SCHEDULE 14(A) INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Definitive Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Additional Materials Commission only (as
[X] Soliciting Material Under Rule 14a - 12 permitted by Rule 14a-6(e)(2))
FIRST AMERICAN CAPITAL CORPORATION
Attn: Harland Priddle, Chairman
1303 S.W. First American Place
Topeka, Kansas 66604
Phone: 785/267-7077
with a copy to William Schutte, Esq.
Polsinelli, Shalton & Welte, P.C.
6201 College Boulevard, Suite 500
Overland Park, Kansas 66211
Phone: 913/451-8788
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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MEMORANDUM
TO: FIRST AMERICAN CAPITAL CORPORATION ADVISORY BOARD MEMBERS
FROM: Harland E. Priddle, Chairman
DATE: May 1, 2003
I wanted to express our appreciation for your service to First American Capital
Corporation as one of our Advisory Board Members. The concept of establishing
a relationship with you and others has been a major factor in the success of
our marketing staff in selling our First Life American products.
Our annual meeting is scheduled for June 2, 2003, at the Holiday Inn in Topeka,
Kansas. You will be receiving your official meeting notice and proxy card in
about ten days. A group representing Citizens, Inc, from Austin, Texas,
calling themselves the "First American Committee for Protection of Shareholder
Value" plans to contest our election of the Board of Directors being proposed
by First American Capital.
I have enclosed background information on this issue for you. You will also
be receiving additional information from First American Capital as well as the
contesting group regarding our respective positions.
We urge you to continue supporting First American Capital Corporation.
ADDITIONAL INFORMATION
On April 28, 2003, First American filed a preliminary proxy statement with
the Securities and Exchange Commission relating to First American's
solicitation of proxies from the shareholders of First American with respect
to the First American 2003 Annual Meeting of Shareholders. First American
will file with the Commission, and will furnish to First American
shareholders, a definitive proxy statement and may file other proxy
solicitation materials. FIRST AMERICAN ADVISES SECURITY HOLDERS TO READ
ITS DEFINITIVE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION.
First American's proxy statement and other relevant documents will be
available for free at www.sec.gov. You may also obtain a free copy of
First American's definitive proxy statement, when it becomes available,
by writing to First American at 1303 S.W. First American Place, Topeka,
Kansas 66604. Detailed information regarding the names, affiliation and
interest of individuals who may be deemed participants in the solicitation
of proxies of First American's shareholders is provided below and is
available in solicitation materials on Schedule 14(A) filed by First
American with the SEC.
First American and certain directors of First American may be deemed
participants in the solicitation of proxies in respect of electing the
Board of Directors of First American at the 2003 Annual Meeting of
Shareholders of First American. Those directors of First American are
Paul E. Burke, Jr., Edward C. Carter, Kenneth J. Frahm, Stephen J.
Irsik, Jr., John G. Montgomery, Harland E. Priddle, Gary E. Yeager and
Thomas M. Fogt. Additional information with respect to the beneficial
ownership of those directors of First American's common stock is set
forth in the preliminary proxy statement filed by First American on
April 28, 2003.
LEGAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this notice that are not historical are forward-looking
statements, including statements regarding First American's beliefs,
expectations, hopes or intentions regarding the future. It important
to note that actual outcomes and First American's actual results could
differ materially from forward-looking statements. First American
assumes no obligation to update any forward-looking statement.
ADVISORY BOARD MEMBERS INFORMATION MATERIAL
In December, Citizens, Inc of Austin, Texas, made a proposal to
merge/acquire First American Capital Corporation through a stock swap
program with all current shareholders of First American Capital
Corporation to become shareholders of their company.
As part of our discussions with Citizens, we requested a market check
provision be inserted in any merger agreement between the parties to
allow us to withdraw in the event the bidder's offer was found not to
be the best alternative available in the market.
Citizens, Inc withdrew its proposal and indicated it would not allow
us to include a market check withdrawal clause in the merger agreement
and indicated it did not want to be involved in a bidding war.
We believe our position of requiring a market check was prudent and
necessary in fulfilling our responsibilities to the shareholders in
assuring the shareholders were provided a transaction that is in their
best interests. I doubt that any of you would sell property without
determining its value in advance and would not look favorably on a
buyer that prevented you from doing such a market check.
