SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement [ ]Confidential, for Use of the
[x]Definitive Proxy Statement Commission Only (as permitted
[ ]Definitive Additional Materials by Rule 14a-6(e)(2))
[ ]Soliciting Material Under Rule 14a-12
KENTUCKY FIRST BANCORP, INC.
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(Name of Registrant as Specified in Its Charger)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
[LETTERHEAD OF KENTUCKY FIRST BANCORP, INC.]
October 10, 2000
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Kentucky First Bancorp, Inc. to be held at the main office of First Federal
Savings Bank, 306 North Main Street, Cynthiana, Kentucky on Wednesday, November
8, 2000 at 4:30 p.m., local time. Your Board of Directors and Management look
forward to personally greeting those stockholders able to attend.
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 operations of the Company. Directors and officers of the
Company as well as representatives of Grant Thornton, LLP, the Company's
independent auditors, will be present to respond to any questions the
stockholders may have.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED 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 assure that your vote is counted if you are
unable to attend the meeting. On behalf of your Board of Directors, thank you
for your interest and support.
Sincerely,
/s/ Betty J. Long
Betty J. Long
President
<PAGE>
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KENTUCKY FIRST BANCORP, INC.
306 NORTH MAIN STREET
CYNTHIANA, KENTUCKY 41031-1210
(859) 234-1440
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 8, 2000
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Kentucky First Bancorp, Inc. (the "Company"), will be held at the
main office of First Federal Savings Bank, 306 North Main Street, Cynthiana,
Kentucky at 4:30 p.m. on Wednesday, November 8, 2000.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company; and
2. The transaction of such other matters as may properly come before the
Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before
the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Stockholders of
record at the close of business on September 29, 2000, are the stockholders
entitled to notice of and to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kevin R. Tolle
KEVIN R. TOLLE
SECRETARY
Cynthiana, Kentucky
October 10, 2000
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. PLEASE ACT PROMPTLY.
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<PAGE>
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PROXY STATEMENT
OF
KENTUCKY FIRST BANCORP, INC.
306 NORTH MAIN STREET
CYNTHIANA, KENTUCKY 41031-1210
ANNUAL MEETING OF STOCKHOLDERS
November 8, 2000
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Kentucky First Bancorp, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company (the
"Meeting") which will be held at the main office of First Federal Savings Bank,
306 North Main Street, Cynthiana, Kentucky on Wednesday, November 8, 2000, at
4:30 p.m., local time. The accompanying notice of meeting and this Proxy
Statement are being first mailed to stockholders on or about October 10, 2000.
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company, at the address shown above, by filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting or by attending the Meeting and voting in person. Proxies solicited by
the Board of Directors of the Company will be voted in accordance with the
directions given therein. WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE
VOTED FOR THE NOMINEES FOR DIRECTOR SET FORTH BELOW IN THIS PROXY STATEMENT. The
proxy confers discretionary authority on the persons named therein to vote with
respect to the election of any person as a director where the nominee is unable
to serve or for good cause will not serve, and matters incident to the conduct
of the Meeting. Proxies marked as abstentions, and shares held in street name
which have been designated by brokers on proxies as not voted, will not be
counted as votes cast. Proxies marked as abstentions or as broker non-votes
will, however, be treated as shares present for purposes of determining whether
a quorum is present.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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The securities entitled to notice of and to vote at the Meeting consist
of the Company's common stock, par value $.01 per share (the "Common Stock").
Stockholders of record as of the close of business on September 29, 2000 (the
"Record Date"), are entitled to one vote for each share of Common Stock then
held. As of the Record Date, there were 1,030,177 shares of Common Stock issued
and outstanding. The presence, in person or by proxy, of at least one-third of
the total number of shares of Common Stock outstanding and entitled to vote will
be necessary to constitute a quorum at the Meeting.
Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934 with the Company and the Securities and Exchange
Commission ("SEC"). Based on such reports (and certain other written information
received by the Company), management knows of no persons other than those set
forth below who owned more than 5% of the outstanding shares of Common Stock as
of the Record Date. The following table sets forth, as of the Record Date,
certain information as to those persons who were the beneficial owners of more
than five percent (5%) of the Company's outstanding shares of Common Stock and
the shares of Common Stock beneficially owned by all executive officers and
directors of the Company as a group.
