[FIRST INDEPENDENCE CORPORATION LETTERHEAD]
December 28, 2000
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., central standard
time, on January 31, 2001, 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,
/s/ Larry G. Spencer
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 31, 2001
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., central standard time, on January
31, 2001.
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 two 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, 2001;
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
4, 2000 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
/s/ Lavern W. Strecker
Lavern W. Strecker
Chairman of the Board
Independence, Kansas
December 28, 2000
--------------------------------------------------------------------------------
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 31, 2001
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 28, 2000.
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 31, 2001
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 two 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, 2001; 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 4,
2000 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 4, 2000, 1,024,666 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 cast. In all matters
other than the election of directors, the affirmative vote of the majority of
shares cast 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.
1
<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, 2001.
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, 2001.
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 4, 2000, 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 4, 2000, 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.
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<PAGE>
<TABLE>
Shares Percent
Beneficially of
Beneficial Owner Owned(1) Class
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
First Independence Corporation Employee Stock Ownership Plan 113,610(2) 11.09%
("ESOP")
Athena Capital Management, Inc. 99,151(3) 9.68
621 E. Germantown Pike
Plymouth Valley, PA 19401
Jeffrey L. Gendell 93,743(4) 9.15
200 Park Avenue
Suite 3900
New York, NY 10166
Dr. Phillip Eastep, Michael S. Mitchell Revocable Trust, 57,623(5) 5.62
Jon Harrison, John Banks, Steve Waite, and Demo Sales, Inc.
Larry G. Spencer, President, Chief Executive Officer and Director 72,096(6) 6.89
James B. Mitchell, Vice President and Chief Financial Officer 55,122(7) 5.33
William T. Newkirk II, Director 9,818(8) 0.95
Harold L. Swearingen, Director 9,230(9) 0.90
Lavern W. Strecker, Chairman of the Board and Director 7,118(10) 0.69
Joseph M. Smith, Director 6,302(11) 0.61
Robert A. Johnson, Director 2,204(12) 0.21
E. JoVonnah Boecker, Director 982(13) 0.10
Directors and executive officers as a group (10 persons) 242,016(14) 22.02
</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 named individuals may be deemed to have sole or shared
voting and/or investment powers.
(2) The amount reported represents shares held by the ESOP, 102,290 shares 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 filed on
January 27, 2000. Athena Capital Management, Inc., a registered investment
adviser, reported sole voting and investment powers with respect to 836
shares and shared voting and investment powers with respect to 98,315
shares.
(4) As reported by Jeffrey L. Gendell in a Schedule 13D/A filed on February 10,
2000. 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 powers with respect to 72,800 shares. Tontine
Overseas Associates, L.L.C. reported shared voting and investment powers
with respect to 20,900 shares. Jeffrey L. Gendell reported shared voting
and investment powers with respect to 93,700 shares and sole voting and
investment powers with respect to 43 shares .
(5) As reported by the above persons in a Schedule 13D filed on April 7, 2000.
The Schedule 13D was a joint filing pursuant to Rule 13d-1(k)(l) of the
Securities Exchange Act of 1934. Dr. Phillip Eastep reported sole voting
and investment powers as to 19,533 shares, Michael S. Mitchell Revocable
Trust reported sole voting and investment powers as to 18,915 shares, Jon
Harrison reported sole voting and investment powers as to 9,250 shares,
John Banks reported sole voting and investment powers as to 5,000 shares,
Steve Waite reported sole voting and investment powers as to 2,000 shares,
and Demo Sales, Inc. reported sole voting and investment powers as to 2,925
shares. Dr. Eastep's business address is 220 North Main, Cherryvale, KS
67335. Michael S. Mitchell Revocable Trust's address is P.O. Box 753,
Chanute, KS 66720. Mr. Harrison's business address is 6507 N. 127th Street,
Wichita, KS 67226. Mr. Banks' address is 1824 Lawndale, El Dorado, KS
67042. Mr. Waite's business address is 719 Meadow Road, El Dorado, KS
67042. Demo Sales, Inc.'s address is 2930 Terrace Drive, Independence, KS
67301.
3
<PAGE>
(6) Includes 22,416 shares held directly, 11,328 shares held jointly with Mr.
Spencer's spouse, 641 shares held solely by Mr. Spencer's spouse, 600
shares held by minor children of Mr. Spencer, 15,390 shares allocated to
Mr. Spencer's ESOP account and 21,721 shares subject to options.
