SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by the Registrant
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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
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KENTUCKY FIRST FEDERAL BANCORP
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
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Check box if any part of the fee is offset as
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previous filing by registration statement number, or the Form or
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Parent Company of
First Federal Savings and Loan of Hazard
and First Federal Savings Bank of Kentucky
October 13, 2017
Dear Shareholder:
We invite you to attend the annual meeting of stockholders of
Kentucky First Federal Bancorp 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
Thursday, November 16, 2017 at 3:30 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
Chief Executive Officer
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KENTUCKY FIRST FEDERAL
BANCORP
655 Main Street
P.O. Box 1069
Hazard, Kentucky 41702
____________________
NOTICE OF 2017 ANNUAL
MEETING OF STOCKHOLDERS
____________________
TIME
AND DATE
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3:30 p.m. on Thursday, November 16,
2017
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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) To elect two directors to serve for
terms of three years each;
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(2) To ratify the selection of BKD, LLP as
our independent registered public accounting firm for the fiscal
year ending June 30, 2018;
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(3) To vote on a non-binding resolution to
approve the compensation of the named executive
officers;
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(4) Such other business as may properly
come before the meeting. Note: 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 29,
2017.
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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 13, 2017
KENTUCKY FIRST FEDERAL
BANCORP
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 2017 annual
meeting of stockholders 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
Thursday, November 16, 2017, at 3:30 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 13,
2017.
NOTICE OF AVAILABILITY
OF PROXY MATERIALS
Important Notice
Regarding the Availability of Proxy Materials for the Annual
Meeting of Stockholders to be Held on November 16, 2017.
The proxy statement and the 2017 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 29, 2017. As of the close of business on September 29,
2017 (the “Record Date”), a total of 8,444,515 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;
•
Indirectly through a broker, bank or other holder of record in
“street name”; or
•
Indirectly in the Kentucky First Federal Bancorp Employee Stock
Ownership Plan.
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 the Company’s 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.
1
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 the
Company’s common stock, the votes it casts will insure the
presence of a quorum.
Votes Required for Proposals
.
At this
year’s annual meeting, stockholders will elect two 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 BKD, 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
.
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:
•
“FOR” each
of the nominees for director;
•
“FOR”
ratification of BKD, LLP as the Company’s independent
registered public accounting firm for the fiscal year ending June
30, 2018; and
•
“FOR” the
approval of the compensation of the named executive
officers.
2
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 Company 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.
The deadline for
returning your voting instruction card is November 6,
2017.
3
CORPORATE GOVERNANCE AND
BOARD MATTERS
Director
Independence
The Company’s Board of Directors currently consists of eight
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 Savings and Loan
Association of Hazard (“First Federal of Hazard”) for
services provided to First Federal of Hazard during the year ended
June 30, 2017.
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 eight directors, five 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.
4
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.
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., 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.,
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., 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
5
director nominee no later than the July 1
st
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:
•
The name of the person recommended as a director candidate;
•
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;
•
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;
•
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
•
A statement disclosing whether such stockholder is acting with or
on behalf of any other person and, if applicable, the identity of
such person.
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, 2017,
the Board of Directors of the Company met five 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, 2017 and the total number of meetings held by Committees on
which he served during such fiscal year.
6
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 2016 annual meeting of
stockholders held on November 14, 2016.
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 2017 fiscal year. This table includes compensation for
services performed by non-employee directors of the Company for
First Federal of Hazard and First Federal Savings Bank of Kentucky
(“First Federal of Kentucky”). See the section on
“Meeting Fees for Non-Employee Directors” for detailed
compensation earned by non-employee directors. This table excludes
perquisites, which did not exceed $10,000 in the aggregate for each
director. During the year ended June 30, 2017, all options held by
directors expired unexercised.
|
|
Fees
Earned or Paid in Cash
($)
|
|
|
Stephen G. Barker
|
|
18,000
|
|
18,000
|
Walter G. Ecton, Jr.
|
|
18,000
|
|
18,000
|
William D. Gorman, Jr.
|
|
18,000
|
|
18,000
|
David R. Harrod
|
|
18,000
|
|
18,000
|
C. Michael Davenport
|
|
18,000
|
|
18,000
|
W. Banks Hudson
(1)
|
|
23,400
|
|
23,400
|
Tony D. Whitaker
|
|
10,800
|
|
10,800
|
Meeting Fees for Non-Employee Directors.
The following
tables set forth the applicable retainers and fees that are paid to
all non-employee directors for their service on the boards of
directors of the Company, First Federal of Hazard and First Federal
of Kentucky. Officers of the Company who are directors are not
compensated for their service as directors. Officers of either Bank
who are also directors are not compensated for their service as
directors.
