<PAGE>
<PAGE>
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
[x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 41a-12
FRANKFORT FIRST BANCORP, INC.
- ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
FRANKFORT FIRST BANCORP, INC.
- ----------------------------------------------------------------
(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.
1. Title of each class of securities to which
transaction applies:
_________________________________________________________________
2. Aggregate number of securities to which transaction
applies:
_________________________________________________________________
3. Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11:
_________________________________________________________________
4. Proposed maximum aggregate value of transaction:
_________________________________________________________________
5. Total fee paid:
_________________________________________________________________
[ ] Fee paid previously with preliminary proxy 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:
____________________________________________<PAGE>
<PAGE>
October 10, 1997
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Frankfort First Bancorp, Inc. to be held at the
main office of First Federal Savings Bank of Frankfort, 216 West
Main Street, Frankfort, Kentucky on Tuesday, November 11, 1997 at
4:30 p.m., local time. Your Board of Directors and Management
look forward to personally greeting those stockholders able to
attend.
The attached Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the
Company. Directors and officers of the Company as well as
representatives of Grant Thornton LLP, the Company's independent
auditors, will be present to respond to any questions the
stockholders may have.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE
ANNUAL MEETING. Your vote is important, regardless of the number
of shares you own. This will not prevent you from voting in
person but will assure that your vote is counted if you are
unable to attend the meeting. On behalf of your Board of
Directors, thank you for your interest and support.
Sincerely,
/s/ William C. Jennings
William C. Jennings
President<PAGE>
<PAGE>
_________________________________________________________________
FRANKFORT FIRST BANCORP, INC.
216 W. MAIN STREET
FRANKFORT, KENTUCKY 40602
(502) 223-1638
_________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 11, 1997
_________________________________________________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders (the "Meeting") of Frankfort First Bancorp, Inc.
(the "Company"), will be held at the main office of First Federal
Savings Bank of Frankfort, 216 West Main Street, Frankfort,
Kentucky at 4:30 p.m. on Tuesday, November 11, 1997.
A Proxy Card and a Proxy Statement for the Meeting are
enclosed.
The Meeting is for the purpose of considering and acting
upon:
1. Election of three directors of the Company;
2. Approval of a one-for-two reverse stock split,
including approval of an amendment to the
Company's Certificate of Incorporation reflecting
the reverse stock split; and
3. Transaction of such other matters as may properly
come before the Meeting or any
adjournments thereof.
The Board of Directors is not aware of any other business to
come before the Meeting.
Any action may be taken on any one of the foregoing
proposals at the Meeting on the date specified above or on any
date or dates to which, by original or later adjournment, the
Meeting may be adjourned. Stockholders of record at the close of
business on September 30, 1997, are the stockholders entitled to
notice of and to vote at the Meeting and any adjournments
thereof.
You are requested to fill in and sign the enclosed form of
proxy which is solicited by 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
/s/ Danny A. Garland
DANNY A. GARLAND
SECRETARY
Frankfort, Kentucky
October 10, 1997
_________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A
QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. PLEASE ACT PROMPTLY.
_________________________________________________________________
<PAGE>
<PAGE>
_________________________________________________________________
PROXY STATEMENT
OF
FRANKFORT FIRST BANCORP, INC.
216 W. MAIN STREET
FRANKFORT, KENTUCKY 40602
ANNUAL MEETING OF STOCKHOLDERS
November 11, 1997
_________________________________________________________________
_________________________________________________________________
General
_________________________________________________________________
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Frankfort
First Bancorp, Inc. (the "Company") to be used at the Annual
Meeting of Stockholders of the Company (the "Meeting") which will
be held at the main office of First Federal Savings Bank of
Frankfort, 216 West Main Street, Frankfort, Kentucky on Tuesday,
November 11, 1997, at 4:30 p.m., local time. The accompanying
notice of meeting and this Proxy Statement are being first mailed
to stockholders on or about October 10, 1997.
_________________________________________________________________
Voting and Revocability of Proxies
_________________________________________________________________
Stockholders who execute proxies retain the right to revoke
them at any time. Unless so revoked, the shares represented by
such proxies will be voted at the Meeting and all adjournments
thereof. Proxies may be revoked by written notice to the
Secretary of the Company, at the address shown above, by filing
of a later dated proxy prior to a vote being taken on a
particular proposal at the Meeting or by attending the Meeting
and voting in person. Proxies solicited by the Board of
Directors of the Company will be voted in accordance with the
directions given therein. Where no instructions are indicated,
proxies will be voted for the nominees for director set forth
below and in favor of the reverse stock split proposal. The
proxy confers discretionary authority on the persons named
therein to vote with respect to the election of any person as a
director where the nominee is unable to serve or for good cause
will not serve, and matters incident to the conduct of the
Meeting.
_________________________________________________________________
Benefit Plan Restructuring
_________________________________________________________________
In June 1997, the Company's Board of Directors approved a
restructuring plan designed to improve the Company's
profitability by, among other things, reducing the compensation
expense associated with certain of the Company's stock benefit
plans. The restructuring plan involved a series of actions
including termination of the Company's Employee Stock Ownership
Plan ("ESOP") and Management Recognition Plan ("MRP"), a special
cash distribution of $4.00 per share, and the one-for-two reverse
stock split which is the subject of Proposal II of this Proxy
Statement.
To compensate plan participants for the loss of benefits
under the ESOP and MRP, the Company paid plan participants an
aggregate of approximately $915,000 in cash in June 1997. For
further information, see "PROPOSAL I Compensation Committee
Report on Executive Compensation," "-- Executive Compensation"
and "-- Director Compensation," below.
<PAGE>
<PAGE>
_________________________________________________________________
Voting Securities and Principal Holders Thereof
_________________________________________________________________
The securities entitled to notice of and to vote at the
Meeting consist of the Company's common stock, par value $.01 per
share (the "Common Stock"). Stockholders of record as of the
close of business on September 30, 1997 (the "Record Date"), are
entitled to one vote for each share of Common Stock then held.
