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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.
FIRST FRANKLIN 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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FIRST FRANKLIN CORPORATION
4750 ASHWOOD DRIVE
CINCINNATI, OHIO 45241
(513) 469-5352
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 23, 2001
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of First Franklin Corporation (the "Company"), the holding company
for The Franklin Savings and Loan Company ("Franklin"), will be held at the
corporate office of the Company located at 4750 Ashwood Drive, Cincinnati, Ohio
45241 on April 23, 2001, at 3:00 p.m.
The Meeting is for the purpose of considering and acting upon:
1. The reelection of two directors of the Company;
2. The ratification of the selection of Clark, Schaefer,
Hackett & Co. as the independent accountants of the Company
for the current fiscal year; 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. Any action may be taken on the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which the
Meeting may be adjourned.
Stockholders of record at the close of business on March 7, 2001, are
the stockholders entitled to vote at the Meeting and any adjournments thereof. A
Proxy Card and a Proxy Statement for the Meeting are enclosed. Please fill in
and sign the enclosed Proxy Card, which is solicited on behalf of the Board of
Directors, and mail it promptly in the enclosed envelope. The Proxy Card will
not be used if you submit a later-dated proxy or written revocation to the
Company before the commencement of voting at the Meeting or if you attend and
vote at the Meeting in person.
Cincinnati, Ohio By Order of the Board of Directors
March 23, 2001
Thomas H. Siemers
President and Chief Executive Officer
================================================================================
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
================================================================================
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FIRST FRANKLIN CORPORATION
4750 ASHWOOD DRIVE
CINCINNATI, OHIO 45241
(513) 469-5352
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 2001
This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of First Franklin Corporation (the
"Company") of proxies to be used at the Annual Meeting of Stockholders of the
Company (the "Meeting"), which will be held at the corporate office of the
Company located at 4750 Ashwood Drive, Cincinnati, Ohio 45241, on April 23,
2001, at 3:00 p.m., and at all adjournments of the Meeting. The accompanying
Notice of Annual Meeting of Stockholders and this Proxy Statement are first
being mailed to stockholders on or about March 23, 2001.
Stockholders who execute proxies retain the right to revoke them at any
time prior to the votes being taken at the Meeting. Unless so revoked, the
shares represented by such proxies will be voted at the Meeting and all
adjournments thereof. Proxies may be revoked by the filing of a later-dated
proxy or written revocation prior to a vote being taken on a particular proposal
at the Meeting or by attending the Meeting and voting in person. Proxies
solicited on behalf of the Board of Directors of the Company will be voted in
accordance with the directions given therein and, in the absence of specific
instructions to the contrary, will be voted:
FOR the reelection of James E. Hoff, S.J. and Thomas H. Siemers as
directors of the Company for terms expiring in 2004; and
FOR the ratification of the selection of Clark, Schaefer, Hackett
& Co. ("Clark Schaefer") as the independent accountants of the
Company for the current fiscal year.
A majority of the shares of the Company's issued and outstanding common
stock (the "Common Stock"), present in person or represented by proxy at the
Meeting, shall constitute a quorum for purposes of the Meeting. Abstentions and
broker Non-votes (defined below) are counted for purposes of determining a
quorum.
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VOTE REQUIRED
Directors shall be elected by a plurality of the shares present in
person or by proxy at the Meeting and validly voted in the election of
directors. Shares as to which the authority to vote is withheld and shares held
by a nominee for a beneficial owner which are present in person or by proxy but
are not voted with respect to the election of directors ("Non-votes") are not
counted toward the election of directors. If the enclosed Proxy is signed, dated
and returned by the stockholder but no vote is specified thereon, the shares
held by such stockholder will be voted FOR the reelection of Fr. Hoff and Mr.
Siemers.
The affirmative vote of the holders of a majority of the shares present
in person or by proxy at the Meeting is necessary to ratify the selection of
Clark Schaefer as the independent accountants of the Company for the current
fiscal year. The effect of an abstention or a Non-vote is the same as a vote
against ratification. If the enclosed Proxy is signed and dated by the
stockholder, but no vote is specified thereon, the shares held by such
stockholder will be voted FOR the ratification of the selection of Clark
Schaefer as independent accountants.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on March 7, 2001,
will be entitled to one vote for each share then held. As of that date, the
Company had 1,613,873 shares of Common Stock issued and outstanding.