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF SHARES
NAME AND ADDRESS AMOUNT AND NATURE OF OF COMMON STOCK
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OUTSTANDING (2)
------------------- ----------------------- ------------------
<S> <C> <C>
Paul Lynch 71,423 6.25%
11 Victoria Drive
New Castle, Pennsylvania 16105
Betty J Long 60,154 5.65%
750 Sandpiper Court
Lexington, Kentucky 40505
Kentucky First Bancorp, Inc. 104,761 (3) 9.17%
Employee Stock Ownership Plan
306 North Main Street
Cynthiana, Kentucky 41031-1210
All Executive Officers and Directors 224,958 (4) 20.12%
as a Group (10 persons)
<FN>
_____________
(1) For purposes of this table, a person is deemed to be the beneficial
owner of any shares of Common Stock if he or she has or shares voting
or investment power with respect to such Common Stock or has a right to
acquire beneficial ownership at any time within 60 days from the Record
Date. As used herein, "voting power" is the power to vote or direct the
voting of shares and "investment power" is the power to dispose or
direct the disposition of shares. Except as otherwise noted, ownership
is direct, and the named persons exercise sole voting and investment
power over the shares of the Common Stock.
(2) In calculating the percentage ownership of each named individual and
the group, the number of shares outstanding is deemed to include any
shares of the Common Stock which the individual or the group has the
right to acquire within 60 days of the Record Date.
(3) These shares are held in a suspense account for future allocation among
participating employees as the loan used to purchase the shares is
repaid. The trustees of the Kentucky First Bancorp, Inc. Employee Stock
Ownership Plan (the "ESOP"), currently Directors Wilson, Morris and
Rees, vote all allocated shares in accordance with instructions of the
participants. Unallocated shares and shares for which no instructions
have been received generally are voted by the ESOP trustees in the same
ratio as participants direct the voting of allocated shares or, in the
absence of such direction, as directed by the Company's Board of
Directors. As of the Record Date, 48,611 shares had been allocated.
(4) Includes 20,645 shares which have been allocated to the accounts of
executive officers in the ESOP and 87,678 shares which may be purchased
pursuant to options exercisable within 60 days of the Record Date. Does
not include 56,150 unallocated shares held by the ESOP.
</FN>
</TABLE>
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Company's Board of Directors is composed of eight members. The
Company's Certificate of Incorporation requires that directors be divided into
three classes, as nearly equal in number as possible, each class to serve for a
three year period, with approximately one-third of the directors elected each
year. The Board of Directors has nominated Luther O. Beckett, Diane E. Ritchie
and John Swinford, each of whom is currently a member of the Board, to serve as
a director for a three-year period.
If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend or the size of the Board may be reduced to eliminate the
vacancy. At this time, the Board knows of no reason why any nominee might be
unavailable to serve.
2
<PAGE>
Under the Company's Bylaws, directors shall be elected by a plurality
of the votes of the shares present in person or by proxy at the Meeting. Votes
which are not cast at the Meeting, either because of abstentions or broker
non-votes, are not considered in determining the number of votes which have been
cast for or against the election of a nominee.
Unless otherwise specified on the proxy, it is intended that the
persons named in the proxies solicited by the Board will vote for the election
of the named nominees.
The following table sets forth the names of the Board's nominees for
election as directors of the Company and of those directors who will continue to
serve as such after the Meeting. Also set forth is certain other information
with respect to each person's age, the year he or she first became a director of
the Company's wholly owned subsidiary, First Federal Savings Bank (the "Bank" or
"First Federal"), the expiration of his or her term as a director, and the
number and percentage of shares of the Common Stock beneficially owned. With the
exception of Russell M. Brooks, all of the individuals were initially appointed
as director of the Company in 1995 in connection with the Company's
incorporation.
