SCHEDULE 14(A)
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement [ ]Confidential, for Use of the
[ ] Definitive Additional Materials Commission only (as
[ ] Soliciting Material Under Rule 14a - 12 permitted by Rule 14a-6(e)(2))
FIRST AMERICAN CAPITAL CORPORATION
Attn: Harland Priddle, Chairman
1303 S.W. First American Place
Topeka, Kansas 66604
Phone: 785/267-7077
with a copy to William Schutte, Esq.
Polsinelli, Shalton & Welte, P.C.
6201 College Boulevard, Suite 500
Overland Park, Kansas 66211
Phone: 913/451-8788
(Name of Registrant as Specified in Its Charter)
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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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FIRST AMERICAN CAPITAL CORPORATION
1303 S. W. FIRST AMERICAN PLACE
TOPEKA, KANSAS 66604
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, JUNE 2, 2003 AT 11:00 A.M.
To Our Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of First
American Capital Corporation, (the "Company"), will be held Monday, June 2, 2003
at 11:00 a.m. Central Time at the Holiday Inn West, 605 S.W. Fairlawn, Topeka,
Kansas, 66606 for the following purposes:
1. To elect eight directors of the Company to serve for one year or until
their successors are elected and qualified. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" THE ELECTION OF ITS NOMINEES ON THE ENCLOSED
BLUE PROXY CARD. WE URGE YOU NOT TO VOTE FOR ANY INDIVIDUALS WHO MAY
BE NOMINATED BY THE CITIZENS GROUP, AS DEFINED IN THE PROXY STATEMENT,
AND NOT TO EXECUTE ANY PROXY CARD OTHER THAN A BLUE PROXY CARD.
2. To ratify and approve the appointment of Kerber, Eck & Braeckel LLP as
independent auditors for the next fiscal year. THE BOARD RECOMMENDS A
VOTE "FOR" THIS PROPOSAL.
3. To consider and act upon such other business as may properly be
brought before the meeting, or any adjournment or postponement
thereof.
The Board of Directors has fixed the close of business on April 30, 2003 as
the record date for determination of shareholders entitled to notice of and to
vote at the Annual Meeting or any adjournment or postponement thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
VOTE YOUR SHARES BY SIGNING, DATING AND MAILING THE ENCLOSED BLUE PROXY CARD IN
THE POSTAGE-PREPAID ENVELOPE PROVIDED. If you are present at the meeting and
desire to do so, you may revoke your proxy and vote in person.
THE BOARD ALSO URGES THAT YOU NOT SIGN ANY PROXY CARDS SENT TO YOU BY THE
CITIZENS GROUP. YOU CAN REVOKE ANY CITIZENS GROUP PROXY CARD YOU HAVE PREVIOUSLY
SIGNED BY SIGNING, DATING AND MAILING THE ENCLOSED BLUE PROXY CARD.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE VOTING, PLEASE CONTACT US BY
CALLING OUR PROXY SOLICITOR, ALLEN NELSON & CO. INCORPORATED, TOLL FREE AT
1-800-932-0181.
BY ORDER OF THE BOARD OF DIRECTORS
FIRST AMERICAN CAPITAL CORPORATION
Harland E. Priddle
Secretary
Dated: May 9, 2003
Topeka, Kansas
IMPORTANT
THIS ANNUAL MEETING IS PARTICULARLY IMPORTANT TO ALL SHAREHOLDERS OF THE COMPANY
BECAUSE OF THE ATTEMPT OF THE CITIZENS GROUP TO TAKE OVER YOUR BOARD. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE, SIGN AND
PROMPTLY RETURN YOUR ENCLOSED BLUE PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE.
FIRST AMERICAN CAPITAL CORPORATION
1303 S.W. First American Place
Topeka, Kansas 66604
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 2, 2003
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PROXY STATEMENT
The accompanying proxy is solicited on behalf of the Board of Directors
(the "Board") of First American Capital Corporation, a Kansas corporation (the
"Company" or "First American"), for use at the Annual Meeting of Shareholders of
the Company to be held on Monday, June 2, 2003, at 11:00 a.m. Central Time at
the Holiday Inn West, 605 S.W. Fairlawn, Topeka, Kansas 66606, or at any
adjournment or postponement thereof. This Proxy Statement and the BLUE Proxy
Card are being mailed to shareholders on or about May 12, 2003. This Proxy
Statement is being sent to each holder of record of the outstanding shares of
$.10 par value Common Stock of the Company (the "Common Stock") as of April 30,
2003 (the "Record Date") in order to furnish each shareholder information
relating to the business to be transacted at the meeting.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE,
SIGN, DATE AND RETURN TO THE COMPANY THE ACCOMPANYING BLUE PROXY CARD IN THE
ENVELOPE PROVIDED. IF YOU ARE PRESENT AT THE MEETING, YOU MAY WITHDRAW YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
Only shareholders of record at the close of business April 30, 2003 are
entitled to vote. On that day, there were outstanding 4,687,078 shares of Common
Stock. Each share entitles the holder to one vote. Thirty-three and one-third
percent of the shares of the Common Stock outstanding on the record date will
constitute a quorum for transaction of business at the meeting. To be elected as
a director, each nominee must receive the favorable vote of a plurality of the
shares represented and entitled to vote at the meeting. In all other matters
other than the election of directors, a majority of the shares represented at
the meeting and entitled to vote is required for approval of the proposal.
The shareholder has the right to vote for all directors by checking the box
labeled "FOR", withhold authority to vote by checking the box labeled "WITHHOLD
AUTHORITY" or not vote for a particular director by striking a line through his
name. The BLUE Proxy Card must be signed using the same name(s) as the stock
certificate is titled.
When the enclosed BLUE Proxy Card is duly executed and returned in advance
of the meeting, and is not revoked, the shares represented thereby will be voted
in accordance with the authority contained therein. Any shareholder giving a
proxy may revoke such proxy at any time before it is voted by delivering to the
Secretary of the Company a written notice of revocation or a duly executed proxy
bearing a later date, or by attending the meeting and voting in person. If a
proxy fails to specify how it is to be voted, it will be voted at the discretion
of the Chairman of the Board.
THE PROXY CONTEST
A group calling itself the "First American Committee for the Protection of
Shareholder Value" (designated herein as the "Citizens Group") is seeking to
take control of the Company's Board of Directors. The Citizens Group is
comprised of Citizens, Inc., a Colorado corporation and insurance holding
company ("Citizens"); Harold E. Riley, chairman of the board of Citizens; Rick
D. Riley, an executive officer of Citizens; Mark A. Oliver, president of
Citizens; Michael N. Fink, a senior vice president of Citizens and the Company's
former chairman of the board; Rickie D. Meyer, a marketing consultant for
Citizens and the Company's former president and chief executive officer; Danny
Biggs; Dean Ferrell; and Roger Viola. According to proxy materials filed with
the Securities and Exchange Commission (the "SEC") by the Citizens Group, the
Citizens Group states that its nominees are committed to exploring alternatives
to increase shareholder liquidity and to maximize shareholder value. Given the
background of dealings between Citizens and certain other members of the
Citizens Group (see "Background of the Citizens Group Solicitation"), your Board
believes that the Citizens Group proxy solicitation is the next step in
Citizens' efforts to acquire the Company.
