SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 the
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
FIRST INDEPENDENCE CORPORATION
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
Common Stock, par value $.01
________________________________________________________________________________
1) Title of each class of securities to which transaction applies:
978,333
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
10.625 (average high & low price per share of Common Stock
as reported on the Nasdaq Stock Market on Sept. 30, 1998
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
[_] Fee paid previously with preliminary materials:
________________________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(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:
(SC14A-07/98)
<PAGE>
[FIRST INDEPENDENCE CORPORATION LETTERHEAD]
December 28, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of First Independence
Corporation (the "Company"), we cordially invite you to attend the Annual
Meeting of Stockholders of the Company (the "Meeting"). The Meeting will be held
at 2:00 p.m., Independence, Kansas time, on January 27, 1999, at the office of
the Company located at Myrtle and Sixth Streets, Independence, Kansas.
In addition to the election of directors, stockholders are also being asked
to ratify the appointment of Grant Thornton LLP as the Company's auditors.
Accordingly, your Board of Directors unanimously recommends that you vote FOR
the election of the nominees for director as well as the ratification of
auditors.
We encourage you to attend the Meeting in person. Whether or not you plan
to attend, however, please read the enclosed Proxy Statement and then complete,
sign and date the enclosed proxy and return it in the accompanying postpaid
return envelope as promptly as possible. This will save the Company additional
expense in soliciting proxies and will ensure that your shares are represented
at the Meeting.
Thank you for your attention to this important matter.
Very truly yours,
Larry G. Spencer
President and Chief Executive Officer
<PAGE>
FIRST INDEPENDENCE CORPORATION
Myrtle and Sixth Streets
Independence, Kansas 67301
(316) 331-1660
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on January 27, 1999
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of First Independence Corporation ("First Independence" or the
"Company") will be held at the office of the Company located at Myrtle and Sixth
Streets, Independence, Kansas, at 2:00 p.m. Independence, Kansas time, on
January 27, 1999.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company;
2. The ratification of the appointment of Grant Thornton LLP as auditors
for the Company for the fiscal year ending September 30, 1999;
and such other matters as may properly come before the Meeting, or any
adjournments or postponements 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 as of the close of business on December 4,
1998 are the stockholders entitled to vote at the Meeting and any adjournments
or postponements thereof. A complete list of stockholders entitled to vote at
the Meeting will be available for inspection by stockholders at the office of
the Company during the ten days prior to the Meeting as well as at the Meeting.
You are requested to complete and sign the enclosed Proxy Card 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 attend and vote at the
Meeting in person.
By Order of the Board of Directors
Donald E. Aitken
Chairman of the Board
Independence, Kansas
December 28, 1998
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING.
A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
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<PAGE>
PROXY STATEMENT
FIRST INDEPENDENCE CORPORATION
Myrtle and Sixth Streets
Independence, Kansas 67301
(316) 331-1660
ANNUAL MEETING OF STOCKHOLDERS
January 27, 1999
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of First Independence Corporation (the
"Company") of proxies to be used at the Annual Meeting of Stockholders of the
Company (the "Meeting") which will be held at the office of the Company, located
at Myrtle and Sixth Streets, Independence, Kansas, on January 27, 1999, at 2:00
p.m., Independence, Kansas time, and all adjournments of the Meeting. The
accompanying Notice of Annual Meeting and this Proxy Statement are first being
mailed to stockholders on or about December 28, 1998. Certain of the information
provided herein relates to First Federal Savings and Loan Association of
Independence (the "Association"), a wholly owned subsidiary of the Company.
At the Meeting, stockholders of the Company are being asked to consider and
vote upon the election of two directors of the Company and the appointment of
Grant Thornton LLP as the Company's auditors for the fiscal year ending
September 30, 1999.
