SCHEDULE 14A INFORMATION
Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party Other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
FRANKLIN FINANCIAL CORPORATION
______________________________________________________
(Name of Registrant as Specified in Its Charter)
N/A
______________________________________________________
(Name of Person(s) Filing Proxy Statement, if
Other than the Registrant)
Payment of Filing Fee (Check appropriate box):
[X] No filing fee required.
[ ] $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 number 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:
<PAGE>
FIRST FRANKLIN CORPORATION
4750 ASHWOOD DRIVE
CINCINNATI, OHIO 45241
(513) 469-5352
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 28, 1997
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 4750 Ashwood Drive,
Cincinnati, Ohio 45241 on April 28, 1997, 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 reelection of two directors of the Company;
2. The approval of the First Franklin Corporation 1997 Stock Option
and Incentive Plan, a copy of which is attached to the enclosed
Proxy Statement;
3. The ratification of the selection of Clark, Schaefer, Hackett &
Co. as the independent accountants of the Company for the current
fiscal year; 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 12, 1997,
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 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 by written ballot.
Cincinnati, Ohio
March 27, 1997
By Order of the Board of Directors
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.
================================================================================
<PAGE>
FIRST FRANKLIN CORPORATION
4750 ASHWOOD DRIVE
CINCINNATI, OHIO 45241
(513) 469-5352
PROXY STATEMENT
Annual Meeting of Stockholders
April 28, 1997
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 4750 Ashwood Drive, Cincinnati, Ohio 45241, on April 28,
1997, 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 27, 1997.
Stockholders who execute proxies retain the right to revoke them at any
time prior to the votes being taken at the Meeting. Unless so revoked, the
shares represented by such proxies will be voted at the Meeting and all
adjournments thereof. Proxies may be revoked by the filing of a later-dated
proxy or written revocation prior to a vote being taken on a particular proposal
at the Meeting or by attending the Meeting and voting in person by written
ballot. Proxies solicited on behalf of the Board of Directors of the Company
will be voted in accordance with the directions given therein and, in the
absence of specific instructions to the contrary, will be voted:
FOR the reelection of Richard H. Finan and James E. Cross as
directors of the Company for terms expiring in 2000;
FOR the approval of the First Franklin Corporation 1997 Stock Option
and Incentive Plan (the "1997 Option Plan"), a copy of which is
attached hereto as Exhibit A; and
FOR the ratification of Clark, Schaefer, Hackett & Co. ("Clark
Schaefer") as the independent accountants of First Franklin for
the current fiscal year.
A majority of the shares of the Company's issued and outstanding common
stock (the "Common Stock"), present in person or represented by proxy at the
Meeting, shall constitute a quorum for purposes of the Meeting. Abstentions and
broker Non-votes (defined below) are counted for purposes of determining a
quorum.
VOTE REQUIRED
Two directors shall be elected by a plurality of the shares present in
person or represented by proxy at the Meeting and validly voted in the election
of directors. Shares as to which the authority to vote is withheld and shares
held by a nominee for a beneficial owner which are present in person or by proxy
but are not voted with respect to the election of directors ("Non-votes") are
not counted toward the election of directors. If the enclosed Proxy is signed,
dated and returned by the stockholder but no vote is specified thereon, the
shares held by such stockholder will be voted FOR the reelection of the nominees
named thereon.
The affirmative vote of the holders of a majority of the shares present in
person or by proxy is necessary to approve the 1997 Option Plan. The effect of
an abstention or Non-vote is the same as a vote against the 1997 Option Plan. If
the enclosed Proxy is signed, dated and returned by the stockholder, but no vote
is specified thereon, the shares held by such stockholder will be voted FOR the
approval of the 1997 Option Plan.
The affirmative vote of the holders of a majority of the shares represented
in person or by proxy at the Annual Meeting is necessary to ratify the selection
of Clark, Schaefer, Hackett & Co. ("Clark Schaefer") as the independent
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<PAGE>
accountants of the Company for the current fiscal year. The effect of an
abstention or a Non-vote is the same as a vote against ratification. If the
enclosed Proxy is signed and dated by the shareholder, but no vote is specified
thereon, the shares held by such shareholder will be voted FOR the ratification
of the selection of Clark Schaefer as independent accountants.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on March 12, 1997, will
be entitled to one vote for each share then held. As of that date, the Company
had 1,173,234 shares of Common Stock issued and outstanding.
The following table sets forth, as of March 12, 1997, share ownership
information 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 of Beneficial Owner Owned Class
- ------------------------------------ ------------------- ----------
Thomas H. Siemers(1) 158,115 13.3%
First Franklin Corporation
4750 Ashwood Drive
Cincinnati, Ohio 45241
All directors and executive officers of Franklin 363,466 30.4
and the Company as a group (11 persons)(2)
_________________________
(1) Mr. Siemers, the President and Chief Executive Officer of the Company, has
sole voting and investment power with respect to 59,580 shares, shared
voting and investment power for 18,600 shares, and options to purchase
13,972 shares granted under the First Franklin Corporation 1987 Stock
Option and Incentive Plan (the "1987 Option Plan"). Mr. Siemers has sole
voting and/or investment power with respect to 24,488 shares allocated to
his account in The Franklin Savings and Loan Company Employee Stock
Ownership Plan ("ESOP"). Finally, as the ESOP trustee, Mr. Siemers may be
deemed to have voting and/or investment power with respect to another
41,470 shares of Common Stock held by the ESOP, which have not been
allocated to the accounts of individual participants or which have been
allocated to the accounts of individual participants and which may still be
sold by the trustee.
