<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
FORT THOMAS FINANCIAL CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FORT THOMAS FINANCIAL CORPORATION
(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 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
================================================================================
<PAGE> 2
FORT THOMAS FINANCIAL CORPORATION
25 North Fort Thomas Avenue
Fort Thomas, Kentucky 41075
(606) 441-3302
December 30, 1999
Dear Fellow Stockholder:
You are cordially invited to attend the 1999 Annual Meeting of Stockholders of
Fort Thomas Financial Corporation. The meeting will be held at the Comfort Inn
Suites located at 420 Riverboat Row, Newport, Kentucky, on Monday, January 24,
2000 at 9:00 a.m., Eastern Time. The matters to be considered by stockholders at
the Annual Meeting are described in the accompanying materials.
It is very important that you be represented at the Annual Meeting regardless of
the number of shares you own or whether you are able to attend the meeting in
person. We urge you to mark, sign, and date your proxy card today and return it
in the envelope provided, even if you plan to attend the Annual Meeting. This
will not prevent you from voting in person, but will ensure that your vote is
counted if you are unable to attend.
Your continued support of and interest in Fort Thomas Financial Corporation are
sincerely appreciated.
Sincerely,
/s/ Larry N. Hatfield
Larry N. Hatfield, President and
Chief Executive Officer
<PAGE> 3
FORT THOMAS FINANCIAL CORPORATION
25 North Fort Thomas Avenue
Fort Thomas, Kentucky 41075
(606) 441-3302
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on January 24, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of Fort Thomas Financial Corporation (the "Company") will be held at
the Comfort Inn Suites located at 420 Riverboat Row, Newport, Kentucky, on
Monday, January 24, 2000 at 9:00 a.m., Eastern Time, for the following purposes,
all of which are more completely set forth in the accompanying Proxy Statement:
(1) To elect five directors for terms of one year or until their
successors have been elected and qualified;
(2) To ratify the appointment of VonLehman & Company Inc. as the
Company's independent auditors for the fiscal year ending
September 30, 2000; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof. Except with respect to
procedural matters incident to the conduct of the meeting,
management is not aware of any other such business.
Stockholders of record of the Company as of the close of business on December
23, 1999 are entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Larry N. Hatfield
Larry N. Hatfield, President and
Chief Executive Officer
Fort Thomas, Kentucky
December 30, 1999
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING
OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
- --------------------------------------------------------------------------------
<PAGE> 4
FORT THOMAS FINANCIAL CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
January 24, 2000
This Proxy Statement is furnished to holders of common stock, par value $.01 per
share ("Common Stock"), of Fort Thomas Financial Corporation (the "Company"),
which acquired all of the common stock of Fort Thomas Savings Bank, FSB (the
"Savings Bank") issued in connection with the conversion of the Savings Bank
from a federally chartered mutual savings and loan association to a federally
chartered stock savings bank in June 1995 (the "Conversion").
Proxies are being solicited on behalf of the Board of Directors of the Company
to be used at the Annual Meeting of Stockholders ("Annual Meeting") to be held
at the Comfort Inn Suites located at 420 Riverboat Row, Newport, Kentucky, on
Monday, January 24, 2000 at 9:00 a.m., Eastern Time, and at any adjournment
thereof for the purposes set forth in the Notice of Annual Meeting of
Stockholders. This Proxy Statement is first being mailed to stockholders on or
about December 30, 1999.
Each proxy solicited hereby, if properly signed and returned to the Company and
not revoked prior to its use, will be voted in accordance with the instructions
contained therein. If no contrary instructions are given, each proxy received
will be voted for each of the matters described herein and, upon the transaction
of such other business as may properly come before the meeting, in accordance
with the best judgment of the persons appointed as proxies.
Any stockholder giving a proxy has the power to revoke it at any time before it
is exercised by (i) filing with the Secretary of the Company written notice
thereof (J. Michael Lonnemann, Vice President and Secretary, Fort Thomas
Financial Corporation, 25 North Fort Thomas Avenue, Fort Thomas, Kentucky
41075); (ii) submitting a duly executed proxy bearing a later date; or (iii)
appearing at the Annual Meeting and giving the Secretary notice of his or her
intention to vote in person. Proxies solicited hereby may be exercised only at
the Annual Meeting and any adjournment thereof and will not be used for any
other meeting.