The following table sets forth, as of March 7, 2001, share ownership
information regarding (i) those persons or entities who were known by management
to own beneficially more than five percent of the outstanding shares of Common
Stock; and (ii) all directors and executive officers of the Company and its most
significant subsidiary, The Franklin Savings and Loan Company ("Franklin"), as a
group.
Shares Beneficially Percent of
Name and Address of Beneficial Owner Owned Class
- ------------------------------------ ----- -----
Thomas H. Siemers(1) 322,230 19.79%
First Franklin Corporation
4750 Ashwood Drive
Cincinnati, Ohio 45241
Franklin Savings & Loan Company Employee Stock Ownership Plan (2) 162,433 10.06
4750 Ashwood Drive
Cincinnati, Ohio 45241
All directors and executive officers of Franklin 565,415 34.20
and the Company as a group (10 persons) (3)
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(Footnotes on next page.)
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(1) Mr. Siemers has sole voting power with respect to 113,416 shares which he
owns directly, 14,625 shares subject to options that he holds and 44,156
shares allocated to his Employee Stock Ownership Plan ("ESOP") account. Mr.
Siemers has shared voting power with respect to 31,756 shares held by Mr.
Siemers' spouse and 1,000 unallocated ESOP shares for which the ESOP grants
the power to vote to the ESOP administrative committee of which Mr. Siemers
is a member. Mr. Siemers has sole dispositive power with respect to the
113,416 shares he owns directly and the 14,625 shares subject to options.
Mr. Siemers has shared dispositive power with respect to the 31,756 shares
held by his spouse and the 162,433 shares owned by the ESOP. Shares owned
by the ESOP are counted only once in calculating the total number of shares
held by Mr. Siemers and the directors and executive officers as a group.
(2) All shares held by the ESOP are also included as shares beneficially owned
by Mr. Siemers as trustee of the ESOP.
(3) Includes shares held directly, shares allocated to executive officers'
accounts in the ESOP, shares subject to options and shares held by
controlled corporations or certain family members, over which shares the
specified individuals or group effectively exercise sole or shared voting
and investment power. Such amount also includes the shares that may be
deemed to be beneficially owned by Mr. Siemers, as trustee of the ESOP of
Franklin. Share information for each director of the Company is included
under "Election of Directors."
The following table sets forth, as of March 7, 2001, share ownership information
for each director of the Company and for each individual named in the Summary
Compensation Table.
Shares Beneficially Percent of
Name and Address of Beneficial Owner (1) Owned (2) Class
- ---------------------------------------- --------- -----
James E. Cross 33,768 (3) 2.09%
Richard H. Finan 79,674 (4) 4.93
James E. Hoff, S.J. -- --
John L. Nolting 3,750 (5) .23
Thomas H. Siemers 322,230 (6) 19.79
Daniel T. Voelpel 52,359 (7) 3.23
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(1) Each of the persons listed in this table may be contacted at the address of
the Company, 4750 Ashwood Drive, Cincinnati, Ohio 45241.
(2) Unless otherwise indicated by footnote, the individual has sole voting and
dispositive power with respect to all shares reported as owned.
(3) Includes 2,250 shares that may be acquired upon the exercise of stock
options.
(4) Includes 2,250 shares that may be acquired upon the exercise of stock
options. Mr. Finan has shared voting and dispositive power over 75,000
shares.
(5) Includes 2,250 shares that may be acquired upon the exercise of stock
options and 1,500 shares owned by DataTech Services, Inc. of which Mr.
Nolting is President and Chief Executive Officer.
(Footnotes continued on next page.)
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(6) Mr. Siemers has sole voting power with respect to 113,416 shares which he
owns directly, 14,625 shares subject to options that he holds and 44,156
shares allocated to his Employee Stock Ownership Plan ("ESOP") account. Mr.
Siemers has shared voting power with respect to 31,756 shares held by Mr.
Siemers' spouse and 1,000 unallocated ESOP shares for which the ESOP grants
the power to vote to the ESOP administrative committee of which Mr. Siemers
is a member. Mr. Siemers has sole dispositive power with respect to the
113,416 shares he owns directly and the 14,625 shares subject to options.
Mr. Siemers has shared dispositive power with respect to the 31,756 shares
held by his spouse and the 162,433 shares owned by the ESOP. Shares owned
by the ESOP are counted only once in calculating the total number of shares
held by Mr. Siemers and the directors and executive officers as a group.
(7) Includes 6,750 shares that may be acquired upon the exercise of stock
options and 23,271 shares allocated to Mr. Voelpel's ESOP account. Mr.