(7) Includes 13,112 shares held directly, 17,523 shares held jointly with Mr.
Mitchell's spouse, 840 shares held solely by Mr. Mitchell's spouse, 2,922
shares held by minor children of Mr. Mitchell, 11,179 shares allocated to
Mr. Mitchell's ESOP account and 9,546 shares subject to options.
(8) Includes 4,000 shares held directly and 5,818 shares subject to options.
(9) Includes 3,572 shares held in a trust, of which Mr. Swearingen is a
trustee, and 5,658 shares subject to options.
(10) Includes 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.
(11) Includes 484 shares held jointly with Mr. Smith's spouse and 5,818 shares
subject to options.
(12) Includes 1,040 shares held jointly with Mr. Johnson's spouse and 1,164
shares subject to options.
(13) Includes 530 shares held jointly with Ms. Boecker's spouse, 52 shares held
jointly with Ms. Boecker's children and 400 shares subject to options.
(14) 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 74,475
shares subject to options granted under the Stock Option Plan and 45,880
shares allocated to the accounts of participants under the ESOP.
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>
Term
Director to
Name Age(1) Position(s) Held with First Independence Since(2) Expire
------------------------ ----------- ------------------------------------------------ ------------- ----------
<S> <C> <C> <C> <C>
NOMINESS
William T. Newkirk II 44 Director 1992 2004
Joseph M. Smith 55 Director 1993 2004
DIRECTORS CONTINUING IN OFFICE
E. JoVonnah Boecker 53 Director 1999 2003
Larry G. Spencer 52 President, Chief Executive Officer and Director 1993 2003
Harold L. Swearingen 63 Director 1992 2003
Lavern W. Strecker 59 Chairman of the Board and Director 1993 2002
Robert A. Johnson 54 Director 1999 2002
</TABLE>
(1) At September 30, 2000.
(2) Includes service as a director of First Federal.
4
<PAGE>
The business experience during the last five years of each of the directors
is as follows:
William T. Newkirk II. Mr. Newkirk is the Vice President of Newkirk, Dennis
& Buckles Inc., an insurance agency located in Independence, Kansas. Mr. Newkirk
has been in the insurance business for 21 years.
Joseph M. Smith. Mr. Smith is currently retired. Prior to his retirement in
2000, Mr. Smith was the County Extension Agent with the Montgomery County
Extension Council for 28 years.
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.
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.
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 recently became the Human Resource Manager
of Cobalt Boats, a manufacturer of luxury boats. Prior to his current
employment, Mr. Johnson was the Human Resource Manager of M-E-C Company of
Neodesha, Kansas for five years and a personnel manager with Emerson Electric of
Independence, Kansas for 13 years.
Meetings and Committees of the Board of Directors
Meetings and Committees of First Independence. The Board of Directors
generally meets on a quarterly basis. Our Board of Directors met 6 times during
fiscal 2000. During fiscal 2000, 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 2000 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 2000.
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 2000 were Chairman Strecker and Directors Newkirk and
Smith. This committee met twice during the fiscal year ended September 30, 2000.
For additional information regarding the audit committee see, "Audit Committee
Matters" below.
5
<PAGE>
The Compensation Committee for fiscal 2000 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, 2000.
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. However, in the event that less than 40 days' notice of prior public
disclosure of the date of the annual meeting is given or made to stockholders,
nominations by stockholders must be received not later than the close of
business on the 10th day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was first made.
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 two directors.
First Federal Savings Board of Directors met 13 times during the fiscal year
ended September 30, 2000. During fiscal 2000, 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 2000 was composed of Chairman
Strecker and Directors Newkirk and Smith. The Executive Committee met 5 times
during the fiscal year ended September 30, 2000.
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 5
times during fiscal 2000.
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 2000, 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, a Vice President
of First Federal Savings. This committee identifies and reviews First Federal
Savings problem assets. This committee met 4 times during fiscal 2000.
6
<PAGE>
Audit Committee Matters
Audit Committee Report. The Audit Committee of the Board of Directors of
First Independence has issued the following report with respect to the audited
financial statements of First Independence for the fiscal year ended September
30, 2000:
o The Audit Committee has reviewed and discussed with First
Independence's management First Independence's fiscal 2000 audited
financial statements;
o The Audit Committee has discussed with First Independence's
independent auditors (Grant Thornton LLP) the matters required to be
discussed by Statement on Auditing Standards No. 61;
o The Audit Committee has received the written disclosures and letter
from the independent auditors required by Independence Standards Board
No. 1 (which relates to the auditors' independence from First
Independence and its related entities) and has discussed with the
auditors their independence from First Independence; and
o Based on the review and discussions referred to in the three items
above, the Audit Committee recommended to the Board of Directors that
the audited financial statements be included in First Independence's
Annual Report on Form 10-KSB for the fiscal year ended September 30,
2000.
