SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 ss.240.14a-12
First Franklin Corporation
----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
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4) Date Filed:
FIRST FRANKLIN CORPORATION
4750 ASHWOOD DRIVE
CINCINNATI, OHIO 45241
(513) 469-5352
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 28, 2003
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, will be held at the corporate office
of the Company located at 4750 Ashwood Drive, Cincinnati, Ohio 45241 on April
28, 2003, at 3:00 p.m.
The Meeting is for the following purposes, all of which are described in
the accompanying Proxy Statement:
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. 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 12, 2003, 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 complete
and sign the enclosed proxy card and return it promptly in the enclosed
envelope. The proxy 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 28, 2003
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.
================================================================================
FIRST FRANKLIN CORPORATION
4750 ASHWOOD DRIVE
CINCINNATI, OHIO 45241
(513) 469-5352
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 2003
This Proxy Statement is furnished in connection with the solicitation by
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"),
and at all adjournments thereof. The Meeting will be held at the corporate
office of the Company located at 4750 Ashwood Drive, Cincinnati, Ohio 45241, on
April 28, 2003, at 3:00 p.m. The Notice of Annual Meeting of Stockholders and
this Proxy Statement are first being mailed to stockholders on or about March
28, 2003.
The shares represented by proxies will be voted at the Meeting and all
adjournments thereof. Stockholders who submit proxies may revoke them at any
time before the commencement of voting at the Meeting by filing a later-dated
proxy or written revocation with the Secretary of the Company, or by attending
the Meeting and voting in person. Proxies solicited by the Board of Directors of
the Company will be voted as directed by the stockholder and, in the absence of
specific instructions to the contrary, will be voted:
FOR the reelection of Richard H. Finan and Mary W. Sullivan as directors
--- of the Company for terms expiring in 2006; 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, will constitute a quorum for purposes of the Meeting. Abstentions and
broker non-votes (described below) are counted for purposes of determining a
quorum.
VOTE REQUIRED
The directors will be elected by a plurality of the shares voted in person
or by proxy at the Meeting. Shares that are not voted by brokers or other
entities holding shares on behalf of beneficial owners ("broker non-votes") or
shares as to which the authority to vote is withheld are not counted toward the
election of directors. If the enclosed proxy card is signed, dated and returned
by the stockholder but no vote is specified thereon, the shares represented by
the proxy will be voted FOR the reelection of Mr. Finan and Ms. Sullivan.
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 broker non-vote is the same as a vote
against ratification. If the enclosed proxy card is signed and dated by the
stockholder, but no vote is specified thereon, the shares represented by the
proxy will be voted FOR the ratification of the selection of Clark Schaefer as
independent accountants.
OWNERSHIP OF COMPANY STOCK
Stockholders of record as of the close of business on March 12, 2003, are
entitled to one vote at the Meeting for each share held on such date. As of that
date, the Company had 1,635,308 shares of Common Stock issued and outstanding.
The following table contains share ownership information as of March 12,
2003, regarding (i) those persons or entities who were known by management to
beneficially own 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 owned class
- ----------------- ------------------- ----------
Thomas H. Siemers(1) 356,096 21.43
First Franklin Corporation
4750 Ashwood Drive
Cincinnati, Ohio 45241
Franklin Savings & Loan Company 183,924 11.25
Employee Stock Ownership Plan (2)
4750 Ashwood Drive
Cincinnati, Ohio 45241
The PNC Financial Services Group, Inc. (3) 90,675 5.54
PNC Bank, National Association (3)
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
PNC Bancorp, Inc. (3)
222 Delaware Avenue
Wilmington, DE 19899
All directors and executive officers of the Company 595,421 34.84
and Franklin as a group (9 persons) (4)
(1) Includes 26,000 shares subject to options, 47,447 shares allocated to Mr.
Siemers' Employee Stock Ownership Plan ("ESOP") account as to which he has
sole voting and investment power, 33,356 shares as to which Mr. Siemers has
shared voting and investment power, and 136,477 shares owned by the ESOP
and allocated to the accounts of other participants as to which Mr. Siemers
has shared investment power as the ESOP Trustee. Shares owned by the ESOP
are counted only once in calculating the total number of shares held by Mr.
Siemers and the directors and officers.
(2) All shares held by the ESOP are also included as shares beneficially owned
by Mr. Siemers as trustee of the ESOP.