(2) Includes shares held directly, shares allocated to executive officers'
accounts in the ESOP, shares subject to options granted under the 1987
Stock Option Plan and shares held by controlled corporations or certain
family members, over which shares the specified individuals or group
effectively exercise sole or shared voting and investment power. Such
amount also includes the shares that may be deemed to be beneficially owned
by Mr. Siemers, as trustee of the ESOP of Franklin. Share information for
each director of the Company is included under "Election of Directors."
ELECTION OF DIRECTORS
The Board of Directors is currently composed of five members. Directors are
elected to serve for three-year terms or until their respective successors are
elected and qualified. Approximately one-third of the Board of Directors of the
Company is elected annually.
The full Board of Directors appoints a nominating committee for the annual
selection of its nominees as directors. While the nominating committee and the
Board of Directors will consider nominees recommended by others, it has not
actively solicited nominations nor established any procedures for this purpose.
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<PAGE>
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 a nominee) will be voted
at this Meeting for the reelection of the nominees indicated below. If either of
the nominees 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 either of
the nominees might be unable to serve if elected. Except as disclosed herein,
there are no arrangements or understandings between either of the nominees and
any other person pursuant to which either of the nominees were selected.
<TABLE>
Positions held with Year first Shares
the Company elected director of Term to beneficially owned Percent
Name Age(1) and Franklin the Company/Franklin expire at March 12, 1997(2) of class
- ---------- ---------- ------------ -------------------- ------- -------------------- --------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
Richard H. Finan 62 Director 1987/1968 2000(3) 51,616(4) 4.4%
James E. Cross 61 Director 1996/1978 2000(3) 21,136 1.8
DIRECTORS REMAINING IN OFFICE
Thomas H. Siemers 63 President, Chief 1987/1953 1998 158,115(5) 13.3
Executive Officer
and Director
James E. Hoff, S.J. 64 Director 1993/1993 1998 - -
John L. Nolting 64 Director 1987/1981 1999 1,000 .1
_________________________
(1) As of March 12, 1997.
(2) Unless otherwise indicated by footnote, the individual has sole voting and
investment power with respect to all shares reported as owned.
(3) Year new term will expire, if nominee is elected at the Meeting.
(4) Mr. Finan has shared voting and investment power over all 51,616 shares of
Common Stock.
(5) See footnote 1 to table under "VOTING SECURITIES AND PRINCIPAL HOLDERS
THEREOF."
</TABLE>
The business experience of each director during the last five years is as
follows:
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 serves as the President and Chief Executive Officer of Queen City
Leasing, an automobile leasing company located in Cincinnati, and a Director and
the President of DirectTeller Systems, Inc.
Richard H. Finan is the President of the Ohio State Senate. He has been a
member of the State legislature since 1973 and has had a legal practice since
1959. Director 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
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<PAGE>
also a director of Carillon Funds, Inc., a company, which has a class of
securities registered under Section 12 of the Securities Exchange Act of 1934
(the "Exchange Act").
James E. Cross is a partner in the Dayton, Ohio law firm of Allbery Cross
Fogarty and has practiced with that firm for 12 years. He was a member of the
Board of Directors of Central Savings in Dayton, Ohio when it merged with
Franklin in 1978, and has served as a director of Franklin since then.
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.
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.
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, 1996, the Board of Directors held a total of
seven 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.
The Company has an audit committee, which is composed of the four outside
directors. The Audit Committee met once during 1996. The Company has no standing
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. During 1996, the Board of Directors met once acting as a nominating
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, Donald E. Newberry, Sr.
and Mary W. Sullivan. Regular meetings of Franklin's Board of Directors are
generally held on a monthly basis. The Board of Directors held a total of 13
regular and special meetings during 1996. 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. The Board of Directors
of Franklin has standing Executive and Compensation 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 1996.
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 Messrs. Siemers, Finan, Cross and
Nolting. One meeting was held by this committee during 1996.
Compensation of the Board of Directors
Directors of the Company and Franklin receive directors' fees of $1,000 for
each meeting of those Boards of Directors held during the year, except for Mr.
Siemers, who receives fees only as a director of the Company. No fees are
currently paid by the Company or Franklin for committee membership.
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<PAGE>
Executive Compensation
The Company currently does not pay any compensation to its executive
officers. The following table shows the compensation paid or granted by Franklin
and its subsidiaries for services rendered during the periods indicated to each
executive officer whose annual compensation exceeded $100,000 during the fiscal
year.
<TABLE>
Summary Compensation Table
|--------------------------|
| All other compensation |
- ---------------------------------------------------|----------------------|--------------------------|
| Annual compensation | |
|----------------------|--------------------------|
| |
Name and principal position Year Salary($) Bonus($) | ($)(1) |
- --------------------------------------------------------------------------|--------------------------|
<S> <C> <C> <C> <C>
Thomas H. Siemers - President, Chief 1996 $208,512 - $13,454
Executive Officer and Director of the 1995 204,922 - 14,365
Company, Franklin and Madison Service 1994 197,047 $10,000 13,359
Corporation; Chairman of the Board
of DirectTeller Systems, Inc.
Daniel T. Voelpel - Vice President 1996 $105,120 $ 2,000 $ 9,260
and Chief Financial Officer of the 1995 97,957 - 9,398
Company and Franklin and Treasurer 1994 94,263 $ 7,000 9,018
of Madison Service Corporation and
DirectTeller Systems, Inc.
____________________________
(1) Represents the Company's contributions to the ESOP on behalf of Messrs.
Siemers and Voelpel.
</TABLE>
No stock options were awarded under the 1987 Option Plan during 1996. The
following table sets forth certain information concerning the number and value
of stock options at December 31, 1996, held by the individuals named in the
Summary Compensation Table. No stock appreciation rights or limited stock
appreciation rights have been granted to any director or executive officer under
the 1987 Option Plan.