Why the Board's Nominees Should Be Elected
We oppose the Citizens Group solicitation and urge that you not sign any
proxy card sent to you by the Citizens Group. Control of the Company Board by
the Citizens Group nominees is not in the best interests of the Company's
shareholders.
o Your Board and management are highly qualified. Your Board and
management have significant industry experience, first-hand knowledge
of the Company's business, operations and personnel. The Board's
nominees are all highly respected Kansas businessmen with significant
business experience.
o A vote for the Citizens' nominees means a vote for the acquisition of
the Company by Citizens. While the Citizens Group contends that its
nominees will seek to develop liquidity for the Company's Common Stock
and to maximize shareholder value, your Board believes that the
Citizens Group's intentions are clear - that its proxy solicitation is
the next step in Citizens' efforts to acquire the Company on terms
that are in the best interests of Citizens and not the Company's
shareholders. Your Board believes that it is in the best interest of
the shareholders that all alternatives to enhancing shareholder value
be considered, not just an acquisition of the Company by Citizens.
o Unlike a majority of the Citizens Group nominees, the interests of the
Board's nominees are aligned with the interests of all the Company's
shareholders. The Board's nominees are, in our view, in a much better
position to assess and evaluate alternatives to enhancing shareholder
value, including a sale of the Company to a third-party, if warranted.
The Board's nominees have demonstrated their commitment to fulfilling
their fiduciary duty to all shareholders of the Company, without
regard to any personal financial gain. Conversely, five of the eight
Citizens Group nominees have direct financial relationships with
Citizens.
Background of the Citizens Group Solicitation
In late 2002, Citizens made an unsolicited offer to acquire the Company.
Prior to the Citizens offer, the Company had not solicited any offers for the
sale of the Company. On December 4, 2002, representatives of Citizens, including
Harold E. Riley and Mark A. Oliver, made a presentation to the Company's Board.
On December 18, 2002, two current members of the Board of the Company, Harland
E. Priddle and Kenneth L. Frahm, traveled to Austin, Texas to meet with
management of Citizens. Citizens' unsolicited offer involved a proposed merger
whereby shareholders of the Company would receive $3.50 per share of Common
Stock of the Company to be paid in Class A stock of Citizens calculated on an
average trading price as reported on the New York Stock Exchange twenty days
preceding closing of the merger.
As part of its consideration of the offer, the Company's Board determined
that, based on the terms of the proposed transaction, it could not recommend the
proposed merger to the shareholders unless the Board had a basis to believe that
the Citizens offer represented the best alternative for maximizing short-term
value for the Company's shareholders. Accordingly, the Board requested the
acquisition agreement include a "market check" provision. This provision would
have allowed the Company, during a limited period of time between the signing of
the merger agreement and its consummation, to consider any competing bids for
the Company, to share confidential information about the Company with interested
third-parties, and to rescind the Citizens merger if a better alternative was
received. Citizens objected to this validation procedure and, shortly
thereafter, withdrew its offer.
Had the Citizens transaction taken place at the valuation proposed, the
shareholders of the Company who acquired their shares of Company Common Stock in
the Company's public offering for $5.00 per share, would have recognized a 30%
loss on their original investment. Conversely, the Board members (who, like the
other founders, including Messrs. Meyer and Fink, bought their shares at a price
of $.10 per share) would have realized a significant financial benefit from the
proposed business combination with Citizens.
On March 20, 2003, Harold E. Riley and Mark A. Oliver advised Harland
Priddle that Citizens was interested in recommencing negotiations to acquire the
Company. Mr. Priddle subsequently determined that Citizens' position on the
Company's request for a market check remained unchanged. Based on this
clarification, Mr. Priddle advised Mr. Oliver that there would be no benefit to
further negotiations. Since the cessation of discussions with Citizens, the
Company has not solicited bids for the sale of the Company.
As stated in the Citizens Group's Schedule 13D, Amendment No. 1 filing and
its proxy materials, Citizens remains interested in acquiring the Company. On
March 19, 2003, Harold E. Riley and Mark A. Oliver acquired twelve-month
non-revocable proxies to vote, on a shared basis, 652,000 shares of Company
Common Stock from Messrs. Meyer and Fink and another director of the Company,
Danny Biggs. At the time they granted Citizens their irrevocable proxies,
neither Mr. Fink nor Mr. Meyer were employees of the Company. Mr. Fink was the
chairman of the board of First American from its inception in 1996 until
November 2002, when his contract was not
renewed by the Board. Mr. Meyer was First American's president from its
inception until February 2003, when his contract was not renewed by the Board.
At the time Mr. Fink granted his proxy to Citizens, he was, however, an employee
of Citizens. Similarly, on or about the time Mr. Meyer granted his proxy to
Citizens, he was a marketing consultant for Citizens.
On April 23, 2003, the Citizens Group was formed. A majority of the
Citizens Group nominees are associated with Citizens either as a shareholder,
executive officer, employee or consultant. Harold E. Riley is the controlling
shareholder, founder and chairman of the board of Citizens. Rick D. Riley is an
executive officer of Citizens and the son of Harold E. Riley. Mark A. Oliver is
the president of Citizens. Michael N. Fink is a senior vice president of
Citizens; while Rickie D. Meyer is a marketing consultant for Citizens.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
HOW DO I VOTE IN PERSON?
If you owned shares of the Company's Common Stock on the record date, April
30, 2003, you may attend the 2003 Annual Meeting and vote in person. If you are
not the record holder of your shares, please refer to the discussion following
the question "What if I am not the record holder of my shares?". If you hold
your shares in the name of a bank or broker, you will not be able to vote in
person at the Annual Meeting unless you have previously specially requested and
obtained a "legal proxy" from your bank or broker and present it at the Annual
Meeting.
HOW DO I VOTE BY PROXY?
To vote by proxy, you should complete, sign and date the enclosed BLUE
Proxy Card and return it promptly in the enclosed postage-paid envelope. To be
able to vote your shares in accordance with your instructions at the 2003 Annual
Meeting, we must receive your proxy as soon as possible but in any event prior
to the Annual Meeting.
WHAT IF I AM NOT THE RECORD HOLDER OF MY SHARES?
If your shares are held in the name of a brokerage firm, bank nominee or
other institution ("Custodian"), only it can give a proxy with respect to your
shares. You may have received either a blank, executed proxy card from your
Custodian (which you can complete and send directly to the Company) or an
instruction card (which you can complete and return to the Custodian to direct
its voting of your shares). If your Custodian has not sent you either a blank,
executed proxy card or an instruction card, you may contact your Custodian
directly to provide it with instructions. If you need assistance, please contact
Allen Nelson & Co. Incorporated, toll free at 1-800-932-0181.
If your shares are held in the name of a Custodian, and you want to vote in
person at the 2003 Annual Meeting, you may request a document called a "legal
proxy" from your Custodian and bring it to the 2003 Annual Meeting. If you need
assistance, please contact Allen Nelson & Co. Incorporated, toll free at
1-800-932-0181.
WHAT SHOULD I DO IF I RECEIVE A PROXY CARD FROM CITIZENS?
Proxies on the white proxy card are being solicited by the Citizens Group.