(Footnotes continued on next page)
2
(3) Based upon information contained in a Schedule 13G filed February 12, 2003
with the Securities and Exchange Commission by The PNC Financial Services
Group, Inc.; PNC Bancorp, Inc.; and PNC Bank, National Association.
According to the Schedule 13G filing, each entity reported sole voting
power over 90,765 shares and sole dispositive power over 71,400 shares.
(4) 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 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. 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.
The following table contains share ownership information as of March 12,
2003, for each director of the Company and for each individual named in the
Summary Compensation Table, other than Mr. Siemers whose ownership information
is set forth in the previous table.
Shares beneficially Percent of
Name and address (1) owned (2) class
- -------------------- ------------------- ----------
Richard H. Finan 81,424(3) 4.97
Donald E. Newberry, Sr. 2,000(4) 0.12
John L. Nolting 5,500(5) 0.34
Mary W. Sullivan 3,500(6) 0.21
Daniel T. Voelpel 56,349(7) 3.42
(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
investment power for all shares reported as beneficially owned.
(3) Includes 4,000 shares that may be acquired upon the exercise of stock
options, and 77,424 shares as to which Mr. Finan shares voting and
investment power.
(4) Consists of 2,000 shares that may be acquired upon the exercise of stock
options.
(5) Includes 4,000 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.
(6) Includes 2,000 shares that may be acquired upon the exercise of stock
options, and 1,500 shares as to which Ms. Sullivan shares voting and
investment power.
(7) Includes 12,000 shares that may be acquired upon the exercise of stock
options, 25,361 shares allocated to Mr. Voelpel's ESOP account and 16,000
shares as to which Mr. Voelpel shares voting and investment power.
ELECTION OF DIRECTORS
There are five members of the Company's Board of Directors. 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 is
elected annually.
3
Since last year's Annual Meeting of Stockholders, two vacancies were filled
on the Board of Directors of the Company. The Rev. Donald E. Newberry, Sr., a
director of Franklin, was appointed to the Board of Directors of the Company to
fill the seat vacated by James E. Hoff, S.J., who has resigned. Mary W.
Sullivan, also a director of Franklin, was appointed to fill the vacancy created
upon the recent death of James E. Cross.
The full Board of Directors acts as a nominating committee for the annual
selection of its nominees for director. The nominating committee will consider
nominees recommended by others, but has not actively solicited nominations or
established any procedures for this purpose.
If either of the nominees is unable to serve, the shares represented by all
valid proxies will be voted for the election of the substitute, if any,
recommended by the Board of Directors. At this time, the Board knows of no
reason why either nominee might be unable to serve if elected. There are no
arrangements or understandings between the nominees and any other person
pursuant to which the nominees were selected.
The following table contains certain information regarding the composition
of the Company's Board of Directors, including terms of office.
Positions held with Year first
the Company elected director of Term to
Name Age(1) and Franklin the Company/Franklin expire
- ---- --- ------------ -------------------- -------
NOMINEES
--------
Richard H. Finan 68 Director 1987/1968 2006
Mary W. Sullivan 46 Director 2003/1996 2006
DIRECTORS REMAINING IN OFFICE
-----------------------------
John L. Nolting 70 Director 1987/1981 2005
Donald E. Newberry, Sr. 75 Director 2003/1996 2004
Thomas H. Siemers 69 President, Chief Executive 1987/1953 2004
Officer and Director
- ------------------
(1) As of March 12, 2003.
The business experience of each director during the last five years is as
follows:
RICHARD H. FINAN is an attorney and has had a private legal practice since
1959. He was a member of the Ohio legislature from 1973 until 2002, and served
as President of the Ohio State Senate from 1997 until 2002. 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 Union Central Life
Insurance Company.
MARY W. SULLIVAN has been an attorney with the Cincinnati, Ohio law firm of
Peck, Shaffer & Williams LLP since 1980. Ms. Sullivan also serves as a director
of Summit Mutual Funds, Inc. and is a former member of the Ohio Elections
Commission.
4
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, serves as the President and
Chief Executive Officer of Queen City Leasing, an automobile leasing company
located in Cincinnati, and is a Director and the President of DirectTeller
Systems, Inc.
DONALD E. NEWBERRY, SR. has served as pastor of the Lee Chapel AME Church
for over 40 years. Rev. Newberry has been involved in numerous civic and
charitable organizations, including the Dan Beard Council of Boy Scouts, the
Cincinnati Board of Health, Victory Neighborhood Services of Greater Cincinnati
and the Board of Directors of the Payne Theological Seminary.
