UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒
Filed by a party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under § 240.14a-12 |
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 all boxes that apply):
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a- 6(i)(1) and 0-11 |
Parent Company of First Federal Savings and
Loan of Hazard
and First Federal Savings Bank of Kentucky
October 16, 2023
Dear Stockholder:
We invite you to attend the annual meeting of stockholders
of Kentucky First Federal Bancorp to 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, 2023, at 4:30 p.m., Eastern time.
The attached proxy statement and accompanying notice
of annual meeting describe in detail 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 Kentucky First Federal Bancorp, 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. Voting by proxy 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 Kentucky First Federal, First Federal of Hazard and First Federal of Kentucky, we wish to thank you for your continued support.
| Sincerely, |
|
Sincerely, |
| |
|
|
| /s/ Tony D.
Whitaker | |
/s/ Don D.
Jennings |
| Tony D. Whitaker |
|
Don D. Jennings |
| Chairman of the Board |
|
President and |
| |
|
Chief Executive Officer |
KENTUCKY FIRST FEDERAL BANCORP
655 Main Street
P.O. Box 1069
Hazard, Kentucky 41702
NOTICE OF 2023 ANNUAL MEETING OF STOCKHOLDERS
| TIME AND DATE |
4:30
p.m. on Thursday, November 16, 2023 |
| |
|
| PLACE |
Challenger
Learning Center |
| |
Hazard
Community and Technical College Campus |
| |
One
Community College Drive |
| |
Hazard,
Kentucky 41701 |
| |
|
| ITEMS OF BUSINESS |
(1) |
To
elect two directors to serve for a term of three years; |
| |
|
|
| |
(2) |
To
ratify the selection of FORVIS, LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2024; |
| |
|
|
| |
(3) |
To
vote on a non-binding resolution to approve the compensation of the named executive officers; and |
| |
(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. |
| RECORD DATE |
In
order to vote, you must have been a stockholder at the close of business on September 29, 2023. |
| |
|
| PROXY VOTING |
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 proxy statement and the enclosed proxy card are also available on the Internet
at https://materials.proxyvote.com/491292. |
| |
|
| |
BY
ORDER OF THE BOARD OF DIRECTORS |
| |
|
| |
/s/
Lee
Ann Hockensmith |
| |
Lee
Ann Hockensmith |
| |
Secretary |
Hazard,
Kentucky
October
16, 2023
KENTUCKY FIRST FEDERAL BANCORP
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 (“Kentucky First Federal”
or “the Company”) for the 2023 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, 2023, at 4:30 pm., 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 16, 2023.
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, 2023.
The proxy statement and the 2023 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 the Company’s common stock that you owned as of the close of business on September 29, 2023. As of the close of business
on September 29, 2023 (the “Record Date”), a total of 8,086,715 shares of the Company’s common stock were outstanding.
Each share of common stock is entitled to one vote.
Ownership
of Shares; Attending the Meeting
You
may own shares of Kentucky First Federal in one of the following ways:
| ● | 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 Employee Stock Ownership Plan (“ESOP”). |
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 Employee Stock Ownership Plan”
for information on how to vote the shares of Company common stock credited to your ESOP account.
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 a term of three
years. In voting on the election of directors, you may vote in favor of the nominees or withhold your vote 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 FORVIS, 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 represented at the annual meeting and entitled to vote on the proposal.
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 represented at the annual meeting and entitled to vote on the proposal 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 or the non-binding resolution to approve the compensation
of the named executive officers, abstentions will count as votes against the proposal, 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 the Company 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”
election of our nominees for director; |
| ● | “FOR”
ratification of FORVIS, LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30,
2024; and |
| ● | “FOR”
the approval of the compensation of the named executive officers. |
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 Employee Stock Ownership Plan
If
you are an ESOP participant you will receive a voting instruction card that reflects the shares of Company common stock credited to
your ESOP account that 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. As of December 31,
2022, all shares of Company common stock held in the ESOP Trust have been allocated. Please return your ESOP voting instruction
card in the envelope provided on or before November 8, 2023.
