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
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Check the appropriate box:
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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 §240.14a-12
KENTUCKY FIRST FEDERAL BANCORP
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Payment of Filing Fee (Check the appropriate
box):
Payment of Filing Fee (Check the appropriate
box):
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x
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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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(1)
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Title of each class of securities to which transaction applies:
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N/A
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(2)
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Aggregate number of securities to which transaction applies:
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N/A
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange
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Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
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determined):
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N/A
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(4)
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Proposed maximum aggregate value of transaction:
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N/A
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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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N/A
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(2)
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Form, Schedule or Registration Statement No.:
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N/A
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Parent Company of First Federal Savings
and Loan of Hazard
and First Federal Savings Bank of Frankfort
October 14, 2016
Dear Stockholder:
We invite you to attend
the Annual Meeting of Stockholders (the “Annual Meeting”) of Kentucky First Federal Bancorp (the “Company”)
to be held at Challenger Learning Center on the campus of Hazard Community and Technical College located at One Community College
Drive, Hazard, Kentucky on Tuesday, November 15, 2016 at 4:00 p.m., Eastern time.
The attached Notice of
Annual Meeting and Proxy Statement describe the formal business to be transacted at the meeting. During the meeting, we will also
report on the Company’s operations to date. Directors and officers of the Company and First Federal Savings and Loan Association
of Hazard and First Federal Savings Bank of Kentucky will be present to respond to any questions the stockholders may have.
ON BEHALF OF THE BOARD
OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN
TO ATTEND THE ANNUAL MEETING
. Your vote is important, regardless of the number of shares you own. This will not prevent you
from voting in person but will ensure that your vote is counted if you are unable to attend the Annual Meeting.
On behalf of the Board
of Directors and all the employees of the Company and First Federal of Hazard and First Federal of Kentucky, we wish to thank
you for your continued support.
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Sincerely,
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Sincerely,
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Tony D. Whitaker
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Don D. Jennings
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Chairman of the Board
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President and
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Chief Executive Officer
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KENTUCKY FIRST FEDERAL BANCORP
655 Main Street
P.O. Box 1069
Hazard, Kentucky 41702
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
TIME AND DATE
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4:00 p.m. on Tuesday, November
15, 2016
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PLACE
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Challenger Learning Center
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Hazard Community and Technical College Campus
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One Community College Drive
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Hazard, Kentucky 41701
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ITEMS OF BUSINESS
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(1)
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To elect three directors to
serve for terms of three years each;
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(2)
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To ratify the selection of Crowe Horwath,
LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2017;
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(3)
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To vote on a non-binding resolution to approve
the compensation of the named executive officers;
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(4)
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Such other business as may properly come
before the meeting.
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The Board of Directors is not aware of any
other business to come before the meeting.
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RECORD DATE
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In order to vote, you must have
been a stockholder at the close of business on September 30, 2016
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PROXY VOTING
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It is important that your shares be represented
and voted at the meeting. You can vote your shares by completing and returning the proxy card or voting instruction
card sent to you. You can revoke a proxy at any time prior to its exercise at the meeting by following the instructions
in the proxy statement. A copy of the following proxy statement and the enclosed proxy card are also available
on the Internet at
https://materials.proxyvote.com/491292
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BY ORDER OF THE BOARD OF DIRECTORS
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Lee Ann Hockensmith
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Secretary
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Hazard,
Kentucky
October
14, 2016
PROXY STATEMENT
GENERAL INFORMATION
We are providing this proxy statement to you
in connection with the solicitation of proxies by the Board of Directors of Kentucky First Federal Bancorp (“the Company”)
for the 2016 Annual Meeting of Stockholders (the “Annual Meeting”) and for any adjournment or postponement of the
meeting. The annual meeting will be held at the Challenger Learning Center on the campus of Hazard Community and Technical College
located at One Community College Drive, Hazard, Kentucky on Tuesday, November 15, 2016, at 4:00 p.m., Eastern time, and at any
adjournment thereof.
We intend to mail this
proxy statement and the enclosed proxy card to stockholders of record beginning on or about October 14, 2016.
NOTICE OF AVAILABILITY
OF PROXY MATERIALS
Important Notice Regarding the Availability
of Proxy Materials for the Stockholders Meeting to be Held on November 15, 2016.
The proxy statement and the 2016 Annual Report
to Stockholders are available on the Internet at
https://materials.proxyvote.com/491292
.
Who Can Vote at the Meeting
You are entitled to vote
the shares of Kentucky First Federal Bancorp common stock that you owned as of the close of business on September 30, 2016. As
of the close of business on September 30, 2016 (the “Record Date”), a total of 8,483,501 shares of Kentucky First
Federal Bancorp common stock were outstanding. Each share of common stock has one vote.
Ownership of Shares; Attending the Meeting
You may own shares of Kentucky First Federal
Bancorp in one of the following ways:
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Directly in
your name as the stockholder of record;
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Indirectly through
a broker, bank or other holder of record in “street name”; or
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Indirectly in
the Kentucky First Federal Bancorp Employee Stock Ownership Plan.
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If your shares are registered directly in your
name, you are the holder of record of these shares and we are sending these proxy materials directly to you. As the holder of
record, you have the right to give your proxy directly to us or to vote in person at the annual meeting.
If you hold your shares in street name,
your broker, bank or other holder of record is sending these proxy materials to you. As the beneficial owner, you have the
right to direct your broker, bank or other holder of record how to vote by filling out a voting instruction card that
accompanies your proxy materials. Your broker, bank or other holder of record may allow you to provide voting instructions by
telephone or by the Internet. Please see the voting instruction card provided by your broker, bank or other holder of record
that accompanies this proxy statement.
If you hold your shares in street name, you will need proof of ownership to be
admitted to the meeting.
A recent brokerage statement or letter from a bank or broker are examples of proof of ownership.
If you want to vote your shares of Kentucky First Federal Bancorp common stock held in street name in person at the meeting,
you must obtain a written proxy in your name from the broker, bank or other nominee who is the record holder of your
shares.
If you are a participant in the ESOP, see
“Participants
in the Kentucky First Federal Bancorp Employee Stock Ownership Plan”
below for information on how to vote your shares.
Quorum and Vote Required
Quorum
.
We will have a quorum
and will be able to conduct the business of the Annual Meeting if the holders of at least a majority of the outstanding shares
of common stock entitled to vote are present at the meeting, either in person or by proxy. Because First Federal MHC owns in excess
of 50% of the outstanding shares of Kentucky First Federal Bancorp Common Stock, the votes it casts will insure the presence of
a quorum.
Votes Required for Proposals
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At this year’s annual meeting, stockholders will elect three directors to serve for terms of three years each.. In voting
on the election of directors, you may vote in favor of the nominees, withhold votes as to all nominees, or withhold votes as to
specific nominees. There is no cumulative voting for the election of directors. Directors must be elected by a plurality of the
votes cast at the annual meeting. This means that the nominees receiving the greatest number of votes will be elected.
In voting to ratify the appointment of Crowe
Horwath, LLP as the Company’s independent registered public accounting firm, you may vote in favor of this proposal, vote
against this proposal, or abstain from voting. To be approved, this matter requires the affirmative vote of a majority of the
votes cast at the annual meeting.
In the advisory vote on the non-binding resolution
to approve the compensation of the named executive officers, you may vote in favor of the proposal, vote against the proposal
or abstain from voting. To approve the non-binding resolution on an advisory basis, the affirmative vote of a majority of the
votes cast at the annual meeting is required.
