[FIRST INDEPENDENCE CORPORATION LETTERHEAD]
December 27, 1999
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of First
Independence Corporation, we cordially invite you to attend the annual meeting
of stockholders. The annual meeting will be held at 10:30 a.m., Independence,
central standard time, on January 26, 2000, at our office 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 independent 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 annual 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 us the
additional expense in soliciting proxies and will ensure that your shares are
represented at the annual 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 26, 2000
Notice is hereby given that the annual meeting of stockholders of First
Independence Corporation will be held at our office located at Myrtle and Sixth
Streets, Independence, Kansas, at 10:30 a.m. Independence, central standard
time, on January 26, 2000.
A proxy card and a proxy statement for the annual meeting are enclosed.
The annual meeting is for the purpose of considering and acting upon:
Proposal I. Election of three directors of First Independence,
each with a term of three years;
Proposal II. The ratification of the appointment of Grant Thornton
LLP as independent auditors for First Independence
for the fiscal year ending September 30, 2000;
and such other matters as may properly come before the annual meeting, or any
adjournments or postponements thereof. We are not aware of any other business to
come before the annual meeting.
Any action may be taken on the foregoing proposals at the annual
meeting on the date specified above, or on any date or dates to which the annual
meeting may be adjourned. Stockholders of record as of the close of business on
December 6, 1999 are the stockholders entitled to vote at the annual meeting and
any adjournments or postponements thereof. A complete list of stockholders
entitled to vote at the annual meeting will be available for inspection by
stockholders at our office during the ten days prior to the annual meeting as
well as at the annual 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. Your proxy will not be used if you attend and vote at the
annual meeting in person.
By Order of the Board of Directors
Lavern W. Strecker
CHAIRMAN OF THE BOARD
Independence, Kansas
December 27, 1999
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE US THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL MEETING.
A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
FIRST INDEPENDENCE CORPORATION
Myrtle and Sixth Streets
Independence, Kansas 67301
(316) 331-1660
ANNUAL MEETING OF STOCKHOLDERS
January 26, 2000
First Independence Corporation's Board of Directors is using this proxy
statement to solicit proxies from the holders of First Independence common stock
for use at our annual meeting of stockholders. We are first mailing this proxy
statement and the enclosed form of proxy to our stockholders on or about
December 27, 1999.
Certain of the information provided herein relates to our wholly owned
subsidiary, First Federal Savings and Loan Association of Independence.
TIME AND PLACE OF THE ANNUAL MEETING; MATTERS TO BE CONSIDERED
Our annual meeting will be held as follows:
DATE: January 26, 2000
TIME: 10:30 a.m., central standard time
PLACE: Office of First Independence Corporation
Myrtle and Sixth Streets
Independence, Kansas
At the annual meeting, stockholders are being asked to consider and
vote upon the following proposals:
o the election of three directors of First
Independence, each with a term of three years;
o the ratification of the appointment of Grant Thornton
LLP as First Independence's independent auditors for
the fiscal year ending September 30, 2000; and
any other matters that may properly come before the annual meeting. As of the
date of this proxy statement, we are not aware of any other business to be
presented for consideration at the annual meeting.
VOTING RIGHTS OF STOCKHOLDERS; VOTES REQUIRED FOR APPROVAL
Only holders of record of First Independence common stock on December
6, 1999 are entitled to notice of and to vote at the annual meeting. You are
entitled to one vote for each share of First Independence common stock you own
as of the record date. On December 6, 1999, 1,063,730 shares of First
Independence common stock were outstanding and entitled to vote at the annual
meeting.
Directors shall be elected by a plurality of the votes present in
person or represented by proxy at the annual 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 annual 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 First Independence common stock,
present in person or represented by proxy, shall constitute a quorum for
purposes of the annual meeting. Abstentions and broker non-votes are counted for
purposes of determining a quorum.
<PAGE>
THE FIRST INDEPENDENCE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" THE ELECTION OF EACH OF THE BOARD OF DIRECTORS' NOMINEES AND
"FOR" THE PROPOSAL TO RATIFY GRANT THORNTON LLP AS FIRST INDEPENDENCE'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2000.