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 the law firm, Stephen G. Barker, Attorney
at Law, of which he is the sole owner, received $32,760 in 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, 2023.
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 now serves as President and Chief Executive Officer
of the Company and has done so since December 31, 2012. 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. Our Compensation
Committee reviews our compensation policies and practices to help ensure there is a direct relationship between pay levels and corporate
performance and return to shareholders . 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.
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., Lou Ella R. Farler, and William D.
Gorman, Jr. The committee met four 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.
Compensation
Committee. The Compensation Committee is comprised of Chairman William D. Gorman, Jr., Lou Ella R. Farler, David R. Harrod, 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.
Nominating/Corporate
Governance Committee. The Nominating/Corporate Governance Committee is comprised of Chairman Walter G. Ecton, Jr., Lou Ella R.
Farler, David R. Harrod, and William D. Gorman, Jr. 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.
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:
| ● | 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, 2023, the
Board of Directors of the Company met nine 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, 2023 and the total number of meetings held by Committees on which they
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. All of the directors attended
the Company’s 2022 annual meeting of stockholders held on November 17, 2022. Due to COVID-19 concerns, some directors attended
that meeting by phone.
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 2023
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 $10,000
in the aggregate for each director.
| Name | |
Fees Earned
or Paid in
Cash ($) | | |
Total
($) | |
| Stephen G. Barker | |
| 18,400 | | |
| 18,400 | |
| Walter G. Ecton, Jr. | |
| 18,400 | | |
| 18,400 | |
| Lou Ella R. Farler | |
| 18,400 | | |
| 18,400 | |
| William D. Gorman, Jr. | |
| 18,400 | | |
| 18,400 | |
| David R. Harrod | |
| 18,000 | | |
| 18,000 | |
| William H. Johnson | |
| 18,000 | | |
| 18,000 | |
| Tony D. Whitaker (1) | |
| 11,200 | | |
| 11,200 | |
| (1) | Mr.
Whitaker also serves as executive Chairman to the Company and First Federal of Hazard, pursuant
to which he regularly advises the Chief Executive Officers on strategic and operational matters.
Mr. Whitaker receives a salary of $55,000 per year for these services, which amount is not
included in the table above. As an employee of the Company and First Federal of Hazard, Mr.
Whitaker participates in the employer-sponsored dental insurance, cancer insurance and medical
transport plans at no cost to his employers. |
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 | |
| |
| 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 (1) | |
$ | 400 | |
| | |
| | |
| Board of Directors of First Federal of Kentucky | |
| | |
| Fee per month | |
$ | 900 | |
| Fee per Committee Meeting (1) | |
$ | 100 | |
| (1) |
Non-employee directors receive a per committee fee for committee meetings held on days on which the board does not meet, except for Executive
Committee meetings for which they are not compensated. |
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 the Public Accounting Oversights Board Auditing Standard No. 1301
(Communication with Audit Committees), 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, 2023 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 FORVIS, LLP as the Company’s independent registered public accounting
firm for the 2024 fiscal year.
Members
of the Audit Committee
David
R. Harrod (Chairman)
Walter
G. Ecton, Jr.
Lou
Ella R. Farler
William
D. Gorman, Jr.
Auditor
Fees
The
following table sets forth the fees billed to the Company for the fiscal years ended June 30, 2023 and June 30, 2022 by FORVIS, LLP.
| | |
2023 | | |
2022 | |
| Audit fees (1) | |
$ | 97,000 | | |
$ | 88,400 | |
| Audit-related fees (2) | |
| 19,000 | | |
| 16,848 | |
| Tax fees (3) | |
| 0 | | |
| 14,560 | |
| All other fees | |
| — | | |
| — | |
| Total | |
$ | 116,000 | | |
$ | 119,808 | |
| (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) | Beginning
with the 2023 fiscal year, the Company contracted with Mountjoy Chilton Medley, LLP, now
known as Cherry Bekaert, to assist in tax preparation. |
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 2023 and 2022 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.