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
Value Number of unexercised Value of unexercised in-the-money
Shares Acquired Realized options/SARs at FY-end (#) options/SARs at FY-end ($)(2)
Name on Exercise (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ----- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Siemers 15,000 $157,500 13,972 - $160,678 -
Daniel T. Voelpel - - 12,200 - 140,300 -
___________________________
(1) Value is based upon the sales prices of $13.50 and $16.50 per share of the
Common Stock as reported on The Nasdaq National Market at the time of the
trade closest in time to the exercise of the 5,000 and 10,000 options,
respectively, exercised by Mr. Siemers, less the option exercise price of
$5.00 per share.
(2) Value is based upon the sales price of $16.50 per share of the Common Stock
as reported on The Nasdaq National Market on December 31, 1996, less the
option exercise price of $5.00 per share.
</TABLE>
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<PAGE>
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 Mr. Siemers gives written notice to the contrary. The
contract provides for termination upon the employee's death, for cause or in
certain events required 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,
among other things, for participation in an equitable manner in employee
benefits applicable to executive personnel.
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, 1996, at
which date the unexpired term of the contract was 52 months, Mr. Siemers could
have received a cash payment of up to approximately $777,400 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.
Transactions with Management and Indebtedness of Management
Franklin, like many financial institutions, has followed a policy of
granting to its officers, directors and employees loans for the financing and
improvement of their personal residences and consumer loans for other purposes.
Except as set forth below, such loans are made in the ordinary course of
business and are made on substantially the same terms and collateral, as those
of comparable transactions prevailing at the time, and do not involve more than
the normal risk of collectibility or present other unfavorable features.
Currently, for loans to the employees, directors and officers of the Company or
Franklin and their family members, interest rates are generally set at 1% over
Franklin's cost of funds, subject to adjustment to market rates in the event
that the employment relationship is terminated. If the employment relationship
is terminated, the rate will revert to the contract rate and the modification
will be canceled. Loan fees on mortgage loans are generally waived except to the
extent of direct loan origination expenses incurred by Franklin. Other loans are
reviewed on an individual basis and any preferential treatment given is based on
the employees length of service, work performance and past credit history.
Set forth below is certain information at December 31, 1996, as to all
loans made by Franklin to each of its or the Company's current directors or
executive officers which were granted at less than market rates and which for
any one individual resulted in an aggregate indebtedness to Franklin exceeding
$60,000 at any time since January 1, 1995:
<TABLE>
Largest amount Balance as of Market interest
Nature of outstanding since December 31, Current interest rate at the time of
Name Date of loan indebtedness January 1, 1995 1996 rate origination
-------- ------------ ------------ ----------------- ------------- ---------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Richard H. Finan 6/15/84 First mortgage - $86,131 $78,276 6.625% 10.500%
personal residence
Gretchen J. Schmidt 12/24/96 First mortgage - 146,700 146,700 5.875 7.875
personal residence
</TABLE>
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
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<PAGE>
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, 1996.
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, 1996, 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.
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who own more than 10% of a registered class of
the Company's equity securities to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes of ownership in
the Company by the tenth day of the month following a change. Officers,
directors and greater than 10% stockholders are required by regulation to
furnish the Company with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, during the fiscal year ended December 31, 1996, all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with.
1997 STOCK OPTION PLAN
General
On March 24, 1997, the Board of Directors of the Company adopted the 1997
Option Plan. The 1997 Option Plan must be approved by the affirmative vote of
the holders of a majority of the shares of the Company represented in person or
by proxy at the Meeting. The Board of Directors of the Company recommends that
the stockholders of the Company approve the 1997 Option Plan.
The following is a summary of the terms of the 1997 Option Plan and is
qualified in its entirety by reference to the full text of the 1997 Option Plan,
a copy of which is attached hereto as Exhibit A.
Purpose, Administration and Eligibility
The purposes of the 1997 Option Plan include attracting, retaining and
providing incentives to the directors, officers and employees of the Company,
Franklin or any other subsidiary of the Company by facilitating their purchase
of a stock interest in the Company.
The 1997 Option Plan will be administered by a committee of directors
composed of at least two non-employee directors of the Company, as defined in
the regulations of the Securities and Exchange Commission pursuant to Section
16(b) of the Exchange Act (the "Stock Option Committee"). The Stock Option
Committee may grant options under the 1997 Option Plan at such times as it deems
most beneficial to the Company on the basis of an individual participant's
position, duties and responsibilities, the value of the individual's services to
the Company and any other factor the Stock Option Committee deems relevant. The
Company has approximately 50 employees, officers and directors who may be
eligible to receive options under the 1997 Option Plan, subject to the
determination of the Stock Option Committee. Options granted under the 1997
Option Plan to employees of the Company or Franklin may be "incentive stock
options" ("ISOs") within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
The 1997 Option Plan will terminate on April 28, 2007. Without further
approval of the stockholders, the Board of Directors may terminate the 1997
Option Plan prior to that date or may amend it from time to time in such
respects as the Board of Directors may deem advisable, except that the Board of
Directors may not, without the approval of the stockholders, make any amendment
which would: (a) increase the aggregate number of shares of Common Stock which
may be issued under the 1997 Option Plan (except for adjustments to reflect
certain changes in the capitalization of the Company); (b) materially modify the
requirements as to eligibility for participation in the 1997 Option Plan; or (c)
materially increase the benefits accruing to participants under the 1997 Option
Plan. Notwithstanding the foregoing, the Board of Directors may amend the 1997
Option Plan to take into account changes in applicable securities, federal
income tax and other applicable laws.
