are indicated, signed proxies
will be voted "FOR" the nominees for director set forth below and "FOR" the
ratification of the appointment of KPMG LLP as the Company's independent auditor
for the fiscal year ending December 31, 2003. 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, matters incident to the conduct of the meeting, and as to any
other matters that may properly come before the meeting or any adjournment
thereof.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on March 10, 2003
(the "Record Date"), are entitled to one vote for each share of common stock of
the Company (the "Common Stock") then held. As of the Record Date, the Company
had 908,245 shares of Common Stock issued and outstanding.
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The Articles of Incorporation of the Company ("Articles of
Incorporation") provide that in no event shall any record owner of any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who beneficially owns in excess of 10% of the then outstanding shares
of Common Stock (the "Limit") be entitled or permitted to any vote with respect
to the shares held in excess of the Limit. Beneficial ownership is determined
pursuant to the definition in the Articles of Incorporation and includes shares
beneficially owned by such person or any of his or her affiliates (as such terms
are defined in the Articles of Incorporation), or which such person or any of
his or her affiliates has the right to acquire upon the exercise of conversion
rights or options and shares as to which such person or any of his or her
affiliates or associates have or share investment or voting power, but neither
any employee stock ownership or similar plan of the Company or any subsidiary,
nor any trustee with respect thereto or any affiliate of such trustee (solely by
reason of such capacity of such trustee), shall be deemed, for purposes of the
Articles of Incorporation, to beneficially own any Common Stock held under any
such plan.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
meeting. For purposes of determining the votes cast with respect to any matter
presented for consideration at the meeting only those votes cast "FOR" or
"AGAINST" are included. Abstentions and broker non-votes (i.e., shares held by
brokers on behalf of their customers, which may not be voted on certain matters
because the brokers have not received specific voting instructions from their
customers with respect to such matters) will be counted solely for the purpose
of determining whether a quorum is present. In the event there are not
sufficient votes for a quorum or to ratify or adopt any proposal at the time of
the meeting, the meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors, the proxy card being provided by the
Board of Directors allows a stockholder to vote for the election of the nominees
proposed by the Board of Directors, or to withhold authority to vote for one or
both of the nominees being proposed. Under the Company's bylaws, directors are
elected by a plurality of votes cast.
Concerning all other matters that may properly come before the meeting,
including ratification of the appointment of auditors, by checking the
appropriate box, a stockholder may: (i) vote "FOR" the item, or (ii) vote
"AGAINST" the item, or (iii) "ABSTAIN" with respect to the item. Unless
otherwise required, such matters shall be determined by a majority of votes cast
affirmatively or negatively without regard to (a) broker non-votes, or (b)
proxies marked "ABSTAIN" as to that matter.
Security Ownership of Certain Beneficial Owners
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 "1934 Act"). The following
table sets forth, as of the Record Date, persons or groups who own more than 5%
of the Common Stock and the ownership of all executive officers and directors of
the Company as a group. Other than as noted below, management knows of no person
or group that owns more than 5% of the outstanding shares of Common Stock at the
Record Date.
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Percent of Shares
Amount and Nature of of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
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First Kansas Federal Savings Bank 122,466 13.48%
Employee Stock Ownership Plan (the "ESOP")
600 Main Street
Osawatomie, Kansas 66064 (1)
Sandler O'Neill Asset Management, LLC 90,000 9.91%
712 Fifth Avenue
New York, New York 10019 (2)
First Manhattan Co. 68,900 7.59%
437 Madison Avenue
New York, NY 10022 (3)
All directors and officers of the Company 201,970 20.2%
as a group (8 persons) (4)
_____________________________________
(1) The ESOP purchased such shares for the exclusive benefit of plan
participants with funds borrowed from the Company. These shares are held in
a suspense account and are allocated among ESOP participants annually on
the basis of compensation as the ESOP debt is repaid. The ESOP Committee
consisting of certain non-employee directors of the Board instructs the
ESOP Trustee regarding investment of ESOP plan assets. The ESOP Trustee
must vote all shares allocated to participant accounts under the ESOP as
directed by participants. Unallocated shares, and shares for which no
timely voting direction is received, are voted by the ESOP Trustee as
directed by the ESOP Committee.