How We Count Votes
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If you return
valid proxy instructions or attend the meeting in person, we will count your shares for purposes of determining whether there
is a quorum, even if you abstain from voting. Broker non-votes, if any, also will be counted for purposes of determining the existence
of a quorum.
In the election of directors, votes that are
withheld and broker non-votes will have no effect on the outcome of the election.
In voting to ratify the appointment of the
independent registered public accountants and the non-binding resolution to approve the compensation of the named executive officers,
abstentions and broker non-votes will not be counted as votes cast and will have no effect on the outcome of the voting on the
proposal.
Effect of Not Casting Your Vote.
If
you hold your shares in street name it is critical that you cast your vote if you want it to count in the election of directors
or on the advisory vote regarding the compensation of our named executive officers (Proposals 1 and 3 of this proxy statement).
Current regulations restrict the ability of your bank or broker to vote your uninstructed shares in the election of directors
and other matters on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or
broker how to vote in the election of directors or with respect to the advisory votes regarding the compensation of our named
executive officers, no votes will be cast on these matters on your behalf. These are referred to as broker non-votes. Your bank
or broker does, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of
the Company’s independent registered public accounting firm (Proposal 2 of this proxy statement).
Voting by Proxy
The Board of Directors of Kentucky First Federal
Bancorp is sending you this proxy statement for the purpose of requesting that you allow your shares of Company common stock to
be represented at the annual meeting by the persons named in the enclosed proxy card. All shares of Company common stock represented
at the annual meeting by properly executed and dated proxy cards will be voted according to the instructions indicated on the
proxy card. If you sign, date and return a proxy card without giving voting instructions, your shares will be voted as determined
by the Company’s Board of Directors.
The Board of Directors recommends that you
vote:
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“FOR”
each of the nominees for director;
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“FOR”
ratification of Crowe Horwath, LLP as the Company’s independent registered public
accounting firm for the fiscal year ending June 30, 2017; and
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“FOR”
the approval of the compensation of the named executive officers.
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If any matters not described
in this proxy statement are properly presented at the annual meeting, the persons named in the proxy card will vote your shares
as determined by a majority of the Board of Directors. This includes a motion to adjourn or postpone the annual meeting in order
to solicit additional proxies. If the annual meeting is postponed or adjourned, your Kentucky First Federal Bancorp common stock
may be voted by the persons named in the proxy card on the new annual meeting date as well, unless you have revoked your proxy.
We do not know of any other matters to be presented at the annual meeting.
You may revoke your proxy at any time before
the vote is taken at the meeting. To revoke your proxy, you must either advise the Secretary of the Company in writing before
your common stock has been voted at the annual meeting, deliver a later-dated proxy or attend the meeting and vote your shares
in person. Attendance at the annual meeting will not in itself constitute revocation of your proxy.
Participants in the Kentucky First Federal Bancorp Employee
Stock Ownership Plan
If you participate in the
Kentucky First Federal Bancorp Employee Stock Ownership Plan (the “ESOP”), you will receive a voting instruction card
that reflects all shares you may direct the ESOP trustees to vote on your behalf under the plan. Under the terms of the ESOP,
the ESOP trustees vote all allocated shares of Company common stock held by the ESOP as directed by the plan participants. The
ESOP trustees, subject to the exercise of their fiduciary duties, will vote all unallocated shares of Company common stock held
by the ESOP and allocated shares for which no voting instructions are received in the same proportion as shares for which it has
received timely voting instructions. Please return your proxies as instructed as early as possible.
CORPORATE GOVERNANCE AND BOARD MATTERS
Director Independence
The Company’s Board of Directors currently
consists of nine members, all of whom are independent under the listing standards of the Nasdaq Stock Market, except William H.
Johnson, Tony D. Whitaker and Don D. Jennings. In determining the independence of its directors, the Board considered transactions,
relationships and arrangements between the Company and its directors that are not required to be disclosed in this proxy statement
under the heading
“Other Information Relating to Directors and Executive Officers — Transactions with Related Persons.”
These include loans and lines of credit made by the banks in the ordinary course of business, which are made in compliance
with federal lending regulations regarding loans to insiders and approved by the appropriate bank board of directors. In determining
that Director Stephen G. Barker is independent, the Board of Directors considered that he received legal fees from First Federal
of Hazard for services provided to First Federal of Hazard during the year ended June 30, 2016.
Board Leadership Structure and Board’s Role in Risk Oversight
Mr. Tony D. Whitaker serves as Chairman of
the Board of the Company and First Federal of Hazard. Mr. Whitaker served as the President and Chief Executive Officer of the
Company until December 31, 2012. Mr. Don D. Jennings serves as President and Chief Executive Officer of the Company. The Board
of Directors has not designated a lead independent director.
Though different individuals serve in the position
of Chairman of the Board and Chief Executive Officer, the Chairman of the Board had served as Chief Executive Officer until December
31, 2012 and continues to serve as an executive officer and; therefore, is not independent under the listing standards of the
Nasdaq Stock Market. The Company’s Board of Directors endorses the view that one of its primary functions is to protect
stockholders’ interests by providing independent oversight of management, including the Chief Executive Officer. However,
the Board does not believe that mandating a particular structure is necessary to achieve effective oversight. The Board of the
Company is currently comprised of nine directors, six of whom are independent directors under the listing standards of the Nasdaq
Stock Market. The Chairman of the Board has no greater nor lesser vote on matters considered by the Board than any other director,
and the Chairman does not vote on any related party transaction. All directors of the Company, including the Chairman, are bound
by fiduciary obligations, imposed by law, to serve the best interests of the stockholders. Accordingly, having an independent
director serve as Chairman would not serve to enhance or diminish the fiduciary duties of any director of the Company.
To further strengthen the regular oversight
of the full Board, all various committees of the Board are comprised of independent directors. The Compensation Committee of the
Board consists solely of independent directors. The Compensation Committee reviews and evaluates the performance of all executive
officers of the Company, including the Chief Executive Officer and reports to the Board. In addition, the Audit Committee, which
is comprised solely of independent directors, oversees the Company’s financial practices, regulatory compliance, accounting
procedures and financial reporting functions. In the opinion of the Board of Directors, an independent chairman or
the designation of a lead independent director does not add any value to this already effective process.
Risk is inherent with every business, and how
well a business manages risk can ultimately determine its success. We face a number of risks, including credit risk,
interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day
management of risks the Company faces, while the Board, as a whole and through its committees, has responsibility for the oversight
of risk management. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that
the risk management processes designed and implemented by management are adequate and functioning as designed. To do this, the
Chairman of the Board meets regularly with management to discuss strategy and risks facing the Company. Senior management attends
the board meetings and is available to address any questions or concerns raised by the Board on risk management and any other
matters. The Chairman of the Board and independent members of the Board work together to provide strong, independent oversight
of the Company’s management and affairs through its standing committees and, when necessary, special meetings of independent
directors.
Committees of the Board of Directors
Below we provide the Company’s standing
committees and their members. All members of each committee are independent in accordance with the listing requirements of the
Nasdaq Stock Market. The Board’s Audit, Compensation, and Nominating/Corporate Governance Committees each operate under
a written charter that has been approved by the Board of Directors. Each committee reviews and reassesses the adequacy of its
charter at least annually
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Audit Committee.
The Company
has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit
Committee is comprised of Chairman David R. Harrod, Walter G. Ecton, Jr., William D. Gorman, Jr., W. Banks Hudson and C. Michael
Davenport.
The committee met five times during the year.
