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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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-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 appropriate box):
[X] $125 per Exchange Act rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14(a)-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) and O-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 O-11:
[ ] Fee paid previously with preliminary materials
[ ] Check box is any part of the fee is offset as provided by Exchange Act
Rule O-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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PRELIMINARY FILING
FIRST FRANKLIN CORPORATION
401 EAST COURT STREET
CINCINNATI, OHIO
(513) 721-1031
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 24, 1995
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of First Franklin Corporation ("First Franklin" or 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 401 East Court
Street, Cincinnati, Ohio 45202 on April 24, 1995, at 3:00 p.m.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company;
2. A proposed amendment to Section 4 of the Certificate of
Incorporation of the Company to increase the authorized number
of shares of common stock from 1,500,000 to 2,500,000, as set
forth in the Proxy Statement attached hereto;
3. The ratification of the appointment of Coopers & Lybrand as
independent accountants for the Company for the fiscal year
ending December 31, 1995; and
4. 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 15, 1995,
are the stockholders entitled to vote at the Meeting and any adjournments
thereof.
You are requested to fill in and sign the enclosed form of Proxy, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The Proxy will not be used if you give a later dated proxy
or if you attend and vote at the Meeting in person.
By Order of the Board of Directors
Thomas H. Siemers
President and Chief Executive Officer
Cincinnati, Ohio
March 28, 1995
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
401 EAST COURT STREET
CINCINNATI, OHIO
(513) 721-1031
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 1995
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of First Franklin Corporation ("First
Franklin" or 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 401 East Court Street, Cincinnati, Ohio, on
April 24, 1995, 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 28, 1995.
Stockholders who execute proxies retain the right to revoke them at any time.
Unless so revoked, the shares represented by such proxies will be voted at the
Meeting and all adjournments thereof. Proxies may be revoked by the filing of
a later-dated proxy 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, where no instructions are indicated,
will be voted "FOR" the nominees and the adoption of the proposals discussed
herein.
Proxies marked to abstain with respect to a proposal have the same effect as
votes against the proposal. Broker non-votes are treated as absentions and
have no effect on the vote, unless the vote needed for approval of a matter is
a percentage of all the shares entitled to vote. In such case, broker
non-votes have the effect of a vote in opposition. A majority of the shares of
the Company's issued and outstanding common stock, (the "Common Stock") present
in person or represented by proxy, shall constitute a quorum for purposes of
the Meeting. Abstentions and broker non-votes are counted for purposes of
determining a quorum.
VOTE REQUIRED FOR APPROVAL OF THE PROPOSALS
Directors shall be elected by a plurality of the shares present in person or
represented by proxy at the Meeting and entitled to vote on the election of
directors. The approval of the proposed amendment to Section 4 of the
Certificate of Incorporation of the Company to increase the authorized number
of shares of Common Stock from 1,500,000 to 2,500,000 requires the affirmative
vote of the holders of a majority of the shares entitled to vote on the matter.
The ratification of the appointment of Coopers & Lybrand as independent
accountants for the fiscal year ending December 31, 1995, requires the
affirmative vote of the holders of a majority of the shares present in person
or represented by proxy at the Meeting and entitled to vote on the matter.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on March 15, 1995, will be
entitled to one vote for each share then held. As of that date, the Company
had 1,175,786 shares of Common Stock issued and outstanding.
The following table sets forth, as of March 15, 1995, share information
regarding (i) those persons or entities who were known by management to
beneficially own more than five percent of the outstanding shares of the
Company's Common Stock; and (ii) all directors and executive officers of the
Company and The Franklin Savings and Loan Company ("Franklin") as a group.
Shares Beneficially Percent of
Beneficial Owner Owned(1) Class
------------------------------------------------ ------------------- ----------
Thomas H. Siemers(2) 167,589 13.9%
First Franklin Corporation
401 East Court Street
Cincinnati, Ohio 45202
Margaret W. Walton(3) 59,683 5.0
First Franklin Corporation
401 East Court Street
Cincinnati, Ohio 45202
All directors and executive officers of Franklin 463,479 37.1
and the Company as a group (11 persons)(4)
<FN>
- -----------------------------
(1) Reflects two-for-one stock split effective January 10, 1995.