If you submit a proxy to us by signing and returning the BLUE Proxy Card, DO NOT
SIGN OR RETURN THE WHITE PROXY CARD FURNISHED BY THE CITIZENS GROUP or follow
any voting instructions provided by the Citizens Group unless you intend to
change your vote, because only your latest-dated proxy will be counted.
If you have already sent a WHITE proxy card to the Citizens Group, you may
revoke it and provide your support to the Company's nominees by signing, dating
and returning the enclosed BLUE Proxy Card.
WHAT IF I WANT TO REVOKE MY PROXY?
If you give a proxy, you may revoke it at any time before it is voted on
your behalf. You may do so in three ways:
1. By delivering a later-dated proxy to our secretary; or
2. By delivering a written notice of revocation to our secretary; or
3. By voting in person at the 2003 Annual Meeting.
IF I PLAN TO ATTEND THE 2003 ANNUAL MEETING, SHOULD I STILL SUBMIT A PROXY?
Whether you plan to attend the 2003 Annual Meeting or not, we urge you to
submit a BLUE Proxy Card. Returning the enclosed BLUE Proxy Card will not affect
your right to attend the 2003 Annual Meeting and vote.
WHO CAN VOTE?
You are eligible to vote or to execute a proxy only if you owned shares of
the Company's Common Stock on the record date for the 2003 Annual Meeting, April
30, 2003. Even if you sell your shares after the record date, you will retain
the right to execute a proxy in connection with the 2003 Annual Meeting. It is
important that you grant a proxy regarding shares you held on the record date,
or vote those shares in person, even if you no longer own those shares. At the
close of business on April 30, 2003, 4,687,078 shares of the Company's Common
Stock were entitled to be voted.
HOW MANY VOTES DO I HAVE?
With respect to each matter to be considered at the 2003 Annual Meeting,
each shareholder will have one vote for each share of the Company's Common Stock
held by the shareholder on the record date. The Company has no outstanding
voting securities other than its Common Stock.
HOW WILL MY SHARES BE VOTED?
If you give a proxy on the accompanying BLUE Proxy Card, your shares will
be voted as you direct. If you submit a proxy to us without instructions, our
representatives will vote your shares in favor of our nominees. Submitting a
BLUE Proxy Card will entitle our representatives to vote your shares in
accordance with their discretion on matters not described in this Proxy
Statement that may arise at the 2003 Annual Meeting.
Unless a proxy specifies otherwise, it will be presumed to relate to all
shares held of record on the record date by the person who submitted it.
WHAT IS A QUORUM AND WHY IS IT NECESSARY?
Conducting business at the 2003 Annual Meeting requires a quorum. For a
quorum to exist, shareholders representing 33 1/3% of the votes eligible to be
cast must be present in person or represented by proxy. Abstentions and broker
non-votes are treated as present for purposes of determining whether a quorum
exists.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AND HOW WILL VOTES BE COUNTED?
If a quorum is present, directors will be elected by a plurality of the
votes cast. This means that the eight nominees receiving the highest number of
votes will be elected as directors. Accordingly, abstentions and broker
non-votes do not have the effect of a vote against the election of any nominees.
Shareholders do not have the right to cumulate their votes.
Each proposal other than the election of directors will be adopted if a
majority of the shares represented at the meeting and entitled to vote on the
proposal are voted in its favor. Accordingly, abstentions on each such proposal
will have the same effect as a vote against the proposal. Broker non-votes will
not have any effect on any such proposal.
HOW CAN I RECEIVE MORE INFORMATION?
If you have any questions about giving your proxy or about our
solicitation, or if you require assistance, please call Allen Nelson & Co.
Incorporated, toll free at 1-800-932-0181.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 22, 2003, regarding
beneficial ownership of Company Common Stock by (i) the only persons or groups
known by the Company to own beneficially more than 5% of Company Common Stock;
(ii) the directors, individually; (iii) each nominee, individually; (iv) each
executive officer of the Company, individually; and (v) all officers and
directors as a group. Except as otherwise noted in the footnotes to the table,
the beneficial owners have sole voting and investment power as to all of the
shares beneficially owned by them.
Name and Address of Amount and Nature of
Beneficial Owner Status of Holder Beneficial Ownership Percent of Class(1)
------------------- ---------------- -------------------- -------------------
Paul E. "Bud" Burke, Jr. Director; Nominee 50,000 1.1%
2009 Camelback Drive
Lawrence, KS 66047
Edward C. Carter Director; Nominee 85,000 1.8%
4100 Wimbledon Drive
Lawrence, KS 66047
Kenneth L. Frahm Director; Nominee 40,000 *
Box 849
Colby, KS 67701
Stephen J. Irsik, Jr. Director; Nominee 69,000 1.5%
05405 Six Road
Ingalls, KS 67853
John G. Montgomery Director; Nominee 45,000 *
510 Redbud Lane
Junction City, KS 66441
Harland E. Priddle Director; 40,000 *
1303 S.W First American Place Chairman of the Board;
Topeka, KS 66604 Nominee
Gary E. Yager Director; Nominee 40,000 *
3521 SW Lincolnshire
Topeka, KS 66614
Thomas M. Fogt Director, Nominee 0 N.A.
8200 W. 101st Terrace
Overland Park, KS 66212
Rickie D. Meyer Director 0(2) N.A.
900 S.W. Robinson #1905
Topeka, KS 66606
Danny N. Biggs Director 5,000(3) *
2601 Canterbury6
Great Bend, KS 67530
Michael N. Fink Director 0(4) N.A.
2581 Walnut Grove Lane
Lexington, KY 40509
Vincent L. Rocereto President 0 N.A.
1303 S.W. First American Place
Topeka, KS 66604
All Directors and Executive 374,000 7.9%
Officers as a Group
Mark Oliver 5% or more 658,230 14.0%
as power of attorney for Beneficial Holder
the Citizens Group
400 E. Anderson Lane
Austin, TX 78752
* Indicates less than 1% ownership.
(1) Based on 4,687,078 shares of Common Stock outstanding on April 22, 2003.
(2) Does not include shares of Common Stock subject to proxy granted to Harold
E. Riley and Mark A. Oliver. According to a Schedule 13D, Amendment No. 1
filed with the Securities and Exchange Commission, Mr. Meyer granted a
proxy to Messrs. Riley and Oliver on March 19, 2003 with respect to 456,000
shares of Common Stock of the Company. According to the Schedule 13D, Mr.
Meyer retains the right to receive any dividends on the Common Stock
subject to the proxy as well as any proceeds from the sale of such stock.
As a member of the Citizens Group, Mr. Meyer is deemed to share voting
power with respect to 658,230 shares of Company Common Stock.
(3) Does not include shares of Common Stock subject to proxy granted to Harold
E. Riley and Mark A. Oliver. According to a Schedule 13D, Amendment No. 1
filed with the Securities and Exchange Commission, Mr. Biggs, through a
trust, granted a proxy to Messrs. Riley and Oliver on March 19, 2003 with
respect to 71,000 shares of Common Stock of the Company. According to the
Schedule 13D, Mr. Biggs retains the right to receive any dividends on
Common Stock subject to the proxy as well as any proceeds from the sale of
such stock. As a member of the Citizens Group, Mr. Biggs is deemed to share
voting power with respect to 658,230 shares of Company Common Stock.