VOTING AND REQUIRED VOTES
Only stockholders of record at the close of business on December 23, 1999
("Voting Record Date") will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 1,474,321 shares of Common Stock issued and
outstanding, and the Company had no other class of equity securities
outstanding. Each share of Common Stock outstanding is entitled to one vote at
the Annual Meeting on each matter properly presented at the Annual Meeting.
Directors are elected by a plurality of the votes cast with a quorum present. A
quorum consists of stockholders representing, either in person or by proxy, a
majority of the outstanding Common Stock entitled to vote at the meeting.
Abstentions are considered in determining the presence of a quorum and will not
affect the plurality vote required for the election of directors. The
affirmative vote of the holders of a majority of the total votes present in
person or by proxy is required to ratify the appointment of the independent
auditors. Under rules of the New York Stock Exchange, the proposal for
ratification of the auditors is considered a "discretionary" item upon which
brokerage firms may vote in their discretion on behalf of their clients if such
clients have not furnished voting instructions and for which there will not be
"broker non-votes."
<PAGE> 5
INFORMATION WITH RESPECT TO NOMINEES FOR
DIRECTOR AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Articles of Incorporation of the Company presently provide that the Board of
Directors shall consist of five members. As a result, all members shall be
elected for a one year term or until their successors are elected and qualified.
However, to the extent that the Board of Directors consists of six or more
members, the Articles of Incorporation of the Company provide that the Board of
Directors shall be divided into two or three classes as nearly equal in number
as possible provided no class shall consist of fewer than three members. The
members of each class would be elected for a term of two or three years,
respectively, or until their successors are elected and qualified with one class
of directors to be elected annually.
Stockholders of the Company are not permitted to cumulate their votes for the
election of directors. There are no arrangements or understandings between the
Company and any person pursuant to which such person has been elected a
director. No director or nominee for director is related to any other director,
nominee for director or executive officer of the Company by blood, marriage or
adoption except for Director Robert L. Grimm who is the uncle of Director J.
Steven McLane.
Unless otherwise directed, each proxy executed and returned by a stockholder
will be voted for the election of the nominees for director listed below. If any
person named as a nominee should be unable or unwilling to stand for election at
the time of the Annual Meeting, the proxies will nominate and vote for any
replacement nominee or nominees recommended by the Board of Directors. At this
time, the Board of Directors knows of no reason why any of the nominees listed
below may not be able to serve as a director if elected. Ages are reflected as
of December 23, 1999 and service as a director includes service as a director of
the Savings Bank.
<TABLE>
<CAPTION>
Position with the Company and the
Savings Bank and Principal Occupation Director
Name Age During the Past Five Years Since
- ---- --- -------------------------- -----
<S> <C> <C> <C>
Larry N. Hatfield 59 Director; President and Chief Executive Officer of 1975
Company and the Savings Bank since 1994. Prior
thereto, Managing Officer and Executive Vice
President of the Savings Bank from 1973 to 1994.
Robert L. Grimm 80 Chairman of the Board of the Company and 1952
Savings Bank since 1994. Prior thereto, President
of the Savings Bank from 1982 to 1994.
Harold A. Luersen 75 Director of the Company and the Savings Bank and 1971
Vice President of the Savings Bank; Managing
Partner of the law firm of Luersen & Luersen, Fort
Thomas, Kentucky.
Don J. Beckmeyer 55 Director; President of Beckmeyer Insurance 1989
Agency, Inc., Newport, Kentucky.
J. Steven McLane 50 Director; President of Disney-McLane, Inc., 1989
Cincinnati, Ohio, a manufacturing representative in
the commercial plumbing supply business.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ELECTION OF THE ABOVE
NOMINEES FOR DIRECTOR.