-7-
<PAGE>
Effect on Existing Stockholders
Pursuant to the 1997 Option Plan, a maximum of 117,323 shares of Common
Stock will be reserved for issuance by the Company upon the granting of options
to certain directors, officers and employees of the Company or any of its
subsidiaries from time to time under the 1997 Option Plan. Any shares of Common
Stock issued under the 1997 Option Plan will be authorized but unissued shares
or issued shares which have been reacquired by the Company.
As of March 12, 1997, there were 1,173,234 shares of Common Stock
outstanding. As shares of Common Stock are issued to directors and officers of
the Company who receive and exercise options under the 1997 Option Plan, the
voting power of the directors and officers of the Company over the outcome of
the vote on any matters submitted to the Company's stockholders, including
changes of control, will increase.
Option Terms
The exercise price for options granted under the 1997 Option Plan will be
determined by the Stock Option Committee at the time of the grant; provided,
however, that the exercise price for an ISO must not be less than 100% of the
fair market value of the shares of Common Stock on the date of the grant. No
stock option will be exercisable after the expiration of ten years from the date
of grant. If an ISO is granted to a participant who owns more than 10% of the
Company's outstanding shares of Common Stock at the time the ISO is granted, the
exercise price of the ISO may not be less than 110% of the fair market value of
the shares on the date of the grant and the ISO shall not be exercisable after
the expiration of five years from the date of the grant.
An option may not be transferred or assigned other than by will or in
accordance with the laws of descent and distribution. If a participant is
"terminated for cause," as defined in the 1997 Option Plan, any option which has
not been exercised shall terminate as of the date of such termination for cause.
The Company will receive no monetary consideration for the granting of
options under the 1997 Option Plan. Upon the exercise of options, the Company
will receive payment in cash or, if acceptable to the Stock Option Committee,
shares of Common Stock of the Company or surrendered outstanding stock options.
As of March 12, 1997, the market value of the Common Stock underlying the
maximum number of options that could be awarded under the 1997 Option Plan is
$2.1 million, which is calculated by multiplying 117,323 (the maximum number of
options that can be granted under the 1997 Option Plan) by $17.875, the per
share sales price as reported on The Nasdaq National Market on that date.
Tax Treatment of Incentive Stock Options
A participant who is granted an ISO will not recognize taxable income
either on the date of the grant or on the date of exercise, although the
alternative minimum tax may apply. Upon disposition of shares of Common Stock
acquired from the exercise of an ISO, long-term capital gain or loss is
generally recognized in an amount equal to the difference between the amount
realized on the sale or disposition and the exercise price. If the participant
disposes of the shares of Common Stock within two years of the date of the grant
or within one year from the date of the transfer of the shares of Common Stock
to the participant (a "Disqualifying Disposition"), then the participant will
recognize ordinary income, as opposed to capital gain, at the time of
disposition in an amount generally equal to the lesser of (i) the amount of gain
realized on the disposition, or (ii) the difference between the fair market
value of the shares received on the date of exercise and the exercise price. Any
remaining gain or loss is treated as a short-term or long-term capital gain or
loss, depending upon the period of time the shares of Common Stock have been
held.
The Company is not entitled to a tax deduction upon either the exercise of
an ISO or the disposition of shares of Common Stock acquired pursuant to such
exercise, except to the extent that the participant recognizes ordinary income
in a Disqualifying Disposition. Ordinary income from a Disqualifying Disposition
will constitute compensation but will not be subject to tax withholding, nor
will it be considered wages for payroll tax purposes.
If the holder of an ISO pays the exercise price, in whole or in part, with
previously acquired shares of Common Stock, the exchange should not affect the
ISO tax treatment of the exercise. Upon such exchange, and except as otherwise
described herein, no gain or loss is recognized by the participant upon
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delivering previously acquired shares of Common Stock to the Company, and shares
of Common Stock received by the participant equal in number to previously
acquired shares of Common Stock exchanged therefor will have the same basis and
holding period for long-term capital gain purposes as the previously acquired
shares of Common Stock. (The participant, however, will not be able to utilize
the prior holding period for the purpose of satisfying the ISO statutory holding
period requirements for avoidance of a Disqualifying Disposition.) Shares of
Common Stock received by the participant in excess of the number of shares
previously acquired will have a basis of zero and a holding period which
commences as of the date the shares are transferred to the participant upon the
exercise of the ISO. If the exercise of an ISO is effected using shares of
Common Stock previously acquired through the exercise of an ISO, the exchange of
such previously acquired shares will be considered a disposition of such shares
for the purpose of determining whether a Disqualifying Disposition has occurred.
Tax Treatment of Non-qualified Options
A participant receiving an option which does not qualify as an ISO (a
"Non-qualified Option") does not recognize taxable income on the date of the
grant of the option, provided that the option does not have a readily
ascertainable fair market value at the time it is granted. The participant must
recognize ordinary income generally at the time of exercise of a Non-qualified
Option in the amount of the difference between the fair market value of the
shares on the date of exercise and the option price. The ordinary income
received will constitute compensation for which tax withholding by the Company
generally will be required. The amount of ordinary income recognized by a
participant will be deductible by the Company in the year that the participant
recognizes the income if the Company complies with the applicable withholding
requirement.
If, at the time of exercise, the sale of the shares of Common Stock could
subject the participant to short-swing profit liability under Section 16(b) of
the Exchange Act, such person generally will not recognize ordinary income until
the date that the participant is no longer subject to such Section 16(b)
liability. Upon such date, the participant will recognize ordinary income in an
amount equal to the fair market value of the shares of Common Stock on such date
less the option exercise price. Nevertheless, the participant may elect under
Section 83(b) of the Code within 30 days of the date of exercise to recognize
ordinary income as of the date of exercise, without regard to the restriction of
Section 16(b).