(2) Number of shares is based upon the named entity's confirmation of such
amount, and such information supercedes the ownership information reported
in an amended Schedule 13D filed with the Securities and Exchange
Commission ("SEC"), on July 7, 2000, on behalf of itself, Malta Partners,
L.P., Malta Hedge Fund, L.P., Malta Partners II, L.P., Malta Hedge Fund II,
L.P., Malta Offshore, Ltd, SOAM Holdings, LLC, and Mr. Terry Maltese.
(3) Number of shares is based upon an amended Schedule 13G filed with the
Securities and Exchange Commission ("SEC"), on February 13, 2003, on behalf
of the named entity by Neal K. Stearns, General Partner.
(4) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which shares
the individuals effectively exercise sole voting and investment power,
unless otherwise indicated. Includes 93,235 shares of Common Stock that may
be acquired pursuant to the exercise of options within 60 days of the
Record Date. Excludes 107,453 shares held by the ESOP (122,466 shares less
15,013 shares allocated to executive officers) over which certain
non-employee directors, as trustees to the ESOP, exercise shared voting
power. Excludes 19,280 unvested or unawarded shares of Common Stock held by
the Restricted Stock Plan ("RSP") over which certain directors, as members
of the RSP Committee and as RSP Trustees, exercise voting power. Such
individuals disclaim beneficial ownership with respect to such shares held
by the ESOP and the RSP.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the 1934 Act requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership of the Common Stock, on Forms
3, 4 and 5, with the Securities and Exchange Commission ("SEC") and to provide
copies of those Forms 3, 4 and 5 to the Company. The Company is not aware of any
beneficial owner, as defined under Section 16(a), of more than ten percent of
its Common Stock.
Based upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons that no Forms
5 were required, the Company believes that all Section 16(a) filing requirements
applicable to its officers and directors were complied with during the 2002
fiscal year.
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Articles of Incorporation require that directors be divided into
three classes, each class to be elected for a term of three years or until their
successors are elected or qualified. The Board of Directors currently consists
of six members. The Board of Directors has nominated James E. Breckenridge and
Roger L. Coltrin to serve as directors of the Company, both for a three-year
term.
Directors of the Company are elected by a plurality of the votes cast.
It is intended that proxies solicited by the Board of Directors will, unless
otherwise specified, be voted for the election of the named nominees. If either
of the nominees 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. At this time, the Board of Directors knows of no reason either of the
nominees might be unavailable to serve.
The following table sets forth the nominees and the directors, their
names, ages, the year they first became a director, the expiration date of their
current term as a director of the Company, and the number and percentage of
shares of the Common Stock beneficially owned.
Shares of
Common
Age at Year First Current Stock Percent
December 31, Elected or Term to Beneficially of
Name 2002 Appointed(1) Expire Owned (2)(3) Class
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BOARD NOMINEES FOR TERM TO EXPIRE IN 2006
James E. Breckenridge 55 1977 2003 8,701(4)(5) 1.0%
Roger L. Coltrin 63 1996 2003 37,981(4)(5) 4.2%
DIRECTORS CONTINUING IN OFFICE
J. Darcy Domoney 49 1995 2004 12,721(4)(5) 1.4%
Sherman W. Cole 59 2000 2004 10,701(4)(5) 1.2%
Donald V. Meyer 57 1989 2005 16,701(4)(5) 1.8%
Larry V. Bailey 60 1989 2005 72,708(6) 7.7%
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(1) Refers to the year the individual first became a director of the Bank. All
directors of the Bank as of February 1998 became directors of the Company
when it was incorporated in February 1998.
(2) Beneficial ownership as of the Record Date.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership.
(4) Includes 6,216 shares of Common Stock which may be acquired pursuant to the
exercise of options within 60 days of the Record Date.
(5) Excludes 122,466 shares of Common Stock held by the ESOP over which such
individual, as a member of the ESOP Committee and as an ESOP Trustee,
exercises voting power. Once allocated to participant accounts, such shares
are voted by the ESOP Trustees as directed by the plan participant as the
beneficial owner of such shares. Shares which are unallocated to
participating employees (68,371 shares) and shares for which no voting
directions are received are voted by the ESOP Trustees as directed by the
ESOP Committee. Also excludes 19,280 shares of Common Stock held by the RSP
over which such individual, as a member of the RSP Committee and as an RSP
Trustee, exercises voting power. Such individuals disclaim beneficial
ownership of with respect to ESOP and RSP shares.