Voelpel shares voting and dispositive power over 18,300 shares he jointly
owns with his spouse and shares voting power over 1,050 shares owned by his
son.
ELECTION OF DIRECTORS
The Board of Directors is currently composed of five members. Directors
are elected to serve for three-year terms or until their respective successors
are elected and qualified. Approximately one-third of the Board of Directors of
the Company is elected annually.
The full Board of Directors acts as a nominating committee for the
annual selection of its nominees as directors. While the nominating committee
and the Board of Directors will consider nominees recommended by others, it has
not actively solicited nominations or established any procedures for this
purpose.
The following table sets forth certain information regarding the
composition of the Company's Board of Directors, including terms of office. The
proxies solicited on behalf of the Board of Directors (other than proxies in
which the vote is withheld as to a nominee) will be voted at the Meeting for the
reelection of the nominees indicated below. If any of the nominees are 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 why the nominees might be unable
to serve if elected. Except as disclosed herein, there are no arrangements or
understandings between the nominees and any other person pursuant to which the
nominees were selected.
Positions held with Year first
the Company elected director of Term to
Name Age (1) and Franklin the Company/Franklin expire
- ---- --- ------------ -------------------- ------
NOMINEES
--------
James E. Hoff, S.J. 68 Director 1993/1993 2004
Thomas H. Siemers 67 President, Chief Executive 1987/1953 2004
Officer and Director
DIRECTORS REMAINING IN OFFICE
-----------------------------
John L. Nolting 68 Director 1987/1981 2002
James E. Cross 65 Director 1996/1978 2003
Richard H. Finan 66 Director 1987/1968 2003
- -----------------------------
(1) As of March 7, 2001.
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The business experience of each director during the last five years is
as follows:
JAMES E. HOFF, S.J., is Chancellor of Xavier University in Cincinnati,
Ohio. He recently retired as President of Xavier, a position he held from 1991
until December 31, 2000. Prior to his arrival at Xavier, Fr. Hoff was President
of the Creighton Foundation and Vice President of University Relations at
Creighton University.
THOMAS H. SIEMERS has been employed by Franklin since 1949, has been a
director of Franklin since 1953, and has served as President and Chief Executive
Officer since 1968. Mr. Siemers served as a director of the Federal Home Loan
Bank of Cincinnati from 1978 to 1983, as the Chairman of the Ohio Savings and
Loan League in 1981 and 1982 and on the Executive Committee of the U.S. League
of Savings Institutions from 1982 to 1985.
JOHN L. NOLTING has been the President and Chief Executive Officer of
DataTech Services, Inc., a computer service company located in Cincinnati, since
1974. He also is a Vice President of N-Soft of North America, a developer of
software tools for the telecommunication industry and serves as the President
and Chief Executive Officer of Queen City Leasing, an automobile leasing company
located in Cincinnati, and a Director and the President of DirectTeller Systems,
Inc.
JAMES E. CROSS is a partner in the Dayton, Ohio law firm of Allbery
Cross Fogarty and has practiced with that firm since 1985. He was a member of
the Board of Directors of Central Savings in Dayton, Ohio when it merged with
Franklin in 1978, and has served as a director of Franklin since then.
RICHARD H. FINAN is the President of the Ohio State Senate. He has been
a member of the Ohio legislature since 1973 and has had a legal practice since
1959. Mr. Finan also serves as legal counsel for Madison Service Corporation,
Franklin's wholly-owned subsidiary, and DirectTeller Systems, Inc., a joint
venture between the Company and DataTech Services, Inc. Mr. Finan is also a
director of Summit Mutual Funds, Inc., a company that has a class of securities
registered under Section 12 of the Securities Exchange Act of 1934 (the
"Exchange Act").
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
Regular meetings of the Company's Board of Directors are held
quarterly. During the year ended December 31, 2000, the Company's Board of
Directors held a total of five regular and special meetings. All incumbent
directors of the Company attended at least 75% of the total meetings of the
Company's Board of Directors and meetings held by all committees of the
Company's Board of Directors on which such director served during this period.
The Company has an Audit Committee, which is composed of the four
outside directors. The Audit Committee met once during 2000. For a description
of the duties of the Audit Committee, see "AUDIT COMMITTEE REPORT." The Company
has no standing compensation or nominating committees.
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The full Board of Directors acts as the nominating committee for the
annual selection of its nominees for the election of directors. During 2000, the
Board of Directors met once acting as a nominating committee.