On March 20, Citizens, Inc. met with Harland E. Priddle, Chairman, asking
us to reconsider its original proposal. We again indicated we wanted to
conduct a market check but Citizens maintained its original position of
not allowing us to conduct a market check as a part of the due diligence
review on behalf of shareholders.
On March 31, 2003, the bidder filed documentation indicating that officers
of Citizens, Inc. had accumulated proxies totaling 14.1% of the
outstanding shares of First American Capital Corporation. These proxies
were provided to officers of Citizens, Inc. by the former Chairman,
Mike Fink, former President/CEO, Rick Meyer and one of our current Board
of Directors, Danny Biggs.
The Citizens, Inc group has now filed a preliminary proxy statement and
intends to contest our annual election of Board of Directors at our
annual meeting on June 2, 2003.
If elected, there is significant risk that Citizen's chosen Board of
Directors would support its merger proposal, without assuring that it
is the best alternative available.
In a related item, we advised you and other shareholders of the executive
management change in our company on March 25. In the opinion of the
Board of Directors, this change was necessary for the following reasons
(Attached charts reflect specific information on each of the following
areas:
Assets and revenue continue to increase but net income after taxes
continues to decrease for the second consecutive year
Premiums have increased but general expenses have increased
dramatically
Profitability ratios of operating margin, return on assets, return
on equity and earnings per share all have decreased during the past
two years resulting in decreasing shareholder value.
Former executive management did not establish effective plans for
controlling and managing these issues and for this reason, the Board
of Directors, could not continue with the former executive management
of Chairman Mike Fink and President Rick Meyer
I am also attaching additional information on the current management
team and a new Director, Mr. Tom Fogt.
ADDITIONAL INFORMATION
On April 28, 2003, First American filed a preliminary proxy statement
with the Securities and Exchange Commission relating to First
American's solicitation of proxies from the shareholders of First
American with respect to the First American 2003 Annual Meeting of
Shareholders. First American will file with the Commission, and will
furnish to First American shareholders, a definitive proxy statement
and may file other proxy solicitation materials. FIRST AMERICAN
ADVISES SECURITY HOLDERS TO READ ITS DEFINITIVE PROXY STATEMENT WHEN
IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.
First American's proxy statement and other relevant documents will be
available for free at www.sec.gov. You may also obtain a free copy of
First American's definitive proxy statement, when it becomes available,
by writing to First American at 1303 S.W. First American Place, Topeka,
Kansas 66604. Detailed information regarding the names, affiliation and
interest of individuals who may be deemed participants in the
solicitation of proxies of First American's shareholders is provided
below and is available in solicitation materials on Schedule 14(A)
filed by First American with the SEC.
First American and certain directors of First American may be deemed
participants in the solicitation of proxies in respect of electing the
Board of Directors of First American at the 2003 Annual Meeting of
Shareholders of First American. Those directors of First American are
Paul E. Burke, Jr., Edward C. Carter, Kenneth J. Frahm, Stephen J.
Irsik, Jr., John G. Montgomery, Harland E. Priddle, Gary E. Yeager
and Thomas M. Fogt. Additional information with respect to the beneficial
ownership of those directors of First American's common stock is set
forth in the preliminary proxy statement filed by First American on
April 28, 2003.
LEGAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this notice that are not historical are forward-looking
statements, including statements regarding First American's beliefs,
expectations, hopes or intentions regarding the future. It important
to note that actual outcomes and First American's actual results could
differ materially from forward-looking statements. First American
assumes no obligation to update any forward-looking statement.
MANAGEMENT BRIEFING
BOARD OF DIRECTORS
MARCH 31, 2003
INCOME COMPARISON
2001-2002
Income 2001 2002
Income Before Taxes ($201,433) ($144,758)
Net Income After Taxes ($352,828) ($547,226)
Decrease -($194,398)
FINANCIAL ANALYSIS
First Life America Annual Statement
2001 2002 Variance
Total Premiums/
Investment Income $3,610,960 $5,418,221 +$1,807,261
Total Expenses $3,585,792 $6,090,389 +$2,504,597
Commissions $849,577 $1,366,805 +$487,228
General Expenses $1,139,854 $1,920,069 +$780,215
Capital & Surplus $3,698,742 $2,879,079 -$889,663
PROFITABILITY COMPARISONS
Profitability Ratios
2000 2001 2002
Operating Margin 5.82% -10.96% -12.94%
Return on Assets 1.08% -2.23% -3.04%
Return on Equity 1.34% -3.09% -5.17%
Earnings per Share .03 -.07 -.11
BACKGROUND INFORMATION ON CURRENT MANAGEMENT
From Harland Priddle, Chairman, First American Capital Corporation
In my letter of March 25, 2003, I briefly introduced you to the new
members of the management team for First American Capital Corporation.