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. Mr. Siemers is also a director of
Intrieve, Inc. Mr. Siemers is the father of Ms. Schmidt, the Secretary and
Treasurer of the Company.
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, 2002, the Company's Board of Directors held a
total of six 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 the year.
The Company has an Audit Committee, which in 2002 was composed of Messrs.
Cross, Finan and Nolting and in 2003 will be composed of the four outside
directors. The Audit Committee met once during 2002. For a description of the
duties of the Audit Committee, see "AUDIT COMMITTEE REPORT." The Company has no
standing compensation or nominating committees.
The directors of the Company also serve on the Board of Directors of
Franklin, the principal subsidiary of the Company. Regular meetings of
Franklin's Board of Directors are held monthly. Franklin's Board held a total of
18 regular and special meetings during 2002. 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. 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 five times during 2002 and will meet as necessary during 2003. The
committee exercises the power of Franklin's Board of Directors between regular
Board meetings. All of its actions are reviewed and ratified by Franklin's full
Board of Directors.
Franklin's Compensation Committee reviews and makes recommendations to
Franklin's Board of Directors regarding executive compensation and other benefit
programs. The Compensation Committee is comprised of Messrs. Siemers, Finan and
Nolting. This committee met once during 2002.
5
COMPENSATION OF THE BOARD OF DIRECTORS
During 2002, each director who served during the year received $6,250 of
director's fees from the Company and $16,250 of director's fees from Franklin.
Mr. Siemers does not receive director's fees from Franklin. Neither the Company
nor Franklin pays fees for committee membership.
EXECUTIVE OFFICERS
The following information describes the business experience during the past
five years of 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 is elected and qualified, or until he or she resigns
or is removed by the Board. There are no arrangements or understandings between
the persons named below and any other person pursuant to which such officers
were elected.
DAVID E. HAERR, age 70, 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.
LAWRENCE J. SPITZMUELLER, age 45, joined Franklin in 1992 as Chief
Compliance and Security Officer and became Vice President for Residential
Lending in April 2002. Prior to joining Franklin, he was an enforcement attorney
with the Office of Thrift Supervision.
GRETCHEN J. SCHMIDT, age 46, has been the Corporate Secretary/Treasurer of
the Company since 1988. She also serves as Vice President of Operations and
Secretary of Franklin, and is Vice President, Secretary and a director of
Madison Service Corporation, Franklin's wholly owned subsidiary, and is the
Secretary of Direct Teller. Ms. Schmidt held a variety of part-time positions
with Franklin between 1971 and 1978, and has held various 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 54, 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 Treasurer
and a director of Madison Service Corporation. He has been with Franklin since
1983.
EXECUTIVE COMPENSATION
The following table provides certain compensation information for Mr.
Siemers, the President and Chief Executive Officer of the Company and Franklin,
and Mr. Voelpel, the Vice President and Chief Financial Officer of the Company
and Franklin. No other executive officer of the Company or Franklin received
annual compensation exceeding $100,000 in the past three years. The table
includes compensation paid in all forms by Franklin and its subsidiaries for all
services rendered during the periods shown. The Company currently does not pay
any compensation to its executive officers.
6
SUMMARY COMPENSATION TABLE
--------------------------------------------------------
Annual compensation Long term compensation
awards
---------------------------------------------------------
Securities underlying All other compensation
Name and principal position Year Salary ($) Bonus ($) Options/SARs (#)(1) (2)(3)
- ---------------------------------------------------------------------------------------------------------------------------
THOMAS H. SIEMERS
President, Chief Executive 2002 $224,195 -- 9,750 $32,229
Officer and Director of the 2001 224,195 -- 9,750 28,181
Company and Franklin 2000 222,945 -- 4,875 28,842
DANIEL T. VOELPEL
Vice President and Chief 2002 $120,000 -- 4,500 $20,131
Financial Officer of the 2001 119,415 $1,000 4,500 20,821
Company and Franklin 2000 116,487 -- 2,250 20,632
(1) Represents the number of shares of Common Stock underlying options granted
to Messrs. Siemers and Voelpel. Because the Company failed to achieve its
2001 performance goals, the options granted in 2000 were reduced by 50%.
(2) For Mr. Siemers, consists of contributions to the Company's defined
contribution plan of $20,000, $17,000 and $17,000 for 2002, 2001 and 2000,
respectively, and the $12,229, $11,181 and $11,842 value of the allocations
to his ESOP account for 2002, 2001 and 2000, respectively.