(6) Includes 31,077 shares of Common Stock which may be acquired pursuant to
the exercise of options within 60 days of the Record Date.
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The principal occupation of, and other information about, each
director, nominee and executive officer is set forth below as of December 31,
2002. All directors, nominees and executive officers have held their present
positions for five years unless otherwise stated.
James E. Breckenridge has been a director of the Bank since 1977. Since
January 1997, Mr. Breckenridge has been employed by Thorn Industries, an
appliance, electronics and furniture store. Until January 1996, Mr. Breckenridge
was President and majority stockholder of Breck's Inc., a men's clothing store.
Roger L. Coltrin has served the Bank as an advisory director since
1989. In January 1996 he became a voting director. He was elected as Chairman of
the Board in 2000. Mr. Coltrin was a majority stockholder of the Runyan Funeral
Home until 1997, and during 2000 he retired as the manager of such business. He
is a member of the Past Mayors Council, the High School Site Committee and the
local Lions Club. Mr. Coltrin is also a member of the Louisburg Chamber of
Commerce.
J. Darcy Domoney has served the Bank as a director since 1995 and was
Chairman of the Board for three years. Mr. Domoney is a partner in the law firm
of Winkler, Domoney & Schultz. He is a member of the Paola Rotary Club and is on
the Rotary District Youth Exchange Committee.
Sherman W. Cole became a voting director of the Bank in 2000 and, prior
to that, served as an advisory director since 1992. Mr. Cole presently assists
on special projects at the Osawatomie State Hospital where he retired from
full-time employment after 33 years of service. Mr. Cole is a past mayor of
Osawatomie and is active in many civic roles throughout Miami County.
Donald V. Meyer has been a director of the Bank since 1989 and was
Chairman of the Board for four years. He is a dentist with a solo practice in
Paola.
Larry V. Bailey has served the Bank since 1989 as President and Chief
Executive Officer. He is also a member of the Board of Directors. Mr. Bailey has
served as a director of the Osawatomie Chamber of Commerce and was also a
director of the Miami County Economic Development Corporation. Currently, he is
the Treasurer of the local Lions Club, a director of Osawatomie's "Christmas in
October," a director of Greater Osawatomie, Inc. and a director of Miami County
Community Foundation, Inc.
Executive Officers
Daniel G. Droste, age 46, is a Senior Vice President and the Treasurer
of the Bank. He has been employed with the Bank since 1979. Mr. Droste is also
the Treasurer and Scout Master for Boy Scout Troop 100 and a member of the Paola
Sunrise Lions Club. He is also currently the Chairman of the Holy Trinity Church
Building Committee and Co-Chairman of the Holy Trinity Church Development Team.
He has also over the past several years been an active participant in the
"Christmas in October" program.
Galen E. Graham, age 63, has served as an executive officer of the Bank
since 1970. He is a Senior Vice President and the Secretary of the Bank.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
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The Board of Directors conducts its business through meetings of the
Board and through activities of its committees. During the year ended December
31, 2002, the Board of Directors held twelve regular
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meetings and no special meetings. No director attended fewer than 75% of the
total meetings of the Board of Directors and committees on which such director
served during this time period.
During the 2002 fiscal year, Directors Breckenridge, Cole, Coltrin,
Meyer, Bailey and Domoney acted as the Company's nominating committee
("Nominating Committee"), which is a non-standing committee, for selecting the
management nominees for election of directors in accordance with the Company's
Bylaws. In its deliberations, the Nominating Committee considers the candidate's
knowledge of the banking business and involvement in community, business and
civic affairs. While the Board of Directors will consider nominees recommended
by stockholders, it has not actively solicited recommendations from stockholders
for nominees nor, subject to the procedural requirements set forth in the
Articles of Incorporation and Bylaws, established any procedures for this
purpose. The Board of Directors met one time as the Nominating Committee during
the 2002 fiscal year.