Today, I'd like to share with you additional background information
on these individuals to show you why we are so excited to have them
in these important leadership positions.
Our President, Vince Rocereto, brings to First American Capital
Corporation a wealth of experience in marketing, executive management
and corporate development. Beginning 36 years ago as a field
representative and agent, Vince has served as Chairman and Chief
Executive Officer of American Home Life Insurance Company. He is
extremely effective in analyzing life insurance products and commission
structures and their relative effect on the profitability of an
insurance company. Under his direction, we have already initiated work
on a forward-looking business plan and budgeting program for the
coming year and for the following three years, to ensure that our
company continues to operate in the best interest of its policyholders
and shareholders.
Thomas M. Fogt, the newest member of our Board of Directors, has
more than 25 years experience in insurance financial management,
insurance and reinsurance transactions, accounting, corporate
development, mergers and acquisitions, and business planning. Tom
has significant SEC experience (including two initial public
offerings), and he has developed a financial plan for a $3 billion
group of annuity companies.
Currently, Tom serves as the Executive Vice President for Corporate
Development for AmerUs Annuity Group, a $10 billion insurance
organization, where he has responsibility for acquisitions and for
other business-related transactions. We are pleased to add Tom's
expertise to our Board as we plan for our future.
And, while I may be your new Chairman, I am not new to First American
Capital Corporation. In fact, I was the first Director named to the
Board in 1996. I joined the Board because I was so impressed with
the concept of establishing a company with strong Kansas roots that
used local leaders - our Advisory Board Members - to help it grow
and prosper. I can assure you, I'm just as excited today about this
company and our future as I was then.
My experience includes the fields of banking, real estate development,
television marketing, and economic development. In addition to my
background in private industry, I also served as Kansas Secretary
of Agriculture (1982-1986) and Kansas Secretary of Commerce (1987-1991).
I am a veteran of 22 years in the United States Air Force, with seven
years in overseas assignments, and four years as Deputy Director of
the White House Communications agency in Washington, D.C.
ADDITIONAL INFORMATION
On April 28, 2003, First American filed a preliminary proxy statement
with the Securities and Exchange Commission relating to First American's
solicitation of proxies from the shareholders of First American with
respect to the First American 2003 Annual Meeting of Shareholders.
First American will file with the Commission, and will furnish to First
American shareholders, a definitive proxy statement and may file other
proxy solicitation materials. FIRST AMERICAN ADVISES SECURITY HOLDERS
TO READ ITS DEFINITIVE PROXY STATEMENT WHEN IT BECOMES AVAILABLE,
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.
First American's proxy statement and other relevant documents will be
available for free at www.sec.gov. You may also obtain a free copy of
First American's definitive proxy statement, when it becomes available,
by writing to First American at 1303 S.W. First American Place, Topeka,
Kansas 66604. Detailed information regarding the names, affiliation
and interest of individuals who may be deemed participants in the
solicitation of proxies of First American's shareholders is provided
below and is available in solicitation materials on Schedule 14(A)
filed by First American with the SEC.
First American and certain directors of First American may be deemed
participants in the solicitation of proxies in respect of electing the
Board of Directors of First American at the 2003 Annual Meeting of
Shareholders of First American. Those directors of First American
are Paul E. Burke, Jr., Edward C. Carter, Kenneth J. Frahm, Stephen J.
Irsik, Jr., John G. Montgomery, Harland E. Priddle, Gary E. Yeager
and Thomas M. Fogt. Additional information with respect to the
beneficial ownership of those directors of First American's common
stock is set forth in the preliminary proxy statement filed by First
American on April 28, 2003.
LEGAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this notice that are not historical are forward-looking
statements, including statements regarding First American's beliefs,
expectations, hopes or intentions regarding the future. It important
to note that actual outcomes and First American's actual results could
differ materially from forward-looking statements. First American
assumes no obligation to update any forward-looking statement.