As of the Record Date, there were 3,279,952 shares of Common
Stock issued and outstanding.
Persons and groups owning in excess of 5% of the Common
Stock are required to file certain reports regarding such
ownership pursuant to the Securities Exchange Act of 1934 with
the Company and the Securities and Exchange Commission ("SEC").
Based on such reports (and certain other written information
received by the Company), management knows of no persons other
than those set forth below who owned more than 5% of the
outstanding shares of Common Stock as of the Record Date. The
following table sets forth, as of the Record Date, certain
information as to those persons who were the beneficial owners of
more than 5% of the Common Stock, the shares beneficially owned
by the Company's Chief Executive Officer and the shares of
beneficially owned by all executive officers and directors
of the Company as a group.
<TABLE>
<CAPTION>
Percent of Shares
Name and Address Amount and Nature of of Common Stock
of Beneficial Owner Beneficial Ownership Outstanding
___________________ ____________________ __________________
<S> <C> <C>
C.M. Gatton 323,000 9.8%
State & 11th Streets
Bristol, Tennessee 37620
Frankfort First Bancorp, Inc. 274,095 (1) 8.4%
Employee Stock Ownership Plan
216 West Main Street
Frankfort, Kentucky 40602
John Hancock Advisors, Inc. 209,418 6.4%
John Hancock Place
P.O. Box 111
Boston, Massachusetts 02117
William C. Jennings 100,570 (2) 3.0%
President and Chief
Executive Officer
All Executive Officers and 298,843 (2) 8.9%
Directors as a Group (9 persons)
___________
(1) Includes 47,845 shares that have been allocated among
participating employees. For a discussion of the Company's
termination of the ESOP, see "Benefit Plan Restructuring" and
"Compensation Committee Report on Executive Compensation --
Benefit Plan Restructuring" herein.
(2) Includes 32,154 shares which Mr. Jennings and his spouse have
the right to purchase pursuant to the exercise of stock
options which are exercisable within 60 days of September 30,
1997.
(3) Includes stock held in joint tenancy; stock owned as tenants
in common; stock owned or held by a spouse or other member
of the individual's household; stock allocated through
certain employee benefit plans of the Company; and stock in
which the individual otherwise has either sole or shared
voting and/or investment power. Includes 66,861 shares which
all executive officers and directors as a group have the
right to purchase pursuant to the exercise of stock options
which are exercisable within 60 days of September 30, 1997.
</TABLE>
2<PAGE>
<PAGE>
_________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
_________________________________________________________________
The Company's Board of Directors is composed of eight
members. The Company's Certificate of Incorporation requires
that directors be divided into three classes, as nearly equal in
number as possible, each class to serve for a three year period,
with approximately one-third of the directors elected each year.
The Board of Directors has nominated William M. Johnson, Frank
McGrath and Herman D. Regan, Jr. each of whom are currently
members of the Board, to serve as directors for a three-year
period.
If any nominee is unable to serve, the shares represented by
all valid proxies will be voted for the election of such
substitute as the Board of Directors may recommend or the size of
the Board may be reduced to eliminate the vacancy. At this time,
the Board knows of no reason why any nominee might be unavailable
to serve.
Under the Company's Bylaws, directors shall be elected by a
plurality of the votes of the shares present in person or by
proxy at the Meeting. Votes which are not cast at the Meeting,
either because of abstentions or broker non-votes, are not
considered in determining the number of votes which have been
cast for or against the election of a nominee.
Unless otherwise specified on the proxy, it is intended that
the persons named in the proxies solicited by the Board will vote
for the election of the named nominees.
The following table sets forth the names of the Board's
nominees for election as directors of the Company and of those
directors who will continue to serve as such after the Meeting.
Also set forth is certain other information with respect to each
person's age as of the Record Date, the year he first became a
director of First Federal Savings Bank of Frankfort (the "Bank"),
the expiration of his term as a director, and the number and
percentage of shares of the Common Stock beneficially owned as of
the Record Date. With the exception of Mr. Davenport, who was
initially appointed as director in September 1996, all of the
individuals were initially appointed as director of the Company
in 1995 in connection with the Company's incorporation.
<TABLE>
<CAPTION>
Shares of
Age as Year First Common Stock
of the Elected as Current Beneficially
Record Director of Term Owned at the Percent
Name Date the Bank to Expire Record Date (1)of Class
- ---------------------------------------------------------------------------------------
BOARD NOMINEE FOR TERM TO EXPIRE IN 2000
<S> <C> <C> <C> <C> <C>
William M. Johnson 61 1984 1997 14,830 *
Frank McGrath 71 1973 1997 14,830 *
Herman D. Regan, Jr. 68 1988 1997 44,830 1.4%
DIRECTORS CONTINUING IN OFFICE
Charles A. Cotton, III 60 1974 1998 7,830 *
Danny A. Garland 52 1981 1998 49,143 1.5%
David G. Eddins 40 1993 1999 25,070 *
William C. Jennings (2) 61 1973 1999 100,930 3.0%
C. Michael Davenport 38 1996 1999 41,380 1.3%
__________
* Less than 1%.
(1) Includes stock held in joint tenancy; stock owned as tenants in common; stock owned
or held by a spouse or other member of the individual's household; stock allocated
through certain employee benefit plans of the Company; and stock in which the
individual otherwise has either sole or shared voting and/or investment power.
Includes 3,450, 3,450, 3,450, 3,450, 16,077, 3,450, 32,154 and 1,380 shares which
may be purchased pursuant to options which are exercisable within 60 days
of September 30, 1997 by Directors Johnson, McGrath, Regan, Cotton, Garland,
Eddins, Jennings and Davenport, respectively.