Independence. Each member of the Audit Committee is "independent" under the
definition of independence contained in the National Association of Securities
Dealers' listing standards for the Nasdaq Stock Market.
Audit Committee Charter. First Independence has adopted a written audit
committee charter. A copy of the charter is attached to this proxy statement as
Appendix A.
Submitted by the Audit Committee of the Board of Directors of First
Independence:
Lavern W. Strecker
William T. Newkirk II
Joseph M. Smith
Director Compensation
Our directors are not paid fees for their service in such capacity.
Directors of First Federal Savings are paid a fee of $550 per month, plus $550
per special Board meeting of First Federal Savings and $350 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.
7
<PAGE>
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.
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, 2000. No other
executive officer made $100,000 or more during the fiscal year ended September
30, 2000.
<TABLE>
======================================================================================================================
SUMMARY COMPENSATION TABLE
======================================================================================================================
Long-Term Compensation
--------------------------
Annual Compensation(1)
Awards
--------------------------------------------------------------------------- --------------------------
Restricted
Stock Options/ All Other
Salary Bonus Award(s) SARs Compensation
Name and Principal Position Year ($)(2) ($) ($) (#) ($)
-------------------------------------- ----------- ----------- ----------- ------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Larry G. Spencer, President and 2000 $124,372 $13,827 --- --- $10,954(3)
Chief Executive Officer 1999 117,356 10,683 --- --- 11,630
1998 106,126 9,938 --- --- 10,999
======================================================================================================================
</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 $6,800, $6,500 and $6,150 during fiscal 2000,
1999 and 1998, respectively.
(3) Includes the dollar value of 1,905 shares allocated to Mr. Spencer's
account under the First Independence Corporation Employee Stock Option Plan
and excess group life insurance premiums of $340 paid by First Federal
Savings during fiscal 2000.
No stock options or stock appreciation rights were granted during fiscal
2000. The following table sets forth certain information concerning the number
and value of unexercised stock options held by Larry Spencer, our Chief
Executive Officer, at September 30, 2000. No options were exercised during the
fiscal year ended September 30, 2000. In November 2000, however, Mr. Spencer
exercised an option to purchase 7,373 shares of common stock, at an exercise
price of $5.00 per share.
<TABLE>
=========================================================================================================================
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
=========================================================================================================================
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Options/SARs at FY-End (#) at FY-End ($)(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 $150,925 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 $10.1875 per share of the common
stock on September 29, 2000.
8
<PAGE>
Employment Agreements
FirstFederal 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
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, 2000, under circumstances entitling him to severance pay as
described above, he would have been entitled to receive a lump sum cash payment
of approximately $354,000.
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 2001 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.
9
<PAGE>
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, 2001.
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
at least 30 days prior to the date of the next annual meeting. However, in the
event that less than 40 days' notice or prior public disclosure of the date of
the next annual meeting is given or made to stockholders, the stockholder
proposal must be received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was first made. All stockholder proposals must
also comply with our Bylaws and Delaware law.
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 28, 2000
10
<PAGE>
APPENDIX A
Audit Committee Charter
<PAGE>
Audit Committee Charter
Membership
The audit committee will be composed of not less than three members of the
board. They will be selected by the board, taking into account prior experience
in matters to be considered by the committee, probable availability at times
required for consideration of such matters, and their individual independence
and objectivity.
The committee's membership will meet the requirements of the audit committee
policy of the NASDAQ stock exchange. Accordingly, a majority of the members will
be directors independent of management and free from relationships that, in the
opinion of the board of directors, would interfere with the exercise of
independent judgment as a committee member.
No officers or employees of the company or its subsidiaries will serve on the
committee. A former officer of the company or any of its subsidiaries may serve
on the committee (even though the former officer may be receiving pension or
deferred compensation payments from the company) if, in the opinion of the board
of directors, the former officer will exercise independent judgment and will
significantly assist the committee to function. However, a majority of the
committee will be directors who were not formerly officers of the company or any
of its subsidiaries.