VOTING OF PROXIES; REVOCABILITY OF PROXIES; PROXY SOLICITATION COSTS
Proxies are solicited to provide all stockholders of record on the
voting record date an opportunity to vote on matters scheduled for the annual
meeting and described in these materials. Shares of First Independence common
stock can only be voted if the stockholder is present in person at the annual
meeting or by proxy. To ensure your representation at the annual meeting, we
recommend you vote by proxy even if you plan to attend the annual meeting. You
can always change your vote at the annual meeting.
Voting instructions are included on your proxy card. Shares of First
Independence common stock represented by properly executed proxies will be voted
by the individuals named in such proxy in accordance with the stockholder's
instructions. Where properly executed proxies are returned to us with no
specific instruction as to how to vote at the annual meeting, the persons named
in the proxy will vote the shares "FOR" the election of each of the Board of
Directors' nominees and "FOR" ratification of the appointment of Grant Thornton
LLP as our independent auditors for the fiscal year ending September 30, 2000.
Should any other matters be properly presented at the annual meeting for action,
the persons named in the enclosed proxy and acting thereunder will have the
discretion to vote on these matters in accordance with their best judgment.
You may receive more than one proxy card depending on how your shares
are held. For example, you may hold some of your shares individually, some
jointly with your spouse and some in trust for your children -- in which case
you will receive three separate proxy cards to vote.
You may revoke your proxy before it is voted by: (i) submitting a new
proxy with a later date relating to the same shares and delivering it to the
Secretary of First Independence; (ii) notifying the Secretary of First
Independence in writing before the annual meeting that you have revoked your
proxy; or (iii) voting in person at the annual meeting. Any written notice shall
be delivered to Gary L. Overfield, Secretary of First Independence Corporation
at Myrtle and Sixth Streets, Independence, Kansas 67301.
If you plan to attend the annual meeting and wish to vote in person, we
will give you a ballot at the annual meeting. However, if your shares are held
in the name of your broker, bank or other nominee, you must bring an account
statement or letter from the nominee indicating that you were the beneficial
owner of First Independence common stock on December 6, 1999, the record date
for voting at the annual meeting and the number of shares held by the nominee on
your behalf.
We will pay the cost of soliciting proxies. In addition to this
mailing, our directors, officers and employees may also solicit proxies
personally, electronically or by telephone. We will also reimburse brokers and
other nominees for their reasonable expenses in sending these materials to you
and obtaining your voting instructions.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth as of December 6, 1999, information
regarding share ownership of: (i) those persons or entities known by us to
beneficially own more than five percent of the common stock; (ii) each member of
the First Independence Board of Directors; (iii) each executive officer of First
Independence named in the Summary Compensation table appearing under "Executive
Compensation" below; and (iv) all current directors and executive officers of
First Independence as a group. The address of each of the beneficial owners,
except where otherwise indicated, is the same address as First Independence.
2
<PAGE>
<TABLE>
<CAPTION>
SHARES Percent
BENEFICIALLY of
BENEFICIAL OWNER OWNED(1) Class
- ------------------------------------------------------------- ------------- ---------
<S> <C> <C>
First Independence Corporation Employee Stock Ownership Plan 116,925(2) 10.99%
Athena Capital Management, Inc. 87,536(3) 8.23
621 E. Germantown Pike
Plymouth Valley, PA 19401
Jeffrey Gendell 95,700(4) 9.00
31 West 52nd Street
17th Floor
New York, New York 10019
Larry G. Spencer, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR 73,684(5) 6.74
Harold L. Swearingen, DIRECTOR 9,230(6) 0.86
Lavern W. Strecker, DIRECTOR 7,118(7) 0.67
Robert A. Johnson, DIRECTOR 1,622(8) 0.15
William T. Newkirk II, DIRECTOR 9,818(9) 0.92
Joseph M. Smith, DIRECTOR 6,302(10) 0.59
E. JoVonnah Boecker, DIRECTOR 782(11) 0.07
Directors and executive officers as a group (10 persons) 241,171(12) 20.98
</TABLE>
- -----------------------
(1) 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.