(2) Mr. Jennings is the husband of Joyce H. Jennings, Vice President and Treasurer of
the Company.
</TABLE>
3<PAGE>
<PAGE>
The principal occupation of each director of the Company for
the last five years is set forth below.
WILLIAM M. JOHNSON is a self-employed attorney in Frankfort,
Kentucky and currently serves as the attorney for the Bank. He
serves on the Board of Directors of the YMCA of Frankfort, the
Franklin County Development Corporation, and the Frankfort
Cemetery. Mr. Johnson is a member of the Kentucky Chamber of
Commerce, serves on the Board of Trustees of the Kentucky Bar
Center Headquarters, and is Secretary of the Capital City
Performing Arts Foundation.
FRANK MCGRATH has served as President of Frankfort Lumber
Company since 1989. Prior to this date, Mr. McGrath was
manager. He is a member of the Kentucky Lumber and Building
Material Association, the Frankfort/Franklin County Chamber of
Commerce, the Kentucky Chamber of Commerce, and the Lawrenceburg
First Christian Church.
HERMAN D. REGAN, JR. served as Chairman of the Board and
President of Kenvirons, Inc., a civil and environmental
engineering consulting firm from 1975 until his retirement in
August, 1994. He is a registered professional engineer, a
member of the Kentucky Society of Professional Engineers, and
the National Society of Professional Engineers. Mr. Regan
currently serves as a Director of the Baptist Health Care
Systems and is a member of the Kentucky-Tennessee Water
Environment Federation, the National Water Environment
Federation, the American Public Works Association, the First
Baptist Church of Frankfort, Kentucky, and the University of
Kentucky Alumni Association.
CHARLES A. COTTON, III has served as the Commissioner of the
Department of Housing, Building & Construction of the
Commonwealth of Kentucky since 1981. He is the past president
and a director of the National Conference of States on Building
Codes and Standards. He is also a past member of the YMCA of
Frankfort Board of Directors, a past Board member of Galileons
Home, President of the St. Vincent de Paul Society of Frankfort,
President of the Coalition of Committed Christians Homeless
Shelter and Soup Kitchen and involved with the Simon House as a
Fundraiser.
DANNY A. GARLAND has been an employee of First Federal since
1975 and has served as Vice President and Secretary of First
Federal since 1981. Mr. Garland also serves as Chairman of the
Frankfort Chamber of Commerce Success Awards Committee and the
Board of the Kentucky Book Fair. He is a member of the
Frankfort Optimist Club, the Bluegrass Striders running club,
the Frankfort Board of Realtors, and the Capital Community
Economic and Industrial Development Authority. He is a former
Frankfort City Commissioner. He has served on the FCA State
Tournament Breakfast Committee, the Girls Sweet 16 Executive
Committee, the Administrative Board of First United Methodist
Church and the Board of Directors of the YMCA of Frankfort. He
has also coached several youth basketball and baseball teams in
Frankfort.
DAVID G. EDDINS is a self-employed certified public
accountant. He is currently a member of the Frankfort Area
Chamber of Commerce, the Kentucky Chamber of Commerce, and the
National Conference of Practicing CPAs.
WILLIAM C. JENNINGS has been an employee of First Federal
since 1963. He has served as President and Chairman of the
Board of First Federal since 1980. He is also currently
Moderator and Deacon for the Pigeon Fork Baptist Church. His
wife, Joyce H. Jennings, is Vice President and Treasurer of the
Bank.
C. MICHAEL DAVENPORT is an auctioneer, builder, developer,
real estate broker, and serves as President and CEO of Davenport
Broadcasting, Inc. which operates radio station WKYL 102.1 FM
and Mikey Mart. He is currently a member of the Frankfort Home
Builders Association and the Kentucky Youth Association. He has
served previously on the boards of P.U.S.H., the Franklin County
Humane Society, and the Blue Ridge Assembly. He has served as
national director of the Home Builders and is a past president
of the Frankfort Area Chamber of Commerce.
4
<PAGE>
<PAGE>
________________________________________________________________
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
________________________________________________________________
The Boards of Directors of the Company and the Bank hold
regular semi-monthly meetings and hold special meetings as
needed. During the fiscal year ended June 30, 1997, the Board
of the Company met 15 times and the Board of the Bank met 23
times. No director attended fewer than 75% in the aggregate of
the total number of Board meetings held while he was a member
during the fiscal year ended June 30, 1997 and the total number
of meetings held by committees on which he or she served during
such fiscal year.
The Board of Directors of the Company has standing Audit and
Compensation Committees. (The Bank has standing Executive, Loan
and Investment Committees.) The Audit Committee for fiscal 1997
consisted of Directors David Eddins (Chairman), Herman D. Regan,
Jr. and William M. Johnson. The Audit Committee met twice
during fiscal year 1997.
For fiscal 1997, the Compensation Committee consisted of
non-employee Directors Charles A. Cotton, III, William M.
Johnson and Frank McGrath. The Compensation Committee met twice
during fiscal year 1997.
The Company does not have a standing Nominating Committee.
Under the Company's Bylaws, the Board of Directors or a
committee appointed by the Board acts as a nominating committee
for selecting management's nominees for election as directors.
The full Board of Directors served as a nominating committee for
the nominees chosen for election as directors at the Meeting.
While the Board of Directors will consider nominees recommended
by stockholders, it has not actively solicited recommendations
from the Company's stockholders for nominees nor, subject to the
procedural requirements set forth in the Company's Certificate
of Incorporation and Bylaws, established any procedures for this
purpose.