(2) Mr. Siemers, the President and Chief Executive Officer of the Company, has
sole voting and investment power with respect to 62,180 shares and shared
voting and investment power with his wife for 600 shares. In addition,
Mr. Siemers has options to purchase 31,472 shares granted under First
Franklin's Stock Option Plan. Mr. Siemers has voting power with respect
to 19,930 shares allocated to his account in The Franklin Savings and Loan
Company Employee Stock Ownership Plan ("ESOP"). Finally, as a trustee,
Mr. Siemers may be deemed to have voting and/or investment power with
respect to another 38,407 shares of Common Stock held by ESOP, which have
not been allocated to the accounts of individual participants, or which
have been allocated to the accounts of individual participants, but may
still be sold by the trustee, and with respect to the 15,000 shares held
by Franklin's Defined Benefit Pension Plan ("Pension Plan").
(3) Ms. Walton, the Vice President of the Company, has sole voting and
investment power with respect to 40,000 shares and has options to purchase
12,200 shares granted under First Franklin's Stock Option Plan. Ms.
Walton has voting power with respect to 7,483 shares allocated to her
account in the ESOP.
(4) Includes shares held directly, shares allocated to such individuals'
accounts in the ESOP, shares subject to options granted under the
Company's Stock Option Plan and shares held by controlled corporations or
spouses and minor children, 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 and the Defined Benefit
Pension Plan of Franklin.
PROPOSAL I -- ELECTION OF DIRECTORS
The Board of Directors is currently composed of five members. Directors are
generally 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 following table sets forth certain information regarding the composition
of the Company's Board of Directors, including terms of office. It is intended
that the proxies solicited on behalf of the Board of Directors (other than
proxies in which the vote is withheld as to the nominee) will be voted at this
Meeting for the election of the nominees indicated below. If any nominee is
unable to serve, the shares represented by all valid proxies will be voted for
the election of such substitute as the Board of Directors may recommend. 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 any nominee and any other person
pursuant to which such nominee was selected.
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Shares
Positions held with Year first beneficially
the Company elected director of Term to owned at Percent
Name Age and Franklin the Company/Franklin expire March 15, 1994(i) of class
---- --- ------------------- -------------------- ------ ----------------- --------
NOMINEES
Thomas H. Siemers 61 President, Chief 1987/1953 1998 167,589(2) 13.9%
Executive Officer
and Director
James E. Hoff, S.J. 62 Director 1993/1993 1998 - -
DIRECTORS REMAINING IN OFFICE
Richard H. Finan 60 Director 1987/1968 1997 51,616 4.4
Mary J. Hunter 76 Director 1987/1970 1997 51,616 4.4
John L. Nolting 62 Director 1987/1981 1996 31,116 2.6
<FN>
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(1) Reflects two-for-one stock split effective January 10, 1995. May include
shares held directly, shares allocated under the ESOP to the accounts of
directors who are full-time employees of Franklin, shares subject to
options granted under the Company's Stock Option Plan and shares held by
controlled corporations and family members with respect to which shares
the listed individuals or group members may be deemed to have sole or
shared voting and investment power.
(2) Includes 15,000 shares held by Franklin's Pension Plan, of which Mr.
Siemers is the trustee, and 38,407 shares held by the Company's ESOP which
have not been allocated to the account of any participant or have been
allocated, but over which Mr. Siemers, as trustee, retains investment
power.
The business experience of each director during the last five years is as
follows:
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. From 1978 to 1983, Mr. Siemers served as a
director of the Federal Home Loan Bank of Cincinnati. Mr. Siemers also served
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. President Siemers served as a director and Secretary to the Ohio
Financial Service Corporation, Columbus, Ohio for approximately 17 years until
his resignation in June, 1987.
RICHARD H. FINAN has been an Ohio State Senator since 1978 and a lawyer
practicing in Sharonville, Ohio, since 1961. Director Finan also serves as
counsel of record for Madison Service Corporation, Franklin's wholly-owned
subsidiary, and DirectTeller Systems, Inc., a joint venture between the Company
and DataTech Services, Inc.