(2) The amount reported represents shares held by the ESOP, 88,902 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 Athena Capital Management, Inc. in a Schedule 13G/A dated
January 27, 1999. Athena Capital Management, Inc., a registered investment
adviser, reported sole voting and investment power with respect to 836
shares and shared voting and investment power with respect to 86,700
shares.
(4) 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. Tontine Overseas
Associates, L.L.C. reported shared voting and investment power with respect
to 25,000 shares.
(5) Includes 29,885 shares held directly, 641 shares held solely by Mr.
Spencer's spouse, 600 shares held by minor children of Mr. Spencer, 13,464
shares allocated to Mr. Spencer's account under the ESOP and 29,094 shares
subject to options.
(6) Amount includes 3,572 shares held in a trust of which Mr. Swearingen is a
trustee, and 5,658 shares subject to options.
(7) Represents 4,800 shares held in a trust, for the benefit of Mr. Strecker's
wife, for which Mr. Strecker is a co-trustee, 1,000 shares held directly,
and 1,318 shares subject to options.
(8) Includes 1,040 shares held jointly with Mr. Johnson's spouse and 582 shares
subject to options.
(9) Includes 4,000 shares held directly and 5,818 shares subject to options.
(10) Includes 484 shares held jointly with Mr. Smith's spouse and 5,818 shares
subject to options.
(11) Includes 530 shares held jointly with Mrs. Boecker's spouse, 52 shares held
jointly with Mrs. Boecker's children and 200 shares subject to options.
(12) 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 also includes an aggregate of 86,066
shares subject to options granted under the Stock Option Plan and 40,103
shares allocated to the accounts of participants under the ESOP.
3
<PAGE>
PROPOSAL I ELECTION OF DIRECTORS
Our Board of Directors currently consists of seven members.
Approximately one-third of the directors are elected annually. Directors 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 regarding the
composition of our 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 annual 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, we are unaware of any reason why a nominee might 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.
<TABLE>
<CAPTION>
Term
Director to
Name Age(1) Position(s) Held with First Independence Since(2) Expire
- --------------------- ------- ---------------------------------------- --------- ------
NOMINESS
<S> <C> <C> <C> <C>
E. JoVonnah Boecker 52 Director 1999 2003
Larry G. Spencer 51 President, Chief Executive Officer and Director 1993 2003
Harold L. Swearingen 62 Director 1992 2003
DIRECTORS CONTINUING IN OFFICE
Lavern W. Strecker 58 Director 1993 2002
Robert A. Johnson 53 Director 1999 2002
William T. Newkirk II 43 Director 1992 2001
Joseph M. Smith 54 Director 1993 2001
</TABLE>
- ------------------------
(1) At September 30, 1999.
(2) Includes service as a director of the First Federal.
The business experience during the last five years of each of the
directors is as follows:
E. JOVONNAH BOECKER. Ms. Boecker is the City Clerk of Neodesha, a
position she has held since 1983.
LARRY G. SPENCER. Mr. Spencer is President and Chief Executive Officer
of First Independence and First Federal Savings. Mr. Spencer has been employed
by First Federal Savings 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, Kansas Food Bank and Independence Industries. He is also
a member of the Rotary Club.
4
<PAGE>
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.
Mr. Swearingen is a member of the Institute of Electrical and Electronic
Engineers.
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 five 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 20 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 26 years.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
MEETINGS AND COMMITTEES OF FIRST INDEPENDENCE. The Board of Directors
generally meet on a quarterly basis. Our Board of Directors met four times
during fiscal 1999. During fiscal 1999, no incumbent director 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.
Our Board of Directors has standing Executive, Audit and Compensation
Committees.
The Executive Committee for fiscal 1999 was comprised of Chairman
Strecker and Directors Newkirk and Smith. The Executive Committee meets on an as
needed basis and exercises the power of First Independence's Board of Directors
between Board meetings to the extent permitted by Delaware law. This committee
did not meet during fiscal 1999.
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 First Independence are kept in accordance
with applicable accounting principles and standards. The members of the Audit
Committee for fiscal 1999 were Chairman Strecker and Directors Newkirk and
Smith. During the fiscal year ended September 30, 1999, this committee did not
meet; however, the entire First Independence Board of Directors performed its
function during fiscal 1999.