________________________________________________________________
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
________________________________________________________________
OVERVIEW AND OBJECTIVES. Composed of non-employee directors
Charles A. Cotton, III, William M. Johnson and Frank McGrath,
the Compensation Committee (the "Committee") of the Board of
Directors establishes the Company's and the Bank's executive
compensation policies. The Committee is responsible for
developing the Company's and the Bank's executive compensation
policies generally, and for implementing those policies for the
Company's and Bank's executive officers, including the Chief
Executive Officer. The Committee's overall objectives in
designing and administering the specific elements of the
Company's and the Bank's executive compensation program include
providing incentives for executive officers to promote the
success of the Bank and the Company; attracting, retaining and
motivating executive officers for the long-term success of the
Bank and the Company; and aligning executive compensation with
increases in stockholder value.
BENEFIT PLAN RESTRUCTURING. In an effort to facilitate
ownership of the Common Stock by the Company's management and
other employees, the Company implemented the MRP, ESOP and the
1995 Stock Option and Incentive Plan (the "Option Plan") in
connection with the Bank's conversion to stock form in 1995.
Under the MRP, executive officers, directors and employees were
awarded an aggregate of 138,000 shares of Common Stock following
shareholder approval of the plan in January 1996. These awards
were scheduled to vest over five years, subject to forfeiture in
the event of employment termination prior to that time. Under
the ESOP, an aggregate of 276,000 shares were awarded to the
Bank's employees in connection with the Bank's stock
conversion. The Board of Directors believed at the time that
these plans were implemented that they were an important element
of compensation since they provided executives and other
employees with incentives linked to the performance of the
Common Stock. Since that time, however, the Company's
profitability has suffered from the high level of expenses
associated with the MRP and ESOP. On the basis of its belief
that a reduction of these expenses would improve the Company's
profitability and, therefore, the Company's long-term prospects
for independence, the Board of Directors approved a
restructuring plan in June 1997 which called
5<PAGE>
<PAGE>
for, among other things, the termination of the ESOP and the MRP
and the cancellation of all unvested shares under the MRP. See
"Benefit Plan Restructuring." Participants in these plans were
compensated for the loss of benefits under the MRP and ESOP with
cash bonuses aggregating approximately $915,000. Of this
amount, approximately $165,000 was paid out to employees and the
remainder (representing the bonuses payable to the Company's
officers and directors) was credited to deferred compensation
accounts for distribution to the individuals upon their
retirement.
COMPONENTS OF EXECUTIVE COMPENSATION. In furtherance of the
objectives it has established, the Company's and Bank's
executive compensation program consists of the following
components.
. Base Salary. The Board of Directors of the Bank
approved the terms of employment agreements with William C.
Jennings, Chairman and President of the Company and the Bank,
Danny A. Garland, Vice President and Secretary of the Company
and the Bank, and Joyce H. Jennings, Vice President and
Treasurer of the Company and the Bank. These agreements set
forth the base salary of such executive officers. In
establishing base salaries, the Committee considers a number of
factors, including the officer's experience, tenure, abilities
and performance and reviews regional and national surveys of
salaries paid to executive officers of other savings and loan
holding companies and other financial institutions similar in
size and other characteristics. The Committee's objective is to
provide for base salaries that are competitive with the average
salary paid by the Company's peers.
. Bonuses. Historically, bonuses have been paid at the
end of the calendar year and end of the fiscal year at the
discretion of the Board. Bonus payments in the past have been
less than fifteen (15%) percent of the annual compensation of
the employee. Bonuses were paid in fiscal year 1997. The
Committee's current intention, however, is to cease payment of
such bonuses in future periods.
. Stock Option and Incentive Plan. The Company maintains
the Option Plan as a means of providing directors and key
employees the opportunity to acquire a proprietary interest in
the Company and to align their interests with those of the
Company's stockholders. By encouraging stock ownership, the
Company seeks to attract, retain and motivate the best available
personnel for positions of substantial responsibility and to
provide additional incentive to directors and employees of the
Company and the Bank to promote the success of the business of
the Company.
Under this plan, participants are eligible to receive stock
options and stock appreciation rights ("SARs"). Awards under
this plan are subject to vesting and forfeiture as determined by
the Committee. Options and SARs are granted at the market value
of the Common Stock on the date of the grant. Thus, such awards
have value only if the Company's stock price increases. The
Committee believes that this plan aligns stockholder and
officer's interests and helps to retain and motivate executive
officers to improve long-term stockholder value. On January 16,
1996, following receipt of stockholder approval of the Option
Plan, the Committee awarded options to purchase a total of
344,655 shares, including 241,155 to executive officers at an
exercise price of $13.00 per share, the fair market value of the
Common Stock on the date of grant. (The exercise price of these
options was later adjusted to $9.48 under the terms of the
Option Plan to reflect the impact of the Company's first $4.00
special dividend on the market price of the Common Stock.) Such
options vest in 20% increments over a period of five years from
the date of grant.
Deferred Compensation Plan. The Bank maintains a deferred
compensation plan for the benefit of the directors and the
President and Vice Presidents of the Bank. Pursuant to the
terms of this plan, eligible officers may elect to defer receipt
of up to 100% of their future compensation. Deferred amounts
are credited to a bookkeeping account in the individual's name.
Such accounts are credited quarterly with the investment return
which would have resulted if such amounts had been invested,
based on the individual's choice, in either the Common Stock or
the Bank's highest annual rate of interest on certificates of
deposit, regardless of term. Among the purposes of this plan is
to attract and retain directors and executive officers by
permitting them to elect to have Common Stock measure the
appreciation or depreciation of their deferred compensation and
to provide them with a direct equity interest in the Company and
thereby strengthen the connection between the interest of
officers and directors and the interest of the Company's
stockholders. See "Executive Compensation -- Selected Benefit
Plans and Arrangements -- Deferred Compensation Plan."
6
<PAGE>
<PAGE>
Management Recognition Plan. As a result of the
implementation of the benefit plan restructuring, the MRP was
terminated effective June 24, 1997 and all unvested awards were
canceled. Therefore, no further awards will be made under this
plan. Executive officers received deferred compensation
credited to their individual accounts under the Company's
deferred compensation plan.