JAMES E. HOFF, S.J., has been President of Xavier University in Cincinnati,
Ohio, since 1991. Prior to his arrival at Xavier, Fr. Hoff was President of
the Creighton Foundation and Vice President of University Relations at
Creighton University.
MARY J. HUNTER was a member of the Board of Directors of Orpheum Federal
Savings from 1964 until it merged into Franklin on September 30, 1970. Ms.
Hunter, RN-BSN retired, is currently a homemaker.
JOHN L. NOLTING has been the President and Chief Executive Officer of
DataTech Services, Inc., a computer service company located in Cincinnati,
since 1974, President and Chief Executive Officer of Queen City Leasing, an
automobile leasing company located in Cincinnati, since 1980, and Director and
President of DirectTeller Systems, Inc.
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MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
Meetings of the Company's Board of Directors are held regularly on a
quarterly basis. During the year ended December 31, 1994, the Board of
Directors held a total of six regular and special meetings. No incumbent
director of the Company attended fewer than 75% of the total meetings of the
Board of Directors during this period, except for Fr. Hoff, who attended four
meetings.
The Company has no standing audit, compensation or nominating committees.
The full Board of Directors acts as the nominating committee for the annual
selection of its nominees for election of directors and, with the exception of
Mr. Siemers, as the audit committee. During 1994, the Board of Directors met
once acting as a nominating committee and once acting as the audit committee.
While the Board of Directors will consider nominees recommended by
stockholders, it has not actively solicited nominations nor established any
procedures for this purpose.
The Board of Directors of Franklin, the principal subsidiary of the Company,
consists of the five directors of the Company and Francis J. Macke, James E.
Cross and William G. Roedersheimer. Meetings of Franklin's Board of Directors
are generally held on a monthly basis. The Board of Directors held a total of
13 meetings during 1994. No director attended fewer than 75% of the total
number of meetings of the Board of Directors and meetings held by all
committees of the Board of Directors on which he served, except Fr. Hoff, who
attended nine meetings The Board of Directors of Franklin has standing
executive, compensation and loan committees.
The Executive Committee consists of the President and one member of the
Board of Directors who is selected weekly on an alternating basis from the
entire Board. This committee meets weekly (except during weeks when the full
Board meets) and exercises the power of the Board of Directors between regular
Board meetings. All actions of this committee are reviewed and ratified by the
full Board of Directors. This committee met 40 times during 1994.
The Compensation Committee reviews and makes recommendations to the Board of
Directors with respect to executive compensation and other benefit programs.
The Compensation Committee is comprised of Mrs. Hunter and Messrs. Siemers,
Finan and Nolting. One meeting was held by this committee during 1994.
The Loan Committee recommends policies on residential, commercial and
consumer lending to the Board of Directors and reviews loan applications. The
Loan Committee has authority to approve loans in amounts of up to $350,000.
Members of this committee are Mr. Siemers, Mr. Harry Barnaclo and Ms. Margaret
Walton. The committee met approximately 65 times during 1994.
The full Board of Directors appoints a nominating committee for the annual
selection of its nominees for election of directors. While the nominating
committee and the Board of Directors will consider nominees recommended by
others, it has not actively solicited nominations nor established any
procedures for this purpose.
COMPENSATION OF THE BOARD OF DIRECTORS
Directors of the Company received directors' fees of $1,000 per meeting,
beginning in March 1994. Prior to that time, they received no fees for serving
as directors. Directors of Franklin are paid a fee of $1,000 per meeting. No
fees are currently paid by the Company or Franklin for committee membership.
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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 any executive officer whose annual compensation exceeded
$100,000 during the fiscal year.
Summary Compensation Table
--------------------------
All other compensation
Annual compensation ----------------------
-------------------
Name and principal position Year Salary($) Bonus($) ($)(1)
- ------------------------------------------------------------------------------------------------------------
THOMAS H. SIEMERS - President, 1994 $197,047 $10,000 $46,088
Chief Executive Officer and Director of 1993 183,704 25,000 53,214
the Company, Franklin and 1992 170,862 20,000 53,907
Madison Service Corporation; Chairman of
the Board of DirectTeller Systems, Inc.