-2-
<PAGE> 6
STOCKHOLDER NOMINATIONS
Article X.D of the Company's Articles of Incorporation governs nominations for
election to the Board of Directors and requires all such nominations, other than
those made by the Board, to be made at a meeting of stockholders called for the
election of directors, and only by a stockholder who has complied with the
notice provisions in that section. In order for a stockholder of the Company to
make any such nominations, he or she shall give notice thereof in writing,
delivered or mailed by first class mail to the Secretary of the Company not less
than thirty days nor more than sixty days prior to any such meeting; provided,
however, that if less than forty days' notice of the meeting is given to
stockholders, such written notice shall be delivered or mailed, as prescribed,
to the Secretary of the Company not later than the close of the tenth day
following the day which notice of the meeting was mailed to stockholders. Each
such notice given by a stockholder with respect to nominations for the election
of directors shall set forth (i) the name, age, business address and, if known,
residence address of each nominee, and (iii) the number of shares of stock of
the Company which are beneficially owned by each such nominee. In addition, the
stockholder making such nomination shall promptly provide any other information
reasonably requested by the Company.
COMMITTEES AND MEETINGS OF THE BOARD OF THE SAVINGS BANK AND COMPANY
The Board of Directors of the Company has not yet established any committees.
The Board of Directors of the Savings Bank meets on a weekly basis and may have
additional special meetings from time-to-time as needed. During the fiscal year
ended September 30, 1999, the Board of Directors of the Savings Bank met 22
times and the Board of Directors of the Company met nine times. No director
attended fewer than 75% of the total number of meetings or committee meetings of
the Board of Directors on which he served that were held during this period. As
described below, the Board of Directors of the Savings Bank has established an
Audit Committee, Executive Committee, Compensation Committee and Nomination
Committee.
AUDIT COMMITTEE. The Audit Committee, which consists of the entire Board of
Directors, reviews the records and affairs of the Savings Bank, engages the
Savings Bank's external auditors and reviews their reports. The Audit Committee
met once during fiscal 1999.
EXECUTIVE COMMITTEE. The Executive Committee is authorized to exercise all the
authority of the Board of Directors in the management of the Savings Bank
between Board of Directors meetings except as otherwise provided in the Savings
Bank's Bylaws. The Executive Committee, which consists of Messrs. Luersen, Grimm
and Beckmeyer, met once in fiscal 1999.
COMPENSATION COMMITTEE. The Compensation Committee, which consist of Messrs.
Luersen, Grimm and Beckmeyer, reviews the compensation and benefits received by
employees of the Savings Bank and met twice during fiscal 1999.
NOMINATION COMMITTEE. The Nomination Committee, which consists of the entire
Board of Directors, nominates the directors and officers of the Savings Bank.
The Nomination Committee met once during fiscal 1999.
-3-
<PAGE> 7
Executive Officer Who Is Not A Director
The following table sets forth certain information with respect to the only
executive officer of the Company who is not a director. There are no
arrangements or understandings between the Company and such person pursuant to
which such person was elected an executive officer of the Company, and such
officer is not related to any director or officer of the Company by blood,
marriage or adoption.
<TABLE>
<CAPTION>
Name Age(1) Principal Occupation During the Past Five Years
- ---- ------ -----------------------------------------------
<S> <C> <C>
J. Michael Lonneman 41 Vice President of the Savings Bank and the Company since 1988
and 1994, respectively; Secretary of the Savings Bank since
1990 and 1994, respectively.
</TABLE>
- ------------------
(1) As of December 23, 1999.
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table includes, as of the Voting Record Date, certain information
as to the Common Stock beneficially owned by (i) the only person or entity,
including any "group" as that term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended ("1934 Act"), who or which was known to the
Company to be the beneficial owner of more than 5% of the issued and outstanding
Common Stock, (ii) the directors of the Company, and (iii) all directors and
executive officers of the Company and the Savings Bank as a group.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as of
December 23, 1999(1)
--------------------
Name of Beneficial Owner Amount %
------------------------ ------ -
<S> <C> <C>
Fort Thomas Financial Corporation 38,668 2.6
Employee Stock Ownership Plan Trust
25 North Fort Thomas Avenue
Fort Thomas, Kentucky 41075
Directors
Larry N. Hatfield 74,346 4.9
Robert L. Grimm 18,591 1.2
Harold A. Luersen 28,591 1.9
Don J. Beckmeyer 18,147 1.2
J. Steven McLane 20,086 1.3
All directors and executive officers of the Company 227,971 14.6
and the Savings Bank as a group (6 persons)
</TABLE>
(Footnotes on following page)
-4-
<PAGE> 8
- ------
* Represents less than 1% of the outstanding Common Stock.