The Compensation Committee, a standing committee of the Bank's Board of
Directors, consists of Directors Coltrin (Chairman), Domoney and Breckenridge.
The Compensation Committee meets on call to act on compensation matters and
offer guidance to the Bank's management on compensation matters, and any action
taken by the Compensation Committee must be approved by the Board of Directors.
The Company's Compensation Committee met one time during the fiscal year ended
December 31, 2002. The Bank's Board of Directors met one time during fiscal 2002
to act on compensation matters.
The Audit Committee, a standing committee, is comprised of Directors
Breckenridge (Chairman), Coltrin and Meyer and generally meets on a quarterly
basis. All members of the Audit Committee have been determined by the Board of
Directors to be independent as such term is defined by the rules of the Nasdaq
Stock Market. The Audit Committee annually selects the independent auditors and
meets with the accountants to discuss and review the annual audit. The Audit
Committee is further responsible for internal controls for financial reporting.
The Audit Committee met four times during the fiscal year ended December 31,
2002.
The Board of Directors has reviewed, assessed the adequacy of and
approved a formal written charter for the Audit Committee. The full text of the
Charter of the Audit Committee appeared as an appendix to the proxy statement
for the 2001 annual meeting of stockholders.
Audit Fees. For the year ended December 31, 2002, the Company paid
$38,550 for professional services rendered in connection with the audit of the
annual financial statements and review of the quarterly financial statements and
$16,280 for professional services rendered in connection with tax preparation
services. All audit, tax preparation and review services were performed by
employees of the Company's independent auditor, KPMG LLP ("KPMG"), and no other
services, including financial information systems design and implementation,
were rendered by KPMG during the year ended December 31, 2002.
Report of the Audit Committee. For the fiscal year ended December 31,
2002, the Audit Committee (i) reviewed and discussed the Company's audited
financial statements with management, (ii) discussed with the Company's
independent auditor, KPMG, all matters required to be discussed under Statement
on Auditing Standards No. 61, and (iii) received from KPMG disclosures regarding
KPMG's independence as required by Independence Standards Board Standard No. 1
and discussed with KPMG its independence. Based on the foregoing review and
discussions, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 2002.
Audit Committee:
James E. Breckenridge (Chairman), Roger L .Coltrin and Donald V. Meyer
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DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
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Director Compensation
Each director (including the Chairman of the Board) receives a monthly
fee of $1,000. Total aggregate fees paid to the directors for the year ended
December 31, 2002 were $60,000.
Stock Awards. On February 2, 1999, each non-employee director was
awarded options to purchase 7,769 shares of Common Stock at an exercise price of
$10.75. In addition, on February 2, 1999, each non-employee director was awarded
3,107 shares of restricted Common Stock under the RSP. These awards vest at the
rate of 20% a year, starting one year after the date of the award.
Executive Compensation
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by Larry V. Bailey for the three
years ended December 31, 2002. No other employee earned in excess of $100,000
for the year ended December 31, 2002.
Long Term Compensation
Annual Compensation Awards
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Securities
Restricted Underlying
Name and Fiscal Stock Options/ All Other
Principal Position Year Salary Bonus Award($)(1) SARs(#) Compensation(2)
- ------------------ ---- ------ ----- ----------- ---------- ---------------
Larry V. Bailey 2002 $155,000 $21,000 $ -- -- $78,124
Director, President, 2001 149,100 20,000 -- -- 72,203
and CEO 2000 130,000 20,000 -- -- 69,594
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(1) Mr. Bailey was awarded 15,539 shares of restricted Common Stock in
1999. At December 31, 2002, Mr. Bailey held 6,964 shares of restricted
Common Stock with a market value of $97,983 based on the closing market
price of the Common Stock on December 31, 2002 of $14.07. Dividends are
paid on restricted stock awarded under the RSP. Awards are earned at a
rate of 20% per year beginning one year after the date of the award.
(2) Includes matching contributions of $3,667, $3,500 and $4,260 under the
401(k) Plan for 2002, 2001 and 2000, respectively. For 2002, 2001 and
2000, Mr. Bailey accrued $50,581, $42,400 and $41,730, respectively, in
benefits under the Supplemental Executive Retirement Plan. Also
includes the award of 1,864, 1,814 and 2,248 shares under the ESOP
during 2002, 2001 and 2000, respectively, based upon the closing market
price of the Common Stock on the date of the award.