Board of Directors of Kentucky First Federal
Bancorp:
|
|
|
|
Fee per month
|
|
$
|
600
|
There is no
additional compensation for attendance at committee
meetings.
|
|
|
|
|
|
|
|
Board of Directors of First Federal of
Hazard:
|
|
|
|
Fee per month
|
|
$
|
900
|
Fee per Committee
Meeting:
|
|
|
|
Executive Committee
|
|
$
|
0
|
All Other
Committees
|
|
$
|
400
|
|
|
|
|
Board of Directors of First Federal of
Kentucky:
|
|
|
|
Fee per month
|
|
$
|
900
|
Fee per Committee
Meeting:
|
|
|
|
Executive Committee
|
|
$
|
0
|
All Other
Committees
|
|
$
|
100
|
7
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, 2017 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 BKD, LLP as the Company’s
independent registered public accounting firm for the 2018 fiscal
year.
8
Members of the Audit
Committee
David R. Harrod
(Chairman)
C. Michael Davenport
Walter G. Ecton, Jr.
William D. Gorman, Jr.
Auditor Fees
The following table sets forth the fees billed to the Company for
the fiscal years ended June 30, 2017 and 2016 by Crowe Horwath,
LLP:
|
|
|
|
|
Audit fees
(1)
|
|
$
|
79,500
|
|
$
|
78,800
|
Audit-related fees
(2)
|
|
|
16,300
|
|
|
16,000
|
Tax fees
(3)
|
|
|
—
|
|
|
8,600
|
All other fees
|
|
|
—
|
|
|
—
|
Total
|
|
$
|
95,800
|
|
$
|
103,400
|
On September 29, 2017, the Company dismissed Crowe Horwath, LLP
(“Crowe”) based on the recommendation of the Audit
Committee of the Board of Directors and formally notified Crowe
that they would not be retained as the Company’s independent
registered public accounting firm for the fiscal year ending June
30, 2018.
Crowe’s reports on the Company’s financial statements
for the fiscal years ended June 30, 2017 and 2016 did not contain
an adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope, or accounting
principles. During the Company’s two most recent fiscal year
ends (the fiscal years ended June 30, 2017 and 2016) and through
September 29, 2017, there were no disagreements with Crowe on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of Crowe, would have caused Crowe
to make reference to the subject matter of the disagreements in
their report on the financial statements for such years. During the
Company’s two most recent fiscal year ends (the fiscal years
ended June 30, 2017 and 2016) and through September 29, 2017, there
were no “reportable events” as defined in Item
304(a)(1)(v) of Regulation S-K.
On September 28, 2017, based on the recommendation of the Audit
Committee of the Board of Directors, the Company engaged BKD, LLP
to conduct the audit of the Company’s consolidated financial
statements for the fiscal year ending June 30, 2018.
During the Company’s two most recent fiscal year ends (the
fiscal years ended June 30, 2017 and 2016) and through September
29, 2017, the Company did not consult with BKD, LLP, regarding
application of accounting principles to any specified transaction
or the type of report that might be rendered on the Company’s
financial statements or any other matters or “reportable
events” as defined in Item 304(a)(2) of Regulation S-K.
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 2017 and 2016
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 BKD LLP to prepare the Company’s consolidated
tax return for the year ending June 30, 2018.
9
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, 2017 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
of Beneficial Ownership
(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
|
(3)
|
|
1.4
|
|
Don D. Jennings
|
|
65,071
|
|
|
*
|
|
Stephen G. Barker
|
|
28,731
|
|
|
*
|
|
Walter G. Ecton, Jr.
|
|
23,202
|
(4)
|
|
*
|
|
William D. Gorman, Jr.
|
|
11,666
|
|
|
*
|
|
David R. Harrod
|
|
9,495
|
|
|
*
|
|
William H. Johnson
|
|
42,927
|
|
|
*
|
|
C. Michael Davenport
|
|
39,606
|
(5)
|
|
*
|
|
|
|
|
|
|
|
|
Executive Officers Who Are Not
Directors
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Clay Hulette
|
|
56,937
|
(6)
|
|
*
|
|
Lou Ella Farler
|
|
32,808
|
|
|
*
|
|
|
|
|
|
|
|
|
All directors, nominees, and executive officers
of the Company as a group (10) persons)
|
|
436,958
|
(7)
|
|
5.2
|
|
10
ITEMS TO BE VOTED ON BY
STOCKHOLDERS
ITEM 1 — ELECTION
OF DIRECTORS
The Company’s Board of Directors consists of eight members
and is divided into three equal classes with approximately
one-third of the directors elected each year. At the annual
meeting, two directors will be elected for a term expiring at the
2020 annual meeting of stockholders. The Nominating/Corporate
Governance Committee of the Board of Directors has nominated Walter
G. Ecton, Jr., and C. Michael Davenport, 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. On June 30, 2017, W. Banks
Hudson retired from the Board of Directors. The Board of Directors
elected not to fill the vacancy and the size of the Board was
reduced to eight members.