Vote Required and Proxy Information
All shares of common stock of the Company, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting and not revoked will be voted at the Meeting
in accordance with the instructions thereon. If no instructions are indicated,
properly executed proxies will be voted for the nominees and the adoption of the
proposal set forth in this Proxy Statement. The Company does not know of any
matters, other than as described in the Notice of Annual Meeting, that are to
come before the Meeting. If any other matters are properly presented at the
Meeting for action, the persons named in the enclosed form of proxy and acting
pursuant thereto will have the discretion to vote on such matters in accordance
with their best judgment.
Directors shall be elected by a plurality of the votes present in person or
represented by proxy at the Meeting and entitled to vote on the election of
directors. In all matters other than the election of directors, the affirmative
vote of the majority of shares present in person or represented by proxy at the
Meeting and entitled to vote on the matter shall be the act of the stockholders.
Proxies marked to abstain with respect to a proposal have the same effect as
votes against the proposal. Broker non-votes have no effect on the vote.
One-third of the shares of the Common Stock, present in person or represented by
proxy, shall constitute a quorum for purposes of the Meeting. Abstentions and
broker non- votes are counted for purposes of determining a quorum.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy, (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting, or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Gary L.
Overfield, Secretary, First Independence Corporation, Myrtle and Sixth Streets,
Independence, Kansas 67301.
Voting Securities and Principal Holders Thereof
Stockholders of record as of the close of business on December 4, 1998 will
be entitled to one vote for each share then held. As of that date, the Company
had 963,819 shares of Common Stock issued and outstanding. The following table
sets forth information regarding share ownership of: (i) those persons or
entities known by management to beneficially own more than five percent of the
Common Stock and (ii) all directors and executive officers of the Company and
the Association as a group.
<PAGE>
<TABLE>
<CAPTION>
Shares Percent
Beneficially of
Beneficial Owner Owned(1) Class
- ------------------------------------------------------------------------- ------------------ -------------
<S> <C> <C>
First Independence Corporation Employee Stock Ownership Plan 101,832(2) 10.57%
Myrtle and Sixth Streets
Independence, Kansas 67301
John Hancock Mutual Life Insurance Company 71,000(3) 7.37%
John Hancock Place
P.O. Box 111
Boston, Massachusetts 02117
Athena Capital Management, Inc. 78,236(4) 8.12%
621 E. Germantown Pike
Plymouth Valley, PA 19401
Jeffrey Gendell 95,700(5) 9.93%
31 West 52nd Street
17th Floor
New York, New York 10019
Larry G. Spencer 71,458(6) 7.20%
President, Chief Executive Officer and Director
901 Birdie Drive
Independence, KS 67301
Directors and executive officers as a group (10 persons) 269,821(7) 25.49%
</TABLE>
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(1) Reflects a two-for-one stock split which occurred in fiscal 1997.
(2) The amount reported represents shares held by the Employee Stock Ownership
Plan (the "ESOP"), 72,737 of which have been allocated to accounts of
participants. First Bankers Trust Company, Quincy, Illinois, the trustee of
the ESOP, may be deemed to beneficially own the shares held by the ESOP
which have not been allocated to the accounts of participants.
(3) As reported by John Hancock Mutual Life Insurance Company ("John Hancock")
and certain of John Hancock's subsidiaries, including John Hancock
Advisors, Inc. ("JHA"), a registered investment adviser, and John Hancock
Freedom Regional Bank Fund ("JHFRBF") in an amended Schedule 13G dated
February 2, 1996. JHA reported sole voting and investment power with
respect to the 35,500 shares held through JHFRBF.
(4) As reported by Athena Capital Management, Inc. in a Schedule 13G dated
January 29, 1998. Athena Capital Management, Inc., a registered investment
adviser, reported sole voting and investment power with respect to 836
shares of the Common Stock and shared voting and investment power with
respect to 77,400 shares of the Common Stock.
(5) As reported by Jeffrey L. Gendell, in a Schedule 13D dated January 9, 1998.