The Board of Directors of Franklin, the principal subsidiary of the
Company, consists of the five directors of the Company, Donald E. Newberry, Sr.,
and Mary W. Sullivan. Regular meetings of Franklin's Board of Directors are
generally held on a monthly basis. Franklin's Board of Directors held a total of
eighteen regular and special meetings during 2000. All directors attended at
least 75% of the total meetings of Franklin's Board of Directors and meetings
held by all committees of Franklin's Board of Directors on which such director
served, except Mr. Nolting and Fr. Hoff. The Board of Directors of Franklin has
standing Executive and Compensation Committees.
The Executive Committee consists of the President and three other
members of Franklin's Board of Directors. Each board member, other than the
President, serves for a total of six months during the year on a rotating basis.
This committee met on a weekly basis during 2000 and will meet as necessary,
normally once between regular board meetings, during 2001. The committee
exercises the power of Franklin's Board of Directors and all of its actions are
reviewed and ratified by Franklin's full Board of Directors. This committee met
40 times during 2000.
Franklin's Compensation Committee reviews and makes recommendations to
Franklin's Board of Directors with respect to executive compensation and other
benefit programs. The Compensation Committee is comprised of Messrs. Siemers,
Finan and Nolting. This committee held one meeting during 2000.
COMPENSATION OF THE BOARD OF DIRECTORS
During 2000, director's fees paid by the Company and Franklin were
$1,250 for each meeting of the Board of Directors of the Company and Franklin
held during the year. Fees paid to a director by Franklin do not exceed $16,250
per year. Mr. Siemers does not receive director's fees from Franklin. No fees
are currently paid by the Company or Franklin for committee membership.
EXECUTIVE OFFICERS
The following information as to the business experience during the past
five years is supplied with respect to executive officers of the Company and
Franklin who do not serve on the Company's Board of Directors. Each officer is
elected annually to serve until his or her successor shall have been elected and
qualified, or until he or she shall resign or be removed by the Board of
Directors. There are no arrangements or understandings between the persons named
and any other person pursuant to which such officers were selected.
DAVID E. HAERR, age 68, joined Franklin in May 1998 as Vice President
and Chief Lending Officer. Prior to joining Franklin, Mr. Haerr served as Senior
Vice President of lending at Merchants Bank and Trust Company in West Harrison,
Indiana. Mr. Haerr has also held lending positions at Fifth Third Bank and
Provident Bank in Cincinnati.
GRETCHEN J. SCHMIDT, age 44, has been the Corporate Secretary/Treasurer
of the Company since 1988. She also serves as Vice President of Operations and
Secretary of Franklin. Ms. Schmidt held a
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variety of part-time positions with Franklin between 1971 and 1978, and
full-time positions since 1978. Currently, she is responsible for branch
operations and general corporate administration. Ms. Schmidt is the daughter of
President Siemers.
DANIEL T. VOELPEL, age 52, has been Vice President/Chief Financial
Officer of the Company since 1988. He also serves as Vice President/Chief
Financial Officer of Franklin and Treasurer of DirectTeller Systems, Inc., and
Franklin's subsidiary, Madison Service Corporation. He has been with Franklin
since 1983.
EXECUTIVE COMPENSATION
The Company currently does not pay any compensation to its executive
officers. The following table shows the compensation paid or granted by Franklin
and its subsidiaries for services rendered during the periods indicated to each
executive officer whose annual compensation exceeded $100,000 during the fiscal
year.
Summary Compensation Table
-------------------------------------------------------
Annual Compensation Long Term Compensation
Awards
- ---------------------------------------------------------------------------------------------------------------------------
Name and Principal Position Year Salary ($) Securities Underlying All Other Compensation
Options/SARs (#)(1) (2)(3)
- ---------------------------------------------------------------------------------------------------------------------------
THOMAS H. SIEMERS President, 2000 $222,945 9,750 $28,842
Chief Executive Officer and 1999 221,392 4,875 27,390
Director of the Company and 1998 222,683 4,875 30,000
Franklin
DANIEL T. VOELPEL 2000 $116,487 4,500 $20,632
Vice President and Chief 1999 115,755 2,250 19,986
Financial Officer of the 1998 112,325 2,250 22,374
Company and Franklin
- --------------------
(1) Represents the number of shares of Common Stock underlying options granted
to Messrs. Siemers and Voelpel pursuant to the First Franklin Corporation
1997 Stock Option and Incentive Plan. During 2000, the Company failed to
achieve its 2000 performance goals and the options granted in 1999 were
reduced by 50%.
