October 1, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders of
First Federal Financial Corporation of Kentucky (the "Corporation") to be held
at the Corporation's home office, 2323 Ring Road, Elizabethtown, Kentucky on
Wednesday November 10, 1999 at 5:00 p.m.
The attached Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted at the meeting. During the meeting, we will report on
the operations of the Corporation. Directors and officers of the Corporation as
well as a representative from the Corporation's independent accounting firm,
Crowe, Chizek and Company LLP, will be present to respond to appropriate
questions of shareholders.
Detailed information concerning activities and operating performance during the
fiscal year ended June 30, 1999 is contained in our Annual Report, which is also
enclosed.
Please sign, date and promptly return the enclosed proxy card to the
Corporation. If you attend the meeting, you may vote in person even if you have
previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
B. KEITH JOHNSON
President & Chief Executive Officer
<PAGE>
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
2323 Ring Road
Elizabethtown, Kentucky 42702-5006
(270) 765-2131
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held on November 10, 1999
The Annual Meeting of Shareholders of First Federal Financial Corporation of
Kentucky (the "Corporation"), will be held at the Corporation's home office,
2323 Ring Road, Elizabethtown, Kentucky, on Wednesday, November 10, 1999 at 5:00
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 four directors of the Corporation;
2. Such other matters as may properly come before the meeting
or any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the meeting.
Any action may be taken on any one of the foregoing proposals at the meeting on
the date specified above or on any date or dates to which, by original or later
adjournment, the meeting may be adjourned. Shareholders of record at the close
of business on September 15, 1999 are the shareholders entitled to vote at the
meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed proxy card, which is
solicited by the Board of Directors, and to mail it promptly in the enclosed
envelope. The proxy card will not be used if you attend and vote at the meeting
in person.
BY ORDER OF THE BOARD OF DIRECTORS
REBECCA S. BOWLING
Corporate Secretary
Elizabethtown, Kentucky
October 1, 1999
IMPORTANT: THE PROMPT RETURN OF PROXY CARDS WILL SAVE THE CORPORATION THE
EXPENSE OF FURTHER REQUESTS FOR PROXY CARDS IN ORDER TO INSURE A QUORUM. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
<PAGE>
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
2323 Ring Road
Elizabethtown, Kentucky 42702-5006
(270) 765-2131
ANNUAL MEETING OF SHAREHOLDERS
November 10, 1999
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of proxy
cards by the Board of Directors of First Federal Financial Corporation of
Kentucky (the "Corporation") for use at the 1999 Annual Meeting of Shareholders
of the Corporation (the "Meeting") to be held at the Corporation's home office,
2323 Ring Road, Elizabethtown, Kentucky, on Wednesday, November 10, 1999 at 5:00
p.m. The accompanying Notice of Annual Meeting of Stockholders and this Proxy
Statement, together with the enclosed proxy card, are being first mailed to
stockholders of the Corporation on or about October 1, 1999.
REVOCABILITY OF PROXY CARDS
Shareholders who execute proxy cards retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxy cards will be
voted at the Meeting and all adjournments thereof. Proxy cards may be revoked by
written notice to the Corporate Secretary of the Corporation or by the filing of
a later-dated proxy card prior to a vote being taken on a particular proposal at
the Meeting. A written notice of revocation of a proxy card should be sent to
the Corporate Secretary, First Federal Financial Corporation of Kentucky, 2323
Ring Road, P.O. Box 5006, Elizabethtown, Kentucky 42702-5006, and will be
effective if received by the Corporate Secretary prior to the Meeting. A
previously submitted proxy card will also be revoked if a shareholder attends
the Meeting and votes in person. Proxy cards solicited by the Board of Directors
of the Corporation will be voted in accordance with the directions given
therein. Where no instructions are indicated, the shares represented by a signed
proxy card will be voted for the nominees for director set forth below.