Mr. Gendell serves as the Managing Member of Tontine Management, L.L.C. and
Tontine Overseas Associates, LTD. The principal business of Tontine
Management is serving as General Partner to Tontine Financial Partners,
L.P. and to Tontine Partners, L.P., an affiliated private investment
limited partnership. Tontine Financial Partners, L.P. reported shared
voting and investment power with respect to 70,700 shares of the Common
Stock. Tontine Overseas Associates, L.L.C. reported shared voting and
investment power with respect to 25,000 shares of the Common Stock.
(6) Includes 29,748 shares held directly, 600 shares held solely by Mr.
Spencer's spouse, 600 shares held by minor children of Mr. Spencer, 11,416
shares allocated to Mr. Spencer's account under the ESOP and 29,094 shares
subject to options granted to Mr. Spencer under the 1993 Stock Option and
Incentive Plan (the "Stock Option Plan"), which are exercisable within 60
days of the date hereof.
(7) The group includes all current directors and nominees, including two
directors of the Company and the Association who are not standing for
re-election at the Meeting. Includes shares held directly, as well as
shares held jointly with family members, shares held in retirement
accounts, held in a fiduciary capacity or by certain family members, with
respect to which shares the listed individuals or group members may be
deemed to have sole or shared voting and/or investment power. This amount
includes the shares held by Larry G. Spencer and listed separately on this
table. This amount also includes an aggregate of 94,920 shares subject to
options granted under the Stock Option Plan and 34,353 shares allocated to
the accounts of participants under the ESOP.
2
<PAGE>
I. ELECTION OF DIRECTORS
General
The Company's Board of Directors currently consists of seven members and
has been reduced to six members effective upon completion of the Meeting. Except
for Directors Strecker and Smith, who have served on the Board since January
1994, each of the current directors of the Company has served in such capacity
since its incorporation in June 1993. The Board is divided into three classes,
each of which contains one-third of the Board. Approximately one-third of the
Board is elected annually. Directors of the Company are generally elected to
serve for a three-year period or until their respective successors are elected
and qualified.
The following table sets forth certain information, as of December 4, 1998,
regarding the composition of the Company's Board of Directors, including each
director's term of office. The Board of Directors acting as the nominating
committee has recommended and approved the nominees identified in the following
table. 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 the Meeting FOR the election of the nominees identified below.
If a nominee is unable to serve, the shares represented by all valid proxies
will be voted for the election of such substitute nominee as the Board of
Directors may recommend. At this time, the Board of Directors knows of no reason
why any nominee may be unable to serve, if elected. Except as disclosed herein,
there are no arrangements or understandings between the nominee and any other
person pursuant to which the nominee was selected.
The Board of Directors gratefully acknowledges the dedicated service of
Directors Donald E. Aitken and John T. Updegraff, who will retire from the Board
effective the date of the Meeting after serving the Company and the Association
since 1968 and 1979, respectively. In 1996, Mr. Aitken retired from his position
as Manager of City Publishing Co., Inc., a position he held for 29 years. In
1990, Mr. Updegraff retired from his position as Vice President and Senior
Counsel for ARCO Pipeline Company, a position he had held for 15 years.
<TABLE>
<CAPTION>
Shares of
Common
Term Stock Percent
Director to Beneficially of
Name Age Position(s) Held in the Company Since(1) Expire Owned(2) Class
- -----------------------------------------------------------------------------------------------------------------------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
Lavern W. Strecker 57 Director 1993 2002 6,118(3) (4)
Robert A. Johnson 52 --- --- 2002 --- ---
DIRECTORS CONTINUING IN OFFICE
William T. Newkirk II 42 Director 1992 2001 9,818(5) 1.01%(4)
Joseph M. Smith 53 Director 1993 2001 5,878(6) (4)
Larry G. Spencer 50 President, Chief Executive Officer and
Director 1993 2000 71,458(7) 7.20%
Harold L. Swearingen 61 Director 1992 2000 9,018(8) (4)
</TABLE>
- ----------
(1) Includes service as a director of the Association.