STOCK
OWNERSHIP
The
following table sets forth certain information regarding the beneficial ownership of our common stock as of September 29, 2023 by (i)
persons known to the Company who beneficially own more than 5% of our common stock, (ii) each of the Company’s directors, (iii)
the non-director executive officers, and (iv) by all directors and executive officers as a group.
| | |
Amount
and
Nature of
Beneficial
Ownership(1) | | |
Percent of
Class(2) | |
| Persons
Owning Greater than 5%: | |
| | | |
| | |
| | |
| | | |
| | |
| First Federal MHC | |
| 4,727,938 | | |
| 57.9 | % |
| 655 Main Street | |
| | | |
| | |
| P.O. Box 1069 | |
| | | |
| | |
| Hazard, Kentucky 41702 | |
| | | |
| | |
| | |
| | | |
| | |
| Directors: | |
| | | |
| | |
| | |
| | | |
| | |
| Tony D. Whitaker | |
| 117,124 | (3) | |
| 1.5 | |
| Don D. Jennings | |
| 76,619 | | |
| 1.0 | |
| Stephen G. Barker | |
| 28,731 | | |
| * | |
| Walter G. Ecton, Jr. | |
| 25,052 | (4) | |
| * | |
| Lou Ella R. Farler | |
| 31,671 | | |
| * | |
| William D. Gorman, Jr. | |
| 11,666 | | |
| * | |
| David R. Harrod | |
| 9,495 | | |
| * | |
| William H. Johnson | |
| 46,710 | | |
| * | |
| | |
| | | |
| | |
| Executive
Officers Who Are Not Directors: | |
| | | |
| | |
| | |
| | | |
| | |
| R. Clay Hulette | |
| 74,528 | (5) | |
| * | |
| Jaime Coffey | |
| 7,419 | | |
| * | |
| | |
| | | |
| | |
| All directors, nominees, and executive officers
of the Company as a group (10) persons) | |
| 429,015 | (6) | |
| 5.3 | |
| * | Represents
less than 1% of the shares outstanding. |
| (1) | Includes
shares allocated to the account of the individuals under the Kentucky First Federal Employee Stock Ownership Plan, with respect to which
the individual has voting but not investment power as follows: Mr. Jennings — 6,694 shares; Mr. Hulette — 5,809 shares; and
Mrs. Coffey –7,419 . |
| (2) | Based
on a total of 8,086,715 shares of Common Stock outstanding as of the Record Date. |
| (3) | Includes
15,000 shares owned by Mr. Whitaker’s spouse. |
| (4) | Includes
600 shares in Mr. Ecton’s spouse’s IRA. |
| (5) | Includes
47,029 shares owned by Mr. Hulette’s spouse. |
| (6) | Includes
62,629 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 eight members and is divided into three equal classes with approximately one-third of
the directors elected each year. The Nominating/Corporate Governance Committee of the Board of Directors has nominated Walter G. Ecton,
Jr. and Tony Whitaker to serve as directors for a three-year term or until their respective successors have been elected and qualified.
Our 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. Ecton and Whitaker.
Information
regarding the Board of Directors’ nominees for election 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, 2023. 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 Director
The
nominees for Director to serve for a three-year term expiring in 2026:
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 69. 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 Master’s 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.
Tony
D. Whitaker has served as Chairman of the of the Company since its inception in March 2005 and executive Chairman since December
31, 2012. He served as Chief Executive Officer of the Company from its inception until his retirement on December 31, 2012 and as President
and Chief Executive Officer of First Federal of Hazard from 1997 until his retirement on December 31, 2012. He also 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 77. 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 an ongoing leader of Kentucky First Federal and as such provides extremely valuable
service to our board.
Directors
Continuing in Office
The
following Directors have terms ending in 2024:
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 69. 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.
Lou
Ella R. Farler was appointed to the Company’s Board of Directors on January 27, 2022. Previously, she is retired President
and Chief Executive Officer of First Federal of Hazard and served from January 1, 2013 until her retirement on January 1, 2019. Her career
at First Federal began in 1975. She has served on the board of First Federal of Hazard since 2011. Mrs. Farler has served her community
on various civic committees and was a Hazard City Commissioner from 2002-2012. Age 66. Director since 2022.