The Company’s Board of Directors has
determined that one member of the Audit Committee, David R. Harrod, qualifies as an “audit committee financial expert”
under the rules of the Nasdaq Stock Market.
The function of the Audit
Committee is to review and discuss the audited financial statements with management, internal audit and the independent auditors;
to determine the independent accountants’ qualifications and independence; to engage the independent auditors of the Company;
to review the internal audit function and internal accounting controls; to review the internal audit plan; to review the Company’s
compliance with legal and regulatory requirements; and to review the Company’s auditing, accounting and financial processes
generally. The Audit Committee operates under a written charter, a copy of which is posted on the website of First Federal Savings
Bank of Kentucky at www.ffsbky.bank, under the Policies tab (see “Corporate Policies.”)
Compensation Committee.
The Compensation
Committee is comprised of Chairman William D. Gorman, Jr., W. Banks Hudson, C. Michael Davenport, and Walter G. Ecton, Jr. The
committee met once during the year. The Compensation Committee evaluates the compensation and fringe benefits of the directors,
officers and employees and recommends changes. The Compensation Committee reviews all components of compensation, including
salaries, cash incentive plans, equity incentive plans and various employee benefit matters. Decisions by the Compensation Committee
with respect to the compensation of executive officers are approved by the full Board of Directors. The Chief Executive Officer
makes recommendations to the Compensation Committee regarding compensation of directors and executive officers other than himself,
but final compensation decisions are made by the Board of Directors based on the recommendation of the Compensation Committee.
The Compensation Committee
operates under a written charter that establishes the Compensation Committee’s responsibilities. The Compensation Committee
and the Board of Directors review the Charter periodically to ensure that the scope of the charter is consistent with the Compensation
Committee’s expected role. Under the charter, the Compensation Committee is charged with general responsibility for the
oversight and administration of the Company’s compensation program. The charter vests in the Compensation Committee principal
responsibility for determining the compensation of the Chief Executive Officer based on the Compensation Committee’s evaluation
of his performance. The charter also authorizes the Compensation Committee to engage consultants and other professionals without
management approval to the extent deemed necessary to discharge its responsibilities. The Compensation Committee charter is posted
on the website of First Federal Savings Bank of Kentucky at www.ffsbky.bank, under the Policies tab (see “Corporate Policies.”).
Nominating/Corporate
Governance Committee.
The Nominating/Corporate Governance Committee is comprised of Chairman Walter G. Ecton, Jr., David
R. Harrod, William D. Gorman, Jr., W. Banks Hudson, and C. Michael Davenport. The Board of Directors’ Nominating/Corporate
Governance Committee nominates directors to be voted on at the annual meeting and recommends nominees to fill any vacancies on
the Board of Directors. The Board of Directors has adopted a charter for the Nominating/Corporate Governance Committee a copy
of which is posted on the website of First Federal Savings Bank of Kentucky at www.ffsbky.bank, under the Policies tab (see “Corporate
Policies.”).
It is the policy of the Nominating/Corporate
Governance Committee to consider director candidates recommended by security holders who appear to be qualified to serve on the
Company’s Board of Directors. Any stockholder wishing to recommend a candidate for consideration by the Nominating/Corporate
Governance Committee as a possible director nominee for election at an upcoming annual meeting of stockholders must provide written
notice to the Nominating/Corporate Governance Committee of such stockholder’s recommendation of a director nominee no later
than the July 1st preceding the annual meeting of stockholders. Notice should be provided to: Secretary, Kentucky First Federal
Bancorp, P.O. Box 535, Frankfort, Kentucky 40602. Such notice must contain the following information:
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The name of the
person recommended as a director candidate;
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All information
relating to such person that is required to be disclosed in solicitations of proxies
for election of directors pursuant to Regulation 14A under the Securities Exchange Act
of 1934;
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The written consent
of the person being recommended as a director candidate to being named in the proxy statement
as a nominee and to serving as a director if elected;
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As to the stockholder
making the recommendation, the name and address, as he or she appears on the Company’s
books, of such stockholder; provided, however, that if the stockholder is not a registered
holder of the Company’s common stock, the stockholder should submit his or her
name and address, along with a current written statement from the record holder of the
shares that reflects ownership of the Company’s common stock; and
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A statement disclosing
whether such stockholder is acting with or on behalf of any other person and, if applicable,
the identity of such person.
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In its deliberations, the
Nominating/Corporate Governance Committee considers a candidate’s personal and professional integrity, knowledge of the
banking business and involvement in community, business and civic affairs, and also considers whether the candidate would provide
for adequate representation of the banks’ market areas. Any nominee for director made by the Nominating/Corporate Governance
Committee must be highly qualified with regard to some or all the attributes listed in the preceding sentence. In searching for
qualified director candidates to fill vacancies in the Board, the Nominating/Corporate Governance Committee solicits the Company’s
then current directors for the names of potential qualified candidates. Moreover, the Nominating/Corporate Governance Committee
may ask its directors to pursue their own business contacts for the names of potentially qualified candidates. The Nominating/Corporate
Governance Committee would then consider the potential pool of director candidates, select a candidate based on the candidate’s
qualifications and the Board’s needs, and conduct a thorough investigation of the proposed candidate’s background
to ensure there is no past history that would cause the candidate not to be qualified to serve as a director of the Company. In
the event a stockholder has submitted a proposed nominee, the Nominating/Corporate Governance Committee would consider the proposed
nominee in the same manner in which the Nominating/Corporate Governance Committee would evaluate nominees for director recommended
by directors.
The Nominating Committee seeks to create a
Board that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance,
management and leadership, vision and strategy, business operations, business judgment, industry knowledge and corporate governance.
Accordingly, the Board of Directors will consider the following criteria in selecting nominees: financial, regulatory and business
experience; familiarity with and participation in the local community; integrity, honesty and reputation; dedication to the Company
and its stockholders; independence; and any other factors the Board of Directors deems relevant, including age, diversity, size
of the Board of Directors and regulatory disclosure obligations.
With respect to nominating an existing director
for re-election to the Board of Directors, the Nominating/Corporate Governance Committee will consider and review an existing
director’s Board and committee attendance and performance, length of Board service, experience, skills and contributions
that the existing director brings to the Board and independence.
Board and Committee Meetings
The Board of Directors of the Company meets
quarterly and may have additional special meetings. During the year ended June 30, 2016, the Board of Directors of the Company
met six times. No director attended fewer than 75% in the aggregate of the total number of Company Board of Directors meetings
held during the year ended June 30, 2016 and the total number of meetings held by Committees on which he served during such fiscal
year.
Director Attendance at Annual Meeting of Stockholders
Directors are expected to prepare themselves
for and to attend all Board meetings, the Annual Meeting of Stockholders and the meetings of the Committees on which they serve,
with the understanding that on occasion a director may be unable to attend a meeting. Eight of nine directors attended the Company’s
2015 annual meeting of stockholders held on November 12, 2015.
Code of Ethics and Business Conduct
The Company has adopted a Code of Ethics and
Business Conduct that applies to all of its directors, officers and employees. To obtain a copy of this document at no charge,
please write to Kentucky First Federal Bancorp, P.O. Box 535, Frankfort, Kentucky 40602-0535, or call toll-free (888) 818-3372
and ask for Investor Relations.
Director Compensation
The following table provides
the compensation received by individuals who served as non-employee directors of the Company during the 2016 fiscal year. This
table excludes perquisites, which did not exceed $10,000 in the aggregate for each director. During the year ended June 30, 2016,
all options held by directors expired unexercised.