<TABLE>
<CAPTION>
SHARES OF
YEAR FIRST COMMON STOCK
ELECTED AS BENEFICIALLY
AGE AT THE DIRECTOR CURRENT TERM OWNED AT THE PERCENT OF
NAME RECORD DATE OF THE BANK TO EXPIRE RECORD DATE (1) CLASS (2)
---- ----------- ----------- --------- --------------- ---------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2003
<S> <C> <C> <C> <C> <C>
Luther O. Beckett 76 1968 2003 17,660 (3) 1.71%
Diane E. Ritchie 51 1987 2003 7,828 (4) 0.75%
John Swinford 68 1968 2003 21,160 (5) 2.05%
DIRECTORS CONTINUING IN OFFICE
Betty J. Long 53 1995 2001 60,154 (6) 5.65%
Milton G. Rees 69 1968 2001 22,450 (7) 2.17%
Wilbur H. Wilson 61 1980 2001 28,573 (8) 2.76%
William D. Morris 76 1963 2002 23,525 (9) 2.27%
Russell M. Brooks 49 1999 2002 4,868 (10) 0.47%
<FN>
____________
(1) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; stock allocated through certain employee benefit plans of the
Company; stock in which the individual either has or shares voting and/or
investment power and shares which the individual has the right to acquire
at any time within 60 days of the Record Date. Each person or relative of
such person whose shares are included herein exercises sole or shared
voting and dispositive power as to the shares reported. Does not include
shares with respect to which Directors Wilson, Morris and Rees have "voting
power" by virtue of their positions as trustees of the trust holding
104,761 shares under the Company's ESOP. The ESOP trustees must vote all
allocated shares held in the ESOP in accordance with the instructions of
the participants. Unallocated shares and allocated shares for which no
timely direction is received are voted by the ESOP trustees in proportion
to the participant-directed voting of allocated shares.
(2) In calculating the percentage ownership of each named individual, the
number of shares outstanding is deemed to include any shares of the Common
Stock which the individual has the right to acquire within 60 days of the
Record Date.
(3) Includes 1,940 shares which may be acquired pursuant to options exercisable
within 60 days of the Record Date.
(4) Includes 6,948 shares which may be acquired pursuant to options exercisable
within 60 days of the Record Date.
(5) Includes 3,470 shares which may be acquired pursuant to options exercisable
within 60 days of the Record Date.
(6) Includes 8,300 shares held for the benefit of Ms. Long by the 401(k) Plan,
1,669 shares held in an IRA account, 9,141 shares allocated to her ESOP
account and 34,713 shares which she has the right to acquire pursuant to
options exercisable within 60 days of the Record Date.
(7) Includes 1,135 shares held by spouse and 3,470 shares which may be acquired
pursuant to options exercisable within 60 days of the Record Date.
3
<PAGE>
(8) Includes 15,000 shares held by spouse and 6,940 shares which may be
acquired pursuant to options exercisable within 60 days of the Record Date.
(9) Includes 1,000 shares held by spouse and 5,205 shares which may be acquired
pursuant to options exercisable within 60 days of the Record Date.
(10) Includes 3,700 shares held in an IRA account and 1,168 shares allocated to
his ESOP account
</FN>
</TABLE>
The principal occupation of each director of the Company is set forth
below.
LUTHER O. BECKETT retired from his position as Executive Vice President and
Secretary of the Bank in June 1992, a position he had held since 1967. Mr.
Beckett currently serves as Vice Chairman of the Board of Directors. Mr. Beckett
resides at Route 1, Berry, Kentucky.
DIANE E. RITCHIE is purchasing manager for Stamler Corporation in
Millersburg, Kentucky. She served as Vice President, Branch Manager and
Marketing Officer of the Bank from March 1996 to June 1998. Prior to becoming an
officer of the Bank, she was a buyer for Grede Foundries, a foundry based in
Cynthiana, Kentucky for 24 years.
JOHN SWINFORD is an attorney with the law firm of Swinford & Sims, P.S.C.,
based in Cynthiana, Kentucky. He is President of the Board of Trustees of the
Cynthiana/Harrison County Library.
BETTY J. LONG has served as President and Chief Executive Officer of the
Bank since May 1994 and has been a member of the Board of Directors of the Bank
since January 1995. Prior to assuming her current position, Ms. Long served as
Vice President of the Bank from 1986 to 1994. She joined the Bank in 1965.
MILTON G. REES retired in 1993. Prior to his retirement, Mr. Rees was the
owner and manager of Harrison Motor Co. in Cynthiana, Kentucky.
WILBUR H. WILSON is a retired physician in Cynthiana, Kentucky. Dr. Wilson
is Past Chairman of the Board of the Harrison County Health Department and Past
Chairman of the Board of the Wedco District Health Department.