DANIEL T. VOELPEL - Vice President 1994 $94,263 $ 7,000 $17,992
and Chief Financial Officer of the 1993 90,135 7,000 16,089
Company and Franklin and Treasurer 1992 85,320 5,000 20,805
of Madison Service Corporation and
DirectTeller Systems, Inc.
<FN>
- -------------------------------
(1) Represents the Company's contributions to the ESOP and the Pension Plan on
behalf of Mr. Siemers and Mr. Voelpel.
No stock options were awarded under the Stock Option Plan during 1994. The
following table sets forth certain information concerning the number and value
of stock options at December 31, 1994, held by these listed individuals, as
adjusted to reflect the two-for-one stock split effective January 10, 1995. No
stock appreciation rights or limited stock appreciation rights have been
granted to any director or executive officer under the Company's Stock Option
Plan.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
--------------------------------------------------------------------------------
Number of unexercised Value of unexercised in-the-money
options/SARs at FY-end (#) options/SARs at FY-end ($)(1)
Shares Acquired Value --------------------------- ---------------------------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ----- --------------- ------------ ----------- ------------- ----------- -------------
Thomas H. Siemers 4,000 $34,000 31,472 - $282,248 -
Daniel T. Voelpel - - 12,200 - 109,800 -
<FN>
- -----------------------------
(1) Value is based upon the sales price of $27.00 per share of the Company's
Common Stock as reported on the Nasdaq Stock Market at the time of the
trade closest in time to the exercise of the options, adjusted to $13.50 to
reflect the stock split, less the exercise price of $5.00 per share.
(2) Value is based upon the sales price of $28.00 per share of the Company's
Common Stock as reported on the Nasdaq Stock Market on December 31, 1994,
adjusted to $14.00 to reflect the stock split, less the exercise price of
$5.00 per share.
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EMPLOYMENT CONTRACT
On May 1, 1984, the Board of Directors of Franklin approved a five year
employment agreement with Mr. Siemers. The contract provides for automatic
extensions of one year each upon the expiration of one year of the contract,
until either Franklin or the employee gives written notice to the contrary.
The contract provides for termination upon the employee's death, for cause or
in certain events specified by federal regulations. The contract is terminable
by the employee upon 90 days' notice to Franklin.
The employment agreement provides for a salary as determined by the Board of
Directors but not less than the employee's current annual salary. Salary
increases will be reviewed not less often than annually thereafter and are
subject to the sole discretion of the Board of Directors.
The contract provides for payment to the employee of an amount equal to the
present value of the employee's salary for the unexpired term of the contract
in the event there is a change in control of Franklin where employment
terminates involuntarily in connection with such change of control or within
six months thereafter. If Mr. Siemers' employment were terminated in
connection with a change in control while earning his current salary as of
December 31, 1994, at which date the unexpired term of the contract was 52
months, Mr. Siemers could have received a cash payment of up to approximately
$734,700 pursuant to his contract. Such termination payments are provided on a
similar basis in connection with a voluntary termination of employment in
connection with a change in control which was at any time opposed by Franklin's
Board of Directors. The contract provides, among other things, for
participation in an equitable manner in employee benefits applicable to
executive personnel.
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TRANSACTIONS WITH MANAGEMENT AND INDEBTEDNESS OF MANAGEMENT
Franklin, like many financial institutions, has followed the 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, except
for loan fees and interest rates on loans to employees who are not officers or
directors, 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 employees who are not directors, officers
or principal shareholders of the Company or Franklin, interest rates are
generally set at 1% over Franklin's cost of funds, subject to adjustment to
market rates in the event that the employment relationship is terminated.
Interest rates on loans originated after August 9, 1989, are set at market
rates for directors, officers and principal shareholders. Except for loans
made to directors, officers and principal shareholders, loan fees on mortgage
loans are generally waived except to the extent of direct loan origination
expenses incurred by Franklin.