Name
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Fees
Earned or
Paid in
Cash ($)
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Total
($)
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Stephen G. Barker
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18,400
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18,400
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Walter G. Ecton, Jr.
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18,400
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18,400
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William D. Gorman, Jr.
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18,400
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18,400
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David R. Harrod
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18,000
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18,000
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C. Michael Davenport
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16,200
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18,000
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W. Banks Hudson
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23,400
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23,400
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Tony D. Whitaker (1)
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66,200
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66,200
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(1) Mr. Whitaker serves as Chairman of the
Board of Directors and is an executive officer of the Company. Mr. Whitaker earned $11,200 in fees for service as a director of
First Federal of Hazard and $55,000 for service as an executive officer of the Company.
Fees.
Each nonemployee director
of the Company receives a quarterly retainer of $1,800. Officers of the Company who are directors are not compensated for their
service as directors. Directors who also serve as directors of First Federal of Hazard receive $10,800 annually plus $400 for
serving on the investment committee. Directors who also serve as directors of First Federal of Kentucky receive $10,800 annually
plus $100 for certain committee meetings. Officers of either Bank who are also directors are not compensated for their service
as directors.
AUDIT RELATED MATTERS
Report of the Audit Committee
The Company’s management is responsible
for the Company’s internal controls and financial reporting process. The independent registered public accounting firm is
responsible for performing an independent audit of the Company’s consolidated financial statements and issuing an opinion
on the conformity of those financial statements with generally accepted accounting principles. The Audit Committee oversees the
Company’s internal controls and financial reporting on behalf of the Board of Directors.
In this context, the Audit Committee has met
and held discussions with management and the independent registered public accounting firm. Management represented to the Audit
Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent
registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm matters
required to be discussed pursuant to U.S. Auditing Standards No. 380 (The Auditor’s Communication With Those Charged With
Governance), including the quality, not just the acceptability, of the accounting principles, the reasonableness of significant
judgments, and the clarity of the disclosures in the financial statements.
In addition, the Audit Committee has received
the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements
of the Public Company Accounting Oversight Board and has discussed with the independent registered public accounting firm the
auditors’ independence from the Company and its management. In concluding that the auditors are independent, the Audit Committee
considered, among other factors, whether the non-audit services provided by the auditors were compatible with its independence.
The Audit Committee discussed with the Company’s
independent registered public accounting firm the overall scope and plans for its audit. The Audit Committee meets with the independent
registered public accounting firm, with and without management present, to discuss the results of its examination, its evaluation
of the Company’s internal controls, and the overall quality of the Company’s financial reporting.
In performing all of these functions, the Audit
Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of
the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent
registered public accounting firm who, in its report, express an opinion on the conformity of the Company’s financial statements
to generally accepted accounting principles. The Audit Committee’s oversight does not provide it with an independent basis
to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate
internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations.
Furthermore, the Audit Committee’s considerations and discussions with management and the independent registered public
accounting firm do not assure that the Company’s financial statements are presented in accordance with generally accepted
accounting principles, that the audit of the Company’s consolidated financial statements has been carried out in accordance
with the standards of the Public Company Accounting Oversight Board or that the Company’s independent registered public
accounting firm is in fact “independent.”
In reliance on the reviews and discussions
referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated
financial statements be included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2016 for filing
with the Securities and Exchange Commission. The Audit Committee and the Board of Directors also have approved, subject to stockholder
ratification, the selection of Crowe Horwath, LLP as the Company’s independent registered public accounting firm for the
2017 fiscal year.
Members
of the Audit Committee
David R. Harrod (Chairman)
C. Michael Davenport
Walter G. Ecton, Jr.
William D. Gorman, Jr.
W. Banks Hudson
Auditor Fees
The following table sets forth the fees
billed to the Company for the fiscal years ended June 30, 2016 and 2015 by Crowe Horwath, LLP:
|
|
2016
|
|
|
2015
|
|
Audit fees
(1)
|
|
$
|
78,800
|
|
|
$
|
77,500
|
|
Audit-related fees
(2)
|
|
|
16,000
|
|
|
|
16,000
|
|
Tax fees
(3)
|
|
|
8,600
|
|
|
|
8,600
|
|
All other fees
|
|
|
0
|
|
|
|
0
|
|
Total
|
|
$
|
103,400
|
|
|
$
|
102,100
|
|
|
(1)
|
Audit fees consist of fees for professional services rendered for the audit of the Company’s annual financial statements.
|
|
(2)
|
Audit-related fees include review of quarterly reports on Form 10-Q filed by the Company.
|
|
(3)
|
Tax services fees consist of fees for tax compliance services, including preparation of federal
and state income tax returns.
|
Pre-Approval of Services by the Independent Auditor
The Audit Committee
does not have a policy for the pre-approval of non-audit services to be provided by the Company’s independent registered
public accounting firm. Any such services would be considered on a case-by-case basis. All non-audit services provided by the independent
auditors in fiscal years 2016 and 2015 were approved by the Audit Committee before the independent auditors were engaged to provide
the services. Certain services such as the review of the Company’s public filings, review of the Company’s tax returns,
and general discussions with management regarding accounting issues, which may be construed as necessary for the accurate completion
of the audit, are approved in advance on an annual basis. The Committee has also approved the engagement of Crowe Horwath, LLP
to prepare the Company’s consolidated tax return for the year ending June 30, 2017.
STOCK OWNERSHIP
Persons and groups
beneficially owning more than 5% of Kentucky First Federal Bancorp common stock are required to file certain reports with respect
to such ownership pursuant to the Securities Exchange Act of 1934, as amended. The following table sets forth information regarding
the shares of Common Stock beneficially owned as of September 30, 2016 by persons known to the Company who beneficially own more
than 5% of the common stock, each of the Company’s directors, the non-director executive officer and by all directors and
executive officers as a group.
|
|
Amount
and Nature
|
|
|
Percent
of
|
|
|
|
of
Beneficial Ownership
|
|
|
Class
(1)
|
|
Persons
Owning Greater than 5%:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Federal MHC
|
|
|
4,727,938
|
|
|
|
56.0
|
%
|
479 Main Street
|
|
|
|
|
|
|
|
|
P.O. Box 1069
|
|
|
|
|
|
|
|
|
Hazard, Kentucky 41702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tony D. Whitaker
|
|
|
115,574
|
(2)
|
|
|
1.4
|
|
Don D. Jennings
|
|
|
55,925
|
|
|
|
*
|
|
Stephen G. Barker
|
|
|
28,731
|
|
|
|
*
|
|
Walter G. Ecton, Jr.
|
|
|
22,202
|
(3)
|
|
|
*
|
|
William D. Gorman, Jr.
|
|
|
11,666
|
|
|
|
*
|
|
David R. Harrod
|
|
|
9,495
|
|
|
|
*
|
|
W. Banks Hudson
|
|
|
47,358
|
(4)
|
|
|
*
|
|
William H. Johnson
|
|
|
42,067
|
|
|
|
*
|
|
C. Michael Davenport
|
|
|
39,606
|
(5)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Executive
Officers Who Are Not Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Clay Hulette
|
|
|
52,137
|
(6)
|
|
|
*
|
|
Lou Ella Farler
|
|
|
32,071
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
All directors, nominees, and
executive officers of the Company as a group (11) persons)
|
|
|
457,832
|
(7)
|
|
|
5.4
|
|
|
*
|
Represents less than 1% of the shares outstanding.
|
|
(1)
|
Based on a total of 8,483,5011 shares of Common Stock outstanding as of the Record Date.
|
|
(2)
|
Includes 15,000 shares owned by Mr. Whitaker’s spouse.