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. Ecton
and Davenport
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 29, 2017. 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:
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
58.
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 63.
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.
11
Directors Continuing in Office
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 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, Executive Vice President 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. Barker 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 63. 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 serves as Chairman of the Audit Committee of Kentucky First
Federal Bancorp. Age 58. 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 72.
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.
12
The following directors have terms ending in 2019:
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 68. 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 the Government
Relations Committee and previously served on the Board of the
Kentucky Bankers Association. Age 52. 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 67. 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.
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 55.
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 60.
13
ITEM 2 —
RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit Committee of the Board of Directors has appointed BKD,
LLP to be the Company’s independent registered public
accounting firm for the fiscal year ending June 30, 2018, subject
to ratification by stockholders. There are no plans for a
representative of BKD, LLP to be present at the 2017 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.
14
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, 2017 and for the two other most highly compensated
executive officers of the Company who received a salary of $100,000
or more during the year ended June 30, 2017.
Name
and Principal Position
|
|
|
|
|
|
All
Other Compensation
($)
(1)
|
|
|
Don D. Jennings
|
|
2017
|
|
190,000
|
|
19,643
|
|
209,643
|
Chief Executive Officer of Kentucky First Federal Bancorp
and First Federal Savings Bank of Kentucky; Chairman of First
Federal Savings Bank of Kentucky.
|
|
2016
|
|
187,500
|
|
9,320
|
|
196,820
|
|
|
|
|
|
|
|
|
|
R. Clay Hulette,
|
|
2017
|
|
171,022
|
|
18,106
|
|
189,128
|
Vice
President, Chief
Financial Officer and Treasurer
of Kentucky First
Federal Bancorp; Area President and Director of First Federal
Savings Bank of Kentucky
|
|
2016
|
|
169,033
|
|
9,227
|
|
178,260
|
|
|
|
|
|
|
|
|
|
William H. Johnson,
|
|
2017
|
|
137,652
|
|
16,343
|
|
153,995
|
Vice
President of Kentucky
First Federal Bancorp; Area President and Director of First Federal
Savings Bank of Kentucky
|
|
2016
|
|
136,823
|
|
9,045
|
|
145,868
|
Employment
Agreements
The Company and First Federal of Kentucky each maintain 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 and are currently set to expire on August 15, 2020, unless
otherwise renewed by the respective Boards of Directors. The
current base salary under the agreements for Messrs. Jennings,
Hulette, and Johnson are $190,000, $171,022, and $137,652,
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
15
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,
2017.
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%.
16
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 2017 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, 2017, loans to
directors and executive officers and their affiliates totaled
$1,010,033, 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.
17
SUBMISSION OF BUSINESS
PROPOSALS AND STOCKHOLDER NOMINATIONS
The Company must receive proposals that stockholders seek to
include in the proxy statement for the Company’s next annual
meeting no later than June 15, 2018. If next year’s annual
meeting is held on a date more than 30 calendar days from November
16, 2018, a stockholder proposal must be received by a reasonable
time before the Company begins to print and mail its proxy
solicitation material for such annual meeting. Any stockholder
proposals will be subject to the requirements of the proxy rules
adopted by the Securities and Exchange Commission.
The Company’s Bylaws provides that in order for a stockholder
to make nominations for the election of directors or proposals for
business to be brought before the annual meeting, a stockholder
must deliver notice of such nominations and/or proposals to the
Secretary not less than 30 days before the date of the annual
meeting; provided that if less than 40 days’ notice or prior
public disclosure of the date of the annual meeting is given to
stockholders, such notice must be received not later than the close
of business on the tenth day following the day on which notice of
the date of the annual meeting was mailed to stockholders or prior
public disclosure of the meeting date was made. A copy of the
Bylaws may be obtained from the Company.
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.
18
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 2017 Annual Report to Stockholders, including
financial statements, has been mailed to all stockholders of record
as of the close of business on September 29, 2017. 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, 2017 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.
|
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
|
|
|
|
|
Lee Ann Hockensmith
|
|
|
Secretary
|
October 13, 2017
Frankfort, Kentucky
19
[KENTUCKY FIRST FEDERAL
BANCORP LETTERHEAD]
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 16,
2017 (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 2017 Annual
Report to Shareholders are enclosed for your review. As noted in
the Proxy Statement, the Annual Meeting is scheduled for Thursday,
November 16, 2017, at 3:30 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 6, 2017
.
Sincerely,
Don D. Jennings
President and Chief Executive Officer