Other Compensation Plans. The Company and the Bank have
also adopted certain broad-based employee benefit plans in which
executive officers have been permitted to participate, including
the Bank's retirement fund. As part of the benefit plan
restructuring, the Company also intends to terminate the ESOP as
of December 31, 1997, subject to receipt of a favorable
determination from the IRS that the ESOP is tax-qualified upon
its termination. At such time, the vested value of ESOP
participants' accounts, including those accounts of
participating executive officers, will be paid in the form of
cash, Common Stock or both.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Jennings has been employed by the Bank for over 34
years, and has served as President and Chief Executive Officer
for over 16 years. In establishing Mr. Jennings' compensation
generally, the Committee takes into account regional and
national surveys of salaries paid to chief executive officers of
other savings and loan holding companies and other financial
institutions similar in size and other characteristics.
Mr. Jennings' base salary is established in accordance with
the terms of the employment agreement entered into between the
Bank and Mr. Jennings (see "Executive Compensation - Employment
Agreements") and is currently $80,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee consists entirely of
non-employee directors.
THE COMPENSATION COMMITTEE
Charles A. Cotton, III
William M. Johnson
Frank McGrath
7<PAGE>
<PAGE>
________________________________________________________________
EXECUTIVE COMPENSATION
________________________________________________________________
SUMMARY COMPENSATION TABLE
The following table sets forth cash and noncash compensation
for each of the last three fiscal years awarded to or earned by
the Chief Executive Officer of the Company and the Bank. No
other executive officer received salary and bonus in excess of
$100,000 during the fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
Annual Compensation -----------------------
Name and ------------------------------- Restricted Securities
Principal Fiscal Other Annual Stock Underlying All Other
Position Year Salary Bonus Compensation(2) Award(s)(3) Options Compensation(4)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $80,000 $178,666 (1) 7,200 $ -- -- $31,886
William C. Jennings 1996 80,000 6,666 7,200 322,920 80,385 26,004
President and Chief 1995 77,667 9,222 6,600 -- -- 5,680
Executive Officer
Danny A. Garland 1997 65,000 168,417 (1) 7,200 -- -- 25,907
Vice-President and 1996 65,000 5,417 7,200 304,980 80,385 21,120
Secretary 1995 63,517 7,630 6,600 -- -- 4,640
Joyce H. Jennings 1997 55,000 167,583 (1) -- -- -- 21,922
Vice-President and 1996 55,000 4,583 -- 304,980 80,385 17,880
Treasurer 1995 53,353 6,326 -- -- -- 3,900
_____________
(1) Consists of regular annual bonuses of $6,666, $5,417 and $4,583 for Mr. Jennings,
Mr. Garland and Ms. Jennings, respectively, as well as contributions of $172,000,
$163,000 and $163,000 to these individuals' accounts, respectively, under the
Bank's Deferred Compensation Plan paid in connection with the termination and
cancellation of awards under the MRP. See "Benefit Plan Restructuring."
(2) "Other Annual Compensation" represents directors' fees.
(3) All unvested awards under the MRP were subsequently cancelled pursuant to the
Company's benefit plan restructuring. See "Benefit Plan Restructuring."
(4) "All Other Compensation" represents contributions to the individual's account under
the ESOP.
</TABLE>
Option/SAR Exercises and Year-End Value Table
The following table sets forth information concerning the
value of options held by the Chief Executive Officer
at June 30, 1997.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year-End at Fiscal Year-End (1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------------------- -------------------------
<S> <C> <C>
William C. Jennings 16,077/64,308 N/A (2)
- ----------
(1) Represents the difference between the fair market value of the underlying
shares of Common Stock at fiscal year-end and the exercise price.
(2) The exercise price of Mr. Jennings' options ($9.48) per share) exceeded
the fair market value of the Common Stock at June 30, 1997.
</TABLE>
8
<PAGE>
<PAGE>
PENSION PLAN
Effective July 1, 1994, the Bank adopted the FIRF Pension
Trust (the "Pension Plan") for the benefit of all employees who
are at least 21 years of age and have completed one year of
service. A participant becomes fully vested after six years of
service.
The following table illustrates annual pension benefits at
age 65 under the Pension Plan at various levels of compensation
and years of service, assuming 100% vesting of benefits. All
retirement benefits illustrated in the table below are without
regard to any Social Security benefits to which a participant
might be entitled.
<TABLE>
<CAPTION>
Years of Service
Average ----------------------------------------
Compensation 15 20 25 30 35
- ----------------- ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C>
$ 20,000 $3,750 $ 5,000 $ 6,250 $ 7,500 $8,750
40,000 7,500 10,000 12,500 15,000 17,500
60,000 11,250 15,000 18,750 22,500 26,250
80,000 15,000 20,000 25,000 30,000 35,000
100,000 18,750 25,000 31,250 37,500 43,750
</TABLE>
Participants in the Pension Plan will receive an annual
benefit based on average salary and years of service at the time
of retirement, which is not subject to offset for social
security payments. Average salary for purposes of determining a
participant's benefit consists of salary only, exclusive of
overtime, bonuses and other special payments. At June 30, 1997,
Mr. Jennings had 34 years of credited service under the Pension
Plan.
SELECTED BENEFIT PLANS AND ARRANGEMENTS
Deferred Compensation Plan. In 1994, the Bank established
the First Federal Savings Bank of Frankfort Deferred
Compensation Plan (the "Deferred Compensation Plan") for the
exclusive benefit of members of the Bank's Board of Directors
and the President and Vice Presidents of the Bank. Pursuant to
the terms of the Deferred Compensation Plan, directors may elect
to defer the receipt of all or part of their future fees, and
eligible officers may elect to defer receipt of their future
compensation. Deferred amounts are credited to a bookkeeping
account in the participant's name, which will also be credited
quarterly with the investment return which would have resulted
if such deferred amounts had been invested, based upon the
participant's choice in either the Common Stock or the Bank's
highest annual rate of interest on certificates of deposit,
regardless of their term. Participants may cease future
deferrals any time. The Bank contributes to the Deferred
Compensation Plan on a quarterly basis.
