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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 to Rule 14a-11(c) or Rule 14a-12
Franklin American Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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APRIL 25, 1997
TO OUR SHAREHOLDERS:
You are cordially invited to attend the 1997 Annual Meeting of the
shareholders of Franklin American Corporation on Thursday, May 22, 1997, at
10:00 AM (Franklin Time), at the First Floor, 377 Riverside Drive, Franklin,
Tennessee. To help us control unauthorized visitors, please bring this letter
with you as evidence of your ownership.
Whether or not you plan to be present, please date, sign, and return
your proxy as soon as possible, so that your vote will be recorded. A
self-addressed envelope is provided.
JOHN A. HACKNEY
Chairman and Chief Executive Officer
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE HOLDERS OF COMMON STOCK:
Notice is hereby given that the Annual Meeting of Shareholders of
Franklin American Corporation (the "Company") will be held on Thursday, May 22,
1997, at 10:00 AM, at the First Floor, 377 Riverside Drive, Franklin, Tennessee,
to consider and take action upon the following business:
1. Election of seven (7) directors;
2. Approval of the selection by the Board of Directors of Leuty & Heath,
CPA'S, as Auditors for the Company's 1997 Fiscal Year; and
3. To consider and act upon amendment to Company's charter to increase
number of authorized shares of common stock from Twenty Million shares
(20,000,000) to Forty Million (40,000,000) shares.
4. Such other business as may properly come before the meeting or any
adjournment thereof.
The Board of Directors has determined that only those persons who were
holders of record of Common Stock of the Company at the close of business on
April 18, 1997, the record date, will be entitled to notice of and to vote at
the meeting and any adjournment thereof.
Dated: April 25, 1997
By Order of the Board of Directors
WADE A. WILLIS
Secretary
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PROXY STATEMENT
Introduction. This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Franklin American
Corporation, a Tennessee corporation (the "Company") to be voted at the Annual
Meeting of Shareholders of the Company to be held on May 22, 1997, at 10:00 AM,
at the First Floor, 377 Riverside Drive, Franklin, Tennessee, and any
adjournment thereof (the "Meeting"), for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. This Proxy Statement and
the enclosed proxy form are first being mailed or given on or about April 25,
1997 to holders of the Company's Common Stock as of April 18, 1997.
The Company's principal executive offices are located at 377 Riverside
Drive, Franklin, Tennessee 37064, and its mailing address is Post Office Box
681389, Franklin, Tennessee 37068-1389.
All shares represented by properly executed proxies received before the
Meeting and not revoked will be voted in accordance with the shareholder's
directions specified on the proxy. Unless the shareholder specifies otherwise on
his proxy, such shares will be voted in accordance with the recommendations of
the Board of Directors by the person named as proxy:
FOR election as directors of the Company the seven nominees for
director, as listed under the caption "ELECTION OF DIRECTORS" herein.
FOR the approval of the selection by the Board of Directors of Leuty
and Heath, CPA'S, as auditors of the Company for fiscal year 1997.
FOR the proposal to amend the Company's charter to increase the number
of authorized shares of common stock from Twenty Million (20,000,000) shares to
Forty Million (40,000,000) shares.
The proxy will also be voted in the discretion of the person acting
thereunder to transact such other business as may properly come before the
Meeting and any adjournment thereof. The persons named as proxies in the
enclosed form of proxy, John A. Hackney and John M. Jordan were selected by the
Board of Directors of the Company.
The proxy form enclosed is for use at the Meeting if a shareholder is
unable to attend or does not desire to vote in person. Any shareholder giving a
proxy has the right to revoke it at any time before the proxy is exercised by
filing with the Secretary of the Company at the address set forth above a
written revocation or a duly executed proxy bearing a later date, or by voting
in person at the Meeting.
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RECORD DATE AND VOTING AT THE MEETING.