(2) Amounts include shares held directly and jointly with family members, as
well as shares which are held in retirement accounts, or held by certain
members of the named individuals' families, or held by trusts of which the
named individual is a trustee or substantial beneficiary, with respect to
which shares the respective directors may be deemed to have sole or shared
voting and/or investment power. Amounts also include 29,094, 5,658 and
1,318 shares subject to options granted under the Stock Option Plan to Mr.
Spencer, Mr. Swearingen and Mr. Strecker, respectively, and 5,818 shares to
each of the remaining non-employee directors, which were exercisable within
60 days of the Record Date.
(3) Represents 300 shares held in a trust, for the benefit of Mr. Strecker's
wife, for which Mr. Strecker is a co-trustee, 4,500 shares held directly,
and 1,318 shares subject to options, as described in footnote 2.
(4) Less than 1.0%.
(5) Includes 4,000 shares held directly and 5,818 shares subject to options, as
described in footnote 2.
(6) Includes 60 shares held jointly with Mr. Smith's spouse and 5,818 shares
subject to options, as described in footnote 2.
3
<PAGE>
(7) See footnote 7 under "Voting Securities and Certain Holders Thereof" for
information regarding Mr. Spencer's stock ownership.
(8) Amount includes 3,360 shares held in a trust of which Mr. Swearingen is a
trustee, and 5,658 shares subject to options, as described in footnote 2.
The principal occupation of each director of the Company and each of the
nominees for director is set forth below. All directors and nominees have held
their present position for at least five years unless otherwise indicated.
Lavern W. Strecker. Mr. Strecker is currently retired. Prior to his
retirement in 1992, Mr. Strecker was employed by ARCO Pipe Line Company for 26
years with his last position being Manager of Accounting and Control.
Robert A. Johnson. Mr. Johnson is currently the Human Resource Manager with
M-E-C Company of Neodesha, Kansas. Mr. Johnson has been employed by M-E-C
Company for the past four years. Prior to his employment with M-E-C Company, he
was personnel manager with Emerson Electric of Independence, Kansas for 13
years.
William T. Newkirk II. Mr. Newkirk is an insurance agent with the Newkirk,
Dennis & Buckles Insurance Co. located in Independence, Kansas. Mr. Newkirk has
been in the insurance business for 19 years.
Joseph M. Smith. Mr. Smith is currently the County Extension
Agent-Agriculture and Coordinator with the Montgomery County Extension Council.
Mr. Smith has been employed by the Montgomery County Extension Council for the
past 25 years.
Larry G. Spencer. Mr. Spencer is President and Chief Executive Officer of
the Company and the Association. Mr. Spencer has been employed by the
Association since 1974 and has held a variety of positions including Executive
Vice President. Mr. Spencer was promoted to his present position in 1990. Mr.
Spencer received a degree in Business Administration from Pittsburg State
University and served in the U.S. Army for three years. He has served on the
board of the Chamber of Commerce, Main Street, the Independence Community
College Endowment Association, Community Chest and Junior Achievement. He is
presently a member of the board of Heartland Community Bankers, USD#446
Endowment Association, Independence Food Bank and Independence Industries. He is
also a member of the Rotary Club.
Harold L. Swearingen. Prior to his retirement in 1992, Mr. Swearingen was
employed as a telecommunications manager by ARCO Pipe Line Company,
Independence, Kansas. Mr. Swearingen had been employed by Atlantic Richfield Co.
and its subsidiaries since 1960. He is a graduate of Kansas State University
(Manhattan). Mr. Swearingen is a member of the Institute of Electrical and
Electronic Engineers.
Meetings and Committees of the Board of Directors
Meetings and Committees of the Company. Meetings of the Company's Board of
Directors are generally held on a quarterly basis. The Board of Directors met
six times during fiscal 1998. During fiscal 1998, no incumbent director of the
Company attended fewer than 75% of the aggregate of the total number of Board
meetings and the total number of meetings held by the committees of the Board of
Directors on which he served.