Employment Agreements. The Company and the Bank have
entered into separate employment agreements (the "Employment
Agreements") with William C. Jennings, Chairman of the Board and
President of First Federal and of the Company; Danny A. Garland,
Vice President and Secretary of First Federal and the Company;
and Joyce H. Jennings, Vice President and Treasurer of First
Federal and the Company (collectively, the "Executives"). In
such capacities, the Executives are responsible for overseeing
all operations of First Federal and the Company, and for
implementing the policies adopted by the Boards of Directors of
the Company and the Bank. The Boards believe that the
Employment Agreements assure fair treatment of the Executives in
relation to their careers with the Company and First Federal by
assuring them of some financial security.
The Employment Agreements became effective on the date of
completion of the conversion of the Bank to stock form and
provide for a term of three years, with an annual base salary
for Mr. Jennings, Mr. Garland and Ms. Jennings equal to $80,000,
$65,000 and $55,000, respectively. On each anniversary date
from the date of commencement of the Employment Agreements, the
term of employment will be extended for an additional one-year
period beyond the then-effective expiration date, upon a
determination by the Boards of Directors that the performance
9
<PAGE>
<PAGE>
of the Executive has met the required performance standards and
that such Employment Agreement should be extended. The
Employment Agreements provide the Executives with a salary
review by the Board of Directors not less often than annually,
as well as with inclusion in any discretionary bonus plans,
retirement and medical plans, customary fringe benefits and
vacation and sick leave and reimbursement for reasonable
out-of-pocket expenses. Each Employment Agreement will
terminate upon death or disability, and is terminable by First
Federal for "just cause" as defined in the Employment Agreement.
In the event of termination for just cause, no severance
benefits are available. If the Company or First Federal
terminates an Executive without just cause, he or she will be
entitled to a continuation of his salary and benefits from the
date of termination through the remaining term of his or her
Employment Agreement plus an additional 12-month period. If an
Employment Agreement is terminated due to the Executive's
"disability" (as defined in the Employment Agreement), he or she
will be entitled to a continuation of his or her salary and
benefits for the period preceding such termination of
employment. In the event of an Executive's death during the
term of his or her Employment Agreement, his or her estate will
be entitled to receive his or her salary through the end of the
month of the Executive's death. Severance benefits payable to
the Executive or to his or her estate will be paid in a lump sum
or in installments, as he or she (or his or her estate) elects.
An Executive is able to voluntarily terminate his or her
Employment Agreement by providing 60 days' written notice to the
Boards of Directors of First Federal and the Company, in which
case he or she is entitled to receive only his or her
compensation, vested rights and benefits up to the date of
termination.
Each Employment Agreement contains provisions stating that
in the event of the Executive's involuntary termination of
employment in connection with, or within one year after, any
change in control of First Federal or the Company, other than
for "just cause," the Executive will be paid within 10 days of
such termination an amount equal to the difference between (i)
2.99 times his "base amount," as defined in Section 280G(b)(3)
of the Internal Revenue Code, and (ii) the sum of any other
parachute payments, as defined under Section 280G(b)(2) of the
Internal Revenue Code, that he or she receives on account of the
change in control. "Control" generally refers to the
acquisition, by any person or entity, of the ownership or power
to vote more than 25% of First Federal's or Company's voting
stock, the control of the election of a majority of First
Federal's or the Company's directors, or the exercise of a
controlling influence over the management or policies of First
Federal or the Company. In addition, under the Employment
Agreements, a change in control occurs when, during any
consecutive two-year period, directors of the Company or
First Federal at the beginning of such period cease to
constitute two-thirds of the Board of Directors of the Company
or First Federal, unless the election of replacement directors
was approved by a two-thirds vote of the initial directors
then in office. The Employment Agreements with First Federal
provide that within five business days of a change in
control, First Federal shall fund, or cause to be funded, a
trust in the amount of 2.99 times his or her base amount, that
will be used to pay the Executive amounts owed to him or her
upon termination other than for just cause within one year
of the change in control. The amount to be paid to each
Executive from this trust upon his or her termination is
determined according to the procedures outlined in the
Employment Agreements with First Federal, and any money not
paid to the Executive is returned to First Federal. The
Employment Agreements also provide for a similar lump sum
payment to be made in the event of an Executive's voluntary
termination of employment within one year following a
change in control, upon the occurrence, or within 90 days
thereafter, of certain specified events following the change
in control, which have not been consented to in writing by the
Executive, including (i) the requirement that he or she perform
his or her principal executive functions more than 35 miles from
First Federal's current primary office, (ii) a reduction in his
or her base compensation as then in effect, (iii) the failure of
the Company or First Federal to maintain existing or
substantially similar employee benefit plans, including material
vacation, fringe benefits, stock option and retirement plans,
(iv) the assignment to an Executive of duties and
responsibilities which are other than those normally associated
with his or her position with First Federal, (v) a material
reduction in his or her authority and responsibility, and (vi)
in the case of Mr. Jennings and Mr. Garland, the failure to
re-elect them to the Company's or First Federal's Board of
Directors. The aggregate payments that would be made to Mr.
Jennings, Mr. Garland and Ms. Jennings assuming their
termination of employment under the foregoing circumstances at
June 30, 1997 would have been approximately $241,675, $198,767
and $163,865, respectively. These provisions may have an
anti-takeover effect by making it more expensive for a potential
acquiror to obtain control of the Company. Under the terms of
the Employment Agreements, in the event that an Executive
prevails over the Company and First Federal in a legal dispute
as to his or her Employment Agreement, he or she will be
reimbursed for his or her legal and other expenses.