WILLIAM D. MORRIS has been retired since 1988 from his position as a
certified public accountant and a partner in the firm of Morris, Ingram &
Brunker in Cynthiana Kentucky. Mr. Morris served as President of the Bank from
January 1, 1987 until December 31, 1993 and has served as Chairman of the Board
since that date. Mr. Morris serves on the Board of Directors of the Cynthiana
Library Board. He is a former Board member of the Cynthiana-Harrison County
Community Service Center, the Society for Retarded Citizens and the Industrial
Foundation.
RUSSELL M. BROOKS is Executive Vice President of the Company and the Bank.
Mr. Brooks assumed the positions in June, 1998. Prior to joining the Company, he
served as Vice President of Kentucky Bank, Paris, Kentucky from 1996 to 1998 and
served as Chief Executive Officer of Jessamine First Federal Savings and Loan,
Nicholasville, Kentucky from 1989 until its acquisition by Kentucky Bank in
1996. From 1984 to 1989, Mr. Brooks served as Chief Executive Officer of Harlan
Federal Savings and Loan.
4
<PAGE>
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
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The Board of Directors of the Company meets monthly and may have additional
special meetings. During the year ended June 30, 2000, the Board held 12 regular
meetings. No director attended fewer than 75% of the total number of Board
meetings held during the year ended June 30, 2000 and the total number of
meetings held by committees on which such director served during such fiscal
year.
The Company's Nominating Committee consists of the Board of Directors. The
Board of Directors met one time in that capacity during fiscal year 2000.
The Company's Audit Committee consists of three directors appointed
annually by the Board of Directors. Directors Morris, Rees and Wilson comprise
the Company's Audit Committee. The Audit Committee meets periodically during the
year to examine and approve the audit report prepared by the independent
auditors of the Company, to review the independent auditors to be engaged by the
Company, to review the internal audit function and internal accounting controls.
The Committee also meets as needed with the Company's independent auditors to
review the Company's accounting and financial reporting policies and practices.
The Audit Committee met six times during the year ended June 30, 2000.
The Company's Salary Committee consisted of Directors Wilson, Morris and
Rees. The Company's Salary Committee meets on an as needed basis to review and
designate compensation levels for officers of the Company and the Bank. This
Committee met twice during fiscal year 2000.
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EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------
Summary Compensation Table. The following table sets forth cash and noncash
compensation for each of the last three fiscal years awarded to or earned by the
Chief Executive Officer of the Company and the Bank. No executive officer
received salary and bonus in excess of $100,000 during the fiscal year ended
June 30, 2000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
NAME AND FISCAL -------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
------------------ ------ ------ ------ ------------
<S> <C> <C> <C> <C>
Ms. Betty J. Long 2000 $63,400 $ 2,650 $20,630 (2)
President and Chief 1999 61,600 2,600 21,129
Executive Officer (1) 1998 51,600 10,160 15,409
<FN>
____________
(1) As of June 30, 2000, Ms. Long held 2,778 shares of restricted Common
Stock awarded under the Kentucky First Bancorp, Inc. Management
Recognition Plan ("MRP"). Such shares had an aggregate value of $36,461
based on the closing price of the Common Stock on June 30, 2000
($10.125 per share) plus a $3.00 per share return of capital
distribution which is held by the MRP Trust for the benefit of the
participants under the MRP. Such shares vest at the rate of 20% per
year from the date of award, subject to accelerated vesting upon death
or disability. Dividends are paid on such shares to the extent paid on
the Common Stock generally.
(2) Consists of contributions by the Company to Ms. Long's account in the ESOP.
</FN>
</TABLE>
5
<PAGE>
Option Year-end Value Table. The following table sets forth information
concerning the value of options held by the Chief Executive Officer at June 30,
2000. The number of shares underlying options and the exercise price were
adjusted in fiscal year 2000 to reflect the Company's November 1996 return of
capital distribution.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
-------------------------------- ------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ms. Betty J. Long 34,713 8,680 $13,451 $ 3,364
<FN>
____________
(1) Based on the aggregate fair market value of the shares of Common Stock
underlying the options at June 30, 2000, less the aggregate exercise
price. For purposes of this calculation, the fair market value of the
Common Stock is based upon the closing price of the Common Stock on
June 30, 2000 of $10.125 per share. All options granted to Ms. Long
were granted at an adjusted exercise price of $9.7375 per share.