Franklin's policy is to grant certain consumer loans to employees, other than
officers, directors, and principal shareholders, at the prevailing market rate
and modify them to 1% over Franklin's cost of funds. If the employment
relationship is terminated, the rate will revert to the contract rate and the
modification will be cancelled. Other loans are reviewed on an individual
basis and any preferential treatment given is based on the employees length of
service, work performance and past credit history. All loans by Franklin to
its directors and executive officers are subject to regulations requiring that
loans and other transactions involving directors, executive officers and
principal shareholders be on terms and conditions comparable to those for
similar transactions with non-affiliates.
Set forth below is certain information at December 31, 1994, as to all loans
made by Franklin to each of its directors and executive officers, which were
granted prior to August 9, 1989 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, 1993:
Largest amount
outstanding Balance as of Current Market interest
Nature of since December 31, interest rate at the time
Name Date of loan indebtedness January 1, 1994 rate of origination
---- ------------ ------------ ------------ ------------- --------- ----------------
Richard H. Finan 6/15/84 First mortgage $92,076 $86,131 8.25% 10.50%
- personal
residence
Mary J. Hunter 10/29/81 First mortgage 98,344 90,047 8.25 12.50
- personal
residence
David T. Voelpel 8/27/87 First mortgage 112,921 -0- 8.00 10.00
- personal
residence
In 1989, the Company entered into a joint venture called DirectTeller
Systems, Inc. ("DirectTeller"), with DataTech Services, Inc. ("DataTech"), for
the purpose of marketing computer software developed by DataTech 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, 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. Under the terms of
the joint venture, 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 currently owns a 51% interest in DirectTeller. The Company's
investment in such venture was $50,000 at December 31, 1994.
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, 1994, 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) 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 SEC initial reports of
ownership and reports of changes in the Company by the tenth day of the month
following a change. Officers, directors and greater than 10% stockholders are
required by SEC 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,
1994, all Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with.
PROPOSAL II -- PROPOSED AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
The Certificate of Incorporation of First Franklin currently authorizes
2,000,000 shares of capital stock, divided into 1,500,000 shares of Common
Stock, $.01 par value per share, and 500,000 shares of preferred stock, $.01
par value per share. As of March 15, 1994, there were 1,175,786 shares of
Common Stock issued and outstanding, 91,878 shares of Common Stock held by the
Company as treasury stock and no shares of preferred stock issued. Each share
of Common Stock entitles the holder thereof to one vote on each matter properly
submitted to the stockholders for their vote. In addition, 74,536 shares of
Common Stock are reserved for issuance upon the exercise of stock options
issued by the Company.
The shareholders approved a reduction in the number of authorized shares of
capital stock in 1992 in order to reduce state franchise taxes paid by the
Company. After that reduction, there were still over 600,000 authorized shares
of Common Stock available for issuance for purposes, other than stock option
exercises. The two-for-one stock split effected January 10, 1995, doubled the
number of issued and outstanding shares of Common Stock and reduced to 249,678
shares available for issuance as Common Stock.
The Board believes an increase in the total authorized Common Shares will
enable First Franklin to better meet its future business needs, particularly in
view of the stock split which reduced significantly the number of shares
available for such purposes. In order to have sufficient authorized but
unissued shares available for any possible acquisitions or other corporate
purposes, such as stock dividends or stock options, the Board of Directors
believes it is advisable to increase the authorized number of shares of Common
Stock by 1,000,000 to 2,500,000. The proposed increase in the number of
authorized shares will give First Franklin greater flexibility in responding
quickly to advantageous business opportunities. While First Franklin has no
agreements with respect to the issuance of shares of Common Stock at the
present time, it continues to explore opportunities to acquire other financial
institutions as permitted by federal law and regulation and is presently
considering the acquisition of other financial institutions as separate
subsidiaries or in mergers with Franklin. It is not presently known whether,
or on what terms, any potential acquisition decisions will result in issuances
of the Company's Common Stock. Any acquisition of another financial
institution would be subject to the approval of one or more financial
institution regulators. Depending on the means by which the acquisition is
completed, the stockholders may not be required to vote on the acquisition.