The Board of Directors of the Company has standing Executive, Audit and
Compensation Committees.
The Executive Committee for fiscal 1998 was comprised of Chairman Aitken
and Directors Strecker and Updegraff, with Director Newkirk serving as an
alternate. The Executive Committee meets on an as needed basis and exercises the
power of the Board of Directors between Board meetings to the extent permitted
by Delaware law. This committee did not meet during fiscal 1998.
The Audit Committee recommends independent auditors to the Board, reviews
the results of the auditors' services, reviews with management and the internal
auditors the systems of internal control and internal audit reports and assures
that the books and records of the Company are kept in accordance with applicable
accounting principles and standards. The members of the Audit Committee for
fiscal 1998 were Chairman Aitken and Directors Strecker and Updegraff. During
the fiscal year ended September 30, 1998, this committee did not meet; however,
the entire Board of Directors performed its function during fiscal 1998.
The Compensation Committee for fiscal 1998 was composed of Chairman Aitken
and Directors Strecker and Updegraff. This Committee is responsible for
administering the Stock Option Plan and RRP and also reviews compensation and
benefit matters. This committee did not meet during the fiscal year ended
September 30, 1998.
4
<PAGE>
The entire Board of Directors acts as a nominating committee for selecting
nominees for election as directors. While the Board of Directors of the Company
will consider nominees recommended by stockholders, the Board has not actively
solicited such nominations. Pursuant to the Company's Bylaws, nominations by
stockholders must be delivered in writing to the Secretary of the Company at
least 30 days before the date of the Meeting.
Meetings and Committees of the Association. The Association's Board of
Directors meets monthly and may have additional special meetings upon the
written request of the Chairman of the Board or at least three directors. The
Board of Directors met 13 times during the fiscal year ended September 30, 1998.
During fiscal 1998, no incumbent director of the Association attended fewer than
75% of the aggregate of the total number of Board meetings and the total number
of meetings held by the committees of the Board of Directors on which he served.
The Association has standing Executive, Investment/Interest Rate Risk, Loan
and Asset Review Committees.
The Association's Executive Committee exercises the powers of the full
Board of Directors between board meetings, except that this committee does not
have the authority of the board to amend the charter or bylaws, adopt a plan of
merger, consolidation, dissolution, or provide for the disposition of all or
substantially all of the property and assets of the Association. The Executive
Committee also serves as the Association's Audit Committee and selects the
Association's independent accountants and meets with the accountants to discuss
the scope and to review the results of the annual audit. The Executive Committee
for fiscal 1998 was composed of Chairman Aitken and Directors Strecker and
Updegraff, with Director Newkirk serving as an alternate. The Executive
Committee met one time during the fiscal year ended September 30, 1998.
The Investment/Interest Rate Risk Committee is comprised of Director and
President Spencer, Senior Vice President and Senior Loan Officer Gary L.
Overfield and Vice President and Chief Financial Officer James B. Mitchell. The
Investment Committee is responsible for the formulation of the Association's
strategy and monitoring its investment performance and implementation of the
Association's interest rate risk management strategy. This committee met six
times during fiscal 1998.
The Loan Committee is composed of Director and President Spencer, Mr.
Overfield, Vice President and Asset Manager Jim L. Clubine and Vice President
Gregg S. Webster. This committee meets weekly to evaluate and approve all loan
applications. During fiscal 1998, this committee met 52 times.
The Asset Review Committee is comprised of Director and President Spencer,
Messrs. Overfield, Clubine and Webster and Ms. Lori L. Kelley, an Assistant Vice
President of the Association. This committee identifies and reviews the
Association's problem assets. This committee met four times during fiscal 1998.
Director Compensation
The Company's directors are not paid fees for their service in such
capacity. Directors of the Association are paid a fee of $500 per month plus
$500 per special Association Board meeting and $300 per Association Executive
Committee meeting attended. With the exception of the Association's Executive
Committee, no fee is paid for membership on the Association's committees.