Employment Agreement. The Bank has entered into an employment agreement
with its President, Larry V. Bailey. Mr. Bailey's current base salary under the
employment agreement is $158,100 which includes fees paid to him as a director.
The employment agreement has a term of three years. The agreement is terminable
by the Bank for "just cause" as defined in the agreement. If the Bank terminates
Mr. Bailey without just cause, he will be entitled to a continuation of his
salary from the date of termination through the remaining term of the agreement
but in no event for a period of less than twenty- four months. The employment
agreement contains a provision stating that in the event of the termination of
employment in connection with any change in control of the Company, Mr. Bailey
will be paid a lump sum amount equal to 2.99 times his five year average annual
taxable cash compensation. If such payment were to be made under the agreement
as of December 31, 2002, it would equal approximately $520,493. The agreement
may be renewed annually by the Bank's Board of Directors upon a determination of
satisfactory performance within the Board's sole discretion. If Mr. Bailey shall
become disabled during the term of the agreement, he shall continue to receive
payment of 100% of the base salary for a period
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of 12 months and 65% of such base salary for the remaining term of such
agreement. Such payments shall be reduced by any other benefit payments made
under other disability programs in effect for the Bank's employees.
Supplemental Executive Retirement Plan. The Bank has a supplemental
executive retirement plan ("SERP") for the benefit of its President, Mr. Bailey.
The SERP will provide Mr. Bailey with a supplemental retirement benefit in
addition to benefits under the Pension Plan and the ESOP. Under the SERP, Mr.
Bailey's retirement pension will be supplemented by the crediting of an
additional 15 years of service. The SERP will provide a retirement benefit equal
to 30% of final average earnings at retirement after age 65, in addition to the
projected benefit of 36% of final average earnings under the Pension Plan
(Pension Plan benefits are calculated based upon 2% times years of service times
Final Average Earnings). Benefits payable under the Pension Plan will be reduced
for retirement prior to age 65 based upon fewer years of service. Additionally,
the SERP will reduce the Pension Plan reduction for retirement prior to age 65
from 3% per year to 2% per year. Payments under the SERP are accrued for
financial reporting purposes during the period of employment. The SERP is
unfunded. All benefits payable under the SERP would be paid from the Bank's
current assets. There are no tax consequences to either the participant or the
Bank related to the SERP prior to payment of benefits. Upon receipt of payment
of benefits, the participant will recognize taxable ordinary income in the
amount of such payments received, and the Bank will be entitled to recognize a
tax-deductible compensation expense at that time.
The following table set forth information concerning options granted
under the Option Plan.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES (1)
Number of
Securities Value of
Underlying Unexercised In-
Unexercised The-Money
Options/SARs at Options/SARs at
FY-End (#)(1)(2) FY-End ($)(1)(3)
---------------- ----------------
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
---- --------------- ------------------ ------------- -------------
Larry V. Bailey -- -- 31,077 / 7,770 $103,179 / $25,796
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(1) No Stock Appreciation Rights (SARs) are authorized under the Option Plan.
(2) Includes options that are exercisable within 60 days of the Voting Record
Date.
(3) Based upon an exercise price of $10.75 per share and the Common Stock's
closing market price of $14.07 as of December 31, 2002. Such options, by
their terms, are first exercisable at a rate of 20% one year following the
date of the award of the option and 20% per year on the anniversary date of
the date of the award thereafter, but in no event shall such option be
exercisable more than ten years after the effective date of award.
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PROPOSAL II - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
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The Board of Directors of the Company has appointed KPMG LLP as the
Company's independent auditor for the fiscal year ending December 31, 2003,
subject to ratification by the Company's stockholders. A representative of KPMG
LLP is expected to be present at the Meeting, will have the opportunity to make
a statement if he so desires, and is expected to be available to respond to
appropriate questions.