The accompanying proxy card confers discretionary authority on the persons named
as proxies to vote in their discretion in matters incident to the conduct of the
Meeting. If one or more persons other than the nominees named below are
nominated as directors, then the named proxies or their substitutes will have
the power, in their discretion, to vote cumulatively for some number less than
all nominees named below or for such of the other nominees as they may choose.
If any of the nominees named below becomes unwilling or unable to accept
nomination or election, then the proxies will have the right to vote for any
substitute nominee in place of the nominee who has become unwilling or unable to
accept nomination or election.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Shareholders of record as of the close of business on September 15, 1999 are
entitled to one vote for each share then held, except in the election of
directors, when cumulative voting applies. As of September 15, 1999 the
Corporation had 4,057,038 shares of common stock ("Common Stock") issued and
outstanding.
Persons and groups owning more than 5% of the Common Stock are required to file
certain reports regarding their ownership pursuant to the Securities Exchange
Act of 1934. Based on such reports, the following table sets forth, as of
September 15, 1999, certain information as to those persons who were beneficial
owners of more than 5% of the outstanding shares of Common Stock as of that
date. The table also sets forth the beneficial ownership of all executive
officers and directors of the Corporation as a group.
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Amount & Nature Percent of Shares
of Beneficial of Capital Stock
Ownership Outstanding
--------------- -----------------
First Federal Financial Corporation
of Kentucky Employee Stock
Ownership Plan
2323 Ring Road
P.O. Box 5006
Elizabethtown, Kentucky 42702-5006 225,889(1) 5.57%
All Executive Officers and
Directors as a Group (19 Persons) 458,358(2) 11.23%
- -----------------------------------
(1) As of the date of this proxy statement, all shares have been allocated.
The voting of allocated shares is directed by the employees.
(2) Includes certain shares owned by spouses, or as custodian or trustee,
over which shares all executive officers and directors as a group
effectively exercise sole voting and investment power, unless otherwise
indicated. Also includes 24,256 shares of Common Stock which may be
purchased pursuant to stock options exercisable within 60 days from the
record date, and 96,031 shares held by the Bank's ESOP which have been
allocated to all executive officer participants as a group. Each
employee participant votes shares allocated to his or her account.
CUMULATIVE VOTING
Pursuant to the Articles of Incorporation and Bylaws of the Corporation, every
stockholder voting for the election of directors is entitled to cast a number of
votes calculated by multiplying his shares times the number directors to be
elected. Each stockholder will be entitled to cast his votes for one director or
distribute his votes among any number of candidates as he or she chooses. The
Board of Directors intends to vote the shares represented by completed proxy
cards solicited by it equally among the four candidates standing for election as
directors nominated by the Board of Directors. However, the Board reserves the
right, in its sole discretion, to distribute the votes among some or all of the
nominees of the Board of Directors in another manner so as to elect as directors
the maximum number of nominees possible.
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PROPOSAL I - ELECTION OF DIRECTORS
The Corporation's Board of Directors is currently comprised of ten directors,
divided into three classes with staggered terms. We currently have two classes
of directors with three directors in the class and one class of directors with
four directors.
At the Meeting, four current directors will stand for election. The Board has
nominated each of Wreno M. Hall, Walter D. Huddleston, J. Stephen Mouser, and
Michael L. Thomas for election to a three-year term ending at the 2002 annual
meeting. If any nominee is unable to serve, the shares represented by all valid
proxy cards will be voted for election of such substitute director as the Board
of Directors may recommend. At this time, the Board knows of no reason why any
nominee might be unable to serve.
The four persons receiving the most votes at the meeting will be elected as
directors. Votes which are not cast at the meeting, either because of
abstentions or broker non-votes, are not considered in determining the number of
votes which have been cast for the election of a nominee.
The following table sets forth for each nominee and for each director continuing
in office such person's name, age, the year he or she first became a director
and the number of shares and percentage of the Common Stock beneficially owned.