</FN>
</TABLE>
Supplemental Executive Retirement Agreement. In order to provide Ms.
Betty J. Long with competitive retirement benefits, and thereby to encourage her
continuing service as the President and Chief Executive Officer of the Bank, the
Bank has entered into a supplemental executive retirement agreement (the "SERA")
with Ms. Long effective January 1, 1995. Pursuant to the terms of the SERA, upon
Ms. Long's termination of employment with the Bank, for any reasons other than
"just cause" (as determined under Ms. Long's employment agreement), she will be
entitled to receive annual payments from the Bank in an amount equal to the
product of (i) her "Vested Percentage" and 60% of her "Average Annual
Compensation," less (ii) her "Annual Offset Amount." Under the SERA, "Vested
Percentage" means 6.67% per calendar year of Ms. Long's service with the Bank
beginning January 1, 1995 (up to a maximum Vested Percentage of 100%), "Average
Annual Compensation" means the average of Ms. Long's highest annual compensation
for three of the five calendar years preceding her termination of employment,
and "Annual Offset Amount" means the annual amount that would be payable to Ms.
Long if her accounts under the Bank's tax-qualified retirement plans were paid
to her in substantially equal payments over the number of years for which
benefits are payable under the SERA, with such payments deemed to commence upon
termination of Ms. Long's employment. Such annual payments shall be made for her
life, with a 50% benefit payable to her surviving spouse, if any.
In the event Ms. Long terminates employment due to disability as
determined under her employment agreement, Ms. Long would receive annual
payments for life in an amount per year equal to 60% of her Average Annual
Compensation, less her Annual Offset Amount. In the event Ms. Long's spouse
survives her, he shall be entitled to receive 50% of the amount Ms. Long would
have received: (i) in the event benefit payments had commenced prior to her
death, had she survived to collect the full benefits payable for her retirement
or disability, or (ii) otherwise had she retired on the date of her death, with
a Vested Percentage equal to 100%. Termination for just cause would result in
her forfeiture of all retirement benefits under the SERA. In the event the Bank
terminates Ms. Long's employment for other than "just cause" or in the event of
termination of employment in connection with a change in control (as defined in
the Option Plan), then Ms. Long's Vested Percentage shall be deemed to be 100%
(unless she had terminated employment before the change in control), and the
present value of the benefits payable to Ms. Long would be paid in one lump sum
within 10 days of termination of employment or within 10 days following a change
in control, if earlier.
Employment Agreements. The Company and the Bank have each entered into
a separate employment agreement (the "Employment Agreements"), with Ms. Betty J.
Long, President and Chief Executive Officer of the Bank and of the Company. In
such capacity, Ms. Long is responsible for overseeing all operations of the Bank
and the Company, and for implementing the policies adopted by the Board of
Directors. The Board of Directors believe that the Employment Agreements assure
fair treatment of Ms. Long in relation to her career with the Company and the
Bank.
6
<PAGE>
The Employment Agreements became effective on the date of completion of
the Conversion and provide for a term of three years, with an annual base salary
equal to her existing base salary rate in effect on the date of Conversion. On
each anniversary date from the date of commencement of the Employment
Agreements, the term of her employment under the Employment Agreements may be
extended for an additional one-year period beyond the then effective expiration
date, upon an affirmative determination by the Board of Directors that the
performance of Ms. Long has met the required performance standards and that such
Employment Agreements should be extended. The Employment Agreements provide for
a salary review by the Board of Directors not less often than annually, as well
as with inclusion in any discretionary bonus plans, retirement and medical
plans, customary fringe benefits and vacation and sick leave. The Employment
Agreement will terminate upon Ms. Long's death or disability, and is terminable
by the Bank for "just cause" as defined in the Employment Agreements. In the
event of termination for just cause, Ms. Long will have no right to receive
compensation or benefits. If the Company or the Bank terminates her without just
cause, she will be entitled to a continuation of her salary and benefits from
the date of termination through the remaining term of the Employment Agreement
plus an additional 12-month period (but not in excess of applicable OTS
limitations). If the Employment Agreements are terminated due to Ms. Long's
"disability" (as defined in the Employment Agreements), she will be entitled to
a continuation of her salary and benefits through the date of such termination,
including any period prior to establishment of disability. In the event of Ms.