Mrs.
Farler’s many years of banking experience and strong ties to the Hazard community are the basis for her appointment to the board
and for continued exemplary service to the organization.
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. Age 64. 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.
The
following Directors have terms ending in 2025:
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. Mr. Gorman served as President and Chief Executive Officer of Hazard Insurance Group, LLC through July 31, 2014. 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 74. 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 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 board of the Kentucky Bankers
Association and has previously served on the American Bankers Association Mutual Advisory Committee and the American Bankers Association
Government Relations Committee. Age 58. 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 and Frankfort First Bancorp and has played a major role in the structure of the entire corporation
William
H. Johnson is the retired Danville-Lancaster Area President of First Federal Savings Bank, a capacity in which he served from
January 2013 until March 2022. Previously, he served as President and Chief Executive Officer of Central Kentucky Federal Savings Bank
and CKF Bancorp from August 2005 until that bank’s merger with First Federal Savings Bank. 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 73.
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.
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 61.
Jaime
Steele Coffey has served as President and Chief Executive Officer of First Federal of Hazard since January 1, 2019. She has been
employed by the bank since 2012 and has worked in various areas including lending and compliance. She was appointed Vice President in
2016. She is a member of the Hazard Independent College Foundation Board, the Hazard Lions Club and serves on the lending committee with
Red Bud Housing, part of the Housing Development Alliance. She also serves on the Board of Directors of the Kentucky Bankers Association.
Age 44.
The
information shown below is our Board Matrix based on voluntary self-identification of each member of our Board.
Board
Diversity Matrix
| | |
As of June 30, 2023 | | |
As of June 30, 2022 | |
| Board Size: |
|
| |
| Total Number of Directors | |
8 | | |
8 | |
| Gender: | |
Male | | |
Female | | |
Non-
Binary | | |
Gender
Undisclosed | | |
Male | | |
Female | | |
Non-
Binary | | |
Gender
Undisclosed | |
| Number of directors based on gender identity | |
| 7 | | |
| 1 | | |
| 0 | | |
| - | | |
| 7 | | |
| 1 | | |
| 0 | | |
| - | |
| Number of directors who identify in any of the categories below: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| African American or Black | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Alaskan Native or American Indian | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Asian | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Hispanic or Latinx | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Native Hawaiian or Pacific Islander | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| White | |
| 7 | | |
| 1 | | |
| - | | |
| - | | |
| 7 | | |
| 1 | | |
| - | | |
| - | |
| Two or More Races or Ethnicities | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| LGBTQ+ | |
| | | |
| | | |
| - | | |
| | | |
| | | |
| | | |
| - | | |
| | |
| Undisclosed | |
| | | |
| | | |
| - | | |
| | | |
| | | |
| | | |
| - | | |
| | |
ITEM
2—RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee of the Board of Directors has appointed FORVIS, LLP to be the Company’s independent registered public accounting
firm for the fiscal year ending June 30, 2024, subject to ratification by stockholders. There are no plans for a representative of FORVIS,
LLP to be present at the 2023 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
Pursuant
to Section 14A of the Exchange Act and Rule 14a-21(a) thereunder, we are providing 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 compensation paid to the Company’s named executive officers, as described in the tabular disclosure regarding named
executive officer compensation and the accompanying narrative disclosure in this proxy statement is hereby
approved”
At
our prior annual meetings, our stockholders overwhelmingly approved the say on pay proposal.