-8-
Ratification of the appointment of the independent auditor requires the
affirmative vote of a majority of the votes cast, in person or by proxy, by the
stockholders of the Company at the Meeting. The Board of Directors recommends
that stockholders vote "FOR" the ratification of the appointment of KPMG LLP as
the Company's independent auditor for the 2003 fiscal year.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
Certain Related Transactions
The Bank, like many financial institutions, has followed a policy of
granting various types of loans to officers, directors, and employees. As part
of the employee and director benefit package, full-time and qualified part-time
employees and directors of the Company are eligible for preferential interest
rates on certain adjustable-rate residential mortgage loans and fixed-rate
consumer loans made by the Bank. While such loans are made with a discounted
interest rate based on the greater of the Bank's cost of funds or the Applicable
Federal Rate, they are underwritten in accordance with the Bank's established
underwriting guidelines. All other loans made by the Bank to employees and
directors are on the same terms and conditions as those available to the general
public.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order 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 offices at 600 Main Street, Osawatomie, Kansas 66064, no later than
November 20, 2003. In addition, stockholder proposals must meet other applicable
criteria as set forth in the Company's bylaws in order to be considered for
inclusion in the Company's proxy materials.
Under the Company's bylaws, stockholder proposals that are not included
in the Company's proxy materials for next year's annual meeting, will only be
considered at such meeting if the stockholder submits notice of the proposal to
the Company at the above address by February 15, 2004. In addition, stockholder
proposals must meet other applicable criteria as set forth in the Company's
bylaws in order to be considered at next year's annual meeting.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
meeting other than those matters described 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 judgment of the persons named in the accompanying proxy.
- --------------------------------------------------------------------------------
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.
-9-
The Company's 2002 Annual Report to Stockholders was mailed on March
18, 2003 to all stockholders of record on March 10, 2003. Any stockholder who
has not received a copy of the Annual Report may obtain a copy by writing to the
Secretary of the Company.
- --------------------------------------------------------------------------------
FORM 10-KSB
- --------------------------------------------------------------------------------
A copy of the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2002 will be furnished without charge to stockholders as
of the record date upon written request to the Secretary, First Kansas Financial
Corporation, 600 Main Street, Osawatomie, Kansas 66064.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Galen E. Graham
------------------
Galen E. Graham
Secretary
Osawatomie, Kansas
March 18, 2003
-10-
- --------------------------------------------------------------------------------
FIRST KANSAS FINANCIAL CORPORATION
600 MAIN STREET
OSAWATOMIE, KANSAS 66064
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
April 15, 2003
- --------------------------------------------------------------------------------
The undersigned hereby appoints the Board of Directors of First Kansas
Financial Corporation (the "Company"), or its designee, with full powers of
substitution, to act as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of the Company which the undersigned is entitled to vote
at the 2003 Annual Meeting of Stockholders (the "Meeting"), to be held at 600
Main Street, Osawatomie, Kansas, on April 15, 2003, at 1:00 p.m. and at any and
all adjournments thereof, in the following manner:
FOR WITHHELD
--- --------
1. The election as director of the nominees
listed below for the terms indicated
(except as marked to the contrary below): [ ] [ ]
James E. Breckenridge (3-year term)
Roger L. Coltrin (3-year term)
INSTRUCTIONS: To withhold your vote for any nominee, write the nominee's name on
the line provided below.
-----------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The ratification of the appointment
of KPMG LLP as the Company's
independent auditor for the fiscal
year ending December 31, 2003. |_| |_| |_|
In their discretion, such attorneys and proxies are authorized to vote upon such
other business as may properly come before the Meeting or any adjournments
thereof.
The Board of Directors recommends a vote "FOR" the above listed
nominees and proposal.
- --------------------------------------------------------------------------------
THIS SIGNED PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS SIGNED PROXY WILL BE VOTED FOR THE ABOVE LISTED NOMINEES AND
PROPOSAL. IF ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS SIGNED PROXY
WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT 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 adjournments thereof, and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this Proxy,
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke this Proxy by filing a
subsequently dated Proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this Proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting, a Proxy Statement dated
March 18, 2003 and the 2002 Annual Report to Stockholders.
Dated:
----------------------
- ------------------------------ -------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------ -------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this Proxy. 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.
- --------------------------------------------------------------------------------