Long's death during the term of the Employment Agreement, her estate will be
entitled to receive his or her salary through the end of the month of her death.
Ms. Long may voluntarily terminate her Employment Agreement by providing at
least 90 days' written notice to the Boards of Directors of the Bank and the
Company, in which case she would be entitled to receive only her compensation,
vested rights and benefits up to the date of termination.
The Employment Agreements contain provisions stating that in the event
of Ms. Long's involuntary termination of employment in connection with, or
within 12 months after, any change in control of the Bank or the Company, other
than for "just cause," Ms. Long will be paid within 10 days of such termination
an amount equal to the difference between (i) the product of 2.99 times his or
her "base amount," as defined in Section 280G(b)(3) of the Internal Revenue
Code, and (ii) the sum of any other parachute payments, as defined under Section
280G(b)(2) of the Internal Revenue Code, that she receives on account of the
change in control. The Employment Agreements also provide for a similar lump sum
payment to be made in the event of Ms. Long's voluntary termination of
employment within one year following a change in control, upon the occurrence,
or within 90 days thereafter, of certain specified events following the change
in control, which have not been consented to in writing by her, including (i)
the requirement that she perform her principal executive functions more than 30
miles from the Bank's current primary office, (ii) a reduction in her base
compensation as then in effect, (iii) the failure of the Company or the Bank to
maintain existing or substantially similar employee benefit plans, including
material vacation, fringe benefits, stock option and retirement plans, (iv) the
assignment of duties and responsibilities which are other than those normally
associated with her position with the Bank, (v) a material reduction in the
Employee's authority and responsibility, (vi) the failure to elect or re-elect
Ms. Long to the Company's or the Bank's Board of Directors; and (vii) a material
reduction in her secretarial or other administrative support. "Control"
generally refers to the acquisition, by any person or entity, of the ownership
or power to vote more than 25% of the Bank's or Company's voting stock, the
control of the election of a majority of the Bank's or the Company's directors,
or the exercise of a controlling influence over the management or policies of
the Bank or the Company. In addition, under the Employment Agreements, a change
in Control occurs when, during any consecutive two-year period, directors of the
Company or the Bank at the beginning of such period (the "Continuing Directors")
cease to constitute at least a majority of the Board of Directors of the Company
or the Bank, unless the election of replacement directors was approved by at
least a majority vote of the Continuing Directors then in office. The Employment
Agreements with the Bank provide that within five business days before or after
a change in control which was not approved in advance by a resolution of a
majority of the Continuing Directors, the Bank shall fund, or cause to be
funded, a trust in the amount of 2.99 times Ms. Long's base amount, that will be
used to pay amounts owed her upon termination, other than for just cause, within
12 months of the change in control. The amount to be paid to Ms. Long from this
trust upon her termination is determined according to the procedures outlined in
her Employment Agreement with the Bank, and any money not paid to her is
returned to the Bank. The aggregate payments that would be made to Ms. Long
assuming her termination of employment under the foregoing circumstances at June
30, 2000 would have been approximately $255,000. These provisions may have an
anti-takeover effect by making it more expensive for a potential acquiror to
obtain control of the Company. In the event that Ms. Long prevails over the
Company and the Bank in a legal dispute as to the Employment Agreement, she will
be reimbursed for her legal and other expenses.
7
<PAGE>
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DIRECTORS' COMPENSATION
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The Company's directors receive fees of $200 per month. The Bank's
directors receive fees of $800 per month. The directors also receive $50 per
special meeting and committee meeting attended (with the exception of the Chief
Executive Officer and the Executive Vice President). The Chairman receives a fee
of $300 per month for his service on the Company Board and receives a fee of
$1,000 per month for his service on the Bank Board.
Pursuant to the Kentucky First Bancorp, Inc. Stock Option and Incentive
Plan (the "Option Plan"), non-employee directors of the Company received
automatic grants of stock options in fiscal year 1996. Each director who was not
an employee on the effective date of the Option Plan received options to
purchase 8,679 shares (adjusted for the November 1996 return of capital
distribution) of Common Stock at an exercise price equal to the fair market
value of the Common Stock on the date of grant ($9.7375 per share, adjusted for
the November 1996 return of capital). All such options will expire on April 2,
2006. In addition, pursuant to the MRP, non-employee directors each received a
plan share award of 2,777 shares of restricted Common Stock. Such shares vest at
the rate of 20% per year from the effective date of the award (April 3, 1996).