The Compensation Committee for fiscal 1999 was composed of Chairman
Strecker and Directors Newkirk and Smith. This committee is responsible for
administering the First Independence Corporation 1993 Stock Option and Incentive
Plan and also reviews compensation and benefit matters. This committee did not
meet during the fiscal year ended September 30, 1999.
5
<PAGE>
Our entire Board of Directors acts as a nominating committee for
selecting nominees for election as directors. While we will consider nominees
recommended by stockholders, we have not actively solicited such nominations.
Pursuant to our Bylaws, nominations by stockholders must be delivered in writing
to the Secretary of First Independence at least 30 days before the date of the
annual meeting.
MEETINGS AND COMMITTEES OF FIRST FEDERAL SAVINGS. First Federal Savings
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.
First Federal Savings Board of Directors met 13 times during the fiscal year
ended September 30, 1999. During fiscal 1999, no incumbent director of First
Federal Savings attended fewer than 75% of the aggregate of the total number of
meetings and the total number of meetings held by the committees on which he
served.
The Board of Directors of First Federal Savings has standing Executive,
Investment/Interest Rate Risk, Loan and Asset Review Committees.
First Federal Savings Executive Committee exercises the powers of First
Federal Savings 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 First
Federal Savings. The Executive Committee also serves as First Federal Savings
Audit Committee and selects First Federal Savings 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 1999 was composed of Chairman
Strecker and Directors Newkirk and Smith. The Executive Committee met twice
during the fiscal year ended September 30, 1999.
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 First Federal Savings
strategy and monitoring its investment performance and implementation of First
Federal Savings interest rate risk management strategy. This committee met four
times during fiscal 1999.
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 1999, 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 First Federal Savings. This committee identifies and
reviews First Federal Savings problem assets. This committee met four times
during fiscal 1999.
DIRECTOR COMPENSATION
Our directors are not paid fees for their service in such capacity.
Directors of First Federal Savings are paid a fee of $500 per month plus $500
per special Board meeting of First Federal Savings and $300 per Executive
Committee meeting attended. With the exception of First Federal Savings
Executive Committee, no fee is paid for membership on First Federal Savings
committees.
EXECUTIVE COMPENSATION
We have not paid any compensation to First Independence executive
officers since its formation. We do not presently anticipate paying any
compensation to such persons until it becomes actively involved in the operation
or acquisition of businesses other than First Federal Savings.
6
<PAGE>
The following table sets forth information regarding compensation paid
by First Independence and First Federal Savings to their Chief Executive Officer
for services rendered during the fiscal year ended September 30, 1999. No other
executive officer made $100,000 or more during the fiscal year ended September
30, 1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
======================================================================================================================
Long-Term Compensation
Annual Compensation(1) Awards
RESTRICTED
STOCK OPTIONS/ ALL OTHER
Salary Bonus AWARD(S) SARS COMPENSATION
Name and Principal Position Year ($)(2) ($) ($) (#) ($)
- -------------------------------------- ---------- ---------- --------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry G. Spencer, President and Chief 1999 $117,356 $10,683 $--- --- $11,630(3)
Executive Officer 1998 106,126 9,938 --- --- 10,999
1997 99,837 9,184 --- --- 11,119
======================================================================================================================
</TABLE>
- -----------------------
(1) Pursuant to Securities and Exchange Commission rules, perquisites equal
to the lesser of $50,000 and 10% of salary and bonus are excluded from
the table above.
(2) Includes directors' fees of $6,500, $6,150 and $5,575 during fiscal
1999, 1998 and 1997, respectively.
(3) Includes the dollar value of 2,048 shares allocated to Mr. Spencer's
account under the First Independence Corporation Employee Stock Option
Plan and excess group life insurance premiums of $485 paid by First
Federal Savings during fiscal 1999.