The holders of record at the close of business on April 18, 1997, the
record date, of Common Stock of the Company will be entitled to one vote per
share on each matter submitted to the Meeting. At the close of business on the
record date, there were 14,263,746 shares of the Common Stock outstanding. No
other voting securities of the Company were outstanding at the close of business
on the record date. A majority of the total shares issued and outstanding,
whether present in person or represented by proxy, will constitute a quorum for
the transaction of business at the Meeting.
The affirmative vote of a plurality of the total shares represented in
person or by proxy at the Meeting and entitled to vote is required for the
election of directors and the approval of such other matters as may properly
come before the Meeting or any adjournment thereof. Abstentions and broker
non-votes on returned proxies and ballots shall be considered present for
purposes of determining whether a quorum exists but no vote shall be recorded.
Accordingly, abstentions and broker non-votes will have the same effect as
voting against a proposal.
ANNUAL REPORT.
The Company's Annual Report to shareholders for the fiscal year ended
December 31, 1996 is being furnished with this Proxy Statement to the holders of
record of the Company's Common Stock on April 18, 1997.
I. ELECTION OF DIRECTORS
NOMINEES
A Board of Directors having from 3 to 15 members is permitted by the
Bylaws. The seven current directors of the Company have been nominated and have
consented to stand for election to the Company's Board of Directors. All seven
members of the Board of Directors elected at the Meeting will serve for one year
or until their successors are duly elected and qualified.
It is the intention of the persons named in the accompanying form of
proxy to vote for the nominees named below. Management of the Company has no
reason to believe that any of the nominees named below will not stand for
election or serve as a director. In the event any person nominated fails to
stand for election, the proxy shall be voted for the election of such other
person or persons selected by the current Board of Directors as substitute
nominee or nominees.
The Board of Directors has nominated the following persons to serve as
directors of the Company:
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DIRECTOR
NAME AGE POSITION SINCE
- ---- --- -------- -----
John A. Hackney 47 Chairman, President and 1991
Chief Executive Officer
Gary L. Atnip 45 Director 1991
Chief Financial Officer
John T. Bible 71 Director 1985
Judith C. Lowrey 47 Director 1995
Vice President, Treasurer
William T. Patterson 59 Director 1991
Jerry D. Poindexter 50 Director 1996
Vice President
Wade A. Willis 36 Director 1995
Vice President, Secretary
Directors serve for a period of one year or until their successors are
elected and qualified.
John A. Hackney became Chairman, President and Chief Executive Officer
of the Company in October 1991. From October 1990 to October 1991, Mr. Hackney
was a private consultant specializing in the acquisition of financial
institutions. Mr. Hackney served as Vice President of Marketing and Operations
for Security Information Systems, Brentwood, Tennessee, a financial data
processing firm, from March 1988 until October 1990.
Gary L. Atnip became Treasurer and Chief Financial Officer of the
Company in October 1991. Mr. Atnip has been in private practice as a Certified
Public Accountant in Nashville and Columbia, Tennessee, since 1981.
John T. Bible has been the owner of John T. Bible Co., a private real
estate firm in Morristown, Tennessee, since 1979. Mr. Bible served as director
of National Savings Life Insurance Company, Murfreesboro, Tennessee from 1962
until 1982.
Judith C. Lowrey became Treasurer of Franklin American Corporation in
April, 1995 and has served as a Director since September, 1995. Mrs. Lowrey has
been with the Company since 1987.
William T. Patterson has been President of Stockdale-Malin Funeral
Home, Camden, Tennessee, since 1955. Mr. Patterson is a director of the Bank of
Camden, Camden, Tennessee.
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Jerry D. Poindexter joined Franklin American Life Insurance Company in
1993 and has served as a Director since May, 1996.
Wade A. Willis became Secretary in August, 1995 and has served as a
Director since September, 1995. Mr. Willis has been with the Company since
November, 1989.
DESCRIPTION OF THE BOARD AND COMMITTEES.
During 1996, ten (10) meetings were held by the Board of Directors.