(1) For purposes of this table, pursuant to rules promulgated under the
1934 Act, an individual is considered to beneficially own shares of
Common Stock if he or she directly or indirectly has or shares (i)
voting power, which includes the power to vote or to direct the voting
of the shares; or (ii) investment power, which includes the power to
dispose or direct the disposition of the shares. Unless otherwise
indicated, an individual has sole voting power and sole investment
power with respect to the indicated shares. Shares which may be
acquired by the exercise of stock options which are exercisable within
60 days of the Voting Record Date are deemed to be beneficially owned
by the holder and are outstanding for the purpose of computing the
percentages of Common Stock beneficially owned by the respective
individual and group. The shares reflected as beneficially owned by
Messrs. Hatfield, Grimm, Luersen, Beckmeyer and McLane include 31,475,
6,136, 6,136, 6,136 and 6,136 shares which are exercisable within 60
days of the Voting Record Date pursuant to the Company's stock option
plans.
(2) The Fort Thomas Financial Corporation Employee Stock Ownership Plan
Trust ("Trust") was established pursuant to the Fort Thomas Financial
Corporation Employee Stock Ownership Plan ("ESOP") by an agreement
between the Company and Messrs. Beckmeyer, Grimm and Luersen, who act
as trustees of the plan ("Trustees"). As of the Voting Record Date, the
Trust had allocated 83,430 shares to the accounts of participating
employees. Under the terms of the ESOP, the Trustees must vote all
allocated shares held in the ESOP in accordance with the instructions
of the participating employees, and allocated shares for which
employees do not give instructions will be voted in the same ratio on
any matter as to those shares for which instructions are given.
Unallocated shares held in the ESOP will be voted by the ESOP Trustees
in accordance with their fiduciary duties as trustees. The amount of
Common Stock beneficially owned by each individual trustee or all
directors and executive officers as a group does not include the shares
held by the Trust.
(3) Includes 10,000 shares held jointly with Mr. Hatfield's spouse, with
whom voting and dispositive power is shared, 19,935 shares allocated to
Mr. Hatfield pursuant to the Company's ESOP and 350 shares held by his
spouse, which Mr. Hatfield may be deemed to beneficially own.
(4) Includes 5,000 shares held by Mr. Grimm's spouse, which Mr. Grimm may
be deemed to beneficially own. Excludes the shares held by the ESOP, of
which Mr. Grimm is one of three trustees.
(5) Includes 10,000 shares held jointly with Mr. Luersen's spouse, with
whom voting and dispositive power is shared, and 10,000 shares held by
his spouse, which Mr. Luersen may be deemed to beneficially own.
Excludes the shares held by the ESOP, of which Mr. Luersen is one of
three trustees.
(6) Includes 5,250 shares held jointly with Mr. Beckmeyer's spouse, with
whom voting and dispositive power is shared, 1,153 shares held by his
spouse's IRA, and 2,000 shares held by a corporation as to which Mr.
Beckmeyer owns 100% of the outstanding stock. Excludes the shares held
by the ESOP, of which Mr. Beckmeyer is one of three trustees.
(7) Includes 5,407 shares held by Mr. McLane's spouse, which Mr. McLane may
be deemed to beneficially own and 1,500 shares held in trust for Mr.
McLane's children for which he acts as trustee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 Act requires the Company's directors,
officers and any persons holding more than 10% of the Common Stock to report
their ownership of the Common Stock and any changes in that ownership to the
Securities and Exchange Commission ("Commission") and the National Association
of Securities Dealers, Inc. ("NASD") by specific dates. Officers, directors and
greater than 10% stockholders are required by regulation to furnish the Company
with copies of all Section 16(a) forms they file. The Company knows of no person
who owns 10% or
-5-
<PAGE> 9
more of the Common Stock. Based on representations of its directors and officers
and copies of the reports that they have filed with the Commission and the NASD,
the Company believes that all of these filing requirements were satisfied by the
Company's directors and officers in the fiscal year ended September 30, 1999.
EXECUTIVE COMPENSATION
Summary Compensation Table
The Company has not yet paid separate compensation directly to its officers. The
following table sets forth a summary of certain information concerning the
compensation paid by the Savings Bank for services rendered in all capacities
during the indicated periods to the two executive officers of the Company and
the Savings Bank.