Shares of Common Stock acquired upon the exercise of a Non-qualified Option
will have a tax basis equal to their fair market value on the exercise date or
other relevant date on which ordinary income is recognized, and the holding
period for the shares generally will begin on the date of exercise or such other
relevant date. Upon subsequent disposition of the shares of Common Stock, the
participant will recognize long-term capital gain or loss if the participant has
held the shares for more than one year prior to disposition, or short-term
capital gain or loss if the participant has held the shares for one year or
less.
If a holder of a Non-qualified Option pays the exercise price, in whole or
in part, with previously acquired shares of Common Stock, the participant will
recognize ordinary income in the amount by which the fair market value of the
shares received exceeds the exercise price. The participant will not recognize
gain or loss upon delivering such previously acquired shares of Common Stock to
the Company. Shares of Common Stock received by a participant equal in number to
the previously acquired shares exchanged therefor will have the same basis and
holding period as such previously acquired shares. Shares of Common Stock
received by a participant in excess of the number of such previously acquired
shares will have a basis equal to the fair market value of such additional
shares as of the date ordinary income is recognized. The holding period for such
additional shares of Common Stock will commence as of the date of exercise or
such other relevant date.
Proposed Awards
The Board of Directors of the Company adopted the 1997 Option Plan on March
24, 1997. The Board of Directors has made no determination regarding the
granting of options under the 1997 Option Plan, if it is adopted by the
stockholders.
The Stock Option Committee may grant options under the 1997 Option Plan to
the directors, officers and employees of the Company and its subsidiaries in the
future at such times as they deem most beneficial to the Company on the basis of
the individual participant's position, duties and responsibilities, the value of
the participant's services and any other relevant factor.
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THE BOARD OF DIRECTORS OF RECOMMENDS A VOTE FOR THE APPROVAL OF THE 1997 OPTION
PLAN. ===
CHANGE IN AND SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors approved the selection of Clark Schaefer to replace
Coopers & Lybrand L.L.P. ("Coopers") as the Company's independent accountants
effective September 30, 1996. Coopers had served as the Company's independent
accountants for all fiscal years since its inception in 1987. This change in
accountants has resulted in a significant decrease in the amount of accounting
fees paid by the Company.
Coopers' reports on the consolidated financial statements of the Company
for the two years ended December 31, 1995, did not contain any adverse opinion
or disclaimer of opinion, nor were such reports qualified or modified as to
uncertainty, audit scope or accounting principles. There were no disagreements
between the Company and Coopers on any matter of accounting principles or
practices, consolidated financial statement disclosure or audit scope or
procedure during the two years ended December 31, 1995, and any subsequent
interim period through September 27, 1996.
The Board of Directors' decision to engage Clark Schaefer as its
independent accountant is based on that firm's experience with community-based
financial institutions. Prior to selecting and engaging Clark Schaefer as its
independent accountant, the Company did not request or obtain any advice from
Clark Schaefer concerning any material accounting, auditing or financial
reporting issue regarding the application of accounting principles to a
specified transaction or the type of audit opinion that might be rendered on the
Company's consolidated financial statements.
Clark Schaefer conducted the independent audit of the Company for the year
ended December 31, 1996 and the Board of Directors has selected Clark Schaefer
as the independent accountants of the Company for the fiscal year ended December
31, 1997.
The Board of Director is requesting and recommends that the stockholders of
the Company ratify the selection of Clark Schaefer as the independent
accountants of the Company for the current fiscal year. Management of the
Company expects that a representative of Clark Schaefer will be present at the
Annual Meeting, and that such representative will have an opportunity, if
desired, to make a statement and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION
OF CLARK SCHAEFER AS INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE CURRENT
FISCAL YEAR.
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 27, 1997. Any such
proposal shall be subject to the requirements of the proxy rules adopted under
the Securities Exchange Act of 1934, as amended.
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OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, as
provided for in the Bylaws of the Company, 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.
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 27, 1997
<PAGE>
Exhibit A
THE FIRST FRANKLIN CORPORATION
1997 STOCK OPTION AND INCENTIVE PLAN
1. Purpose. The Purpose of The First Franklin Corporation 1997 Stock Option
and Incentive Plan (this "Plan") is to promote the best interests of First
Franklin Corporation (the "Company") and its shareholders by enabling the
Company to attract, retain and reward directors, officers, managerial and other
key employees of the Company and any Subsidiary (hereinafter defined), and to
strengthen the mutuality of interest between such directors, officers and
employees of the Company and the Company's shareholders.
2. Definitions. For purposes of this Plan, the following terms shall have
the meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto, together with rules, regulations and interpretations
promulgated thereunder.
(c) "Committee" means the Committee of the Board constituted as
provided in Section 3 of this Plan.
(d) "Common Shares" means the common shares of the Company or any
security of the Company issued in substitution, in exchange or in lieu
thereof.
(e) "Company" means First Franklin Corporation, a Delaware
corporation, or any successor corporation.
(f) "Employment" means regular employment with the company or a
Subsidiary and does not include service as a director or officer only.
(g) "ERISA" means the Employee Retirement Income Security Act, as
amended, or any successor thereto, together with rules, regulations and
interpretations promulgated thereunder.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.