During 1996, each director attended at least seventy-five percent (75%) of the
aggregate number of meetings of the Board of Directors and committees of the
Board of Directors (if any) on which he served (for the periods during which he
served).
The Board of Directors has no standing audit or nominating committee.
The Board of Directors has the following standing committees:
EXECUTIVE COMMITTEE, composed of Directors Hackney, Atnip, Lowrey, and
Willis acts on behalf of the Board between meetings and considers general
management problems or matters that affect the Company as a whole. The number of
executive committee meetings held during 1996 was 12.
INVESTMENT COMMITTEE, composed of Directors Hackney and Atnip, performs
functions required by Tennessee insurance law of general supervision, periodic
review, and prior approval, where required, of authorized investments and loans
made by the Company. The number of investment committee meetings held during
1996 was 12.
COMPENSATION COMMITTEE, composed of Directors Atnip and Patterson (Mr.
Patterson is not an employee of the Company), reviews the role of the Chief
Executive Officer and his performance and develops guidelines for compensation
for the executive officers based upon performance and practices in the industry,
including bonus allocations, benefits, stock options, and employment contracts.
The number of compensation committee meetings held during 1996 was two.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors, and persons who beneficially own more than 10% of
a registered class of the Company's equity securities to file reports of
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% beneficial owners are required by regulation of the Securities
and Exchange Commission to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on a review of the Forms 3, 4 and 5 and amendments thereto
and certain written representations furnished to the Company, the Company
believes that during the fiscal year ending December 31, 1996, all filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company has no "parent" as that term is defined in regulations
under the Securities Exchange Act of 1934, as amended, and none of its officers
or directors own any equity securities of any of the Company's subsidiaries.
The following table sets forth information with respect to the
beneficial ownership of the Company's common stock as of January 15, 1997 by (i)
each director of the Company, (ii) each of the executive officers named under
"EXECUTIVE COMPENSATION," (iii) all directors and executive officers of the
Company as a group, and (iv) each person known to the Company to be the
beneficial owner of more than five percent of the outstanding shares of common
stock.
SHARES BENEFICIALLY OWNED
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NAME AND ADDRESS NUMBER (1) PERCENT
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John A. Hackney 11,922,024 (2) 83.6
377 Riverside Drive
Fourth Floor
Franklin, TN 37064
Thunor Trust 11,922,024 83.6
2323 Crestmoor Road
Nashville, TN 37215-2003
Gary L. Atnip 0 -
604 North High St.
Columbia, TN 38401
John T. Bible 302,742 2.1
400 West Main Street
Suite 309A
Morristown, TN 37814
Judith C. Lowrey 0 -
190 Heathersett Drive
Franklin, TN 37064
William T. Patterson 28,155 (4) *
P. O. Box 246
Camden, TN 38320
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Jerry D. Poindexter 0 -
1102 Houchin Drive
Franklin, TN 37064
Wade A. Willis 1,310 -
1100 Bryana Drive
Franklin, Tennessee
SHARES BENEFICIALLY OWNED
NAME AND ADDRESS NUMBER (1) PERCENT
All Directors/Executive 12,254,232 85.9
Officers as a Group (7 persons)
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* Less than 1%.
(1) No beneficial owner listed has the right to acquire within 60 days,
through options, warrants, rights, conversion privileges or similar
obligations, any additional shares of the Company's common stock.
(2) Mr. Hackney, as sole trustee of the Thunor Trust, exercises sole
investment and voting control over the shares of common stock owned by
Thunor Trust.
(3) Includes 25,000 organizational shares held in escrow which cannot be
transferred.
(4) Includes 1,500 shares owned by Mr. Patterson's wife.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PRIVATE PLACEMENTS
On December 6, 1995, the Company issued and sold 1,500,000 shares of
Common Stock to the Thunor Trust, the majority shareholder of the Company, for
$2.00 per share, or an aggregate sales price of $3,000,000 in a private
placement. As a result of this sale the Trust's ownership increased from 80.6%
to 83.6% of the outstanding Common Stock of the Company. Such sales price was
subject to adjustment pursuant to a subsequent determination of the per share
fair market value of the Common Stock. On December 27, 1995, the Company
received the opinion of a financial analyst that the per share market value of
the Common Stock was $2.00 per share.