(2) For Mr. Siemers, consists of contributions to the Company's defined
contribution plan in the amounts of $17,000, $16,000 and $15,408 for 2000,
1999 and 1998, respectively, and the $11,842, $11,390 and $14,592 value of
the allocations to his ESOP account for 2000, 1999 and 1998, respectively.
(3) For Mr. Voelpel, consists of contributions to the Company's defined
contribution plan in the amounts of $12,161, $11,675 and $11,702, for 2000,
1999 and 1998, respectively, and the $8,471, $8,311 and $10,672 value of
the allocations to his ESOP account for 2000, 1999 and 1998, respectively.
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STOCK OPTIONS
The following table sets forth information regarding all grants of
options to purchase common shares of the Company made to individuals named in
the Summary Compensation Table during 2000:
Individual Grants
---------------------------------------------------------------------------------------------------
% of Total Options/
Number of Securities Underlying SARs Granted to Exercise or Expiration
Name Options/SARs Granted (#)(1) Employees in Fiscal Year Base Price ($/share) Date
- ---- --------------------------- ------------------------ -------------------- ----
Thomas H. Siemers 9,750 15.71% $8.53 03/01/06
Daniel T. Voelpel 4,500 7.25 $7.75 03/01/11
- ----------------------------
(1) Each option was granted on December 22, 2000, and is first exercisable with
respect to one-third of the shares subject to the option on each of January
20, 2002, 2003 and 2004, provided that both the option recipient and the
Company achieve specified performance goals in 2001. If the recipient
achieves his 2001 performance goals and the Company fails to achieve its
2001 performance goals, the recipient may exercise only 50% of his
allocated options. If the recipient fails to achieve his 2001 performance
goals, no options will be exercisable. The options are intended to qualify
as incentive stock options.
The following table sets forth information regarding the number and
value of unexercised options held by the individuals named in the Summary
Compensation Table at December 31, 2000:
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Values
-------------------------------------------------------------------------------------------------------
Value of Unexercised In-the-
Shares Number of Securities Underlying Money Options/SARs at
Acquired on Value Unexercised Options/SARs at 12/31/00 12/31/00 ($)(1)
Name Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------ -------- ------------------------- -------------------------
Thomas H. Siemers -0- N/A 8,125/21,125 $0/$0
Daniel T. Voelpel -0- N/A 3,750/9,750 $0/$1,688
- ----------------------------
(1) An option is "in-the-money" if the fair market value of the underlying
stock exceeds the exercise price of the option. The figure represents the
value of such options, determined by multiplying the number of shares
subject to unexercised options by the difference between the exercise price
and the fair market value of a share of the Company's stock on December 31,
2000, of $8.125 per share.
EMPLOYMENT CONTRACT
On October 23, 2000, the Board of Directors of Franklin approved a
three-year employment agreement with Mr. Siemers. The agreement provides for a
salary and performance review by the Board of Directors not less often than
annually. After such a review and prior to the expiration of each year of the
agreement, the Board of Directors may extend the agreement for periods of one
year each. The agreement provides for inclusion of Mr. Siemers in any formally
established employee benefit, bonus, pension and profit-sharing plans for which
senior management personnel are eligible and for vacation and sick leave.
The agreement is terminable by Franklin at any time. In the event of
termination by Franklin for "just cause," as defined in the agreement, Mr.
Siemers will have no right to receive any compensation or other benefits for any
period following such termination. In the event of a termination other than for
"just cause" and not in connection with a "change of control", as defined in the
agreement, Mr. Siemers will be entitled to payment of an amount equal to the his
annual salary for 36 months plus benefits. The agreement
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further provides that in the event of a termination without just cause in
connection with or within one year of a "change of control," Mr. Siemers will be
entitled to payment of an amount equal to three times his annual salary. The
amount which would be payable to Mr. Siemers in the event of a "change of
control," based upon his salary as of December 31, 2000, is $668,835.
TRANSACTIONS WITH MANAGEMENT AND INDEBTEDNESS OF MANAGEMENT
Franklin, like many financial institutions, has followed a policy of
granting to its officers, directors and employees loans for the financing and
improvement of their personal residences and consumer loans for other purposes.