SHARES OF
COMMON
YEAR FIRST STOCK
ELECTED BENIFICIALLY
AGE AT OR TERM OWNED AT PERCENT
SEPT.15, APPOINTED TO SEPTEMBER 15, OF
NAME 1999 DIRECTOR (1) EXPIRE 1999 (2) (3) CLASS
---- -------- ----------- ------ ------------- -------
Wreno M. Hall 80 1979 2002 89,960 2.22%
Walter D. Huddleston 73 1966 2002 74,030 1.82%
J. Stephen Mouser 50 1997 2002 4,840 *
Michael L. Thomas 44 1997 2002 797 *
DIRECTORS CONTINUING IN OFFICE
Robert M. Brown 59 1991 2001 14,822 *
B. Keith Johnson 38 1997 2000 25,901 *
Irene B. Lewis 78 1983 2000 3,200 *
Kennard Peden 83 1967 2000 24,000 *
Burlyn Pike 78 1995 2001 5,311 *
J. Alton Rider 62 1987 2001 78,608 1.94%
Certain Non-Director Executive Officers
Number of Shares of Percent
Common Stock Beneficially of
Name Age Owned Class
---- --- ------------------------- ------
Wm. Ray Brown 50 26,249(4) *
- -------------------------------
* Represents less than 1%
(1) Reflects the year first elected as a director of the Bank or the
Corporation. Each director first elected in 1990 or earlier became a
director of the Corporation on the date of its incorporation in June 1990.
(2) Includes certain shares owned by spouses, or as custodian or trustee over
which shares the director or executive officer effectively exercises sole
voting and investment power, unless otherwise indicated.
5
<PAGE>
(3) Includes 20,000 shares of Common Stock subject to currently exercisable
stock options. Also includes 2,047 shares under the ESOP, which have been
allocated to Mr. Johnson's account for which Mr. Johnson has voting rights.
(4) Includes 23,249 shares under the ESOP, which have been allocated to Mr.
Brown's account for which Mr. Brown has voting rights.
Listed below is certain information about the directors and executive officers
of the Corporation. Unless otherwise noted all directors and executive officers
have held these positions for at least five years.
Robert M. Brown owns and operates Brown Funeral Home, which he formed in 1972.
He is a charter member of the Elizabethtown A.M. Rotary Club. Mr. Brown is also
active in the National, Kentucky and South Central Funeral Directors
Association. He is also an active member of the Chamber of Commerce and has
served as a major division chairman of Elizabethtown Community College's
Partners in Progress fund raising campaign.
Wreno M. Hall is a retired surgeon. He practiced in Elizabethtown for over 39
years.
Walter D. Huddleston is a former two-term member of the United States Senate.
Since leaving the Senate in 1985, he has owned and operated Walter D. Huddleston
Consulting, a legislative consulting firm located in Elizabethtown and
Washington, D.C. He is a member of the Chamber of Commerce.
B. Keith Johnson was named President and C.E.O. of the Corporation and the Bank
on September 4, 1997. Mr. Johnson joined the Bank as Comptroller in 1993 and was
appointed Executive Vice President in 1995. Before joining the Corporation he
was a principal in the accounting firm of Whelan, Johnson, Doerr, Pike & Pawley
P.S.C., where he was extensively involved in the firm's financial institution
practice. He has been a licensed CPA since 1984. He is a member of the Board of
Directors of the Kentucky Bankers Association. He serves in various capacities
on several community/charitable organization boards.
Irene B. Lewis was employed by the Savings Bank in various capacities including
Controller and Corporate Secretary for 38 years prior to her retirement in 1985.
Mrs. Lewis has been a director since 1983.
Stephen Mouser is President of Mouser Kitchens, Inc., a family-owned cabinet
manufacturer in Elizabethtown. He is a member of the Better Business Bureau, the
Elizabethtown-Hardin County Chamber of Commerce, and the Home Builders
Association. He is a former President of the Rineyville Optimist Club and former
Board Member of Lincoln Trail Home Builders' Association.
Kennard Peden is a retired farmer. Mr. Peden serves as a director of the North
Central Kentucky Education Foundation.