(i) "Fair Market Value" means and shall be determined as follows:
(i) If the Common Shares are traded on a national securities
exchange at the time of grant of a Stock Option, then the Fair Market
Value shall be the average of the highest and the lowest selling price
on such exchange on the date such Stock Option is granted or, if there
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were no sales on such date, then on the next prior business day on
which there was a sale.
(ii) If the Common Shares are quoted on The Nasdaq Stock Market
at the time of the grant of the Stock Option, then the Fair Market
Value shall be the mean between the closing high bid and low asked
quotation with respect to a Common Share on such date on The Nasdaq
Stock Market.
(iii) If the Common shares are not traded on a national
securities exchange or quoted on The Nasdaq Stock Market, then the
Fair Market Value shall be as determined by the Committee.
(j) "Incentive Stock Option" means any Stock Option granted pursuant
to the provisions of Section 7 of this Plan that is intended to be and is
specifically designated as an "Incentive Stock Option" within the meaning
of Section 422 of the Code.
(k) "Non-Qualified Stock Option" means any Stock Option granted
pursuant to the provisions of Section 7 of this Plan that is not an
Incentive Stock Option.
(l) "Participant" means an employee, director or officer of the
Company or a Subsidiary who is granted a Stock Option under this Plan.
Notwithstanding the foregoing, for the purposes of the granting of any
Incentive Stock Option under this Plan, the term "Participant" shall
include only employees of the Company or a Subsidiary.
(m) "Plan" means The First Franklin Corporation 1997 Stock Option and
Incentive Plan, as set forth herein and as it may be hereafter amended from
time to time.
(n) "Stock Option" means an award of an option to purchase Common
Shares granted pursuant to the provisions of Section 7 of this Plan.
(o) "Subsidiary" means any corporation or entity in which the Company
directly or indirectly controls 50% or more of the total voting power of
all classes of its stock having voting power.
(p) "Terminated for Cause" means any removal of a director or officer
or discharge of an employee for personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of a material provision
of any law, rule or regulation (other than traffic violations or similar
offenses), a material violation of a final cease-and-desist order or any
other action of a director, officer or employee which results in a
substantial financial loss to the Company or a Subsidiary.
3. Administration.
(a) This Plan shall be administered by the Committee to be comprised
solely of two or more non-employee directors as defined by Exchange Act
Regulation ss.240.16b-3 (b)(3)(i). The members of the Committee shall be
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appointed from time to time by the Board. Members of the Committee shall
serve at the pleasure of the Board, and the Board may from time to time
remove members from, or add members to, the Committee. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business. An action approved in writing by all of the members of the
Committee then serving shall be fully as effective as if the action had
been taken by unanimous vote at a meeting duly called and held.
(b) The Committee is authorized to construe and interpret this Plan
and to make all other determinations necessary or advisable for the
administration of this Plan. The Committee may designate persons other than
members of the Committee to carry out its responsibilities under such
conditions and limitations as it may prescribe. Any determination, decision
or action of the Committee in connection with the construction,
interpretation, administration, or application of this Plan shall be final,
conclusive and binding upon all persons participating in this Plan and any
person validly claiming under or through persons participating in this
Plan. The Company shall effect the granting of Stock Options under this
Plan in accordance with the determinations made by the Committee, by
execution of instruments in writing in such form as approved by the
Committee.
4. Duration of This Plan. This Plan shall terminate on the date which is
ten (10) years from the date on which this Plan is adopted by the Board or the
date on which this Plan is approved by the shareholders of the Company,
whichever is earlier, except with respect to Stock Options then outstanding. No
Incentive Stock Option may be granted under this Plan after the date which is
ten (10) years from the date on which this Plan is adopted by the Board or the
date on which this Plan is approved by the shareholders of the Company,
whichever is earlier.
5. Common Shares Subject to This Plan. The maximum number of Common Shares
with respect to which Stock Options may be granted under this Plan, subject to
adjustment as provided in Section 10 of this Plan, shall be 117,323 Common
Shares. Common Shares which may be issued under this Plan may be either
authorized and unissued shares or issued shares which have been reacquired by
the Company. No fractional shares shall be issued under this Plan.
6. Eligibility and Grants. Persons eligible for Stock Options under this
Plan shall consist of directors, officers and managerial and other key employees
of the Company or a Subsidiary who hold positions with significant
responsibilities or whose performance or potential contribution, in the judgment
of the Committee, will benefit the future success of the Company or a
Subsidiary. In selecting the directors, officers and employees to whom Stock
Options will be awarded and the number of shares subject to such Stock Options,
the Committee shall consider the position, duties and responsibilities of the
eligible directors, officers and employees, the value of their services to the
Company and the Subsidiaries and any other factors that the Committee may deem
relevant. No director, officer or employee shall have any right or entitlement
to receive a Stock Option.
7. Stock Options. Stock Options granted under this Plan may be in the form
of Incentive Stock Options or Non-Qualified Stock Options, and such Stock
Options shall be subject to the following terms and conditions and in such form
as the Committee may from time to time approve and shall contain such additional
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terms and conditions as the Committee shall deem desirable, not inconsistent
with the express provisions of the Plan:
(a) STOCK OPTION PRICE. The option exercise price for Common Shares
purchasable under a Stock Option shall be determined by the Committee at
the time of grant; provided, however, that in no event shall the exercise
price of an Incentive Stock Option be less than 100% of the Fair Market
Value of the Common Shares on the date of the grant of such Incentive Stock
Option. Notwithstanding the foregoing, in the case of a Participant who
owns Common Shares representing more than 10% of the outstanding common
shares at the time an Incentive Stock Option is granted, the option
exercise price shall in no event be less than 110% of the Fair Market Value
of the Common Shares at the time the Incentive Stock Option is granted.