Except as set forth below, such loans are made in the ordinary course of
business and are made on substantially the same terms and collateral as those of
comparable transactions prevailing at the time and do not involve more than the
normal risk of collectibility or present other unfavorable features. Currently,
for loans to the employees, directors and officers of the Company or Franklin
and their family members, interest rates are generally set at 1% over Franklin's
cost of funds, subject to adjustment to market rates in the event that
employment is terminated. If the employment relationship is terminated, the rate
will revert to the contract rate and the modification will be canceled. Loan
fees on mortgage loans are generally waived except to the extent of direct loan
origination expenses incurred by Franklin. Other loans are reviewed on an
individual basis and any preferential treatment given is based on the employee's
length of service, work performance and past credit history.
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Set forth below is certain information at December 31, 2000, as to all
loans made by Franklin to each of its or the Company's current directors or
executive officers which were granted at less than market rates and which for
any one individual resulted in an aggregate indebtedness to Franklin exceeding
$60,000 at any time since January 1, 1999:
Largest amount Balance as of Market interest rate
Nature of outstanding since December 31, Current interest at the time of
Name Date of loan indebtedness January 1, 1999 2000 rate origination
---- ------------ ------------ --------------- ---- ---- -----------
Richard H. Finan 06/15/84 First mortgage - $ 68,948 $ 58,302 6.625% 10.50%
personal residence
John L. Nolting 04/15/98 First mortgage - 124,044 113,959 6.00 7.375
personal residence
09/26/96 Consumer loan 8,449 - 7.50 9.50
12/11/98 Consumer loan 4,700 - 8.00 10.00
02/12/99 Consumer loan 18,000 10,354 7.25 9.25
07/19/99 Consumer loan 13,500 7,760 6.75 7.75
Gretchen J. Schmidt 09/01/98 First mortgage - 233,834 226,064 6.00 7.25
personal residence
02/07/97 Consumer loan 13,075 - 7.00 9.00
08/12/98 Consumer loan 2,805 800 6.75 7.75
02/13/98 Consumer loans 5,845 - 8.50 10.50
06/09/99 Consumer loan 23,000 16,352 7.00 9.00
06/01/00 Consumer Loan 13,500 12,018 7.25 9.25
The Company owns a 51% interest in DirectTeller Systems, Inc.
("DirectTeller"), an Ohio corporation that markets computer software developed
by DataTech Services, Inc. ("DataTech"), which owns a 49% interest in
DirectTeller, to financial institutions. Director Nolting is the President and
Chief Executive Officer of DataTech. When this venture was approved by the Board
of Directors of the Company in 1989, Director Nolting abstained from voting on
the matter. The Company initially contributed $50,000 and DataTech contributed
the software it developed to the initial capitalization of DirectTeller. The
Company is responsible for maintaining the financial records of DirectTeller and
DataTech is obligated to manage the day to day operations of DirectTeller,
including software maintenance and marketing. DataTech does not receive a
management fee for performing these services. The Company's investment in Direct
Teller was $50,000 at December 31, 2000.
Director Finan is an attorney at law who from time to time provides
legal services to Madison Service Corporation and DirectTeller. During the year
ended December 31, 2000, fees paid by the subsidiaries of Franklin and the
Company did not exceed five percent of Mr. Finan's gross revenues for the last
fiscal year.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who own more than 10% of a registered class of
the Company's equity securities to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes of ownership in
the Company. Officers, directors and greater than 10% stockholders are required
by regulation to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 2000, all
Section 16(a) filings required were timely filed.
SELECTION OF INDEPENDENT ACCOUNTANTS
Clark Schaefer conducted the independent audit of the Company for the
year ended December 31, 2000, and the Board of Directors has selected Clark
Schaefer as the independent accountants of the Company for the fiscal year ended
December 31, 2001.
The Board of Directors is requesting and recommends that the
stockholders of the Company ratify the selection of Clark Schaefer as the
independent accountants of the Company for the current fiscal year. Management
of the Company expects that a representative of Clark Schaefer will be present
at the Annual Meeting, and that such representative will have an opportunity, if
desired, to make a statement and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION
OF CLARK SCHAEFER AS INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE CURRENT
FISCAL YEAR.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of the Company is
comprised of four directors, all of whom are considered "independent" under Rule
4200(a)(14) of the National Association of Securities Dealers' listing
standards. The Audit Committee is responsible for overseeing the Company's
accounting functions and controls, as well as recommending to the Board of
Directors an accounting firm to audit the Company's financial statements. The
Audit Committee has adopted a charter to set forth its responsibilities (the
"Charter"). A copy of the Charter is attached to this Proxy Statement as Exhibit
A.