EXECUTIVE COMPENSATION
The following table sets forth summary information concerning
compensation paid or accrued by or on behalf of the Company's Chief Executive
Officer for fiscal years 1996 and 1995. The Company had no other executive
officer whose total annual salary and bonus exceeded $100,000 for fiscal year
1996.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
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Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restrict-
Annual ed Stock LTIP All Other
Name and Principal Salary Bonus Compen- Award(s) Options/ Payouts Compen-
Position Year ($) ($) sation ($) ($) SARs (#) ($) sation ($)
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John A. Hackney, 1996 120,923 12,000 0 0 0 0 2,200 (a)
CEO
1995 114,615 0 0 0 0 0 4,898 (a)
(a) Dollar value of premiums paid by the Company on a $500,000 term life
insurance policy and a disability insurance policy for the benefit of
Mr. Hackney.
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COMPENSATION OF DIRECTORS
Each member of the Board receives a fee of $200 for each Board meeting
attended. Directors are entitled to receive reimbursement of travel expenses
incurred in attending Board meetings.
III. INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Leuty and Heath, CPA's, Nashville,
Tennessee, as independent auditors of the Company and its subsidiaries for the
current fiscal year. Shareholder approval of the appointment will be asked at
the Meeting. A representative of Leuty and Heath will be present at the Meeting,
will have an opportunity to make a statement if he so desires, and will be
available to respond to appropriate questions.
IV. AMENDMENT OF CHARTER
The Board of Directors and management of the Company recommend that the
Shareholders vote to approve the proposed amendment as it is in the best
interest of the Company and the Stockholders. The Company would like to issue
additional shares of Common Stock in order to fund future acquisitions of other
life insurance companies. Use of the Company's Common Stock to fund acquisitions
would insure that the Company is able to maximize shareholder value when making
acquisitions and will allow it the flexibility to structure transactions using
both cash and Common Stock for the maximum benefit of the Company and its
Shareholders. Any such acquisitions will be subject to approval of the Board of
Directors and a majority of the Shareholders. The Company has no specific
targeted acquisitions at this time. In addition, management of the Company
believes that adding Shareholders through acquisitions will stimulate the
trading of the Company's Common Stock and improve its market value. Existing
Shareholders' rights will not be affected by the increase in shares other than
by possible dilution of their percentage of ownership of the Company's Common
Stock.
The text of the proposed amendment and the Resolution relating to the
Charter amendment to increase the Common Shares of stock to 40,000,000
authorized Shares is attached as Exhibit A to this Proxy Statement and is
incorporated herein by reference.
OTHER MATTERS
Management of the Company does not intend to present any other items of
business and knows of no other business that is likely to be brought before the
Meeting, except those set forth in the Notice of Annual Meeting of Shareholders.
However, if any other matters should properly come before the Meeting, the
person named in the enclosed proxy will have discretionary authority to vote
such proxy in accordance with his best judgment.
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PROPOSAL OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the next Annual
Meeting of Shareholders must be received by the Company at its principal
executive offices (377 Riverside Drive, Franklin, Tennessee 37064) by December
31, 1997 for inclusion in the Company's proxy materials relating to the meeting.
Proposals should be sent by certified mail, return receipt requested.
COST OF SOLICITATION
This solicitation is made on behalf of the Board of Directors. All
costs of such solicitation will be paid by the Company. The Company will also,
pursuant to regulations of the Securities and Exchange Commission, make
arrangements with brokerage houses, custodians, nominees, and other fiduciaries
to send proxies and proxy material to their principals and will reimburse them
for their reasonable expense in doing so.