No stock appreciation rights were granted during fiscal 1999. The
following table sets forth certain information concerning the number and value
of unexercised stock options held by our Chief Executive Officer at September
30, 1999. No options were exercised during fiscal 1999.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
=====================================================================================================================
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT FY-END (#) AT FY-END ($)(1)
SHARES VALUE
NAME ACQUIRED REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
ON EXERCISE (#)
<S> <C> <C> <C> <C> <C> <C>
Larry G. Spencer N/A N/A 29,094 N/A $180,928 N/A
=====================================================================================================================
</TABLE>
- --------------------
(1) Represents the aggregate market value (market price of First
Independence common stock less the exercise price) of the option
granted based upon the average of the bid and asked prices of $11.21875
per share of the common stock on September 30, 1999.
EMPLOYMENT AGREEMENTS
First Federal Savings has entered into employment agreements with Mr.
Spencer and two other executive officers. The employment agreements are designed
to assist us in maintaining a stable and competent management team upon which
our continued success First Federal Savings depends. These agreements were filed
with, and approved by, the Office of Thrift Supervision as part of First Federal
Savings 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
7
<PAGE>
the Board of Directors of First Federal Savings. The agreements provide for
termination upon the employee's death, for cause or in certain events specified
by Office of Thrift Supervision regulations. The employment agreements are also
terminable by the employee upon 90 days' notice to First Federal Savings.
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
First Federal Savings 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 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 First Federal Savings for federal income tax purposes. For
the purposes of the employment agreements, a "change in control" is defined as
any event which would require the filing of an application for 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 First Independence's common stock. The agreements also guarantee
participation in an equitable manner in employee benefits applicable to
executive personnel.
Based on his current salary, if Mr. Spencer had been terminated as of
September 30, 1999, under circumstances entitling him to severance pay as
described above, he would have been entitled to receive a lump sum cash payment
of approximately $332,568.
CERTAIN TRANSACTIONS
We have 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 our 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 our loan committee.
PROPOSAL II RATIFICATION OF THE APPOINTMENT OF AUDITORS
We have renewed our arrangement for Grant Thornton LLP to be our
independent auditors for the 2000 fiscal year, subject to the ratification of
the appointment by our 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.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the proxy materials for next
year's annual meeting of stockholders, any stockholder proposal to take action
at such annual meeting must be received at the executive office located at
Myrtle and Sixth Streets, Independence, KS 67301 no later than August 30, 2000.
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
stockholder proposal to take action at such annual meeting must be received at
our executive office located at Myrtle and Sixth Streets, Independence, KS 67301
by December 28, 2000; provided, however, that in the event that the date of the
annual meeting is held before December 28, 2000, or after February 25, 2001, the
stockholder proposal must be received not later than the close of business on
the later of the 30th 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 annual meeting was first made. All
stockholder proposals must also comply with our bylaws and Delaware law.
8
<PAGE>
OTHER MATTERS
We are not aware of any business to come before the annual meeting
other than those matters described above in this proxy statement. However, if
any other matter should properly come before the annual meeting, it is intended
that holders of the proxies will act in accordance with their best judgment.
Independence, Kansas
December 27, 1999
9
<PAGE>
REVOCABLE PROXY
FIRST INDEPENDENCE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 26, 2000
The undersigned hereby appoints the Board of Directors of First
Independence Corporation, 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 which the undersigned is entitled to vote at the annual
meeting of stockholders, to be held at the main office of First Independence
located at Myrtle and Sixth Streets, Independence, Kansas, on January 26, 2000
at 10:30 a.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.
E. JOVONNAH BOECKER LARRY G. SPENCER HAROLD L. SWEARINGEN
II. The ratification of the appointment of Grant Thornton LLP as auditors of the
the Company for the fiscal year ending September 30, 2000.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
In their discretion, the proxies are authorized to vote on such other
matters as may properly come before the annual meeting or any adjournments or
postponements thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE DIRECTORS AND THE
PROPOSAL LISTED ABOVE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY,
IF PROPERLY EXECUTED, WILL BE VOTED FOR EACH OF THE PROPOSALS SET FORTH HEREIN.
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 annual meeting
or at any adjournments or postponements thereof, and after notification to the
Secretary of First Independence at the annual 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 First Independence, prior to the
execution of this Proxy, of Notice of the Annual Meeting, a Proxy Statement and
First Independence's Annual Report to Stockholders for the fiscal year ended
September 30, 1999.
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.