As required by the Charter, the Audit Committee received and reviewed
the report of Clark Schaefer regarding the results of their audit, as well as
the written disclosures and the letter from Clark Schaefer required by
Independence Standards Board Standard No. 1. The Audit Committee reviewed the
audited financial statements with the management of the Company. A
representative of Clark Schaefer also discussed with the Audit Committee the
independence of Clark Schaefer from the Company, as well as the matters required
to be discussed by Statement of Auditing Standards 61. Discussions between the
Audit Committee and the representative of Clark Schaefer included the following:
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o Clark Schaefer's responsibilities in accordance with generally
accepted auditing standards
o The initial selection of, and whether there were any changes in,
significant accounting policies or their application
o Management's judgments and accounting estimates
o Whether there were any significant audit adjustments
o Whether there were any disagreements with management
o Whether there was any consultation with other accountants
o Whether there were any major issues discussed with management
prior to Clark Schaefer's retention
o Whether Clark Schaefer encountered any difficulties in performing
the audit
o Clark Schaefer's judgments about the quality of the Company's
accounting principles
o Clark Schaefer's responsibilities for information prepared by
management that is included in documents containing audited
financial statements
Based on its review of the financial statements and its discussions
with management and the representative of Clark Schaefer, the Audit Committee
did not become aware of any material misstatements or omissions in the financial
statements. Accordingly, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Annual Report
on Form 10-KSB for the year ended December 31, 2000, to be filed with the SEC.
AUDIT COMMITTEE
James E. Cross
Richard H. Finan
James E. Hoff, S.J.
John L. Nolting
AUDIT FEES
During the year ended December 31, 2000, Clark Schaefer billed the
Company $48,747 in fees for professional services in connection with the audit
of the Company's annual financial statements and the review of financial
statements included in the Company's Forms 10-QSB and 10-KSB.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During 2000, no fees were incurred by the Company from Clark Schaefer
for professional accounting services to design, implement or manage, hardware or
software that collects or generates information significant to the Company's
financial statements.
ALL OTHER FEES
During 2000, Clark Schaefer billed the Company $14,075 in fees for
services rendered by Clark Schaefer for all accounting services other than the
services discussed under the headings AUDIT FEES and FINANCIAL INFORMATION
SYSTEMS DESIGN AND IMPLEMENTATION FEES above. The majority of these fees were
for the preparation of tax returns.
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STOCKHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy materials for next
year's Annual Meeting of Stockholders, any stockholder proposal requesting
action at such meeting must be received at the Company's main office, 4750
Ashwood Drive, Cincinnati, Ohio 45241, no later than November 23, 2001. Any such
proposal shall be subject to the requirements of the proxy rules adopted under
the Exchange Act. In addition, if a stockholder intends to present a proposal at
next year's Annual Meeting of Stockholders without including the proposal in the
proxy materials related to that meeting, and if the proposal is not received by
February 6, 2002, then the proxies designated by the Board of Directors of the
Company for next year's Annual Meeting of Stockholders of the Company may vote
in their discretion on any such proposal any shares for which they have been
appointed proxies without mention of such matter in the proxy statement or on
the proxy card for such meeting.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, as
provided for in the Bylaws of the Company, the holders of the proxies will act
in accordance with their best judgment.
The cost of solicitation of 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 solicitation 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 also enclosed. Any stockholders who have not received a copy of
such Annual Report may obtain a copy by writing to the Company. Such Annual
Report is not to be treated as part of the proxy solicitation materials, or as
having been incorporated herein by reference.
BY ORDER OF THE BOARD OF DIRECTORS
Cincinnati, Ohio Thomas H. Siemers
March 23, 2001 President and Chief Executive Officer
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FIRST FRANKLIN CORPORATION
EXHIBIT A
AUDIT POLICY
The Board of Directors and Management of First Franklin Corporation
acknowledge the need to safeguard all assets through proper internal control and
operating practices. The control function will be guided by approved policies
and procedures.
AUDIT COMMITTEE
The Board of Directors will establish an Audit Committee to oversee the
audit and compliance function as described in this policy and to be a link
between the independent auditor and Board. This committee will be comprised
solely of independent outside Directors, each of whom is financially literate
and will report to the full Board on a regular basis. At the conclusion of each
annual audit, the Audit Committee shall meet with the independent auditor. At
such meeting, the independent auditor shall fully disclose all audit exceptions
and all relevant data and information concerning the financial condition,
investment practices, and other financial and accounting policies and procedures
of First Franklin. A complete record of the proceedings of this meeting shall be
kept in the minute book.