<TABLE>
<CAPTION>
Annual Compensation
-----------------------------------------------
Name and Fiscal Other Annual All Other
Principal Position Year Salary(1) Bonus Compensation(2) Compensations(3)
------------------ ---- --------- ----- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Larry N. Hatfield 1999 $159,797 $28,782 $4,456 $38,483
President and Chief 1998 154,015 34,125 4,349 69,638
Executive Officer 1997 144,738 31,395 4,178 31,697
J. Michael Lonneman 1999 98,435 19,188 2,874 26,891
Vice President and 1998 96,057 22,750 2,801 51,037
Secretary 1997 90,093 20,930 2,681 22,142
</TABLE>
(1) Includes directors' fees for Mr. Hatfield during each of the respective
fiscal years shown.
(2) Such amounts consist of a portion of the discretionary contributions
made by the Savings Bank to the Savings Bank's 401(k) Plan which were
allocated to the respective accounts of Messrs. Hatfield and Lonnemann
and matching contributions on behalf of Messrs. Hatfield and Lonnemann
pursuant to the Savings Bank's deferred compensation plan. Other annual
compensation does not include amounts attributable to other
miscellaneous benefits received by Messrs. Hatfield and Lonnemann,
including automobile expenses and the payment of civic club dues. The
costs to the Company of providing such benefits did not exceed 10% of
the total salary and bonus paid to or accrued for the benefit of such
individual executive officer in any of the fiscal years shown.
(3) Consists of amounts allocated during the respective periods pursuant to
the ESOP based on the market price per share on the date of allocation.
-6-
<PAGE> 10
STOCK OPTIONS
The following table discloses the options exercised for the year ended September
30, 1999, and held at year-end, by Messrs. Hatfield and Lonnemann.
<TABLE>
<CAPTION>
Shares Acquired Value Number of Options at Value of Options at
Name On Exercise Realized September 30, 1999 September 30, 1999
---- ----------- -------- ------------------ ------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry N. Hatfield - - - - - - 23,606 15,738 205,726 135,156
J. Michael Lonneman - - - - - - 23,606 15,738 205,726 135,156
</TABLE>
(1) Based on a per share market price of $15.63 at September 30, 1999.
No options were granted to either Mr. Hatfield or Mr. Lonnemann during the year
ended September 30, 1999.
DIRECTOR COMPENSATION
During the year ended September 30, 1999, each member of the Board of Directors
of the Savings Bank received an annual fee of $15,000. During fiscal 1999, each
director of the Company received a fee of $1,800.
EMPLOYMENT AGREEMENTS
The Savings Bank and the Company (collectively the "Employers") entered into
employment agreements with Messrs. Hatfield and Lonnemann on June 27, 1995. The
Employers have agreed to employ Messrs. Hatfield and Lonnemann for a term of
three years in their current respective positions. The term of each employment
agreement shall be extended each year for a successive additional one-year
period upon approval of the Employers' Board of Directors, unless the officer
elects, not less than 30 days prior to the annual anniversary date, not to
extend the employment term.
The employment agreements are terminable with or without cause by the Employers.
The officer shall have no right to compensation or other benefits pursuant to
the employment agreement for any period after voluntary termination or
termination by the Employers for cause, disability, retirement or death,
provided, however, that (i) in the event that the officer terminates his
employment because of failure of the Employers to comply with any material
provision of the employment agreement or the Employers change the officers'
title or duties or (ii) the employment agreement is terminated by the Employers
other than for cause, disability, retirement or death or by the officer as a
result of certain adverse actions which are taken with respect to the officer's
employment following a Change in Control of the Employers, as defined, Messrs.
Hatfield and Lonnemann would be entitled to a cash severance amount equal to
2.99 times their base salaries, and to continuation of benefits similar to those
they are receiving at the time of such termination for the remaining term of the
agreement or until the officers obtain full-time employment with another
employer.
-7-
<PAGE> 11
A Change in Control is generally defined in the employment agreement to include
any change in control required to be reported under the federal securities laws,
as well as (i) the acquisition by any person of 25% or more of the Company's
outstanding voting securities and (ii) a change in a majority of the directors
of the Company during any two-year period without the approval of at least
two-thirds of the persons who were directors of the Company at the beginning of
such period.