At
the Annual Meeting of Kentucky First Federal in 2019, stockholders were asked to vote on the frequency this vote should be held. Upon
the recommendation of the Board, the stockholders 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 provides information concerning the total compensation awarded, earned, or paid to the principal executive officer of
the company and for the two other most highly compensated executive officers of the Company who received a salary of $100,000 or more
during the years ended June 30, 2023 and 2022.
| Name and Principal Position |
|
Year |
|
|
Salary ($) |
|
|
All Other
Compensation
($) (1) |
|
|
Total
($) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Don D. Jennings |
|
2023 |
|
|
|
190,000 |
|
|
|
13,674 |
|
|
|
203,674 |
|
| Chief Executive Officer of Kentucky First Federal and First Federal Savings Bank of Kentucky; Chairman of First Federal Savings Bank of Kentucky. |
|
2022 |
|
|
|
190,000 |
|
|
|
21,631 |
|
|
|
211,631 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| R. Clay Hulette, |
|
2023 |
|
|
|
171,022 |
|
|
|
13,123 |
|
|
|
184,145 |
|
| Vice President, Chief Financial Officer and Treasurer of Kentucky First Federal; Area President and Director of First Federal Savings Bank of Kentucky |
|
2022 |
|
|
|
171,022 |
|
|
|
19,788 |
|
|
|
190,810 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Teresa Hulette, |
|
2023 |
|
|
|
112,750 |
|
|
|
11,413 |
|
|
|
124,613 |
|
| Executive Vice President First Federal Savings Bank of Kentucky |
|
2022 |
|
|
|
107,529 |
|
|
|
15,511 |
|
|
|
123,040 |
|
| (1) | Includes
ESOP allocations for Mr. Jennings, Mr. Hulette and Mrs. Hulette, which were valued at $3,181,
$2,741, and $1,548 for 2023 and $11,244, $9,511, and $5,778 for 2022, respectively. During
fiscal 2022 and 2023, our named executive officers did not receive perquisites or other personal
benefits that exceeded the greater of $25,000 or 10% of total perquisites and personal benefits. |
Pay
Versus Performance
In
accordance with SEC rules, the following tables describe how the compensation of our named executive officers align with our performance.
| Year | |
Summary
Compensation
Table Total for
PEO ($)(1)(2) | | |
Compensation
Actually Paid to
PEO ($)(3) | | |
Average
Summary
Compensation
Table Total for
non-PEO
Named
Executive
Officers ($)(2)(4) | | |
Average
Compensation
Actually Paid
to non-PEO
Named
Executive
Officers ($)(2)(5) | | |
Value of
Initial Fixed
$100
Investment
Based on
Total
Shareholder
Return ($)(6) | | |
Net Income ($)
(in thousands)(7) | |
| 2023 | |
$ | 203,674 | | |
$ | 203,674 | | |
$ | 154,399 | | |
$ | 154,399 | | |
$ | 108.42 | | |
$ | 933 | |
| 2022 | |
$ | 211,631 | | |
$ | 211,631 | | |
$ | 156,925 | | |
$ | 156,925 | | |
$ | 120.71 | | |
$ | 1,590 | |
| (1) | As
reported in the Summary Compensation Table on page 16 of this proxy statement |
| | |
| (2) | During
fiscal years 2023 and 2022, our principal executive officer (“PEO”) was Don D.
Jennings, and our non-PEO Named Executive Officers (“non-PEO NEOs”) were R. Clay
Hulette and Teresa Hulette. |
| | |
| (3) | We
had no outstanding equity awards for fiscal years 2023 and 2022. Accordingly, no equity award
adjustments are applicable to the compensation paid to the PEO in 2023 and 2022. |
| | |
| (4) | Average
summary compensation total for non-PEO NEOs represents the average of the SCT total compensation
paid to the non-PEO NEOs during each of the years in the SCT. |
| | |
| (5) | We
had no outstanding equity awards for fiscal years 2023 and 2022. Accordingly, no equity award
adjustments are applicable to the compensation paid to the non-PEO named executive officers
in 2023 and 2022. |
| | |
| (6) | Cumulative
total shareholder return (“TSR”) assumes an initial investment of $100 investment
as of market close on June 30, 2021 |
| | |
| (7) | Net
Income as reported on page 25 of the Company’s Annual Report on Form 10-K for the fiscal
year ended June 30, 2023. |
Analysis
of the Information Presented in the Pay Versus Performance Table
We
generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with “compensation
actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v)
of Regulation S-K we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance
Table.