(4) Does not include shares of Common Stock subject to proxy granted to Harold
E. Riley and Mark A. Oliver. According to a Schedule 13D, Amendment No. 1
filed with the Securities and Exchange Commission, Mr. Fink granted a proxy
to Messrs. Riley and Oliver on March 19, 2003 with respect to 125,000
shares of Common Stock of the Company. According to the Schedule 13D, Mr.
Fink retains the right to receive any dividends on Common Stock subject to
the proxy as well as any proceeds from the sale of such stock. As a member
of the Citizens Group, Mr. Fink is deemed to share voting power with
respect to 658,230 shares of Company Common Stock.
(5) According to a Schedule 13D, Amendment No. 1 filed with the SEC by a group
designated therein as the First American Committee for the Protection of
Shareholder Value (and herein as the "Citizens Group"), Citizens Group
shares the right to vote 658,230 shares of Common Stock of the Company
until December 31, 2003 pursuant to an Agreement and Power of Attorney
granted by the members of the Citizens Group to Mark A. Oliver and Michael
Fink. According to the SEC filing the Citizens Group is comprised of
Citizens, Inc., a Colorado corporation and insurance holding company
("Citizens"); Harold E. Riley, chairman of the board of Citizens; Rick D.
Riley, an executive officer of Citizens; Mark A. Oliver, president of
Citizens; Michael N. Fink, a senior vice president of Citizens and the
Company's former chairman of the board; Rickie D. Meyer, a marketing
consultant for Citizens and the Company's former president and chief
executive officer; Danny Biggs; Dean Ferrell; and Roger Viola. Citizens
does not own any share of Company Common Stock. Neither of Messrs. Harold
E. Riley nor Mr. Oliver directly own any shares of Common Stock of the
Company. However, under certain proxies delivered on March 19, 2003 by
Messrs. Meyer, Fink and Biggs, Messrs. Harold E. Riley and Mr. Oliver may
be deemed to have a beneficial ownership of 652,000 shares of Common Stock
of the Company. Mr. Rick D. Riley has no direct or indirect ownership of
shares of Company Common Stock. Mr. Ferrell directly owns 1,230 shares of
Company Common Stock. Mr. Viola does not own directly or indirectly any
shares of Company Common Stock. All of the members of the Citizens Group
may be deemed to share voting power with respect to 658,230 shares of
Company Common Stock.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board is presently composed of the following eleven directors, all of whom
hold office for a one year term:
Name Age
---- ---
Harland E. Priddle 72
Danny N. Biggs 66
Paul E. Burke, Jr 69
Edward C. Carte 60
Michael N. Fink 47
Kenneth L. Frahm 56
Stephen J. Irsik Jr 56
Name Age
---- ---
Rickie D. Meyer 51
John G. Montgomery 63
Gary E. Yager 48
Thomas M. Fogt 57
The Directors serve until their successors are elected and qualified.
Directors will be elected annually by the shareholders. The Executive Officers
serve at the discretion of the Board of Directors. The President, Secretary and
Treasurer are elected at the annual meeting of the Board, while the other
officers are elected by the Board from time to time as the Board deems
advisable. The Executive Officers and Directors also hold the same positions for
the Company's subsidiaries.
Rickie D. Meyer and Mike Fink were not nominated by the Board for election
to the Board of Directors for the coming year. Danny Biggs was nominated by the
Board but subsequently withdrew his acceptance of the nomination.
Danny N. Biggs: Mr. Biggs is Vice-President, Partner, General Superintendent and
Director of Pickrell Drilling Company, Inc., Mobile Drilling Company, Inc.,
Central Dirt Service, Inc., and Pickrell Acquisitions, Inc. and also a Partner
in Kelly Petroleum.
Michael N. Fink: Mr. Fink is a founder of the Company and was the Company's
Chairman of the Board from inception (July 10, 1996) until November 1, 2002. Mr.
Fink was President of First Alliance Corporation and its life insurance and
venture capital companies from 1993 until February 2003 when First Alliance
Corporation was acquired by Citizens. Mr. Fink is currently Senior Vice
President of Corporate Development of Citizens.
Rickie D. Meyer: Mr. Meyer is a founder of the Company and was the President of
the Company from July 1996 until February 27, 2003. Mr. Meyer is currently a
marketing consultant for Citizens and has served in that capacity since March
2003.
ADVISORY BOARD
The Company has 118 advisory board members located throughout the state of
Kansas who act as liaisons between the Company and its policyholders. The
advisory board does not advise the Company's Board concerning matters of
corporate policy. The Company does not intend to engage any of the advisory
board members as specially engaged representatives to solicit shareholders.
In addition, the Company does not anticipate that any of the advisory board
members will solicit proxies on behalf of the Company.
NOMINEES
The Board has determined to reduce the number of directors constituting the
Board from eleven directors to eight directors. At the annual meeting, eight
directors are to be elected. Each director will hold office until the next
annual meeting or until his successor is elected and qualified. The persons
named in the BLUE Proxy Card intend to vote the proxies as designated for the
nominees listed below. Should any of the nominees listed below become unable or
unwilling to accept nomination or election, it is intended, in the absence of
contrary specifications, that the proxies will be voted for the balance of those
named and for a substitute nominee or nominees; however, management currently
knows of no reason to anticipate such an occurrence. All of the nominees have
consented to be named as nominees and to serve as directors if elected.
THE BOARD RECOMMENDS A VOTE FOR
THE ELECTION OF EACH OF THE FOLLOWING NOMINATED DIRECTORS:
The names of the nominees, each of whom is currently a director of the
Company, and certain information about them are set forth below:
Name Director Since Principal Occupation
---- -------------- --------------------
Paul E. Burke, Jr. 1996 President of Issues Management Group Inc.
Edward C. Carter 1996 Entrepreneur and real estate developer.
Kenneth L. Frahm 1996 Self employed farmer since 1975.
Name Director Since Principal Occupation
---- -------------- --------------------
Stephen J. Irsik, Jr. 1996 Entrepreneur and agri-business owner.
John G. Montgomery 1996 President of Montgomery Communications, Inc.
Harland E. Priddle 1996 Director, Chairman, Secretary/Treasurer.
Gary E. Yager 1996 Vice Chairman of Western National Bank, Topeka, Kansas.
Thomas M. Fogt 2003 Vice President for Corporate Development, AmerUs Annuity Group.
Harland E. Priddle: Mr. Priddle has been a director of the Company since its
inception and the Chairman of the Board of the Company since November 15, 2002.
Mr. Priddle is President of Priddle & Associates, a business consulting firm
specializing in business and economic development consulting. Mr. Priddle is the
former Kansas Secretary of Agriculture (1982-1986) and served as the first
Kansas Secretary of Commerce (1987-1991). As the first Secretary of Commerce, he
was directly involved in the creation of such programs as Kansas, Inc., Kansas
Technology Enterprise Corporation, Kansas Development Finance Authority and the
Kansas Venture Capital Corp. He was candidate for Lt. Governor of Kansas in 1986
and 1990. He was the Deputy Director of the White House Communications Agency
for the President for a period of four years (1970-1974) where he provided
support and accompanied the President on approximately 200 Presidential trips.