(b) STOCK OPTION TERMS. Subject to the right of the Company to provide
for earlier termination in the event of any merger, acquisition or
consolidation involving the Company, the term of each Stock Option shall be
fixed by the Committee; provided, however, that the term of Incentive Stock
Options will not exceed ten (10) years after the date the Incentive Stock
Option is granted; provided further, however, that in the case of a
Participant who owns a number of Common Shares representing more than 10%
of the Common Shares outstanding at the time an Incentive Stock Option is
granted, the term of the Incentive Stock Option shall not exceed five
years.
(c) EXERCISABILITY. Except as set forth in Section 7(f) and Section 8
of this Plan, Stock Options awarded under this Plan shall become
exercisable commencing on the date or dates and subject to such other terms
and conditions as shall be determined by the Committee at the date of the
grant.
(d) METHOD OF EXERCISE. A Stock Option may be exercised, in whole or
in part, by giving written notice of exercise to the company specifying the
number of Common Shares to be purchased, accompanied by payment in full of
the purchase price in cash or, if acceptable to the Committee in its sole
discretion, in Common Shares already owned by the Participant, or by
surrendering outstanding Stock Options. The Committee may also permit
Participants, either on a selective or aggregate basis, simultaneously to
exercise Stock Options and sell Common Shares thereby acquired, pursuant to
a brokerage or similar arrangement approved in advance by the Committee,
and use the proceeds from such sale as payment of the purchase price of
such Common Shares.
(e) SPECIAL RULE FOR INCENTIVE STOCK OPTIONS. With respect to
Incentive Stock Options granted under this Plan, to the extent the
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of the number of shares with respect to which Incentive
Stock Options are exercisable under all plans of the Company or a
Subsidiary for the first time by a Participant during any calendar year
exceeds $100,000.00 or such other limit as may be required by the Code,
such Stock Options shall be Non-Qualified Stock Options to the extent of
such excess.
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8. Termination of Employment or Directorship.
(a) Except in the event of the death or disability of a Participant,
whenever a Participant ceases to be a director or employee of the Company
or any Subsidiary of the Company, any Stock Option which has not yet become
exercisable shall thereupon terminate and be of no further force or effect,
and, subject to extension by the Committee, any Stock Option which has
become exercisable shall terminate if it is not exercised within three (3)
months of such designation, removal or retirement.
(b) Unless the Committee shall specifically state otherwise at the
time a Stock Option is granted, in the event of the death or disability of
a Participant all Stock Options granted to such Participant under this Plan
shall become exercisable in full and, subject to extension by the
Committee, all options shall terminate if not exercised within twelve
months of the Participant's death or disability.
(c) Notwithstanding the foregoing, in the event a Participant is
Terminated for Cause (hereinafter defined), any Stock Option which has not
been exercised shall terminate as of the date of such Termination for
Cause.
9. Non-transferability of Stock Option. No Stock Option under this Plan,
and no rights or interest therein, shall be assignable or transferable by a
Participant except by will or the laws of descent and distribution. During the
lifetime of a Participant, Stock Options are exercisable only by the Participant
or his or her legal representative.
10. Adjustment Upon Changes in Capitalization.
(a) The existence of this Plan and the Stock Options granted hereunder
shall not affect or restrict in any way the right or power of the Board or
the shareholders of the Company to make or authorize the following: any
adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business; any merger, acquisition or
consolidation of the Company; any issuance of bonds, debentures, preferred
or prior preference stocks ahead of or affecting the Company's capital
stock or rights thereof; the dissolution or liquidation of the Company or
any sale or transfer of all or any part of its assets or business; or any
other corporate act or proceeding, including any merger or acquisition
which would result in the exchange of cash, stock of any other company or
options to purchase the stock of another company for any Stock Option
outstanding at the time of such corporate transaction or which would
involve the termination of all Stock Options outstanding at the time of
such corporate transaction.
(b) In the event of any change in capitalization affecting the Common
Shares of the Company, such as a stock dividend, stock split,
recapitalization, merger, consolidation, spin-off, split-up, combination or
exchange of shares or other form of reorganization, or any other change
affecting the Common Shares, such proportionate adjustments, if any, as the
Board in its discretion may deem appropriate to reflect such change shall
be made with respect to the aggregate number of Common Shares for which
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Stock Options in respect thereof may be granted under this Plan, the
maximum number of Common Shares which may be sold or awarded to any
Participant, the number of Common Shares covered by each outstanding Stock
Option, and the exercise price per share in respect of outstanding Stock
Options.
11. Amendment and Termination of this Plan. Without further approval of the
shareholders, the Board may at any time terminate this Plan, or may amend it
from time to time in such respects as the Board may deem advisable, except that
the Board may not, without approval of the shareholders, make any amendment
which would (a) increase the aggregate number of Common Shares which may be
issued under this Plan (except for adjustments pursuant to Section 10 of this
Plan), (b) materially modify the requirements as to eligibility for
participation in this Plan, or (c) materially increase the benefits accruing to
Participants under this Plan. The above notwithstanding, the Board may amend
this Plan to take into account changes in applicable securities, federal income
tax and other applicable laws.
12. Modification of Options. The Board may authorize the Committee to
direct the execution of an instrument providing for the modification of any
outstanding Stock Option which the Board believes to be in the best interests of
the Company; provided, however, that no such modification, extension or renewal
shall confer on the holder of such Stock Option any right or benefit which could
not be conferred on him by the grant of a new Stock Option at such time and
shall not materially decrease the Participant's benefits under the Stock Option
without the consent of the holder of the Stock Option, except as otherwise
permitted under this Plan.