Director Retirement Plan. The Bank's Board of Directors has adopted a
retirement plan for its non-employee directors (the "Directors' Plan"),
effective January 1, 1995. A participant in the Directors' Plan will receive a
one-time payment following termination of service on the Board in an amount
equal to the product of his or her "Benefit Percentage," his or her "Vested
Percentage," and $14,400. A participant's "Benefit Percentage" is based on his
or her overall years of service on the Board of Directors of the Bank, and
increases in increments of 33-1/3% from 0% for less than five years of service,
to 33-1/3% for six to 12 years of service, to 66-2/3% for 13 to 19 years of
service, and to 100% for 20 or more years of service. A participant's "Vested
Percentage" equals 33-1/3% if the participant is serving on the Board on the
date of the Conversion, increases to 66-2/3% if the participant completes one
year of service following the Conversion, and becomes 100% if the participant
completes a second year of service following the Conversion. However, in the
event a participant terminates service on the Board due to "disability" or
death, or in the event of a "change in control" (as such terms are defined in
the Directors' Plan) while serving as a director, the participant's Vested
Percentage becomes 100% regardless of his or her years of service. This
provision may have the effect of deferring a hostile change in control by
increasing the costs of acquiring control. If a participant dies, his or her
surviving spouse, or if none, the participant's estate, will receive an amount
equal to 100% of the benefit that would have been paid to the participant if the
participant (i) had retired on the date of his or her death, and (ii) had a
Vested Percentage equal to 100%. The Bank will pay all benefits under the
Directors' Plan from its general assets.
Deferred Compensation Program. The Bank has entered into separate
deferred compensation agreements (the "Deferred Compensation Program") with
Directors Rees, Ritchie, Swinford, and Wilson, pursuant to which they will
receive certain benefits in lieu of cash compensation they otherwise would have
received.
In addition, as part of the Incentive Compensation Plan ("Incentive
Compensation Plan"), directors may elect to defer the receipt of all or part of
their compensation. Under the deferred compensation program, deferred amounts
are credited to a bookkeeping account ("Deferral Account") in the participant's
name, which is credited quarterly and according to the terms of the
participant's deferred compensation agreement. The Deferral Account is adjusted
at the end of each calendar year to credit the participant's Deferral Account
with the appreciation or depreciation that would have occurred if the deferred
amounts had been invested based upon the participant's choice between (i) 3%
times the Multiplier, (as defined under the First Federal Savings Bank Incentive
Compensation Plan), (ii) Common Stock, and (iii) the Bank's highest annual rate
of interest on certificates of deposit having a one-year term. Deferred
compensation agreements are prospective only and irrevocable with respect to
amounts deferred pursuant thereto, except that a participant may at any time,
and from time to time, (i) change the beneficiary designated therein, (ii)
prospectively change the investment selection applicable to his deferral
account, and/or (iii) file a deferred compensation agreement which supersedes a
prior deferred compensation agreement as to amount deferred on or after the
January 1st which coincides with or next follows execution of the superseding
agreement. In addition, participants may cease future accruals at any time. The
Bank will pay all benefits under the Deferred Compensation Program from its
general assets.
8
<PAGE>
For financial reporting purposes, the fees and compensation which are
deferred will be expensed as though paid in cash when earned. For tax purposes,
participants who entered into deferred compensation agreements will defer
ordinary income taxation on amounts otherwise payable in cash. Tax recognition
will occur as deferred amounts, and any earnings attributable thereto, are paid
from the trust to participants, and the Bank will then be entitled to a
corresponding deduction.
--------------------------------------------------------------------------------
TRANSACTIONS WITH MANAGEMENT
--------------------------------------------------------------------------------
Mr. Swinford, an attorney in Cynthiana, Kentucky, serves as local counsel
for the Bank. Swinford & Sims, P.S.C., a firm in which Mr. Swinford is a partner
performs title and document work in connection with mortgage loans. In fiscal
year 2000, fees for such services totaled $11,119. Mr. Swinford is paid a
monthly retainer fee of $300.