Mr. Priddle was the Vice President for Marketing and Customer Services for the
Hutchinson National Bank from 1978 to 1981. He also has served as Assistant
Manager of the Kansas State Fair (1974-1978) and Executive Director of the
Kansas Wildscape Foundation (1999-2002), a not for profit foundation dedicated
to creating outdoor opportunities in Kansas. He retired from the United States
Air Force in 1974, after 22 years, with the rank of Colonel. While in the Air
Force, he received 17 military decorations including the Bronze Star and two
Legions of Merit. He is a veteran of both Korea and Vietnam Campaigns. He
received a BS in Agriculture from Kansas State University in 1952.
Paul E. Burke, Jr.: Mr. Burke has been a director of the Company since its
inception. Mr. Burke is the President of Issues Management Group, Inc., a public
relations and governmental affairs consulting company. Mr. Burke served as a
member of the Kansas State Senate from 1975 to January 1997 and served as the
President of the Senate from 1989 until his retirement in 1997. During his
tenure in the Kansas Senate, Mr. Burke served as Chairman of the Organization,
Calendar and Rules, Legislative Coordinating Council and Interstate Cooperation
Committees. Mr. Burke was a majority leader of the Senate from 1985 to 1988. Mr.
Burke has served in numerous national, state and local leadership positions
including past positions as a member of the President's Advisory Commission on
Intergovernmental Relations. He is also the former owner of WEBBCO, Inc., an
industrial engineering and equipment company. Mr. Burke received his Bachelor of
Science degree in business from the University of Kansas in 1956.
Edward C. Carter: Mr. Carter has been a director of the company since is
inception. Mr. Carter is an entrepreneur and real estate developer. Mr. Carter
is a retired senior executive (1963-1992) with the Kansas Southwestern Bell
Telephone Company. He served in numerous senior executive positions including
Division Manager Regulatory Relations, Regional Vice President Southwestern Bell
Telecom, a start up company serving a four-state area, and Kansas Director of
Marketing and District Manager Residence Service Centers. Mr. Carter served as
City Commissioner and Mayor of Lawrence, Kansas from 1977 to 1981. He was a
director and President of Lawrence, Kansas Rotary Club, past Executive Board
Member of the Kansas State Chamber of Commerce, past Chairman of the Douglas
County United Fund and Director and President of Junior Achievement. He is a
Co-Recipient of the Outstanding Kansan Award for Civic Service and received the
Lifetime Meritorious Achievement Award from Pittsburgh State University in 2001.
Mr. Carter was a member and All Conference guard on the Pittsburgh State
University National Championship Football Team. He received his B.A. in Business
Administration from Pittsburgh State University in 1963.
Kenneth L. Frahm: Mr. Frahm has been a director of the Company since its
inception. Mr. Frahm has been a self-employed farmer since 1975. He currently
owns 1,200 acres of irrigated corn and dryland wheat production land and is a
member of a family partnership which produces over 500,000 bushels of corn and
wheat annually on 6,500 acres of western Kansas farm land. Mr. Frahm's operating
entities include Allied Family Farm and Grain Management, Inc. He is past
President of the Kansas Development Finance Authority. He is past Chairman of
21st Century Grain Processing Cooperative, and a former member of the Board of
Directors of Bank IV Community Bank in Colby. In addition, Mr. Frahm is a member
of the Kansas Farm Service Agency State Committee appointed by US Agriculture
Secretary Ann Veneman. He is a member of the Agricultural Use Value Committee of
the Kansas Department of Revenue, a past member of the Board of Directors of the
Kansas Area United Methodist Foundation and Chairman of its Investment
Committee, Past President and Paul Harris Fellow of Rotary, a member of the
Kansas Farm Bureau, Kansas Livestock Association, Kansas Corn Growers
Association, Kansas Association of Wheat Growers and the Kansas Water Resources
Association. Mr. Frahm is married to Sheila Frahm, a former Kansas United States
Senator and has three daughters. Mr.
Frahm received his B.A. in Economics in 1968 from Fort Hays Kansas State College
and his M.B.A. in Finance in 1969 from the University of Texas at Austin.
Stephen J. Irsik, Jr.: Mr. Irsik has been a director of the Company since its
inception. Mr. Irsik is one of the owners of a multi faceted agri-business
centered in western Kansas. The business deals with identity preserved grain
production, angus beef and the dairy industry. Mr. Irsik is one of the owners of
Irsik & Doll Company, a grain storage, merchandising and full feeding cattle
operation with facilities across the State of Kansas. Mr. Irsik is serving his
16th year on the Gray County Commission. He currently serves on the 21 Century
Alliance Board, 21Century Grain Processing board and Home National Bank Board of
Garden City, Ks. Mr. Irsik has served as a past Board member of the Southwest
Kansas Irrigation Association, Upper Ark Basin Advisory committee and Ground
Water Management District #3. He is a graduate of Kansas State University and a
veteran of the United States Air Force.
John G. Montgomery: Mr. Montgomery has been a director of the Company since its
inception. Mr. Montgomery is the President of Montgomery Communications, Inc. of
Junction City, Kansas. He is a newspaper publisher and TV station owner. His
current business affiliations include directorships with First National Bank,
Junction City. He is also President of the Junction City Housing and Development
Corporation. From 1964 to 1973 he was the Assistant to the President at the San
Francisco Newspaper Printing Company. Mr. Montgomery is a member of the
InterAmerican Press Association, Inland Daily Press Association and the Kansas
Press Association. He was Civilian Aid to the Secretary of the Army of Kansas
from 1979-1981 and has again served in that role since 1995. He has extensive
state government service including Past Chairman of the Kansas Board of Regents,
Past member of the Washburn University Board of Regents, Kansas, Inc. - Science
and Technology Council, and 1986 Democratic nominee for Lieutenant Governor. His
considerable civic involvement, in part, includes being past President of the
Junction City Chamber of Commerce, Director and past President of the United
Way, past Board member of the Boy Scouts of America, Coronado Council, past
Director of the YMCA, Trustee of the William Allen White Foundation, Co-chair of
Economic Lifelines, Board member of Kansas Wildscape and the Kansas 4-H and a
member of the Rotary Club. Mr. Montgomery has received the 1975 Jaycees
Outstanding Young Man of Kansas Award, 1975 Junction City Jaycees Distinguished
Service Award and the Department of the Army, Patriotic Civilian Service Award.
He graduated from the Philips Academy, Andover, Massachusetts, in 1958, Yale
University in 1962, receiving a Bachelor of Arts Degree, and from Stanford
University in 1964, where he received his MBA Degree.
Gary E. Yager: Mr. Yager has been a director of the Company since its inception.
Mr. Yager became the Vice-Chairman of Western National Bank in September of
2002. From December 1995 to September of 2002 Mr. Yager was the Executive Vice
President and Chief Executive Officer and Senior Lender of the Columbian Bank of
Topeka, Kansas. From October 1986 to December 1995, Mr. Yager served as either
the Vice President and Branch Manager or the Vice President of Commercial Loans
for the Commerce Bank and Trust of Topeka, Kansas. From 1976 to 1986, he served
in various management positions with Bank IV of Topeka including Assistant
Vice-President of Correspondent Banking and Branch Manager. Mr. Yager is
currently a member of Downtown Topeka, Topeka Housing Authority, the Art Council
of Topeka and Washburn University Moore Bowl Renovation Committee. He is a
member of the Topeka Chamber of Commerce, former member of the Board of
Directors of the Topeka Family Service and Guidance Center, and former advisor
of Junior Achievement. He is a past member of the Topeka Active 20-30 Club,
where he served in numerous leadership roles including President and Treasurer.