13. Miscellaneous.
(a) TAX WITHHOLDING. The Company shall have the right to deduct from
any settlement, including the delivery or vesting of Common Shares, made
under this Plan any federal, state or local taxes of any kind required by
law to be withheld with respect to such payments or to take such other
action as may be necessary in the opinion of the Company to satisfy all
obligation for the payment of such taxes. If Common Shares are used to
satisfy tax withholding, such shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made.
(b) NO RIGHT TO EMPLOYMENT. Neither the adoption of this Plan nor the
granting of any Stock Option shall confer upon any employee of the Company
or a Subsidiary any right to continued Employment with the Company or a
Subsidiary, as the case may be, nor shall it interfere in any way with the
right of the Company or a Subsidiary to terminate the Employment of any of
its employees at any time, with or without cause.
(c) ANNULMENT OF STOCK OPTIONS. The grant of any Stock Option is
provisional until the Participant becomes entitled to the certificate in
settlement thereof. In the event a Participant is Terminated for Cause, any
Stock Option which is provisional shall be annulled as of the date of such
termination.
(d) OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and
other benefits received by a Participant under a Stock Option made pursuant
to this Plan shall not be deemed a part of a Participant's regular,
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<PAGE>
recurring compensation for purposes of the termination indemnity or
severance pay law of any country and shall not be included in, nor have any
effect on, the determination of benefits under any other employee benefit
plan or similar arrangement provided by the Company or a Subsidiary unless
expressly so provided by such other plan or arrangement, or except where
the Committee expressly determines that a Stock Option or portion of a
Stock Option should be included to accurately reflect competitive
compensation practices or to recognize that a Stock Option has been made in
lieu of a portion of competitive annual cash compensation. Stock Options
under this Plan may be made in combination with or in tandem with, or as
alternatives to, grants, stock options or payments under any other plans of
the Company or a Subsidiary. This Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation programs and additional
compensation arrangements as it deems necessary to attract, retain and
reward directors, officers and employees for their service with the Company
and its Subsidiaries.
(e) SECURITIES LAW RESTRICTIONS. No Common Shares shall be issued
under this Plan unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal and state securities
laws. Certificates for Common Shares delivered under this Plan may be
subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Shares are then listed, and any applicable federal or
state securities law. The Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such
restrictions.
(f) STOCK OPTION AGREEMENT. Each Participant receiving a Stock Option
under this Plan shall enter into an agreement with the Company in a form
specified by the Committee agreeing to the terms and conditions of the
Stock Option and such related matters as the Committee shall, in its sole
discretion, determine.
(g) COST OF PLAN. The costs and expenses of administering this Plan
shall be borne by the Company.
(h) GOVERNING LAW. This Plan and all actions taken hereunder shall be
governed by and construed in accordance with the laws of the State of
Delaware, except to the extent that federal law shall be deemed applicable.
(i) EFFECTIVE DATE. This Plan shall be effective upon the later of the
adoption by the Board and approval by the Company's shareholders. This plan
shall be submitted to the shareholders of the Company for approval at an
annual or special meeting of shareholders.
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REVOCABLE PROXY
FIRST FRANKLIN CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
April 28, 1997
The undersigned hereby appoints John L. Nolting, Thomas H. Siemers and
James E. Hoff, S.J., 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 28, 1997 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:
1. The reelection of the following directors:
_____ FOR all nominees listed _____ WITHHOLD authority to
below (except as otherwise vote for all nominees listed
indicated) below
RICHARD H. FINAN RICHARD H. FINAN
JAMES E. CROSS JAMES E. CROSS
Instruction: To withhold authority to vote for any individual nominee,
write the nominee's name in the space provided below.
_______________________________________
2. The approval of the First Franklin FOR AGAINST ABSTAIN
Corporation 1997 Stock --- ------- -------
Option and Incentive Plan. _______ _________ _______
3. The ratification of the appointment FOR AGAINST ABSTAIN
of Clark, Schaefer, Hackett & Co. --- ------- -------
as independent accountants
for the Company for the year
ending December 31, 1997. _______ _________ _______
4. In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment
thereof.
<PAGE>
The Board of Directors recommends a vote "FOR" the reelection of the two named
directors, "FOR" the adoption of the First Franklin 1997 Stock Option and
Incentive Plan and "FOR" the ratification of the appointment of Clark, Schaefer,
Hackett & Co.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE DIRECTORS AND THE PROPOSITION LISTED. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED
IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
This proxy shall be deemed terminated and of no further force and effect if the
undersigned attends and votes in person by written ballot at the Annual Meeting
or submits a later-dated proxy or written revocation to the Secretary before or
at the Annual Meeting.
The undersigned acknowledges receipt from the Company, prior to the execution of
this Proxy, of Notice of the Meeting, a Proxy Statement dated March 27, 1997,
and a copy of the 1996 Annual Report To Stockholders.
Dated: _________________, 1997
________________________________ ________________________________
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
________________________________________________________________________________
SUPPLEMENTAL INFORMATION
FIRST FRANKLIN CORPORATION
FILING OF DEFINITIVE PROXY
STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD APRIL 28, 1997
One of the matters to be voted on at the Annual Meeting is the approval of the
First Franklin Corporation 1997 Stock Option and Incentive Plan. There have been
no final decisions made on which individuals receive options under that Plan, no
options have yet been issued. The shares of common stock which will be issued
upon the exercise of options under the Plan will be exempt from registration
under Section 4(2) of the Securities Act of 1933 and constitute restricted
securities under Rule 144, or they will be registered under the Securities Act
of 1933 on Form S-8. The Corporation has not determined yet whether it will
register the shares of common stock to be issued upon the exercise of the
options issued under the Plan.