Burlyn Pike is a member of the law firm Pike & Schmidt Law Office, P.S.C. in
Shepherdsville, Kentucky. Mr. Pike also served as the President and Chief
Executive Officer of Bullitt Federal Savings Bank prior to its merger with First
Federal Savings Bank in January 1995. He was named a director of the Corporation
in January 1995.
J. Alton Rider has been owner and operator of Rider's Men & Women Clothing Store
in Elizabethtown since 1969. He is past President of the Hardin County A.M.
Rotary Club, former Hardin County School Board member, past Hardin County
Representative of the Kentucky Retail Association, a current member of the
National Retail Federation, and is a member of the Elizabethtown-Hardin County
Chamber of Commerce. He is also currently serving as a member of the Kentucky
Retail Federation.
Michael Thomas, DVM, has been a partner in Elizabethtown Animal Hospital for 17
years. Dr. Thomas is an active member in the American Veterinary Medical
Association and the Kentucky Veterinary Medical Association.
6
<PAGE>
Certain Non-Director Executive Officers
Wm. Ray Brown currently serves as a Senior Vice President of the Corporation.
Mr. Brown has served in many capacities since joining the Bank in 1972.
Meetings and Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the Board and
through its committees. During the fiscal year ended June 30, 1999, the Board of
Directors held 9 meetings.
The full Board of Directors of the Corporation acts as a nominating committee
for the annual selection of nominees for election as directors. The Board of
Directors met once during the 1999 fiscal year in its capacity as nominating
committee. While the Board of Directors will consider nominees recommended by
shareholders, it has not actively solicited recommendations from the
Corporation's shareholders for nominees. Nominations must be submitted to the
Corporate Secretary of the Corporation in writing in accordance with procedures
set forth in the Corporation's Articles of Incorporation. Such notices generally
must be submitted not less than 30 days nor more than 60 days before the date of
the annual meeting and must include certain information including (i) the name,
age, address, principal occupation and Common Stock ownership of the person to
be nominated; (ii) a description of all arrangements or understandings between
the shareholder and the nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination is to be made by the
shareholder; (iii) such other information regarding the nominee as would be
required to be included in proxy materials filed under the applicable rules of
the SEC had the nominee been nominated by the Board of Directors; and (iv) the
written consent of the nominee to serve as a director of the Corporation if so
elected. The notice must also include information about the shareholder
submitting the nomination including name and address as they appear on the
Corporation's books and the number of shares of Common Stock owned by the
shareholder. Copies of the Articles of Incorporation may be obtained without
charge upon written request to Corporate Secretary, First Federal Financial
Corporation of Kentucky, 2323 Ring Road, Elizabethtown, Kentucky 42702-5006.
The Board's Risk Management Committee selects the Corporation's independent
auditors and reviews major financial, accounting and internal auditing policies.
This committee meets with the independent auditors before scheduling the
external audits to discuss the scope of work and audit findings and reviews the
finished reports. The committee also reviews Office of Thrift Supervision
examiner's reports and monitors policies pertaining to conflicts of interest as
they affect directors, officers, and employees. The Risk Management Committee,
composed of Directors Brown, Lewis, Mouser, Peden, and Rider, met twice during
the 1999 fiscal year.
The Board's Executive Compensation Committee determines issues involving
executive compensation. The compensation committee is composed of Directors
Huddleston, Hall, Mouser, and Pike. The compensation committee met once in 1999.
EXECUTIVE COMPENSATION
Report of Compensation Committee on Executive Compensation
During fiscal 1994, the Corporation established a Compensation Committee,
comprised entirely of independent, nonemployee directors, with responsibility
for reviewing all aspects of the Corporation's and Bank's executive compensation
program. The Compensation Committee's primary objective in structuring executive
compensation is to provide a means of attracting and retaining executives with
the experience and capability of providing outstanding leadership to the
Corporation and the Bank.
The Corporation's and the Bank's executive compensation program, described in
greater detail below, consists of a competitive base salary, an incentive bonus
based on the attainment of annual corporate performance objectives, and
stock-based compensation awards.