Mr. Yager received his BA degree in Business Administration from Washburn
University of Topeka in 1976.
Thomas M. Fogt: Mr. Fogt has been a director of the Company since March 31,
2003. Mr. Fogt has over twenty years of experience in insurance, financial
management, accounting, corporate development and business planning. He has a
master's degree from Xavier in business, is a member of the American Institute
of Certified Public Accountants and is licensed to practice accounting in both
Kansas and Missouri. Mr. Fogt currently serves as Executive Vice President for
Corporate Development for AmerUs Annuity Group Co., a subsidiary of AmerUs
Group, an insurance holding company. Prior to joining AmerUs, Mr. Fogt was
employed by AmVestors Financial Corporation, a Topeka, Kansas-based insurance
holding company. Mr. Fogt has been an employee of AmerUs since 1997, when AmerUs
acquired AmVestors.
MEETINGS AND COMMITTEES OF THE MEMBERS OF THE BOARD OF DIRECTORS
During 2002, the Board of Directors held four regularly scheduled meetings,
two special meetings and two teleconference meetings. No Director attended less
than 75% of the Board meetings. The Board has established Audit, Compensation,
Nominating and Investment Committees.
Currently, the Audit Committee members are Gary Yager, John Montgomery and
Tom Fogt. The Audit Committee met four times during 2002. The Audit Committee
oversees the work of the Company's independent auditors. The Audit Committee has
been established in accordance with Section 3(a)(58)(A) of the Securities
Exchange Act of 1934 ("Exchange Act") and the members of the Committee are
"independent" as that term is defined in Rule 4200(a)(14) of the Nasdaq
Marketplace Rules. The Board of Directors has not adopted a written charter
for the Audit Committee.
The Compensation Committee members are Paul Burke, Steve Irsik and Danny
Biggs. The purpose of the Compensation Committee is to establish and execute
compensation policies for the executives of the Company and award any
performance bonuses. The Compensation Committee met four times in 2002 and held
one teleconference meeting.
The Investment Committee members are Ken Frahm, Rickie Meyer and Ed
Carter. The Investment Committee reviews investments bought, sold and held to
assure that the Company is adhering to established investment policy and
guidelines.
EXECUTIVE OFFICERS OF THE COMPANY
Present Positions Principal Occupation(s) or
Name/Age With the Company Employment(s) During Past Five Years
-------- ---------------- ------------------------------------
Harland E. Priddle Chairman of the Board Chairman of the Board of the company since November 15,
72 Secretary 2002. President, Priddle & Associates, a business
Treasurer consulting firm with specialties in economic and
community development for past ten years. Has been a
Director since initial establishment of the Company.
Vincent L. Rocereto President/CEO President of the Company since February 28, 2003.
81 Former Chairman and CEO of American Home Life
Insurance Company with 36 years experience in all
areas of life insurance marketing and executive
management. Retired from American Home Life in 1986.
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the President and
Chairman and certain former executive officers of the Company (together named
"Executive Officers") for the fiscal years ended December 31, 2002 2001 and
2000. Disclosure for the remaining executive officers is not required because
none had annual salary and bonus that exceeded $100,000.
SUMMARY COMPENSATION TABLE
Other Annual
Name and Principal Positions Year Salary($) Bonus($)(1) Compensation($)(2)
---------------------------- ---- --------- ----------- ------------------
Rickie D. Meyer 2002 105,301 104,651 8,131
Former President 2001 96,271 79,080 5,983
Current Director 2000 93,000 80,309 --
-----
Michael N. Fink 2002 64,748 86,199 3,554
Former Chairman of the Board and 2001 77,017 63,264 2,792
Current Director 2000 74,330 64,247 --
Phillip M. Donnelly 2002 74,895 31,957 --
Former Treasurer/Secretary and Director 2001 72,838 19,783 --
2000 67,408 -- 400
(1) Includes incentive compensation pursuant to the Executive Employment
Agreements, based on premiums.
(2) Other annual compensation consists of automobile allowances. The aggregate
cost to the Company of such personal benefits did not exceed the lesser of
$50,000 or 10% of the annual salaries received by the above individuals.
EXECUTIVE CONTRACTS
The Company had entered into Executive Employment Agreements with Messrs.
Meyer, Fink and Donnelly. The employment agreements for Messrs. Fink and Meyer
were for a term of four years beginning November 1, 1998. The employment
agreement for Mr. Donnelly was for a term of two years beginning November 1,
2000. Annual compensation under the agreements was $90,000, $72,000 and $70,000
for Messrs. Meyer, Fink and Donnelly, respectively. Included in these agreements
was a clause that required the base salaries to be adjusted annually to reflect
current costs of living, based on the Consumer Price Index Labor
Component, on the month preceding the employment anniversary. Each executive
received incentive compensation based on percentages of first year life and
renewal premiums of the Company's First America 2000 product.
Mr. Donnelly's services were terminated on October 24, 2002. On November 1,
2002 the employment agreement for Mr. Fink expired and was not renewed. The
employment agreement for Mr. Meyer expired on November 1, 2002, but was
reinstated for a period of time before lapsing.
On November 15, 2002, Mr. Harland E. Priddle became an at will employee
serving as the Chairman of the Board, Secretary and Treasurer of the Company. On
February 28, 2003, Mr. Vincent L. Rocereto became an at will employee serving as
the President and Chief Executive Officer of the Company. Annual compensation
under the at-will agreements is $90,000 and $72,000 for Messrs. Rocereto and
Priddle, respectively.
DIRECTORS' FEES
Directors, who are not officers of the Company, participate in an
attendance fee pool. This pool acts as an annual retainer fee for directors. The
pool consists of 1% of the premiums delivered in each calendar year and is paid
to each board member on a pro-rata basis determined by his or her attendance of
board meetings. In addition, each Director is paid $750 per regular board
meeting attended for the Company and its subsidiaries, $75 per telephonic board
meeting and $250 per committee meeting.
AUDIT COMMITTEE REPORT
The Audit Committee, which consists of three non-employee directors of the
Company, presents this report for inclusion in the Proxy Statement. The Audit
Committee has reviewed and discussed the audited financial statements with
management. The Audit Committee has also discussed with independent auditors the
matters required to be discussed by SAS 61. The Audit Committee has received the
written disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1. The Audit Committee has received
the reports of the Chief Executive Officer and the Chief Financial Officer
relating to their evaluation and internal controls. The Audit Committee, based
on the review and discussion outlined above, recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-KSB for the last fiscal year for filing with the SEC.
This report is provided by the following Directors who constitute the Audit
Committee: Gary Yager, John Montgomery and Tom Fogt.
CERTAIN TRANSACTIONS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS
Portions of the Company's short-term investments consisting of certificates
of deposit are purchased through Columbian Bank. Mr. Gary Yager, a Director of
the Company, is the former Chief Executive Officer of this bank.