The stockholders need to approve any proposed amendment to the Certificate
of Incorporation before it can be effective. Therefore, the Board of Directors
of First Franklin recommends that the stockholders approve the following
resolution:
Resolved, that Paragraph 1 of Section 4 of the Certificate of Incorporation
of First Franklin be amended to increase the authorized number of Common
Stock by 1,000,000 to 2,500,000 and to read as follows:
Section 4. CAPITAL STOCK. The total number of shares of capital
stock which the Corporation has authority to issue shall be three
million (3,000,000), of which two million five hundred thousand
(2,500,000) shall be common stock, par value $.01 per share, and five
hundred thousand (500,000) of which shall be preferred stock, par
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value $.01 per share, with rights and preferences to be determined by
the board of directors upon issuance.
Since authorized shares of capital stock of the Company can be issued without
further stockholder approval or pre-emptive rights in existing stockholders,
the Board of Directors could dilute the voting power of existing stockholders
and the voting power of the shares of Common Stock and increase the number of
shares which would have to be purchased to obtain control of the Company. One
effect may be to discourage certain potential business combinations which some
stockholders may believe to be in their best interest and to make more
difficult management changes which might occur if the potential business
combination were successful. In addition, Sections 9, 10 and 11 of the
Company's Certificate of Incorporation contain provisions that could delay,
defer or prevent a change in control of the Company.
Pursuant to Section 9 of the Company's Certificate of Incorporation, no
person may make an offer to acquire beneficial ownership of more than 10% of
the voting shares of the Company, if the Common Stock is exchanged or quoted on
Nasdaq, unless such offer has been approved by two- thirds of the Company's
directors or the person has already obtained regulatory approval to acquire
control of the Company. That provision also prohibits the acquisition of
beneficial ownership of more than 10% of the voting shares of the Company,
unless that acquisition of control is preapproved by (i) two-thirds of the
directors of the Company and the holders of a majority of the outstanding
voting shares of the Company, or (ii) the holders of two-thirds of the
outstanding voting shares of the Company.
If any person acquires any shares of capital stock of the Company in violation
of Section 9, all such shares which are in excess of 10% beneficial ownership
may no longer be voted by the owner nor be transferred without approval of the
Board of the Company or a trustee appointed by the Board for those excess
shares. Those excess shares also are not to be included in determining the
total number of outstanding shares. Any trustee appointed by the Board will be
authorized to sell the excess shares in the open market, with the owner
receiving only a return of its federal tax basis in the shares, after the
payment of the trustee's expenses. Any additional funds received are
maintained by the Company. Any amendment of Section 9 must be approved by the
holders of two-thirds of the voting shares of the Company.
Section 10 of the Certificate of Incorporation imposes restrictions on any
business combination or acquisition of the Company or Franklin by or with one
or more persons which have beneficial ownership of more than 10% of the voting
shares of the Company. In general, such transactions must be approved or
authorized by the holders of 80% of the outstanding voting shares of the
Company. However, the required stockholder vote is whatever is required by
applicable law or other relevant provision of the Certificate of Incorporation,
if the following conditions are (i) two-thirds of all directors who are not
related to the stockholder-acquiror and who have served as a director since
before the stockholder-acquiror acquired any shares of the Company (the
"Continuing Directors") vote in favor of the transaction; (ii) the
consideration paid for shares of capital stock of the Company must be at least
equal to the highest of (a) the highest market value during the one year
preceding the announcement of the transaction, (b) the highest price previously
paid for Company stock by the stockholder-acquiror or (c) the book value per
share at the end of the month preceding the announcement of the transaction;
(iii) such consideration generally must be of the type paid by the
stockholder-acquiror when purchasing its existing shares of capital stock of
the Company; and (iv) whether or not required by law, the stockholders must
receive a proxy statement which is prepared in accordance with the requirements
of Section 14 of the Securities Exchange Act of 1934, whether or not such
provisions actually apply to the Company, and which contains a fairness opinion
and the recommendation of the Continuing Directors. Section 10 may only be
amended by vote of two-thirds of the directors and, if 75% of the Continuing
Directors do not approve the amendment, holders of 80% of the voting shares of
the Company.