10
<PAGE>
<PAGE>
________________________________________________________________
DIRECTORS' COMPENSATION
________________________________________________________________
Fees. The Bank's directors receive fees of $600 per month
and $100 per meeting for certain committee meetings. Directors
do not receive separate compensation for service on the Board of
Directors of the Bank.
In connection with the termination and cancellation of
awards under the MRP pursuant to the Company's benefit plan
restructuring (see "Benefit Plan Restructuring"), amounts were
credited to each director's individual account under the
Deferred Compensation Plan. The accounts of Directors Cotton,
Eddins, Johnson, McGrath and Regan were each credited $48,000;
the account of Danny Garland was credited $163,000; the account
of William Jennings was credited $172,000; and the account of
Director Davenport, who was appointed to the Board after
adoption of the MRP, was credited $11,500. Each director will
be entitled to receive the balance of his account according to
his individually determined payment schedule.
________________________________________________________________
TRANSACTIONS WITH MANAGEMENT
________________________________________________________________
Director William M. Johnson received fees for services
rendered as the Bank's attorney in the amount of $15,935 for
fiscal year 1997.
The Bank offers loans to its directors, officers, and
employees. These loans currently are made in the ordinary
course of business with the same collateral, interest rates and
underwriting criteria as those of comparable transactions
prevailing at the time and to not involve more than the normal
risk of collectibility or present other unfavorable features.
11
<PAGE>
<PAGE>
STOCK PERFORMANCE GRAPH
The graph and table which follow show the cumulative total
return on the Common Stock since the commencement of trading or
the Common Stock on July 10, 1995 compared with the cumulative
total return of (i) the Nasdaq Stock Market Index -- U.S.; and
(ii) the Nasdaq Stock Market Bank Index. Cumulative total
return on the stock or the index equals the total increase in
value since July 10, 1995, assuming reinvestment of all
dividends paid on the stock or the index, respectively. The
graph and table were prepared assuming that $100 was invested at
the closing price on July 10, 1995 in the Common Stock and in
each of the indices. The shareholder returns shown on the
performance graph are not necessarily indicative of the future
performance of the Common Stock or of any particular index.
<TABLE>
<CAPTION>
7/10/95 6/30/96 6/30/97
------- ------- -------
<S> <C> <C> <C>
Frankfort First Bancorp, Inc. 100 164 180
Nasdaq Stock Market Index - U.S. 100 123 149
Nasdaq Stock Market Bank Index 100 127 198
</TABLE>
12<PAGE>
<PAGE>
________________________________________________________________
PROPOSAL II -- APPROVAL OF ONE-FOR-TWO REVERSE STOCK SPLIT
________________________________________________________________
In June 1997, in connection with the benefit plan
restructuring (see "Benefit Plan Restructuring" herein) and
the associated $4.00 special dividend , the Company's Board of
Directors approved a one-for-two reverse stock split, subject to
stockholder approval at the Meeting. The principal effect of
the reverse stock split will be to reduce the number of issued
and outstanding shares of Common Stock from 3,279,952 to
1,639,976.
The purpose of the stock split is to offset the effect on
the market price of the Common Stock of the $4.00 special
dividend paid by the Company on June 24, 1997. As is common
with payment of a special capital distribution of this kind, the
market price of the Common Stock has declined to adjust to the
reduced book value of the Common Stock resulting from the
special dividend, from $12.125 immediately following the June
17, 1997 record date for the dividend to an average of $8.80 for
the 30 day period following payment of the dividend on June 24,
1997. As of September 30, 1997, the closing price of the Common
Stock as reported on the NASDAQ National Market was $10.125
per share. The Company believes that the current market price
of the Common Stock may impair the acceptability of the Common
Stock to certain institutional investors and other members of
the investing public, since certain investors view low-priced
stock as unattractive or, as a matter of policy, are precluded
from purchasing it because of the greater trading volatility
sometimes associated with it. The Board of Directors therefore
views the reverse stock split as a means of improving the
marketability of the Common Stock by reducing the number of
shares outstanding and thus increasing its share market price.
There can be no assurance, however, that the reverse stock split
will in fact favorably affect the per share market price of the
Common Stock or that the marketability of the Common Stock will
improve as a result.
If the reverse stock split is approved and implemented,
each two shares of Common Stock will be automatically
reclassified into one share of Common Stock without any further
action on the part of the Company's shareholders. Thus, a
stockholder currently owning 100 shares could expect to receive
50 shares. Shareholders entitled to receive fractional shares
as a result of the reverse stock split will instead receive
cash. The Company had 3,279,952 shares of Common Stock
outstanding at September 30, 1997. Assuming no change in the
number of outstanding shares prior to the approval of the
reverse stock split, the currently outstanding shares of Common
Stock will be converted into approximately 1,639,976 shares of
reclassified Common Stock. The Company's Certificate of
Incorporation will also be amended to change the authorized
Common Stock of the Company from 7,500,000 shares to 3,750,000
shares of reclassified Common Stock that will be authorized
after the reverse stock split. A shareholder's vote in favor of
the reverse stock split will also constitute a vote in favor of
the related amendment to the Company's Certificate of
Incorporation.
Approval of the reverse stock split and the related
amendment to the Certificate of Incorporation requires the
affirmative vote of a majority of the outstanding shares of
Common Stock outstanding entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
REVERSE STOCK SPLIT AND THE RELATED AMENDMENT TO THE CERTIFICATE
OF INCORPORATION.