The primary responsibilities of the Committee are:
1. Selection of independent auditors;
2. Determining scope of the Audit;
3. Reviewing the Annual Report and Management Letter of the Auditors;
4. Reviewing the results of the Audit;
5. Reviewing the performance of the independent auditor and consulting
with the independent auditor out of the presence of management about internal
controls and the completeness and accuracy of the Company's financial
statements. The Committee's review should include the matters required to be
discussed by Statement on Auditing Standards No. 61 (SAS No. 61) and an
explanation from the independent auditor of the factors considered by the
independent auditor in determining the audit's scope. The independent auditor
should confirm that no limitations have been placed on the scope or nature of
the audit;
6. Reviewing the Internal Controls of the Company;
7. Special Investigations, if deemed appropriate;
8. Reviewing with Counsel, legal matters that could have significant
impact on the Company's Financial Statement;
9. Establishing and monitoring lines of communication with management,
auditors and others;
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10. Any other areas referred to it if deemed appropriate by the
Committee. The Committee may choose to investigate any area(s);
11. Ensuring the Audit Committee receives from the independent auditor
a formal written statement delineating all relationships between the independent
auditor and the Company, consistent with Independence Standards Board Standard 1
("ISBS No. 1"), and engaging in active dialog with the independent auditor about
all disclosed relationships or services that may impact the objectivity and
independence of the independent auditor; and
12. Preparing a report to be included in the Proxy Statement for the
Company's annual meeting of shareholders. As required by the regulations of the
Securities and Exchange Commission, the report must state whether the Committee
has (i) reviewed and discussed the audited financial statements with management;
(ii) discussed with the independent auditor the matters required to be discussed
by SAS No. 61; (iii) received and discussed with the independent auditor the
matters required by ISBS No. 1; and (iv) recommended to the Board that the
audited financial statements be included in the Company's Annual Report on Form
10-KSB for the last fiscal year. The name of each Committee member must appear
below the report.
This policy also recognizes the role and duties of the independent
auditor, appointed by the Board of Directors on an annual basis, to provide
counsel to the Board, the Audit Committee, and Management on issues of
significance in areas, including accounting policy, safeguarding Company assets,
financial management, internal control, and regulatory compliance. This policy
also recognizes that the independent auditor is accountable to the Board and the
Audit Committee, as representatives of shareholders.
In addition to the responsibilities cited above, the Audit Committee
and/or the Chief Executive Officer, together with the independent auditor, will
approve the annual audit plan, and will review financial information, applicable
regulatory and accounting changes, and any other documentation deemed by them to
be of significance to the audit or compliance function of the Company.
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REVOCABLE PROXY
FIRST FRANKLIN CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 2001
The undersigned hereby appoints James E. Hoff, S.J., John L. Nolting
and Thomas H. Siemers or any one of them, with full powers of substitution, to
act as proxy or proxies for the undersigned to vote all shares of Common Stock
of First Franklin Corporation (the "Company") that the undersigned is entitled
to vote at the Annual Meeting of Stockholders (the "Meeting") to be held on
April 23, 2001, at the corporate office of the Company located at 4750 Ashwood
Drive, Cincinnati, Ohio, at 3:00 p.m., and at any and all adjournments thereof,
as follows:
I. The election of the following directors:
____ FOR the nominees listed ____ WITHHOLD authority to vote
below (except as otherwise for all nominees listed below
indicated)
JAMES E. HOFF, S.J.
THOMAS H SIEMERS
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below).
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FOR AGAINST ABSTAIN
II. The ratification of the appointment of Clark,
Schaefer, Hackett & Co. as the independent
accountants for the Company for the fiscal year
ended December 31, 2001. ____ ____ ____
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the nominees listed and "FOR" the
ratification of the appointment of the independent accountants.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE NOMINEES AND THE PROPOSITION LISTED. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS 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.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
This proxy shall be deemed terminated and of no further force and effect if the
undersigned attends and votes in person at the Annual Meeting or submits a
later-dated proxy or written revocation to the Company prior to the commencement
of voting at the Annual Meeting.
The undersigned acknowledges receipt from the Company, prior to the execution of
this Proxy, of Notice of the Meeting, a Proxy Statement dated March 23, 2001,
and a copy of the 2000 Annual Report to Stockholders.
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Print name of stockholder Print name of stockholder
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Signature of stockholder Signature of stockholder
Dated: , 2001 Dated: , 2001
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Please sign exactly as your name appears above on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
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PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
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