When considering relationships that might affect independence, including
possible affiliate status, the board of directors will give appropriate
consideration, in addition to its audit committee policy, to guidelines issued
by the NASDAQ stock exchange, which were provided to assist boards of directors
in observing the spirit of the NASDAQ stock exchange policy.
Actions of the Committee
The committee's activities will include the following actions:
o Oversight of the financial statements and relations with the
independent auditors
o Instruct the independent auditors that the board of directors is
the client in its capacity as the shareholders' representative
o Expect the independent auditors to meet with the board of
directors at least annually so the board has a basis on which to
recommend the independent auditors' appointment to the
shareholders or to ratify its selection of the independent
auditors
o Expect financial management and the independent auditors to
analyze significant financial report issues and practices on a
timely basis
o Expect financial management and the independent auditors to
discuss with the audit committee:
o qualitative judgments about whether current or proposed
accounting principles and disclosures are appropriate, not
just acceptable
o aggressiveness or conservatism of accounting and financial
estimates
o Expect the independent auditors to provide the audit committee
with:
o independent judgments about the appropriateness of the
company's current or proposed accounting principles and
whether current or proposed financial disclosures are clear
o views on whether the accounting principles chosen by
management are conservative, moderate, or aggressive as they
relate to income, asset, and liability recognition, and
whether these accounting principles are commonly used
o reasons why accounting principles and disclosure practices
used for new transactions or events are appropriate
o reasons for accepting or questioning significant estimates
made by management
o views on how selected accounting principles and disclosure
practices affect shareholder and public attitudes about the
company.
o Actions taken on the board's behalf that require board notification
but not board approval:
o Review and approve the scope of the company's audit and that of
its subsidiaries as recommended by the independent auditors and
the president
o Review and approve the scope of the company's annual profit and
pension trust audits
o Answer questions raised by shareholders during an annual
shareholders' meeting on matters relating to the activities if
asked to do so by the board of directors' chairperson
o Ask the president to have the internal audit staff study a
particular area of interest or concern to the audit committee.
<PAGE>
o Matters requiring the committee's review and study before making a
recommendation for the board of directors' action:
o Appointment of the independent auditors
o Implementation of major accounting policy changes
o SEC registration statements to be signed by the board of
directors
o The auditors' reports and financial statements prior to
publication in the annual report.
o Matters requiring the committee's review and study before providing
summary information to the board of directors:
o Accounting policy changes proposed or adopted by organizations
such as the Financial Accounting Standards Board (FASB), the
Securities and Exchange Commission (SEC), and the American
Institute of Certified Public Accountants (AICPA), or by
comparable bodies outside the U.S.
o The independent auditors' assessment of the strengths and
weaknesses of the company's financial staff, systems, controls,
and other factors that might be relevant to the integrity of the
financial statements
o Quarterly financial statement review before publication
o Administration of the company's "conflict of interest" policy
o The performance of management and operating personnel under the
company's code of ethics
o Gaps and exposures in insurance programs
o Reports about the company or its subsidiaries submitted by
agencies of governments in countries in which the company or its
subsidiaries operate
o Periodic SEC filings and the adequacy of programs and procedures
to assure compliance with SEC regulations and regulations of the
NASDAQ stock exchange.
<PAGE>
REVOCABLE PROXY
FIRST INDEPENDENCE CORPORATION
PLEASE MARK VOTES ------
AS IN THIS EXAMPLE / X /
------
Annual Meeting of Stockholders
January 31, 2001
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 31, 2001 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.
William T. Newkirk II
Joseph M. Smith
With- For All
For hold Except
_____ ______ ______
/____/ /_____/ /_____/
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
II. The ratification of the appointment of Grant Thornton LLP as auditors of the
Company for the fiscal year ending September 30, 2001.
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.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS.
Please be sure to sign and date ____________________
this Proxy in the box below. /Date /
________________________________________________________/___________________/
/ /
/ /
/ /
/ /
/_______Stockholder sign above ___________Co-holder (if any) sign above_/
Detach above card, date, sign and mail in postage-paid envelope provided.
FIRST INDEPENDENCE CORPORATION
Should the above signed 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 above signed acknowledges receipt from First Independence, prior to the
execution of this Proxy, of Notice of the Annual Meeting, a Proxy Statement and
the First Independence's Annual Report to Stockholders for the fiscal year ended
September 30, 2000.
Please sign exactly as your name(s) appear(s) on this proxy. 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.