<PAGE>
________________________________________________________________
RELATIONSHIP WITH INDEPENDENT AUDITORS
________________________________________________________________
Butler & Associates, P.S.C. was the Company's independent
certified public accountant for the 1995 fiscal year. On March
27, 1996, the Company, with the approval of the Board of
Directors, decided to dismiss Butler & Associates, P.S.C., and
to engage Grant Thornton LLP. Butler & Associates, P.S.C.
served as the Company's independent public auditors from 1987
through the fiscal period ended June 30, 1995. The Board of
Directors' decision to engage Grant
13<PAGE>
<PAGE>
Thornton LLP was based on the resources of that firm's
community-based financial institution practice. Butler &
Associates, P.S.C.'s reports on the financial statements of the
Company for the fiscal years 1994 and 1995 did not contain any
adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or
accounting principles. There have not been any disagreements
between the Company and Butler & Associates, P.S.C. on any
matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if
not resolved to the satisfaction of Butler & Associates, P.S.C.,
would have caused it to make reference to the subject matter of
such disagreement in connection with its report.
Grant Thornton LLP were the Corporation's independent
certified public auditors for the fiscal year ended June
30, 1997. The Board of Directors presently intends to renew the
Corporation's arrangement with Grant Thornton LLP to be its
independent certified public auditors for the 1998 fiscal year.
A representative of Grant Thornton LLP is expected to be present
at the Meeting to respond to appropriate questions and to make a
statement, if so desired.
________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________
Pursuant to regulations promulgated under the Exchange Act,
the Company's officers, directors and persons who own more than
ten percent of the outstanding Common Stock are required to file
reports detailing their ownership and changes of ownership in
such Common Stock, and to furnish the Company with copies of all
such reports. Based solely on its review of the copies of such
reports received during the past fiscal year or with respect to
the past fiscal year, the Company believes that, during the
fiscal year ended June 30, 1997, all of its officers, directors
and stockholders owning in excess of 10% of the Company's
outstanding Common Stock complied with these requirements,
except that each director and Officer Joyce Jennings
inadvertently failed to file timely one report covering two
transactions.
________________________________________________________________
OTHER MATTERS
________________________________________________________________
The Board of Directors is not aware of any business to come
before the Meeting other than those matters described above in
this Proxy Statement. However, if any other matters should
properly come before the Meeting, it is intended that proxies in
the accompanying form will be voted in respect thereof in
accordance with the determination of the Board of Directors.
________________________________________________________________
MISCELLANEOUS
________________________________________________________________
The cost of soliciting 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 solicitations by mail, directors,
officers and regular employees of the Company may solicit
proxies personally or by telegraph or telephone without
additional compensation.
The Company's Annual Report to Stockholders, including
financial statements, is being mailed to all stockholders of
record as of the Record Date. Any stockholder who has not
received a copy of such Annual Report may obtain a copy by
writing to the Secretary of the Company. Such Annual Report is
not to be treated as a part of the proxy solicitation material
or as having been incorporated herein by reference.
14
<PAGE>
<PAGE>
________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________
In order to be eligible to be considered for inclusion in
the Company's proxy materials for next year's Annual Meeting of
Stockholders, any stockholder proposal to take action at such
meeting must be received at the Company's executive office at
216 W. Main Street, Frankfort, Kentucky 40602, no later than
June 12, 1998. Any such proposal shall be subject to the
requirements of the proxy rules adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Danny A. Garland
DANNY A. GARLAND
SECRETARY
Frankfort, Kentucky
October 10, 1997
________________________________________________________________
FORM 10-K
________________________________________________________________
A COPY OF THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR
ENDED JUNE 30, 1997 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS
OF THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY,
FRANKFORT FIRST BANCORP, INC., 216 W. MAIN STREET, FRANKFORT,
KENTUCKY 40602.
________________________________________________________________
<PAGE>
<PAGE>
REVOCABLE PROXY
FRANKFORT FIRST BANCORP, INC.
FRANKFORT, KENTUCKY
________________________________________________________________
ANNUAL MEETING OF STOCKHOLDERS
November 11, 1997
________________________________________________________________
The undersigned hereby appoints C. Michael Davenport,
David G. Eddins and Charles A. Cotton III, with full powers of
substitution, to act as proxies for the undersigned, to vote all
shares of common stock of Frankfort First Bancorp, Inc. (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 First Federal Savings Bank of Frankfort, 216
West Main Street, Frankfort, Kentucky, on Tuesday, November 11,
1997 at 4:30 p.m., local time, and at any and all adjournments
thereof, as follows:
VOTE
FOR WITHHELD
--- --------
I. The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ]
William M. Johnson
Frank McGrath
Herman D. Regan, Jr.
INSTRUCTION: TO WITHHOLD YOUR VOTE
FOR ANY INDIVIDUAL NOMINEE, INSERT THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
_________________
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
II. Approval of a one-for-two reverse
stock split, including approval of
an amendment to the Company's
Certificate of Incorporation
reflecting the reverse stock split. [ ] [ ] [ ]
</TABLE>
The Board of Directors recommends a vote "FOR" the
nominees and the foregoing proposal.
________________________________________________________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES FOR
DIRECTOR AND FOR THE PROPOSAL LISTED ABOVE. IF ANY OTHER
BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL
BE VOTED BY THOSE NAMED IN THIS PROXY IN ACCORDANCE WITH THE
DETERMINATION OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME,
THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE MEETING. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY ON THE HOLDERS THEREOF TO VOTE WITH RESPECT TO THE
ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE
TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT
TO THE CONDUCT OF THE MEETING.
________________________________________________________________
<PAGE>
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at
the Meeting or at any adjournment 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 said 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 a Notice of Annual
Meeting of Stockholders, a proxy statement dated October 10,
1997 and an annual report.
Dated: _______________________, 1997
__________________________ __________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________ __________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears above. When signing as
attorney, executor, administrator, trustee or guardian,
please give your full title. If shares are held jointly, each
holder should sign.
________________________________________________________________
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE.
________________________________________________________________