Each employment agreement provides that in the event that any of the payments to
be made thereunder or otherwise upon termination of employment are deemed to
constitute "excess parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), then such payments and
benefits received thereunder shall be reduced, in the manner determined by the
employee, by the amount, if any, which is the minimum necessary to result in no
portion of the payments and benefits being non-deductible by the Company for
federal income tax purposes. Excess parachute payments generally are payments in
excess of three times the base amount, which is defined to mean the recipient's
average annual compensation from the employer includable in the recipient's
gross income during the most recent five taxable years ending before the date on
which a change in control of the employer occurred. Recipients of excess
parachute payments are subject to a 20% excise tax on the amount by which such
payments exceed the base amount, in addition to regular income taxes, and
payments in excess of the base amount are not deductible by the employer as
compensation expense for federal income tax purposes.
Although the above-described employment agreements could increase the cost of
any acquisition of control of the Company, management of the Company does not
believe that the terms thereof would have a significant anti-takeover effect.
EMPLOYEE STOCK OWNERSHIP PLAN
The Company has established the ESOP for employees of the Company and the
Savings Bank who have been credited with at least 1,000 hours of service during
a twelve month period and who have attained age 18 are eligible to participate
in the ESOP.
As part of the Conversion, the ESOP borrowed funds from the Company to purchase
125,902 shares of Common Stock issued in the Conversion. The loan to ESOP will
be repaid principally from the Company's and the Savings Bank's contributions to
the ESOP over a period of 15 years, and the collateral for the loan will be the
Common Stock purchased by the ESOP. The interest rate for the ESOP loan bears a
fixed rate of 9.0%. The Company may, in any plan year, make additional
discretionary contributions for the benefit of plan participants in either cash
or shares of Common Stock, which may be acquired through the purchase of
outstanding shares in the market or from individual stockholders, upon the
original issuance of additional shares by the Company or upon the sale of
treasury shares by the Company. Such purchases, if made, would be funded through
additional borrowings by the ESOP or additional contributions from the Company.
The timing, amount and manner of future contributions to the ESOP will be
affected by various factors, including prevailing regulatory policies, the
requirements of applicable laws and regulations and market conditions.
Shares purchased by the ESOP with the proceeds of the loan will be held in a
suspense account and released on a pro rata basis as debt service payments are
made. Discretionary contributions to the ESOP and shares released from the
suspense account will be allocated among participants on the basis of
compensation. Forfeitures will be reallocated among remaining participating
employees and may reduce any amount the Company might otherwise have contributed
to the ESOP.
-8-
<PAGE> 12
Participants will vest in their right to receive their account balances within
the ESOP at the rate of 20% per year starting with the completion of three years
of service and will be 100% vested upon the completion of five years of service.
Credit is given for years of service with the Savings Bank prior to adoption of
the ESOP. Benefits may be payable upon retirement or separation from service.
The Company's contributions to the ESOP are not fixed, so benefits payable under
the ESOP cannot be estimated.
Messrs. Beckmeyer, Grimm and Luersen serve as trustees of the ESOP. Under the
ESOP, the trustees must vote all allocated shares held in the ESOP in accordance
with the instructions of the participating employees, and allocated shares for
which employees do not give instructions will be voted in the same ratio on any
matter as those shares for which instructions are given. Unallocated shares are
voted by the ESOP Trustees in accordance with their fiduciary duties as
trustees.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Savings Bank's loan policy to its directors and officers provides that all
loans made by the Savings Bank to its directors and officers are made in the
ordinary course of business, are made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons and do not involve more than the normal risk of
collectibility or present other unfavorable features. As of September 30, 1999
no director or executive officer had aggregate loan balances in excess of
$60,000. At such date, all loans to directors and officers of the Savings Bank
amounted to approximately $29,000.
Director Luersen serves as the managing partner at the law firm of Luersen &
Luersen, Fort Thomas, Kentucky. During fiscal 1998, Luersen & Luersen performed
loan closing and foreclosure legal services for the Savings Bank which amounted
to approximately $160,000 or more than 5% of the law firm's gross revenues. It
is currently anticipated that the Savings Bank will continue to retain Luersen &
Luersen to perform such services in the future.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed VonLehman & Company Inc.,
independent certified public accountants, to perform the audit of the Company's
consolidated financial statements for the year ending September 30, 2000, and
further directed that the selection of auditors be submitted for ratification by
the stockholders at the Annual Meeting.