7
<PAGE>
In establishing base salary levels and recommending corporate performance
objectives, the Committee reviews relevant financial results for the
Corporation, including growth in earnings, the rate of return on assets, and
various other measures of productivity and efficiency. The Compensation
Committee also believes that stock-based compensation, in the form of ESOP
awards and grants of stock options and stock appreciation rights, can provide a
longer-term incentive by giving executives, employees, and the Corporation's
shareholders a common interest in increasing long-term shareholder value.
Salaries
The Compensation Committee has established a policy of providing base pay for
executives that approximates the median base pay provided to executives of other
thrifts and financial institutions of similar size. Base pay increases for
executives and all other employees are based on an evaluation of individual
performance.
Bonus Incentive Compensation
Corporate performance objectives are established each year by the Board of
Directors, which can include specific targets for growth, return on assets, and
return on equity. When these objectives are met, all employees, including
executive officers, earn an incentive bonus equal to a percentage of base pay.
Based upon the actual financial results for the fiscal year ended June 30, 1999
all employees of the Savings Bank earned an average incentive bonus equal to
6.0% of base pay.
Employee Stock Ownership Plan
The Corporation awards shares of the Common Stock under the ESOP to eligible
employees, including executives, based on a percentage of base pay determined by
the Board of Directors. Under the ESOP, executive officers were awarded an
aggregate of 787 shares of Common Stock during fiscal 1999.
Stock Option and Incentive Plan
The Corporation adopted its 1998 Stock Option and Incentive Plan as a means of
increasing the incentive and encouraging the continued employment of key
employees by facilitating their purchases of an equity interest in the
Corporation. The 1998 Plan, authorized grants of stock options and stock
appreciation rights to eligible employees. Awards under the 1998 Plan are
subject to vesting and forfeiture as determined by the Stock Option Committee
which administers the Plan. The stock options granted under the 1998 Plan can
have various vesting schedules depending on the date of the option. During the
fiscal 1999, 7500 shares were granted to executive officers under the 1998 Plan.
The Board of Directors believes that stock options and other forms of
stock-based incentive compensation help to attract, retain and motivate
executive officers to improve long-term shareholder value.
Compensation of Chief Executive Officer
In establishing Mr. Johnson's salary for fiscal year 1999, the Executive
Compensation Committee took into account the Corporation's success in meeting
its non-financial and financial performance goals during 1999. Mr. Johnson
earned a base salary of $133,000 for 1999. Mr. Johnson also received a
performance incentive bonus of $7,718 or 6.0% of his salary. Mr. Johnson was
also awarded 162 shares of stock under the ESOP during fiscal 1999.
EXECUTIVE COMPENSATION COMMITTEE
Walter D. Huddleston, Chairperson
Wreno M. Hall
Burlyn Pike
Stephen Mouser
8
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Summary Compensation Table
The following table sets forth the cash and noncash compensation for each of the
last three fiscal years awarded to or earned by the Chief Executive Officer of
the Corporation and the Bank. No other executive officer earned a combined
salary and bonus in excess of $100,000 during fiscal year 1999. Mr. Johnson was
named President and Chief Executive Officer of the Corporation and the Bank on
September 7, 1997.
ANNUAL COMPENSATION
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation Compensation
- ------------------ ---- ------ ----- ------------ ------------
(1) (2) (3)
B. Keith Johnson 1999 $133,000 $9,410 $2,160 $26,915
President and Chief 1998 108,834 9,020 2,160 24,349
Executive Officer 1997 98,700 8,510 2,500 6,964
- --------------------
(1) Includes a performance incentive bonus and a Christmas bonus.
(2) Represents compensation related to Mr. Johnson's use of an automobile
provided by the Bank.
(3) Includes the following for the 1997, 1998 and 1999 fiscal years,
respectively: director's fees of $0, $13,000 and $15,250; matching
contributions under the Bank's 401(K) plan of $4,800, $7,530 and $7,980;
and amounts credited to Mr. Johnson's account under the Bank's ESOP of
$2,164, $1,885 and $2,047.