|
|
(3)
|
Includes 600 shares in Mr. Ecton’s spouse’s
IRA.
|
|
(4)
|
Includes 6,458 shares held by Mr. Hudson’s spouse,
814 shares held in trust, and 45 shares as custodian in UGMA account.
|
|
(5)
|
Includes 578 shares as custodian in UGMA account.
|
|
(6)
|
Includes 29,447 shares owned by Mr. Hulette’s spouse.
|
|
(7)
|
Includes 103,010 shares owned by spouses of insiders.
|
ITEMS
TO BE VOTED ON BY STOCKHOLDERS
ITEM 1 – ELECTION
OF DIRECTORS
The Company’s Board of Directors consists
of nine members and is divided into three equal classes with one-third of the directors elected each year. At the annual meeting,
three directors will be elected for a term expiring at the 2019 annual meeting of stockholders The Nominating/ Corporate Governance
Committee of the Board of Directors has nominated William D. Gorman, Jr., Don D. Jennings, and William H. Johnson, to each serve
as a director for a three-year term or until their respective successors have been elected and qualified. All of the nominees are
currently members of the Company’s Board.
Pursuant to the Company’s Bylaws,
there is no cumulative voting for the election of directors. As a result, directors are elected by a plurality of the votes present
in person or by proxy at a meeting at which a quorum is present. This means that the nominees receiving the greatest number of
votes will be elected. In the election of directors, votes that are withheld and broker non-votes will have no effect on the outcome
of the election.
Unless you indicate on
the proxy card that your shares should not be voted for certain nominees, the Board of Directors intends that the proxies solicited
by it will be voted for the election of all of the Board’s nominees. If any nominee is unable to serve, the persons named
in the proxy card would vote your shares to approve the election of any substitute proposed by the Board of Directors. At this
time, the Board knows of no reason why any nominee might be unavailable to serve.
The Board of Directors
recommends a vote “FOR” the election of Messrs. Gorman, Jennings, and Johnson.
Information regarding the Board of Directors’
nominees and the directors continuing in office is provided below. Unless otherwise stated, each individual has held his or her
current occupation for the last five years. The age indicated for each individual is as of September 30, 2016. The indicated period
of service as a director includes the period of service as a director of one of our bank subsidiaries.
Nominees for Election as Directors
The nominees for election to serve for three-year terms
are:
William D. Gorman, Jr.
was
elected as a director of First Federal Savings & Loan of Hazard on December 16, 2010. He follows in the footsteps of his late
father, Mayor William D. Gorman, who served as a director of First Federal Savings & Loan of Hazard and Kentucky First Federal
Bancorp. Mr. Gorman served as President and Chief Executive Officer of Hazard Insurance Group, LLC through July 31, 2014 and continues
to work for that firm as a consultant. Earlier, he was Vice President and General Manager of WKYH-TV in Hazard and was founder
of radio station WYZQ, now WQXY in Hazard. In 2004, he served as President of the Independent Insurance Agents of Kentucky. He
is a member
and past president of the Hazard Lions Club. He has served on the Hazard-Perry
County Tourism Commission and on the Board of Directors of both Kentucky Education Television and Hazard Appalachian Regional Hospital.
Mr. Gorman is a graduate of the University of Kentucky. Age 67. Director since 2010.
Mr. Gorman’s many years as an important
part of the business and civic communities of Hazard and Perry County, as well as his past service to First Federal of Hazard,
make him an excellent member of the Board.
Don D. Jennings
has served
as President and as a Director of the Company since its inception in March 2005. On January 1, 2013, he was appointed Chief Executive
Officer of the Company. Prior to the merger between Kentucky First Federal Bancorp and Frankfort First Bancorp, he served as President
and Chief Executive Officer of Frankfort First Bancorp. He
currently also serves as President and Chief Executive
Officer of First Federal of Kentucky, where he has been employed since 1991. He currently serves on the American Bankers Association
Mutual Advisory Committee and previously served on the Board of the Kentucky Bankers Association. Age 51. Director since 1998.
Mr. Jennings has extensive knowledge of
the workings of both public companies and banks. He was intimately involved in the formation of both Kentucky First Federal Bancorp
and Frankfort First Bancorp and has played a major role in the structure of the entire corporation
William
H. Johnson
was named President and Chief Executive Officer of Central
Kentucky Federal Savings Bank and CKF Bancorp in August 2005 and served in that capacity until his appointment effective January
1, 2013 as Danville-Lancaster Area President for First Federal Savings Bank, which acquired Central Kentucky Federal. He joined
Central Kentucky Federal Savings Bank as Senior Vice President in September 1998 and was named Secretary in April 1999. Prior to
that, he served for 16 years as Vice President and Regional Manager of Great Financial Bank, F.S.B. and for seven years as Managing
Officer of Commonwealth First Federal Savings and Loan Association, Danville, Kentucky. He has served on the Board of Directors
of the Kentucky Bankers Association. Age 66. Director since 2013.
Mr. Johnson’s experience in the Danville
community and the Danville banking market are nearly unequalled. His knowledge of the area as well as his experience in managing
Central Kentucky Federal puts him in position to provide valuable insight to the Board of Kentucky First Federal Bancorp.
Directors Continuing in Office
The following directors have terms ending in 2017:
C. Michael
Davenport
is a builder, developer, real estate broker, and auctioneer.
Mr. Davenport has successfully developed a number
of commercial and residential properties in Franklin County, Kentucky including Prevention Park and Bittersweet Farms. He has been
involved in innumerable charitable and community-building activities including serving as a
co-founder
of L.I.F.E. House for Animals, a no-euthanasia adoption facility. He devotes his auctioneering skills exclusively to non-profit
events. He has been a tireless promoter for the economic and quality-of-life interests of Frankfort and Franklin County. Visitors
are welcomed by a 1800 square foot American flag he erected along interstate 64. Mr. Davenport has served as a director of First
Federal Savings Bank of Kentucky since 1996. He also served on the board of Frankfort First Bancorp, which was a publicly-traded
bank holding company until 2005 when it merged with Kentucky First Federal Bancorp. Age 57.
Mr. Davenport was appointed as director
of Kentucky First Federal Bancorp in August, 2015 Mr. Davenport possesses a high degree of knowledge of the real estate industry
and the business environment of Central Kentucky. This, coupled with his experience as a bank director, make him an extremely valuable
addition to the Company’s board.
Walter G. Ecton, Jr.
has
been a director of the Company since its inception in March 2005. He has been engaged in the private practice of law in Richmond,
Kentucky since 1979. He has served as a director of First Federal of Hazard since 2004. Age 61. Director since 2005.
Mr. Ecton is a graduate of Centre College
and received his Juris Doctorate of law from the University of Kentucky where he was a member of the Kentucky Law Journal. Mr.
Ecton also earned a Masters Degree in Business Administration from the University of Kentucky. In addition to his private practice,
Mr. Ecton served as an Assistant’s Commonwealth’s Attorney from 1981-1993. Mr. Ecton previously served as legal counsel
to First Federal of Richmond, Kentucky and as an advisory director of Great Financial Bank and U.S. Bank. His knowledge of the
banking industry through this service and through his extensive education and legal career provides the Board valuable expertise.
W. Banks Hudson
is a retired attorney. Mr. Hudson was a partner in the Danville, Kentucky, law firm of Hudson and Hudson until his retirement
on June 1, 2014. His practice specialized in real estate, estate planning and business law . He has served on the Board of Directors
of the Boyle County Industrial Foundation, the Bluegrass Community Foundation, the Lottie B. Ellis Scholarship and Discretionary
Fund Advisory Board as Chairman, the Danville-Boyle County Chamber of Commerce, and Heart of Danville, Inc. (Main Street Program).