Compensation
Actually Paid (“CAP”) and Company TSR
TSR
amounts reported in the graph assume an initial fixed investment of $100. CAP to PEO #1, Don Jennings, was $203,674 in 2023 and $211,631
in 2022. CAP to the non-PEO NEOs averaged $154,399 in 2023 and $156,925 in 2022. The Company does not use TSR to determine compensation
levels or inventive plan payouts, therefore the PEO and non-PEO NEOs CAP does not fluctuate with changes to TSR.
Compensation Actually Paid and Net Income
CAP to PEO #1, Don Jennings, was $203,674 in 2023 and $211,631 in 2022.
CAP to the non-PEO NEOs averaged $154,399 in 2023 and $156,925 in 2022. The Company reported net income of $933 thousand in 2023 and
$1.6 million in 2022. The Company does not use net income to determine compensation levels or incentive plan payouts, therefore the PEO
and non-PEO NEOs CAP does not fluctuate with changes to net income.
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 and Chairman and Chief Executive Officer of First Federal of Kentucky and with R. Clay Hulette Vice President
and Chief Financial Officer of Kentucky First Federal and Frankfort 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, 2025, unless otherwise renewed by the respective boards of directors. The current base salary under the agreements for Messrs.
Jennings and Hulette are $190,000 and $171,022, 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.
On
September 1, 2023, Mr. Hulette notified the Board of his intention to retire as of January 2, 2024. His retirement was not the result
of any dispute or disagreement with the company. Mr. Hulette will remain a member of the board of First Federal Savings Bank of Kentucky.
His employment agreements with the Company and First Federal of Kentucky were not renewed by the Compensation Committee and will be considered
terminated at the time of his retirement.
The
Agreements also provide that Kentucky First Federal and First Federal of Kentucky may terminate the employment of Messrs. Jennings or
Hulette 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 or Hulette 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 and Hulette 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, 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 or First Federal of Kentucky will pay or reimburse Messrs. Jennings and Hulette 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 and Hulette with indemnification
to the fullest extent legally allowable.
Under
the Agreements, if either Kentucky First Federal or First Federal of Kentucky terminates the employment of Messrs. Jennings or Hulette
without cause, or if Messrs. Jennings or Hulette 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 or Hulette 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 or Hulette
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, 2023.
Retirement
Plan
Mr.
Jennings, Mr. Hulette, and Mrs. Hulette 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 Financial
Institution 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%. Effective April 30, 2019, the plan has been frozen . No new benefit will accrue for any employee, including the
officers named above, as long as the freeze remains in place.
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 2023 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 Bank’s Board of Directors. At June 30,
2023, loans to directors and executive officers and their affiliates totaled $915,454, or 1.8%, 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
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 18, 2024. If next year’s annual meeting is held on a date more than 30 calendar days from November 16, 2024, 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.
Additionally,
to comply with the universal proxy rules for our 2024 annual meeting of stockholders, stockholders who intend to solicit proxies in support
of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19
under the Securities Exchange Act of 1934 no later than September 17, 2024.
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 2023 Annual Report to Stockholders, including financial statements, has been mailed to all stockholders of record as
of the close of business on September 29, 2023. 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, 2023 as filed with the U.S. 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 |
| |
|
| |
/s/ Lee Ann Hockensmith |
| |
Lee Ann Hockensmith |
| |
Secretary |
October
16, 2023
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 16, 2023 (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
You will soon be receiving
in the mail an 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). 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
Included with your ESOP Voting
Instruction Card, a copy of the Company’s Annual Meeting Proxy Statement (“Proxy Statement”) and a copy of its 2023
Annual Report to Shareholders will be mailed to you for your review. As noted in the Proxy Statement, the Annual Meeting is scheduled
for Thursday, November 16, 2023 at 4:30 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 8, 2023.
Sincerely,
Don D. Jennings
President and Chief Executive Officer
Kentucky First Federal B... (NASDAQ:KFFB)
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