(3) For Mr. Voelpel, consists of contributions to the Company's defined
contribution plan of $12,493, $12,560 and $12,161, for 2002, 2001 and 2000,
respectively, and the $7,638, $8,261 and $8,471 value of the allocations to
his ESOP account for 2002, 2001 and 2000, respectively.
STOCK OPTIONS
The following table contains information regarding all grants of options to
purchase common shares of the Company made to Mr. Siemers and Mr. Voelpel during
2002:
Individual Grants
-----------------------------------------------------------------------------------------------
Number of securities % of total options/
underlying SARs granted to Exercise or Expiration
Name options/SARs granted (#)(1) employees in fiscal year base price ($/share) date
- ---- --------------------------- ------------------------ -------------------- ----------
Thomas H. Siemers 9,750 14.96 15.10 3-01-08
Daniel T. Voelpel 4,500 6.90 13.73 3-01-13
- ------------
(1) Each option was granted on December 20, 2002, and is first exercisable for
one-third of the shares subject to the option on each of January 20, 2004,
2005 and 2006, provided that both the option recipient and the Company
achieve specified performance goals in 2003. If the recipient achieves his
2003 performance goals and the Company fails to achieve its 2003
performance goals, the recipient may exercise only 50% of his allocated
options. If the recipient fails to achieve his 2003 performance goals, no
options will be exercisable. The options are intended to qualify as
incentive stock options.
7
The following table contains information regarding the number and value of
unexercised options held by Mr. Siemers and Mr. Voelpel at December 31, 2002:
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Values
-------------------------------------------------------------------------------------------------------
Shares Number of securities underlying Value of unexercised in-the-money
acquired on Value unexercised options/SARs at 12/31/02 options/SARs at 12/31/02 ($)(1)
Name exercise(#) realized($) exercisable/unexercisable exercisable/unexercisable
- ---- ----------- ----------- ------------------------------------ ---------------------------------
Thomas H. Siemers - - 19,500/24,375 $8,076/$39,065
Daniel T. Voelpel - - 9,000/11,250 $5,347/$24,262
- ------------
(1) An option is "in-the-money" if the fair market value of the underlying
stock exceeds the exercise price of the option. The value presented is
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, 2002, of $13.50 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 at least annually. After
such 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 current
expiration date of the agreement is October 23, 2005. The agreement also
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 may be terminated by Franklin at any time. In the event of
termination by Franklin for "just cause," as defined in the agreement, Mr.
Siemers has 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 his
annual salary in monthly payments for a period of 36 months, plus benefits. The
agreement 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, 2002, is $672,585.
TRANSACTIONS WITH MANAGEMENT AND INDEBTEDNESS OF MANAGEMENT
Franklin, like many financial institutions, has followed a policy of making
loans to its officers, directors and employees 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 on
substantially the same terms and collateral as those available to the general
public, 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 reverts to the contract rate and
the modification is 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.
8
Set forth below is certain information at December 31, 2002, regarding 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 individual, resulted in an aggregate indebtedness to Franklin exceeding
$60,000 at any time since January 1, 2001:
Largest amount Balance as of Market interest rate
Date of Nature of outstanding since December 31, Current interest at the time of
Name loan indebtedness January 1, 2001 2002 rate origination
---- ------- ------------ ----------------- ------------- ----- ---------- --------------------
John L. Nolting 04/15/98 First mortgage - $113,959 $110,809 5.375% 6.375%
personal residence
02/12/99 Consumer loan 10,354 0 7.25 9.25
07/19/99 Consumer loan 7,760 0 6.75 7.75
12/13/00 Line of credit (1) 22,150 11,429 6.0 6.0
Gretchen J. Schmidt 08/12/98 Consumer loan 800 0 6.75 7.75
09/01/98 First mortgage - 226,064 217,659 5.50 6.25
personal residence
06/09/99 Consumer loan 16,352 0 7.00 9.00
06/01/00 Consumer loan 12,018 5,474 7.25 9.25
Lawrence J. Spitzmueller 08/05/96 First mortgage- 84,199 0 5.875 8.625
personal residence
08/03/00 Consumer loan 6,099 0 6.00 7.25
04/10/02 First mortgage - 157,000 155,493 5.25 6.00
personal residence
08/13/02 Consumer loan 4,000 3,649 10.25 12.25
- ---------------
(1) The market interest rate at the time of origination was prime rate and Mr.