Mr. Hudson served as a director of CKF Bancorp from 1981 until the merger with Kentucky First Federal Bancorp. Age 69. Director
since 2013.
Mr. Hudson brings a wealth of experience
from his legal career and service to CKF Bancorp as Director and as Chairman. That, coupled with his longstanding prominence in
the Danville community, makes Mr. Hudson extremely well-qualified to guide Kentucky First Federal Bancorp into its new markets
and new endeavors.
The following directors have terms ending in 2018:
Stephen G. Barker
has been
a director of the Company since its inception in March 2005. Mr. Barker is the Executive Vice President and General Counsel for
Kentucky River Properties LLC, which owns significant land, mineral, oil and gas and timber resources in Kentucky. Kentucky River's
lessees include several nationally known publicly traded resource producers. Mr. Barker has been employed by Kentucky River
Coal Corporation and Kentucky River Properties LLC since 1985, and has served as Assistant General Counsel and Assistant Secretary.
Mr. Barker is a Director and a member of the Executive Committee of the National Council of Coal Lessors in
Washington, D.C. Mr. Barker has been in the private practice of law in Hazard since 1980 and has provided legal representation
to First Federal since 1982. Mr. Barker also served as Master Commissioner for the Perry Circuit Court and is
a member and past President of the Perry County Bar Association. He is a member of the Kentucky Bar Association and the
American Bar Association and is admitted to practice before the Kentucky Supreme Court and the U.S. District Court for the Eastern
District of Kentucky. Prior to obtaining his Juris Doctorate from the University of Kentucky College of Law, Mr. Barker received
a Bachelor of Science in Forestry from the University of Kentucky and was a forester and served as District Conservationist
with the United States Department of Agriculture Soil Conservation Service in eastern Kentucky. Mr. Barker continues
to serve as a District Supervisor and Secretary and Treasurer of the Perry County Conservation District. He is a member
of the Society of American Foresters. Mr. Barker is a private pilot and a member of the Aircraft Owners and Pilots
Association and is Chairman of the Hazard Perry County Airport Board which manages the Wendell H. Ford Regional
Airport near Hazard. Mr. Baker has also served on the Board of Directors of the Company’s wholly owned subsidiary, First
Federal Savings and Loan Association of Hazard since 1997. Age 62. Director since 1997.
Mr. Barker’s long service to First
Federal of Hazard represents a valuable level of expertise and commitment, along with his extensive knowledge of real estate derived
from his legal career make him an exceptional member of the board.
David R. Harrod
has been a
director of the Company since its inception in March 2005. Mr. Harrod
is a certified public accountant and is a principal
of Harrod and Associates, P.S.C., a Frankfort, Kentucky-based accounting firm. He currently serves as a Director and Treasurer
of the Franklin County Industrial Development Authority. He has served as a Director of Frankfort First Bancorp, Inc. and First
Federal of Kentucky since 2003. He also previously served as Director and Chairman of the Audit Committee of Frankfort First Bancorp,
Inc. Age 57. Director since 2003.
Mr. Harrod’s financial expertise is
a necessary component of the board. His career in public accounting, which has included audit work for a publicly-traded financial
institution, affords him an exceptional level of knowledge that is highly appropriate as he chairs the Company’s audit committee
and, as such, is the liaison between the board and the independent public accountants.
Tony D. Whitaker
has
served as Chairman of the of the Company since its inception in March 2005. He served as Chief Executive Officer of the Company
from its inception until his retirement on January 1, 2013. He served as President and Chief Executive Officer of First Federal
of Hazard from 1997 until his retirement on January 1, 2013, although he still serves as Chairman of the First Federal of Hazard
board, on which he has served as a director since 1993. Mr. Whitaker was President of First Federal Savings Bank in Richmond,
Kentucky from 1980 until 1994. From 1994 until 1996, Mr. Whitaker was the President of the central Kentucky region and served
on the Board of Great Financial Bank, a $3 billion savings and loan holding company located in Louisville, Kentucky. Mr. Whitaker
served as a director of the Federal Home Loan Bank of Cincinnati from 1991 to 1997, including a term as Vice-Chairman. He served
on the Board of America’s Community Bankers, a national banking trade group, from 2001 to 2007. Mr. Whitaker has served
on the Board of Directors , including a term as Chairman, of Pentegra Group, Inc., a financial services company specializing in
retirement benefits, since 2002. He served as Chairman of the Kentucky Bankers Association in 2011-12. Age 71. Director since 1993.
Based on his level of experience and the
breadth of his career, Mr. Whitaker has few peers among bankers still actively working. His expertise in the Kentucky thrift community
is incomparable. He is both the architect and ongoing leader of Kentucky First Federal and as such provides extremely valuable
service to our board.
Executive Officers Who Are Not Directors
The following sets forth information with
respect to the executive officers of the Company who do not serve on the Board of Directors.
R. Clay Hulette
has served
as
Vice President, Treasurer and Chief Financial Officer of the Company since its inception in March 2005. Since
2000, he has served as Vice President and Chief Financial Officer of Frankfort First. In January 2012, Mr. Hulette was named as
a Director of First Federal of Kentucky. In March 2007, he was named President of First Federal of Kentucky having served as Vice
President and Treasurer since 2000. On January 1, 2013, he was appointed Frankfort Area President for First Federal of Kentucky.
He has been employed by First Federal of Kentucky since 1997. He is a Certified Public Accountant. Mr. Hulette’s spouse,
Teresa Hulette, serves as Executive Vice President of First Federal of Kentucky. Age 54.
Lou Ella Farler
has served
as President and Chief Executive Officer of First Federal of Hazard since January 1, 2013. She has served on the board of First
Federal of Hazard since 2011. She began her career at First Federal in 1975. She has served her community on various civic committees
and was a Hazard City Commissioner from 2002-2012. Age 59.
ITEM 2—RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Audit Committee of the Board of Directors
has appointed Crowe Horwath, LLP to be the Company’s independent registered public accounting firm for the fiscal year ending
June 30, 2017, subject to ratification by stockholders. There are no plans for a representative of Crowe Horwath LLP to be present
at the 2016 annual meeting.
If the ratification of
the appointment of the independent registered public accounting firm is not approved by stockholders at the annual meeting, the
Audit Committee will consider other independent registered public accounting firms.
The Board of Directors recommends that
stockholders vote “FOR” the ratification of the appointment of the independent registered public accounting firm.
ITEM 3—ADVISORY
VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the “Dodd-Frank Act”) requires, beginning in 2013, that we provide our stockholders with the
opportunity to express their views, on a non-binding advisory basis, on the compensation of the named executive officers as disclosed
in this proxy statement. This vote, which is often referred to as the “say-on-pay” vote, provides stockholders with
the opportunity to endorse or not endorse the following resolution:
“Resolved, that the stockholders approve the
compensation of the named executive officers, as described in the tabular disclosure regarding named executive officer compensation
and the accompanying narrative disclosure in this proxy statement.”
At the Annual Meeting of Kentucky First
Federal Bancorp in 2013, shareholders were asked to vote on the frequency this vote should be held. Upon the recommendation of
the Board, the shareholders voted to hold this vote annually.
Because your vote is advisory, it will not
be binding upon the Board of Directors. However, the Compensation Committee will take into account the outcome of the vote when
considering future executive compensation arrangements.