Executive Compensation
The Company has not paid any compensation to its executive officers since
its formation. The Company does not presently anticipate paying any compensation
to such persons until it becomes actively involved in the operation or
acquisition of businesses other than the Association.
The following table sets forth information regarding compensation paid by
the Company and the Association to their Chief Executive Officer for services
rendered during the fiscal year ended September 30, 1998. No other executive
officer made $100,000 or more during the fiscal year ended September 30, 1998.
5
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
SUMMARY COMPENSATION TABLE
======================================================================================================================
Long-Term Compensation
-----------------------
Annual Compensation(1) Awards
- ----------------------------------------------------------------------------------------------------------------------
Restricted
Stock Options/ All Other
Salary Bonus Award(s) SARs Compensation
Name and Principal Position Year ($)(2) ($) ($) (#) ($)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Larry G. Spencer, President and Chief 1998 $106,126 $9,938 $ --- --- $10,999(3)
Executive Officer 1997 99,837 9,184 --- --- 11,119(3)
1996 89,434 8,919 --- --- 11,185(3)
======================================================================================================================
</TABLE>
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(1) Pursuant to Securities and Exchange Commission rules, perquisites equal to
the lesser of either $50,000 or 10% of salary and bonus are excluded from
the table above.
(2) Includes directors' fees of $6,150, $5,575, and $4,800 during fiscal 1998,
1997, and 1996, respectively.
(3) Includes the dollar value of 2,098, 2,141 and 1,094 shares allocated to Mr.
Spencer's account under the ESOP during fiscal 1998, 1997 and 1996,
respectively and excess group life insurance premiums of $510, $414 and
$248 paid by the Association during fiscal 1998, 1997 and 1996,
respectively.
No stock appreciation rights ("SARs") were granted during fiscal 1998. The
following table sets forth certain information concerning the number and value
of unexercised stock options held by the Company's Chief Executive Officer at
September 30, 1998. No options were exercised during fiscal 1998.
<TABLE>
<CAPTION>
======================================================================================================================
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
- ----------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Options/SARs at FY-End (#) at FY-End ($)(1)
---------------------------- ------------------------------
Shares Acquired Value
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Larry G. Spencer N/A N/A 29,094 N/A $163,654 N/A
======================================================================================================================
</TABLE>
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(1) Represents the aggregate market value (market price of the Common Stock
less the exercise price) of the option granted based upon the average of
the bid and asked prices of $10.625 per share of the Common Stock on
September 30, 1998.
Employment Agreements
The Association has entered into employment agreements with Mr. Spencer and
two other executive officers. The employment agreements are designed to assist
the Association in maintaining a stable and competent management team upon which
the continued success of the Association depends. These agreements were filed
with, and approved by, the Office of Thrift Supervision ("OTS") as part of the
Association's application for conversion from mutual to stock form. The
employment agreements provide for annual base salary in an amount not less than
the employee's current salary and an initial term of three years. Each agreement
provides for extensions of one year, in addition to the then-remaining term
under the agreement, on each anniversary of the effective date of the agreement,
subject to a formal performance evaluation performed by disinterested members of
the Board of Directors of the Association. The agreements provide for
termination upon the employee's death, for cause or in certain events specified
by OTS regulations. The employment agreements are also terminable by the
employee upon 90 days' notice to the Association.
The employment agreements provide for payment to the employee of his salary
for the remainder of the term of the agreement, plus up to 299% of the
employee's base compensation, in the event there is a "change in control" of the
Association where employment terminates involuntarily in connection with such
change in control or within twelve months thereafter. This termination payment
is subject to reduction by the amount of all other compensation to the employee
deemed for purposes of the Internal Revenue Code of 1986, as amended (the
"Code") to be contingent on a "change in control," and may not exceed three
times the employee's average annual compensation over the most recent five year
period or be non-deductible by the Association for federal income tax purposes.