Nolting received the rate of prime rate minus 2%. Both the market rate and
Mr. Nolting's rate have a 6% floor.
The Company owns a 51% interest in DirectTeller Systems, Inc.
("DirectTeller"), an Ohio corporation that markets computer software developed
by DataTech Services, Inc. ("DataTech") to financial institutions. Director
Nolting is the President and Chief Executive Officer of DataTech, which owns the
remaining 49% interest in DirectTeller. When the Board of Directors of the
Company approved this venture in 1989, Director Nolting abstained from voting on
the matter. The Company initially contributed $50,000 and DataTech contributed
the software that 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 its day to day operations, 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, 2002.
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, 2002, fees paid by the subsidiaries of Franklin and the Company did
not exceed five percent of Mr. Finan's gross revenues for the year.
9
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (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 stock, to file reports of
ownership and changes of ownership in the Company's stock with the Securities
and Exchange Commission. These persons are required by regulation to furnish the
Company with copies of all Section 16(a) forms that 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, all
Section 16(a) reports required during the year ended December 31, 2002 were
timely filed.
SELECTION OF INDEPENDENT ACCOUNTANTS
Clark Schaefer conducted the independent audit of the Company for the year
ended December 31, 2002, and the Board of Directors has selected Clark Schaefer
as the independent accountants of the Company for the fiscal year ended December
31, 2003.
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
Meeting, and that such representative will be available to respond to
appropriate questions and will have an opportunity, if desired, to make a
statement.
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 three 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 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:
* Clark Schaefer's responsibilities in accordance with generally
accepted auditing standards
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* The initial selection of, and whether there were any changes in,
significant accounting policies or their application
* Management's judgments and accounting estimates
* Whether there were any significant audit adjustments
* Whether there were any disagreements with management
* Whether there was any consultation with other accountants
* Whether there were any major issues discussed with management prior to
Clark Schaefer's retention
* Whether Clark Schaefer encountered any difficulties in performing the
audit
* Clark Schaefer's judgments about the quality of the Company's
accounting principles
* 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, 2002, to be filed with the SEC.
Audit Committee
James E. Cross*
Richard H. Finan
John L. Nolting
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* Mr. Cross was a member of the Audit Committee at the time of the Audit
Committee Report.
AUDIT FEES
During the year ended December 31, 2002, Clark Schaefer billed the Company
$54,882 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 2002, 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 2002, Clark Schaefer billed the Company $16,700 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, tax consultation and reviews of accounting controls.
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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 29, 2003. Any such
proposal will 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 12, 2004, then the proxies designated by the Board of Directors of the
Company for next year's Annual Meeting of Stockholders may vote in their
discretion on any such proposal any shares for which they have been appointed
proxies without mention of such proposal 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 the matters described in this Proxy Statement. However, if
any other matter properly comes before the Meeting, the holders of the proxies
will act upon such matter in their best judgment.
The Company will pay proxy solicitation costs, and 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 for 2002, including financial
statements, is enclosed with this Proxy Statement. Any stockholders who have not
received a copy of the 2002 Annual Report may obtain a copy by writing to the
Company. The 2002 Annual Report is not part of the proxy solicitation materials
and is not incorporated herein by reference.
BY ORDER OF THE BOARD OF DIRECTORS
Cincinnati, Ohio Thomas H. Siemers
March 28, 2003 President and Chief Executive Officer
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REVOCABLE PROXY
FIRST FRANKLIN CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 2003
The undersigned hereby appoints Thomas H. Siemers and John L. Nolting or
either of them, with full powers of substitution and resubstitution, 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 28, 2003,
at the corporate office of the Company located at 4750 Ashwood Drive,
Cincinnati, Ohio 45241, 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 the nominees listed below
indicated)
RICHARD H. FINAN
MARY W. SULLIVAN
(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
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II. The ratification of the appointment of
Clark, Schaefer, Hackett & Co. as the
Company's independent accountants for
the fiscal year ended December 31, 2003. --- --- ---
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 FOR RATIFICATION. IF ANY OTHER BUSINESS
IS PRESENTED AT THE ANNUAL 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.
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 Meeting or submits a later-dated
proxy or written revocation to the Company prior to the commencement of voting
at the 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 28, 2003,
and a copy of the 2002 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: , 2003 Dated: , 2003
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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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