The Board of Directors recommends a vote
“FOR” approval of the compensation of the named executive officers.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table is furnished for the
individual serving as the principal executive officer of the Company during the year ended June 30, 2016 and for the two other
most highly compensated executive officers of the Company who received a salary of $100,000 or more during the year ended June
30, 2016.
Name and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
All Other
Compensation
($) (1)
|
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Don D. Jennings
|
|
|
2016
|
|
|
|
187,500
|
|
|
|
9,320
|
|
|
|
196,820
|
|
Chief Executive Officer of Kentucky First Federal Bancorp and First Federal Savings Bank of Kentucky; Chairman of First Federal Savings Bank of Kentucky.
|
|
|
2015
|
|
|
|
175,000
|
|
|
|
9,194
|
|
|
|
184,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Clay Hulette,
|
|
|
2016
|
|
|
|
169,033
|
|
|
|
9,227
|
|
|
|
178,260
|
|
Vice
President, Chief Financial Officer and Treasurer
of Kentucky First Federal Bancorp; Area President and Director of First Federal Savings Bank of Kentucky
|
|
|
2015
|
|
|
|
159,090
|
|
|
|
8,685
|
|
|
|
167,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William H. Johnson,
|
|
|
2016
|
|
|
|
136,823
|
|
|
|
9,045
|
|
|
|
145,868
|
|
Vice
President of Kentucky First Federal Bancorp; Area President and Director of First Federal Savings Bank of Kentucky
|
|
|
2015
|
|
|
|
132,677
|
|
|
|
9,204
|
|
|
|
141,881
|
|
|
(1)
|
Details of the amounts reported in the “All Other Compensation” column for 2016 are
provided in the table below.
|
|
|
Don
D. Jennings
|
|
|
R.
Clay Hulette
|
|
|
William
H. Johnson
|
|
|
|
|
|
|
|
|
|
|
|
Medical Insurance
|
|
$
|
7,380
|
|
|
$
|
7,376
|
|
|
$
|
6,686
|
|
Cell Phone Usage
|
|
|
0
|
|
|
|
0
|
|
|
|
906
|
|
Disability Insurance
|
|
|
980
|
|
|
|
891
|
|
|
|
721
|
|
Parking
|
|
|
312
|
|
|
|
312
|
|
|
|
0
|
|
Life Insurance
|
|
|
648
|
|
|
|
648
|
|
|
|
460
|
|
Dental Insurance
|
|
|
0
|
|
|
|
0
|
|
|
|
272
|
|
Total
|
|
$
|
9,320
|
|
|
$
|
9,227
|
|
|
$
|
9,045
|
|
Executive officers receive indirect compensation
in the form of certain perquisites and other personal benefits. The amount of such benefits received by any named executive officer
in fiscal 2016 did not exceed $10,000.
Employment Agreements
The Company and First Federal of Kentucky
have entered into separate employment agreements with Don D. Jennings, President and Chief Operating Officer of Kentucky First
Federal Bancorp and Chairman and Chief Executive Officer of First Federal of Kentucky, with R. Clay Hulette, Vice President and
Chief Financial Officer of Kentucky First Federal Bancorp and Frankfort Area President of First Federal of Kentucky, and William
H. Johnson, Vice President and Danville-Lancaster Area President of First Federal of Kentucky. Such employment agreements
are referred to herein as the “Agreements.” The Agreements provide for three-year terms, expiring on August 15, 2019,
renewable on an annual basis for an additional year upon review and extension by the respective Boards of Directors of Kentucky
First Federal Bancorp and First Federal of Kentucky. The Agreements establish a base salary of $190,000, $171,022, and $137,652
for Messrs. Jennings, Hulette, and Johnson respectively. In addition to establishing a base salary, the Agreements provide
for, among other things, participation in stock-based and other benefit plans, as well as certain fringe benefits.
The Agreements also provide that Kentucky
First Federal Bancorp and First Federal of Kentucky may terminate the employment of Messrs. Jennings, Hulette, or Johnson for cause,
as defined in the Agreements, at any time. No compensation or benefits are payable upon termination of either officer for
cause. Each of the officers may also voluntarily terminate his employment by providing 90 days prior written notice.
Upon voluntary termination, the officer receives only compensation and vested benefits through the termination date.
The Agreements terminate upon the officer’s
death, and his estate receives any compensation due through the last day of the calendar month of death. The Agreements also
allow the appropriate Boards to terminate the employment of Messrs. Jennings, Hulette, or Johnson due to disability, as defined
in the Agreements. A disabled executive receives any compensation and benefits provided for under the agreement for any period
prior to termination during which the executive was unable to work due to disability. Messrs. Jennings, Hulette, and Johnson
also may receive disability benefits under First Federal of Kentucky’s long-term disability plan(s) without reduction for
any payments made under the Agreement. During a period of disability, to the extent reasonably capable of doing so, the officer
agrees to provide assistance and undertake reasonable assignments for the employers.
The Agreements also require Messrs. Jennings
and Hulette to agree not to compete with Kentucky First Federal Bancorp, First Federal of Hazard or First Federal of Kentucky for
one year following a termination of employment, other than in connection with a change in control. Kentucky First Federal
Bancorp or First Federal of Kentucky will pay or reimburse Messrs. Jennings, Hulette, and Johnson for all reasonable costs and
legal fees paid or incurred by him in any dispute or question of interpretation regarding the Agreements, if the executive is successful
on the merits in a legal judgment, arbitration proceeding or settlement. The Agreements also provide Messrs. Jennings, Hulette,
and Johnson with indemnification to the fullest extent legally allowable.
Under
the Agreements, if either Kentucky First Federal Bancorp or First Federal of Kentucky terminates the employment of Messrs. Jennings,
Hulette, or Johnson without cause, or if Messrs. Jennings, Hulette, or Johnson resigns under specified circumstances that constitute
constructive termination, he receives his base salary and continued employee benefits for the remaining term of the Agreement,
as well as continued health, life and disability coverage under the same terms such coverage is provided to other senior executives,
or comparable individual coverage.
Under
the Agreements, if, within one year after a change in control (as defined in the Agreements), either of Messrs. Jennings, Hulette,
or Johnson voluntarily terminates his employment under circumstances discussed in the Agreement, or involuntarily terminates employment,
the executive receives a cash payment equal to three times his average annual compensation over the five most recently completed
calendar years preceding the change in control. He also receives continued employee benefits and health, life and disability insurance
coverage for thirty-six months following termination of employment.
Section
280G of the Internal Revenue Code provides that severance payments that equal or exceed three times the individual’s “base
amount” are deemed to be “excess parachute payments” if they are contingent upon a change in control. Individuals
receiving excess parachute payments are subject to a 20% excise tax on the amount of the payment in excess of their base amount,
and the employer is not entitled to deduct any parachute payments over the base amount. The Agreements limit payments made to
Messrs. Jennings, Hulette, or Johnson in connection with a change in control to amounts that will not exceed the limits imposed
by Section 280G.
Outstanding Equity Awards at Fiscal Year End
There were no outstanding equity awards
at the year ended June 30, 2016. All options awarded in the 2005 Equity Incentive Plan expired during the year unexercised.
Retirement Plan
Messrs. Jennings, Hulette and Johnson participate
in the Financial Institution Retirement Plan (the “Retirement Plan”) to provide retirement benefits for eligible employees.
Employees are eligible to participate in the Retirement Plan after the completion of one year of employment and attainment of age
21. The formula for normal retirement benefits payable annually 1.50%, under the First Federal of Kentucky Retirement Plan, of
the average of the participant’s highest five years of compensation multiplied by the participant’s years of service.