For the purposes of the
6
<PAGE>
employment agreements, a "change in control" is defined as any event which would
require the filing of an applicationfor acquisition of control or notice of
change in control pursuant to 12 C.F.R. ss. 574.3 or 574.4. Such events are
generally triggered prior to the acquisition or control of 10% of the Common
Stock. The agreements also guarantee participation in an equitable manner in
employee benefits applicable to executive personnel.
Certain Transactions
The Association has followed a policy of granting consumer loans and loans
secured by the borrower's personal residence to officers, directors and
employees. Loans to employees, executive officers and directors are made in the
ordinary course of business and on the same terms and conditions, including
interest rates and collateral, as those of comparable transactions prevailing at
the time with other persons, in accordance with the Association's underwriting
guidelines, and do not involve more than the normal risk of collectibility or
present other unfavorable features, which is consistent with current federal
requirements. Loans to executive officers and directors must be approved by a
majority of the disinterested directors and loans to other officers and
employees must be approved by the Association's loan committee.
II. RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has renewed the Company's arrangement for Grant
Thornton LLP to be its auditors for the 1999 fiscal year, subject to the
ratification of the appointment by the Company's stockholders. A representative
of Grant Thornton LLP is expected to attend the Annual Meeting to respond to
appropriate questions and will have an opportunity to make a statement if he or
she so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY'S AUDITORS
FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1999.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at the Company's executive office at
Myrtle and Sixth Streets, Independence, KS 67301 no later than August 31, 1999.
Any such proposal shall be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934, as amended. Otherwise, any
shareholder proposal to take action at such meeting must be received at the
Company's executive office at Myrtle and Sixth Streets, Independence, KS 67301
by November 29, 1999; provided, however, that in the event that the date of the
annual meeting is held before December 29, 1999, or after February 26, 2000, the
shareholder proposal must be received not later than the close of business on
the later of the 60th day prior to such annual meeting or the tenth day
following the day on which notice of the date of the annual meeting was mailed
or public announcement of the date of such meeting was first made. All
shareholder proposals must also comply with the Company's bylaws and Delaware
law.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or the Association
may solicit proxies personally or by telegraph or telephone without additional
compensation.
Independence, Kansas
December 28, 1998
7
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REVOCABLE PROXY
FIRST INDEPENDENCE CORPORATION
Annual Meeting of Stockholders
January 27, 1999
The undersigned hereby appoints the Board of Directors of First
Independence Corporation (the "Company"), and the survivor of them, with full
powers of substitution, to act as attorneys and proxies for the undersigned to
vote all shares of common stock of the Company which the undersigned is entitled
to vote at the Annual Meeting of Stockholders (the "Meeting"), to be held at the
main office of the Company located at Myrtle and Sixth Streets, Independence,
Kansas, on January 27, 1999 at 2:00 p.m., and at any and all adjournments and
postponements thereof, as follows:
I. The election as directors of all nominees listed below for three-year
terms.
[ ] FOR [ ] WITHHELD
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
LAVERN W. STRECKER ROBERT A. JOHNSON
II. The ratification of the appointment of Grant Thornton LLP as auditors of
the Company for the fiscal year ending September 30, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote on such other
matters as may properly come before the Meeting or any adjournments or
postponements thereof.
The Board of Directors recommends a vote "FOR" the directors and the
proposal listed above.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGEMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or at
any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Meeting of the stockholder's decision to
terminate this Proxy, then the power of such attorneys and proxies shall be
deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of Notice of the Annual Meeting, a Proxy Statement and
the Company's Annual Report to Stockholders for the fiscal year ended September
30, 1998.
Dated:________________ _________________________________________
SIGNATURE OF STOCKHOLDER
_________________________________________
SIGNATURE OF STOCKHOLDER
Please sign exactly as your name(s) appear(s) 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.