A note payable, secured by the main office building was obtained through
Columbian Bank. As noted above, Mr. Gary Yager, a Director of the Company, is
the former Chief Executive Officer of this bank.
The Company contracted with First Alliance Corporation ("FAC"), a
Lexington, Kentucky based insurance company holding company and a former 5% or
greater shareholder of the Company, to provide accounting services for the
Company's insurance company subsidiary, First Life America Company ("FLAC"), and
the Company. Under the terms of the management agreement, the Company paid fees
based on a percentage of delivered premiums of FLAC. The percentages were 5.5%
of first year premiums; 4% of second year premiums; 3% of third year premiums;
2% of fourth year premiums; 1% of fifth year premiums; 1% for years six through
ten for ten year policies and .5% in years six through twenty for twenty year
policies. Pursuant to the agreement, the Company incurred $288,936, $142,785,
and $117,246 of fees during 2002, 2001, and 2000, respectively.
Effective September 30, 2002 the Company acquired 525,000 shares of its
Common Stock held by FAC for an aggregate purchase price of $1,002,750. In
conjunction with the agreement to repurchase stock, the Company also acquired
72,500 shares of its Common Stock held by six individuals associated with FAC
for an aggregate purchase price of $138,475. In a related agreement, the Company
and FAC agreed to terminate the management agreement between the parties through
which the Company received administrative, reporting and underwriting services
from FAC. Termination of the agreement occurred by the Company making a lump-sum
payment of $212,000 to FAC on September 30, 2002. This amount represented the
present value of fees earned by FAC under the agreement which would otherwise
have been payable over time. These agreements effectively severed FAC's
financial interest in the Company.
The Company leases approximately 2,500 square feet of the home office
building to Montgomery Communications on a month to month basis in consideration
of rent of approximately $2,750 per month. The lease is cancelable providing
that the lessor or
lessee give the other party written notice 60 days prior to termination of the
lease. Montgomery, a Director of the Company, is the President of Montgomery
Communications.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports of
changes in ownership with the SEC. Such persons are required by SEC regulations
to furnish the Company with copies of all forms under Section 16(a). To the
Company's knowledge, all such filings were made on a timely basis, other than
Edward Carter, who acquired 5,000 shares of Common Stock in 2002 in a private
transaction in satisfaction of a debt. Mr. Carter has not filed a Form 4
reflecting such acquisition. In addition, in the proxy materials of the
Citizens Group, the Citizens Group states that Rickie D. Meyer failed to timely
file a Form 4 reflecting the transfer of shares of Company Common Stock by
Mr. Meyer and his spouse to three persons in September 2002. The same materials
also disclose that Danny Biggs failed to timely file a Form D reflecting the
purchase by his trust of shares of Company Common Stock from Mr. Meyer and his
spouse in September 2002.
PROPOSAL 2 -- APPROVAL OF AUDITORS FOR THE COMPANY
The Board of Directors has selected and appointed Kerber, Eck & Braeckel
LLP as the auditors for the Company for the year 2003, and the shareholders are
being asked to ratify such selection.
Kerber, Eck & Braeckel LLP served as the Company's independent auditors for
the fiscal years ended December 31, 2002, 2001 and 2000. In serving its primary
function as outside auditors for the Company, Kerber, Eck & Braeckel LLP
performed the following audit services: [i] examination of the annual financial
statements for the Company and its subsidiaries; and [ii] review of the
Company's Form 10-KSB and the Company's Form 10-QSB's filed with the Securities
and Exchange Commission.
Auditing fees paid Kerber, Eck & Braeckel for services outlined above
totaled $45,058 and $39,139 in 2002 and 2001, respectively. The Company did not
engage Kerber, Eck & Braeckel LLP to provide services other than auditing
services. The Company's Audit Committee of the Board of Directors believes the
auditing service rendered by the principal accountant does not jeopardize
independence.
It is anticipated that representatives of Kerber, Eck & Braeckel LLP will
not attend the Annual Meeting.
THE AUDIT COMMITTEE AND THE BOARD OF DIRECTORS RECOMMEND THE SHAREHOLDERS VOTE
"FOR" THE RATIFICATION OF KERBER, ECK & BRAECKEL LLP AS INDEPENDENT AUDITORS.
OTHER MATTERS TO COME BEFORE THE MEETING
Management does not intend to bring any other business before the meeting
of the Company's shareholders and has no reason to believe that any will be
presented to the meeting. If, however, any other business should properly be
presented to the meeting, the persons named in the signed and delivered BLUE
Proxy Card will vote the proxies on such matters in their discretion.
METHOD AND COST OF PROXY SOLICITATION
Proxies may be solicited without additional compensation by all directors
on the Company's Board and such officers of the Company listed on Appendix A by
mail, press release, advertisement, email, the internet, web page, telephone,
facsimile, telegram, in person or otherwise. Appendix A sets forth certain
information relating to such persons who will be soliciting proxies on the
Company's behalf (the "Participants").
The Company has retained Allen Nelson & Co. Incorporated to solicit proxies
on its behalf in connection with the 2003 Annual Meeting. Allen Nelson & Co.
Incorporated may solicit proxies from individuals, banks, brokers, custodians,
nominees, other institutional holders and other fiduciaries and will employ
approximately 10 people in its efforts. The Company has agreed to reimburse
Allen Nelson & Co. Incorporated for its reasonable expenses, to indemnify it
against certain losses, costs and expenses, and to pay it a fee based upon time
spent on the Company's solicitation, billed at the standard hourly rates of
Allen Nelson & Co. Incorporated. Allen Nelson & Co. Incorporated has advised the
Company that it estimates that its fee and expenses will be approximately
$30,000.
The Company will bear all costs related to the solicitation of proxies
pursuant to this Proxy Statement, including the preparation, printing and
mailing of proxy materials. The Company has spent approximately $45,000 thus far
in connection with the solicitation of proxies and estimates that it will spend
a total of approximately $80,000.
In addition to the persons named in Appendix A, regular employees of the
Company may, without additional compensation, assist in soliciting proxies by
means of email, telephone, facsimile, telegram, personal interviews and
otherwise.
The Company requests that banks, brokers and other custodians, nominees and
fiduciaries forward proxy materials to the beneficial owners of the Company's
Company Stock and obtain their voting instructions. The Company will reimburse
those firms for their expenses in accordance with SEC rules.
YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT.
PLEASE SIGN AND DATE THE ENCLOSED BLUE PROXY CARD AND RETURN IT TO THE COMPANY.
We urge that you do not sign or return any proxy card that may be sent to
you by the Citizens Group. If you have previously submitted a Citizens Group
proxy card, you have every legal right to change your vote. You can do so simply
by signing, dating and returning the enclosed BLUE Proxy Card. Any person giving
a proxy has the power to revoke it (whether such proxy was solicited by the
Board of the Company or by the Citizens Group) at any time before the voting by
submitting to the Company or to the Citizens Group a written revocation or a
duly executed proxy card bearing a later date. ONLY YOUR LATEST DATED PROXY CARD
WILL COUNT. Please return to "What If I Want To Revoke My Proxy?" for discussion
of how to revoke your proxy.