Beneficiaries under the First Federal of Kentucky Retirement Plan may have the option of receiving all or some benefits in a lump
sum.
The present value of accumulated benefits
for the First Federal of Kentucky Retirement Plan is calculated using the accrued benefit multiplied by a present value factor
based on an assumed age 65 retirement date, the 1994 Group Annuity Mortality table projected five years and an interest rate of
5.00% for 50% of the benefit and 7.75% for 50% of the benefit, discounted to current age at an assumed interest rate of 7.75%.
OTHER INFORMATION
RELATING TO DIRECTORS AND EXECUTIVE OFFICERS
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to regulations promulgated under
the Securities Exchange Act of 1934, as amended, the Company’s officers and directors and all persons who own more than
10% of the Common Stock (“Reporting Persons”) are required to file reports detailing their ownership and changes of
ownership in the Common Stock and to furnish the Company with copies of all such ownership reports that are filed. Based solely
on the Company’s review of the copies of such ownership reports which it has received in the past fiscal year or with respect
to the past fiscal year, or written representations that no annual report of changes in beneficial ownership were required, the
Company believes that during fiscal year 2015 all Reporting Persons have complied with these reporting requirements.
Transactions with Related Persons
First Federal of Hazard and First Federal
of Kentucky both offer loans to their directors and executive officers. These loans were made in the ordinary course of business
on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions
with other persons and did not involve more than the normal risk of collectability or present other unfavorable features. Under
current law, the Banks’ loans to directors and executive officers are required to be made on substantially the same terms,
including interest rates and collateral, as those prevailing for comparable transactions with other persons who are not related
to the lender and must not involve more than the normal risk of repayment or present other unfavorable features. Furthermore,
all loans to such persons must be approved in advance by a disinterested majority of the Company’s Board of Directors. At
June 30, 2016, loans to directors and executive officers and their affiliates totaled $1,043,333, or 1.5%, of the Company’s
stockholders’ equity, at that date. Any transaction with a director, nominee for director, executive officer or 5% stockholder
or with a family member of any such person must be approved in advance by the Audit Committee of the Board of Directors.
SUBMISSION OF BUSINESS
PROPOSALS AND STOCKHOLDER NOMINATIONS
For consideration at the Annual Meeting,
a stockholder proposal must be delivered or mailed to the Company’s Secretary no later than October 24, 2016. In order to
be eligible for inclusion in the proxy materials of the Company for the Annual Meeting of Stockholders for the fiscal year ending
June 30, 2017, any stockholder proposal to take action at such meeting must be received at the Company’s executive offices
at P.O. Box 535, Frankfort, Kentucky 40602 by no later than June 16, 2017
.
Any such proposals shall be subject to the requirements
of the proxy rules adopted under the Exchange Act.
STOCKHOLDER COMMUNICATIONS
The Board of Directors maintains a process
for stockholders to communicate with the Board of Directors. Stockholders wishing to communicate with the Board of Directors should
send any communication to Secretary, Kentucky First Federal Bancorp, P.O. Box 535, Frankfort, Kentucky, 40602. All communications
that relate to matters that are within the scope of the responsibilities of the Board and its committees are to be presented to
the Board no later than its next regularly scheduled meeting. Communications that relate to matters that are within the responsibility
of one of the Board committees are also to be forwarded to the Chair of the appropriate committee. Communications that relate to
ordinary business matters that are not within the scope of the Board’s responsibilities, such as customer complaints, are
to be sent to the appropriate officer. Solicitations, junk mail and obviously frivolous or inappropriate communications are not
to be forwarded, but will be made available to any director who wishes to review them.
MISCELLANEOUS
The Company will pay the cost of this proxy
solicitation. The Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial owners of common stock. In addition to solicitations by mail, directors,
officers and regular employees of the Company may solicit proxies personally or telephone without additional compensation.
The Company’s 2016
Annual Report to Stockholders, including financial statements, has been mailed to all stockholders of record as of the close of
business on September 30, 2016. Any stockholder who has not received a copy of such Annual Report may obtain a copy by writing
to the Secretary of the Company. The Annual Report is not to be treated as a part of the proxy solicitation material or as having
been incorporated herein by reference.
If you and others who share your address
own your shares in street name, your broker or other holder of record may be sending only one annual report and proxy statement
to your address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However,
if a stockholder residing at such an address wishes to receive a separate annual report or proxy statement in the future, he or
she should contact the broker or other holder of record. If you own your shares in street name and are receiving multiple copies
of our annual report and proxy statement, you can request householding by contacting your broker or other holder of record.
A copy of the Company’s Annual
Report on Form 10-K for the fiscal year ended June 30, 2016 as filed with the Securities and Exchange Commission will be furnished
without charge to each stockholder as of the Record Date upon written request to the Secretary, Kentucky First Federal Bancorp,
P.O. Box 535, Frankfort, KY 40602.
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BY ORDER OF THE BOARD OF DIRECTORS
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Lee Ann Hockensmith
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Secretary
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October 14, 2016
Frankfort, Kentucky
Dear Participant,
As a participant in
the
Kentucky First Federal Bancorp Employee Stock Ownership Plan
(the “ESOP”) you are entitled to direct
Pentegra Trust Company (the “ESOP Trustee”) how to vote the shares of Kentucky First Federal Bancorp (the “Company”)
common stock allocated to your ESOP account on the proposals presented at the Annual Meeting of Stockholders of the Company on
November 15, 2016 (the “Annual Meeting”).
The ESOP Trustee will
vote all allocated shares of Company common stock as directed by the ESOP participants. The ESOP Trustee will vote unallocated
shares of Company common stock held in the ESOP Trust and the allocated shares for which timely instructions are not received in
a manner calculated to most accurately reflect the instructions the ESOP Trustee receive from participants, subject to their fiduciary
duties.
HOW TO EXERCISE YOUR
VOTING INSTRUCTION RIGHTS
The enclosed ESOP Voting
Instruction Card allows you to transmit your voting instructions to the ESOP Trustee via U.S. Mail (a postage-paid envelope is
provided), the Internet or by telephone.
Please note that to direct the ESOP Trustee to vote with respect to any of the proposals
presented at the Annual Meeting, you must provide specific instructions, electing not to vote on a matter is not considered an
instruction to the ESOP Trustee.
CONFIDENTIALITY OF
VOTING INSTRUCTIONS
Your specific voting
instructions to the ESOP Trustee will be completely confidential. The ESOP Trustee will tabulate the voting instructions provided
by ESOP participants and has agreed to maintain your voting instructions in strict confidence. In no event will your specific voting
instructions be reported to any employee or director of the Company, First Federal Savings Bank of Kentucky or First Federal Savings
and Loan Association of Hazard.
DELIVERY OF PROXY
MATERIALS
A copy of the Company’s
Annual Meeting Proxy Statement (“Proxy Statement”) and a copy of its 2016 Annual Report to Shareholders are enclosed
for your review. As noted in the Proxy Statement, the Annual Meeting is scheduled for Monday, November 15, 2016, at 4:00 p.m.,
local time, at the Challenger Learning Center on the campus of Hazard Community and Technical College located at One Community
College Drive, Hazard, Kentucky.
DEADLINE FOR PROVIDING
YOUR VOTING INSTRUCTIONS
Your voting instructions
must be received by Pentegra by
11:59 p.m. Eastern Time on November 7, 2016
.
Sincerely,
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Don D. Jennings
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President and Chief Executive Officer
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