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Share Name | Share Symbol | Market | Type |
---|---|---|---|
First Franklin Corp. (MM) | NASDAQ:FFHS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 14.42 | 0 | 01:00:00 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14a-12
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FIRST FRANKLIN CORPORATION
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(Name of Registrant as Specified In Its Charter)
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Lenox Wealth Management, Inc.
John C. Lame
Jason D. Long
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(Name Of Person(S) Filing Proxy Statement, If Other Than The Registrant)
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No fee required
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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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)
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Proposed maximum aggregate value of transaction:
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(5)
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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LENOX |
Wealth
Management
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8044 Montgomery Road
Suite 480
Cincinnati, Ohio 45236
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Office (513) 618-7080 – (800) 472-5734 – Fax (513) 618-7079 | financial solutions since 1887 |
1.
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Mr. Kuntz received 38,000 options at a penny per share worth approximately $380,000 plus salary and guarantees over the next three years of $729,000. In total this amount to over $1.1 million.
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2.
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Mr. Siemers retired April 4, 2010, yet remains as a paid advisor and paid Board member collecting director fees. In addition, Mr. Siemers receives a sweet heart deal whereby he is paid three times his prior year salary, or $267,000, if Franklin has a change in control or sale.
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3.
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Finally, Ms. Schmidt’s employment agreement was renewed and she has three years guaranteed employment for $530,250.
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4.
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Bottom line, the company is losing money and the Board guaranteed almost $2 million in compensation for three people, two of them in the Siemers family, when we could have paid only one Chairman/CEO $250,000/year.
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1.
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No more directors’ fees should be paid in cash to anyone on either the holding company Board or the savings and loan Board until
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a.
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The company is profitable.
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b.
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The regulators have lifted their restrictions.
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c.
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The dividend has been reinstated.
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2.
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In the next 90 days, to help satisfy the regulatory requirements for Franklin to raise additional capital, each of the directors on both Boards should be required to:
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a.
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Invest $250,000 in a new issue of FFHS stock at the current market price;
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b.
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Agree to a minimum holding period of five years for such FFHS stock.
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c.
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In the event that Jason Long and John Lame are elected directors, we commit each of us will meet this requirement alongside the other Board members.
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d.
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We further commit that if Father Barry Windholtz cannot meet this commitment, we will personally fund a $250,000 gift to a charitable foundation holding FFHS stock that benefits St. Rose Church and/or Xavier University, and St. Xavier High School.
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3.
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Immediately remove Tom Siemers as the ESOP trustee.
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a.
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Mr. Siemers should not be voting the ESOP shares for himself or Mr. Kuntz in this year’s election.
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b.
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Mr. Siemers cannot possibly be an independent fiduciary under applicable law.
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c.
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Replace Mr. Siemers with an independent third party fiduciary to protect Mr. Siemers and the Board from future litigation.
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4.
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The Board should immediately renegotiate the employment agreements that were signed on March 30, 2010.
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a.
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We cannot afford to pay three people (Mr. Kuntz, Mr. Siemers, and Ms. Schmidt) to do one job.
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i.
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As advertised, Mr. Siemers should retire now as an employee and a director.
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ii.
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Mr. Siemers should receive no salary, no consulting fees, and no benefits going forward.
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iii.
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Mr. Siemers should have retired at age 65. In Lenox’s opinion, the Board has paid him almost over $3 million for the last ten years while the shareholders lost money.
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iv.
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Mr. Siemers’ three year golden parachute employment agreement should be eliminated. There is no basis for this arrangement when he is age 76 and retired.
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5.
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Ms. Schmidt’s salary should be reduced so it is in line with her business results and contribution to Franklin.
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a.
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Based on Franklin’s performance, Gretchen should not have been appointed (anointed?) CEO.
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b.
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If Ms. Schmidt was qualified, we would not need Mr. Kuntz and Mr. Siemers in their roles.
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c.
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It appears Ms. Schmidt was named CEO and paid over $2 million in the last 10 years
only
because of Mr. Siemers and Mr. Finan’s position on the Board, including Mr. Seimers’ exclusive control over the 12% holding of Franklin stock in the ESOP.
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d.
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Ms. Schmidt’s three year employment agreement should be renegotiated immediately, eliminating the three year golden parachute
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e.
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If Mr. Kuntz is the CEO, Ms. Schmidt’s current role does not merit a Board seat and she should resign from the Board
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6.
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The directors, employees, and immediate family members should immediately pay down their $2.5 million below market rate mortgages to Franklin and return company paid cars. This program has gotten out of control and sends the wrong message to the Board, the officers and their children. It reflects that the company is being run for the benefit of the Siemers family and the directors at the expense of the other shareholders who are losing money. Shareholders should also expect Franklin to end all arrangements relating to unreimbursed Board and officer personal use of Xavier University basketball tickets and the luxury box suite to reduce Franklin waste: require reimbursement from the Siemers family.
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7.
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Senior Management, base salaries should be immediately reduced by one third.
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a.
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The one third should be “at risk” compensation based on performance and reclassified as a bonus.
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b.
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There should be specific annual performance metrics which each officer must meet before they earn a bonus.
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c.
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The bonus should be paid in restricted stock with five year vesting terms.
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d.
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No bonus should be paid if Franklin loses money.
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8.
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Mr. Kuntz should immediately return the option grant of $.01 share and have it reinstated at today’s market price of $10 per share. Vesting requirements should be implemented that are consistent with building long-term shareholder value. The current vesting requirements are ridiculously low. He does not deserve a $380,000 windfall. This is a bad reflection on Mr. Kuntz and the Board.
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9.
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The $14 million of director and officer cash value life insurance on Mr. Siemers, the officers and directors should immediately be evaluated to see if we can sell the policy to raise cash for the company. Mr. Siemers should also explain to the shareholders why these policies were purchased and confirm they do not benefit the Siemers family at the expense of the other shareholders. If Mr. Siemers’ son-in-law was paid a commission on the purchase, this compensation should be immediately returned to the company.
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10.
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Franklin’s Human Resources Department should conduct in depth confidential surveys of all employees’ views of Franklin, senior management, the Board, morale and the work environment.
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11.
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Senator Finan, Mr. Siemers’ best friend since grade school, should resign as lead director until Mr. Siemers finally retires, resigns from the Board, and terminates his consulting engagement with the company. By any standard we know, Mr. Siemers and Mr. Finan’s relationship is not independent; it clearly is not under Nasdaq’s standards.
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12.
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Consistent with our proposal on which you have an opportunity to vote this year, the Board should de-classify itself. Board classification offends all relevant standards of good corporate governance.
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1 Year First Franklin Chart |
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