Options Exercises and Year-end Value Table
The following table sets forth information concerning the value of options held
by the Chief Executive Officer at the end of fiscal year 1999.
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
at Fiscal at Fiscal
Shares Acquired Value Year-End Year-End
Name on Exercise Realized (Exercisable) (Exercisable)(1)
---- --------------- -------- ------------ ----------------
B. Keith Johnson -0- -0- 20,000 $205,000
- -------------------
(1) Difference between fair market value of underlying Common Stock at June 30,
1999 and the exercise price of such options.
Directors' Compensation
Members of the Board of Directors of the Corporation receive a monthly fee of
$250. Members of the Bank's Board of Directors receive a monthly fee of $1000.
Advisory Board members receive a monthly fee of $550. No fees are paid for
attendance at committee meetings.
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Retirement Plan
The Bank is a participating employer in a multiple employer pension plan
sponsored by the Financial Institution Retirement Fund. All full time employees
of the Bank are eligible to participate after one year of service and attaining
age 21. Service credit for purposes of benefit accrued, eligibility and vesting
is retroactive to the date of employment.
A qualifying employee becomes fully vested in the plan upon completion of five
years' service or when the normal retirement age of 65 is attained. The plan is
intended to comply with the requirements of Section 401(a) of the Internal
Revenue Code of 1986, as amended ("Code"), as a "tax qualified" deferred
benefits plan, and with the provisions of the Employee Retirement Income
Security Act of 1974, as amended.
The plan provides for monthly payments to each participating employee at normal
retirement age. The annual allowance payable under the plan is equal to 2% of
the highest average earnings received in any five consecutive full calendar
years during the last ten years of employment before the participant's normal
retirement date multiplied by the years of credited service. A participant who
has attained the age of 45 and completed ten years of service may take an early
retirement and elect to receive a reduced monthly benefit beginning immediately.
Mr. Johnson has 6 years of credited service under the plan. During fiscal year
1999, the Bank had employer contributions and administrative expenses of $4,486
for the plan.
The following table shows the estimated annual benefits payable under the plan
based on an employee's years of service and the compensation indicated below, as
calculated under the plan assuming retirement as of December 31, 1998. Under the
Code, benefits under the plan are limited to $120,000 per year.
YEARS OF SERVICE
------------------------------------------
Remuneration 15 20 25 30 35
- ------------ -- -- -- -- --
10,000 3,000 4,000 5,000 6,000 7,000
20,000 6,000 8,000 10,000 12,000 14,000
30,000 9,000 12,000 15,000 18,000 21,000
60,000 18,000 24,000 30,000 36,000 42,000
90,000 27,000 36,000 45,000 54,000 63,000
120,000 36,000 48,000 60,000 72,000 84,000
150,000 45,000 60,000 75,000 90,000 105,000
Transactions with the Corporation and the Bank
Before 1989, the Bank followed a policy of offering preferential terms on loans
to its officers, directors and employees. As a result of the passage in August
1989 of the Financial Institution Reform, Recovery and Enforcement Act of 1989,
however, the Bank is no longer permitted to grant loans on preferential terms to
executive officers and directors. The Bank therefore currently offers interest
rate and fee concessions only on loans to its non-executive employees. All loans
to directors and executive officers are approved by the Board of Directors and
are made in the ordinary course of business on substantially the same terms as
those of comparable transactions prevailing at the time and do not involve more
than the normal risk of collectability or contain other unfavorable terms.
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COMPARATIVE STOCK PERFORMANCE GRAPH
[GRAPHIC OMITTED]The graph below shows the cumulative total return on the Common
Stock of the Corporation between June 30, 1994 through June 30, 1999 compared
with the cumulative total return of the NASDAQ Stock Market Index for U.S.
Companies and the S&P Savings and Loans Index over the same period. Cumulative
total return on the stock or the index equals the total increase in value since
June 30, 1994, assuming reinvestment of all dividends paid into the stock or the
index, respectively. The graph was prepared assuming that $100 was invested on
June 30, 1994 in the Common Stock of the Corporation or in the indexes.