The Company has been advised by VonLehman & Company Inc. that neither that firm
nor any of its associates has any relationship with the Company or its
subsidiaries other than the usual relationship that exists between independent
certified public accountants and clients. VonLehman & Company Inc. will have one
or more representatives at the Annual Meeting who will have an opportunity to
make a statement, if they so desire, and who will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF VONLEHMAN & COMPANY INC. AS INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING SEPTEMBER 30, 2000.
-9-
<PAGE> 13
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy materials
of the Company relating to the next annual meeting of stockholders of the
Company, which is scheduled to be held in January 2001 must be received at the
principal executive offices of the Company, 25 North Fort Thomas Avenue, Fort
Thomas, Kentucky 41075, Attention: J. Michael Lonnemann, Vice President and
Secretary, no later than September 4, 2000. If such proposal is in compliance
with all of the requirements of Rule 14a8 under the 1934 Act, it will be
included in the proxy statement and set forth on the form of proxy issued for
such annual meeting of stockholders. It is urged that any such proposals be sent
by certified mail, return receipt requested.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year ended
September 30, 1999 accompanies this Proxy Statement. Such annual report is not
part of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED SEPTEMBER 30, 1999 AND A LIST OF THE EXHIBITS THERETO
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE 1934
ACT. SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO J. MICHAEL LONNEMANN, VICE
PRESIDENT AND SECRETARY, FORT THOMAS FINANCIAL CORPORATION, 25 FORT THOMAS
AVENUE, FORT THOMAS, KENTUCKY 41075. THE FORM 10-K IS NOT PART OF THE PROXY
SOLICITATION MATERIALS.
-10-
<PAGE> 14
FORT THOMAS FINANCIAL CORPORATION REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FORT THOMAS
FINANCIAL CORPORATION FOR USE ONLY AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON JANUARY 24, 2000 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of the Company, or
any successors thereto, as proxies, with full powers of substitution, to vote
the shares of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Comfort Inn Suites located at 420 Riverboat Row,
Newport, Kentucky on Monday, January 24, 2000, at 9:00 a.m. Eastern Time, or at
any adjournment thereof, with all the powers that the undersigned would possess
if personally present, as follows:
1. Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD authority to vote
(except as marked to the for all nominees listed below
contrary below)
Nominee for one-year term: Larry N. Hatfield, Robert I. Grimm, Harold A.
Luersen, Don J. Beckmeyer and J. Steven McLane
To withhold authority to vote for any individual nominee, write the name of
the nominee in the space provided below:
---------------------------------------------------------------------------
2. Proposal to ratify the appointment of VonLehman & Company, Inc. as the
Company's independent auditors for the fiscal year ending September 30,
2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote with respect to the
election of any person as a director if the nominee is unable to serve or for
good cause will not serve, matters incident to the conduct of the meeting, and
upon such other matters as may properly come before the meeting.
<PAGE> 15
Fort Thomas Financial Corporation
c/o Corporate Trust Services
Mail Drop 10AT66-4129
38 Fountain Square Plaza
Cincinnati, OH 46263
fold and detach here
- --------------------------------------------------------------------------------
The Board of Directors recommends that you vote FOR the Board of Directors'
nominees listed above and FOR Proposal 2. Shares of common stock of the Company
will be voted as specified. If no specification is made, shares will be voted
for the election of the Board of Directors' nominees to the Board of Directors,
for Proposal 2 and otherwise at the discretion of the proxies. This proxy may
not be voted for any person who is not a nominee of the Board of Directors of
the Company. This proxy may be revoked at any time before it is exercised.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders of Fort Thomas Financial Corporation called for January 24,
2000, a Proxy Statement for the Annual Meeting and the 1999 Annual Report to
Stockholders.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE
ENCLOSED ENVELOPE.
Dated:________________________________________________________
______________________________________________________________
______________________________________________________________
Signature(s)
Please sign exactly as your name(s) appear on this Proxy.
Only one signature is required in the case of a joint account.
When signing in a representative capacity, please give title.