Pursuant to Section 11 of the Certificate of Incorporation, any repurchase of
shares held for less than two years by a beneficial owner of at least 5% of the
voting shares of the Company must be approved by the holders of a majority of
the voting shares of the Company, excluding the stockholder whose shares are to
be repurchased. Any amendment of Section 11 must be approved by the holders of
two-thirds of the voting shares of the Company.
-10-
12
All shares of the Company's Common Stock, including those now authorized and
those which would be authorized by the proposed amendment, are equal in rank
and have the same voting, dividend, and liquidation rights. Holders of the
Company's Common Stock do not have preemptive rights.
The affirmative vote of the holders of a majority of the outstanding shares
of First Franklin's Common Stock is required for the adoption of the proposed
amendment.
THE BOARD OF DIRECTORS OF FIRST FRANKLIN RECOMMENDS THAT THE SHAREHOLDERS OF
FIRST FRANKLIN VOTE FOR THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
UNLESS A CONTRARY CHOICE IS SPECIFIED, PROXIES SOLICITED BY THE BOARD WILL BE
VOTED FOR THE AMENDMENT.
PROPOSAL III -- RATIFICATION OF APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
The Board of Directors has renewed the Company's arrangement for Coopers &
Lybrand to be its independent accountants for 1995, subject to the ratification
of the appointment by the Company's stockholders. A representative of Coopers
& Lybrand is expected to attend the Meeting to respond to appropriate questions
and will have an opportunity to make a statement if he so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF COOPERS & LYBRAND AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR
THE FISCAL YEAR ENDING DECEMBER 31, 1995.
STOCKHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy materials for next year's
Annual Meeting of Stockholders, any stockholder proposal to take action at such
meeting must be received at the Company's main office, 401 East Court Street,
Cincinnati, Ohio 45202, no later than December 1, 1995. Any such proposal
shall be subject to the requirements of the proxy rules adopted under the
Securities Exchange Act of 1934, as amended.
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, it is
intended that 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.
-11-
13
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, nor as having been
incorporated herein by reference.
BY ORDER OF THE BOARD OF DIRECTORS
Thomas H. Siemers
President and Chief Executive Officer
Cincinnati, Ohio
March 28, 1995
-12-
14
REVOCABLE PROXY
FIRST FRANKLIN CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 1995
The undersigned hereby appoints Richard H. Finan, Mary J. Hunter and John L.
Nolting, 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") which the undersigned is entitled to vote
at the Annual Meeting of Stockholders (the "Meeting"), to be held on April 24,
1995 at the corporate office of the Company located at 401 East Court Street,
Cincinnati, Ohio, at 3:00 P.M., and at any and all adjournments thereof, as
follows:
I. The election of the following directors:
____ FOR all nominees listed ____ WITHHOLD authority to vote
below (except as otherwise for all nominees listed below
indicated)
THOMAS H. SIEMERS THOMAS H. SIEMERS
JAMES E. HOFF, S.J. JAMES E. HOFF, S.J.
Instruction: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.
______________________________________
FOR AGAINST ABSTAIN
--- ------- -------
II. The proposed amendment to Section
4 of the Certificate of Incorporation
of the Company increasing the authorized
number of shares of Common Stock
from 1,500,000 to 2,500,000. ---- ---- ----
FOR AGAINST ABSTAIN
--- ------- -------
III. The ratification of the
appointment of Coopers &
Lybrand as independent
accountants for the Company
for the year December 31, 1995. ---- ------- -------
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 directors and "FOR" the
propositions listed.
15
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE DIRECTORS AND THE PROPOSITIONS LISTED. IF ANY
OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE
NAMED IN THIS PROXY IN THEIR BEST JUDGEMENT. 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 Annual Meeting or submits a
later-dated proxy.
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,
1995, and a copy of the 1994 Annual Report To Stockholders.
Dated: _________________, 1995
_________________________ ______________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
_________________________ ______________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
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.
_______________________________________________________________________________
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
_______________________________________________________________________________