- ---------------------------------------------------------------------------
6/94 6/95 6/96 6/97 6/98 6/99
- ---------------------------------------------------------------------------
First Federal Financial
Corporation of Kentucky 100 87 132 120 189 155
NASDAQ Stock Market-US 100 133 171 208 274 393
S&P Savings & Loan Companies 100 121 148 257 329 281
CHANGES IN ACCOUNTANTS
On April 20, 1999, Whelan, Doerr & Company was dismissed after the Board of
Directors approved a recommendation made by the Risk Management Committee to
change accountants.
During the two most recent fiscal years and subsequent interim periods preceding
the dismissal there had been no prior disagreements with Whelan, Doerr & Company
concerning accounting principles or practices, financial statement disclosure,
or auditing scope or procedures. Also, during the past two fiscal years, Whelan,
Doerr & Company's report on the Corporation's financial statements contained an
unqualified opinion.
The reason for the change was due to the fact that Whelan, Doerr & Company could
no longer provide the services needed due to a decrease in personnel. Therefore,
based on the Corporation's current size and projected growth plans, a decision
was made to go with a larger regional firm.
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The new accounting firm appointed by the Board of Directors on April 20, 1999
was Crowe, Chizek & Company LLP. During the two most recent fiscal years and
subsequent interim periods prior to the appointment of Crowe, Chizek & Company
LLP, there have been no consultations with the new accountants regarding the
application of accounting principles to a specified transaction or the type of
audit opinion that might be rendered on the Corporation's financial statements.
Also, the new accountants have not provided a written report or any advice that
they concluded was an important factor in reaching a decision as to the
accounting, auditing or financial reporting issue, or any other matter that was
the subject of a disagreement or reportable event.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to regulations promulgated under the Securities Exchange Act of 1934,
the Corporation's officers, directors and persons who own more than ten percent
of the outstanding Common Stock are required to file reports detailing their
ownership and changes of ownership in Common Stock, and to furnish the
Corporation with copies of all such reports. Based solely on its review of the
copies of such reports received during the past fiscal year or with respect to
the last fiscal year, the Corporation believes that during the fiscal year ended
June 30, 1999, all of its officers and directors and all stockholders who own
more than ten percent of the Corporation's outstanding Common Stock have
complied with the reporting requirements.
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 matters should properly come before the Meeting, it is intended that
shares represented by completed proxy cards in the accompanying form will be
voted in respect thereof in accordance with the judgment of the person or
persons voting such shares.
MISCELLANEOUS
The cost of solicitation of proxy cards will be borne by the Corporation. In
addition to solicitations by mail, directors, officers, and regular employees of
the Corporation may solicit proxy cards personally or by telegraph or telephone
without additional compensation.
The Corporation's Annual Report to Shareholders, including financial statements,
is being mailed to all shareholders of record as of the close of business on
September 15, 1999. Any shareholder who has not received a copy of the Annual
Report may obtain a copy by writing to the Corporate Secretary of the
Corporation. The Annual Report is not to be treated as a part of the proxy
solicitation material or as having been incorporated herein by reference.
SHAREHOLDER PROPOSALS
Shareholders proposals to be presented at the 2000 Annual Meeting must be
received by the Corporate Secretary of the Corporation no later than May 27,
2000 to be included in the proxy statement for the 2000 Annual Meeting. Any such
proposals and any nominations of candidates for election of directors must
comply with the Corporation's Articles of Incorporation and the requirements of
the proxy rules adopted under the Securities Exchange Act of 1934. The
Corporation expects to exercise discretionary voting authority granted under any
proxy form which is properly executed and returned to the Corporation on any
matter that may properly come before the 2000 Annual Meeting unless written
notice of the matter is delivered to the Corporation at its corporate offices,
addressed to the Corporate Secretary of the Corporation, not later than October
11, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
Rebecca S. Bowling
Corporate Secretary
Elizabethtown, Kentucky
October 1, 1999
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