FORWARD LOOKING STATEMENTS
Statements made by the Company in this Proxy Statement that are not
strictly historical facts are "forward looking" statements that are based on
current expectations about the markets in which the Company does business and
assumptions made by management. Such statements should be considered as subject
to risks and uncertainties that exist in the Company's operations and business
environment and could render actual outcomes and results materially different
than predicted.
IMPORTANT
If your shares of Common Stock are held in the name of a brokerage firm,
bank, nominee or their institution, only it can sign a BLUE Proxy Card with
respect to your shares and only upon specific instructions from you. Please
contact the person responsible for your account and give instructions for a BLUE
Proxy Card to be signed representing your shares of the Company's Common Stock.
We urge you to confirm in writing your instructions to the person responsible
for your account and to provide a copy of such instructions to the Company at
the address indicated below so that the Company can attempt to ensure that your
instructions are followed.
If you have any questions about executing your proxy or require assistance,
please contact Allen Nelson & Co. Incorporated, toll free at 1-800-932-0181.
YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT. PLEASE SIGN AND
DATE THE ENCLOSED BLUE PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED
ENVELOPE.
ANNUAL REPORT
A 2002 Annual Report to Shareholders of the Company has been furnished to
the Company's shareholders along with this Proxy Statement. The Annual Report is
not to be regarded as proxy soliciting material or as a communication by means
of which any solicitation is to be made.
SHAREHOLDERS' PROXY STATEMENT PROPOSALS FOR 2004 MEETING
Proposals of Shareholders intended to be presented at the 2004 Annual
Meeting of Shareholders must be received by the Company at its principal office
in Topeka, Kansas, not later than January 11, 2004 for inclusion in the proxy
statement for that meeting.
AVAILABILITY OF REPORT ON FORM 10-KSB
The Company has filed its 2002 Annual Report on Form 10-KSB with the
Securities and Exchange Commission. A copy of the report may be obtained without
charge by any shareholder. Requests for copies of the report should be sent to
Harland E. Priddle, First American Capital Corporation, 1303 S. W. First
American Place, Topeka, KS 66604.
BY ORDER OF THE BOARD OF DIRECTORS
FIRST AMERICAN CAPITAL CORPORATION
HARLAND E. PRIDDLE
Secretary
Dated: May 9, 2003
APPENDIX A
INFORMATION CONCERNING PARTICIPANTS IN THE SOLICITATION
The Company and the members of the Board of Directors who have been
nominated by the Board for election to the Board (sometimes referred to herein
as the Director/Nominees) and certain executive officers of the Company, may be
deemed to be "participants" in the Company's solicitation of proxies from the
Company's shareholders to vote in favor of the election of the directors
nominated by the Board and ratification of the Board's appointment of Kerber,
Eck & Braeckel, LLP as the Company's independent auditors for the fiscal year
ending December 31, 2003.
Set forth below with respect to each participant are his or her name,
principal occupation or employment, business address, the number of shares of
the Company's Common Stock beneficially owned and additional information
concerning transactions in shares of Common Stock of the Company during the past
two years.
DIRECTOR/NOMINEES AND EXECUTIVE OFFICERS
The name and principal occupation of each of the Company's
Director/Nominees, all of whom are participants in the Company's solicitation of
proxies in connection with its 2003 Annual Meeting, are set forth under
"Proposal 1 - Election of Directors" in this Proxy Statement. Additionally,
Vince Rocereto, who is an executive officer of the Company, may also be deemed
to be a participant in the Company's solicitation of proxies in connection with
its 2003 Annual Meeting. Mr. Rocereto's principal occupation is set forth under
"Proposal 1 - Election of Directors." The business address for each of the
directors and Mr. Rocereto is 1303 S.W. First American Place, Topeka, Kansas
66604, unless otherwise noted in the "Security Ownership of Certain Beneficial
Owners and Management" section of this Proxy Statement.
INFORMATION REGARDING OWNERSHIP OF THE COMPANY'S SECURITIES BY PARTICIPANTS
Participants who own any of the Company's Common Stock of record also own
such Common Stock beneficially. The number of shares of the Company's Common
Stock held by the Director/Nominees and the named executive officer is set forth
under the "Security Ownership of Certain Beneficial Owners and Management"
section of this Proxy Statement.
INFORMATION REGARDING TRANSACTIONS IN THE COMPANY'S SECURITIES BY PARTICIPANTS
Except as described in this Appendix A or in the Proxy Statement, none of
the Director/Nominees or Mr. Rocereto have purchased or sold Company Common
Stock within the last two years.
MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS
Except as described in this Appendix A or in the Proxy Statement, to the
best knowledge of the Company, none of the participants nor any of their
respective affiliates or associates (together, the "Participant Affiliates") (i)
directly or indirectly beneficially owns any shares of the Company's Common
Stock or any securities of any subsidiary of the Company or (ii) has had any
relationship with the Company in any capacity other than as a shareholder,
employee, officer or director. Furthermore, except as described in this Appendix
A, or in this Proxy Statement, to the best knowledge of the Company, no
participant or Participant Affiliate is either a party to any transaction or
series of transactions since the beginning of the Company's last fiscal year, or
has knowledge of any currently proposed transaction or series of transactions,
(A) in which the Company or any of its subsidiaries was or is to be a party, (B)
in which the amount involved exceeds $60,000, and (C) in which any participant
or Participant Affiliate had or will have, a direct or indirect material
interest. Except as described in this Appendix A or in the Proxy Statement, to
the knowledge of the Company, no participant or Participant Affiliate has any
substantial interest, direct or indirect, by security holdings or otherwise, in
any matter to be acted upon at the 2003 Annual Meeting of Shareholders. To the
knowledge of the Company, no participant or Participant Affiliate has entered
into any agreement or understanding with any person respecting any future
employment by the Company or its affiliates or any future transactions to which
the Company or any of its affiliates will or may be a party. Except as described
in this Appendix A or in the Proxy Statement, there are no contracts,
arrangements or understandings by any participant or Participant Affiliate
within the past year with any person with respect to the Company's securities,
including, but not limited to, joint ventures, loan or option arrangements, puts
or calls, guarantees against loss or guarantees of profit, division of losses or
profits, or the giving or withholding of proxies.
PROXY
FIRST AMERICAN CAPITAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
JUNE 2, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harland E. Priddle and Gary E. Yager,
jointly and individually, as proxies, with full power of substitution and hereby
authorizes them to represent and to vote, as designated below, all of the shares
of Common Stock of First American Capital Corporation which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Shareholders to be held on June 2, 2003 or any adjournment or postponement
thereof.
(1) ELECTION OF DIRECTORS (see proxy statement for instructions)
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
for all nominees listed
below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR INDIVIDUAL NOMINEE STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
Paul E. Burke Edward C. Carter Thomas M. Fogt Kenneth L. Frahm
Stephen J. Irsik, Jr. John G. Montgomery Harland E. Priddle Gary E. Yager
(2) Approval of Kerber, Eck & Braeckel, LLP as independent auditors for
2003.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, the Proxies are authorized to vote upon such
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDERS.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Dated:
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Signature:
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Signature if held jointly:
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(Please sign exactly using the name(s) in which the
stock is titled. When stock is registered jointly,
all owners must sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please
sign in full corporate name by the President or
other authorized officer. If a partnership, please
sign in partnership name by an authorized person.)