ANNUAL REPORT ON FORM 10-KSB
To obtain a copy of the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1996, together with financial statements and schedules,
as filed with the Securities and Exchange Commission (available without charge
to shareholders), please write to Wade A. Willis, Franklin American Corporation,
4th Floor, 377 Riverside Drive, Franklin, Tennessee 37064, or call (615)
790-0464.
By Order of the Board of Directors,
Franklin, Tennessee Wade A. Willis, Secretary
April 25, 1997
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EXHIBIT A
RESOLUTION OF THE BOARD OF DIRECTORS
TO AMEND THE CHARTER
RESOLVED, that subject to the approval of the shareholders of Franklin
American Corporation (the "Company"), as set forth below, the Board of Directors
of the Company does hereby:
Propose and set forth that Paragraph 2 of the Charter of said Company
be amended so as to increase the authorized number of shares of Common Stock
from 20,000,000 Common Shares, no par value, to 40,000,000 Common Shares, no par
value as follows:
(2) Company is authorized to issue 40,000,000 Common Shares which
Shares collectively shall have the unlimited voting rights and the right to
receive the net assets of the Company upon dissolution.
RESOLVED FURTHER, that the proposed amendment to the Charter set forth
above shall be deemed approved by the shareholders upon receiving the
affirmative vote of holders of a majority of the issued and outstanding Common
Stock.
RESOLVED FURTHER, that the officers of the Company are hereby
authorized and directed to do all other things and execute and file all
documents, including amendments to the Company's Charter which in their judgment
are deemed to be necessary and proper to carry out the intent of the foregoing
Resolution.
IN WITNESS WHEREOF, FRANKLIN AMERICAN CORPORATION has caused this
Resolution to be signed and acknowledged by the Company's Chairman, Chief
Executive Officer and President, John A. Hackney, and to be attested by the
Company's Vice President and Secretary, Wade A. Willis, this ___ day of March,
1997.
FRANKLIN AMERICAN CORPORATION
By:
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John A. Hackney
President
ATTEST:
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Wade A. Willis
Secretary
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Appendix A
FRANKLIN AMERICAN CORPORATION
377 RIVERSIDE DRIVE
FRANKLIN, TENNESSEE 37064
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 22, 1997
The undersigned hereby appoints JOHN A. HACKNEY and JOHN M. JORDAN, and
each of them, proxies with full power of substitution, to represent and to vote
as set forth herein all the shares of Common Stock held of record by the
undersigned on April 18, 1997, at the Annual Meeting of Shareholders of Franklin
American Corporation to be held at First Floor, 377 Riverside Drive, Franklin,
Tennessee, at 10:00 a.m. local time, on Thursday, May 22, 1997 and any
adjournments thereof.
Management recommends a vote FOR all nominees.
1. Election of Directors:
[ ] FOR all nominees, except as marked below.
[ ] WITHHOLD vote from all nominees
John A. Hackney, Gary L. Atnip, John T. Bible, Judith C. Lowrey,
William T. Patterson, Jerry D. Poindexter, and Wade A. Willis.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write the nominee's name on the space provided below.)
2. Approve the selection by the Board of Directors of Leuty &
Heath, CPA's, as Auditors for the Company's 1997 Fiscal Year.
FOR AGAINST ABSTAIN
3. To amend the Company's charter to increase the number of
authorized shares of common stock from 20 million to 40
million shares.
FOR AGAINST ABSTAIN
4. In their discretion, the proxies are authorized to vote as
described in the proxy statement and upon such other business
as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL
NOMINEES, AND "FOR" THE SELECTION OF ACCOUNTANTS, AND "FOR"
AMENDMENT OF THE COMPANY'S CHARTER TO INCREASE THE SHARES OF
COMMON STOCK FROM 20 MILLION TO 40 MILLION.
Dated: , 1997
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Signature
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Signature if held jointly
Please sign exactly as the name appears on the Stock Certificate. If
stock is held in the name of two or more persons, all must sign. When
signing as attorney, executor, administrator, trustee, or guardian,
please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.