The Bank offers loans to its directors, officers, and employees. These
loans currently are made in the ordinary course of business with the same
collateral, interest rates and underwriting criteria as those of comparable
transactions prevailing at the time and do not involve more than the normal risk
of collectibility or present other unfavorable features. Under current law, the
Bank's loans to directors and executive officers are required to be made on
substantially the same terms, including interest rates, as those prevailing for
comparable transactions and must not involve more than the normal risk of
repayment or present other unfavorable features. Furthermore, loans above the
greater of $25,000 or 5% of the Bank's capital and surplus (i.e., up to
$500,000) to such persons must be approved in advance by a disinterested
majority of the Board of Directors. At June 30, 2000, the Bank's loans to
directors and executive officers totaled $202,000, or 1.6% of the Bank's
stockholders equity at that date.
--------------------------------------------------------------------------------
RELATIONSHIP WITH INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
Grant Thornton LLP was the Company's independent certified public
accountants for the 2000 fiscal year. The Board of Directors presently intends
to renew the Company's arrangement with Grant Thornton LLP to be its independent
certified public accountant for the fiscal year ending June 30, 2001. A
representative of Grant Thornton LLP is expected to be present at the Meeting to
respond to appropriate questions and to make a statement, if so desired.
--------------------------------------------------------------------------------
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
--------------------------------------------------------------------------------
Pursuant to regulations promulgated under the Exchange Act, the Company's
officers, directors and persons who own more than ten percent of the outstanding
Common Stock are required to file reports detailing their ownership and changes
of ownership in such Common Stock, and to furnish the Company with copies of all
such reports. Based on the Company's review of such reports which the Company
received during the last fiscal year, or written representations from such
persons that no annual report of change in beneficial ownership was required,
the Company believes that, during the last fiscal year, all persons subject to
such reporting requirements have complied with the reporting requirements.
--------------------------------------------------------------------------------
OTHER MATTERS
--------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the determination of the Board of Directors.
9
<PAGE>
--------------------------------------------------------------------------------
MISCELLANEOUS
--------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. 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 by telegraph or telephone without additional compensation.
The Company's Annual Report to Stockholders, including financial
statements, is being mailed to all stockholders of record as of the Record Date.
Any stockholder who has not received a copy of such Annual Report may obtain a
copy by writing to the Secretary of the Company. Such Annual Report is not to be
treated as a part of the proxy solicitation material or as having been
incorporated herein by reference.
--------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
--------------------------------------------------------------------------------
In order to be eligible to be considered for inclusion in the Company's
proxy materials for the next Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the Company's
executive office at 306 N. Main Street, Cynthiana, Kentucky 41031-1210, no later
than June 12, 2001. Any such proposal shall be subject to the requirements of
the proxy rules adopted under the Exchange Act.
In order for a stockholder of the Company to make any director
nominations and/or proposals other than pursuant to the Exchange Act, he or she
must give notice thereof in writing to the Secretary of the Company not less
than thirty days nor more than sixty days prior to the date of any such meeting;
provided, however, that if less than forty days' notice of the meeting is given
to stockholders, such written notice must be delivered or mailed, to the
Secretary of the Company not later than the close of business on the tenth day
following the day on which notice of the meeting was mailed to stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kevin R. Tolle
KEVIN R. TOLLE
SECRETARY
Cynthiana, Kentucky
October 10, 2000
--------------------------------------------------------------------------------
FORM 10-KSB
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A COPY OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR ENDED JUNE 30,
2000 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED
WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE
SECRETARY, KENTUCKY FIRST BANCORP, INC., P.O. BOX 368, CYNTHIANA, KENTUCKY
41031-1210.
--------------------------------------------------------------------------------
10
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS SAMPLE
REVOCABLE PROXY
KENTUCKY FIRST BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 8, 2000
The undersigned hereby appoints Russell M. Brooks, Milton G. Rees and
Wilbur H. Wilson with full powers of substitution, to act as proxies for the
undersigned, to vote all shares of common stock of Kentucky First Bancorp, Inc.
(the "Company") which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting"), to be held at the main office of First Federal
Savings Bank, 306 North Main Street, Cynthiana, Kentucky, on Wednesday, November
8, 2000 at 4:30 p.m., local time, and at any and all adjournments thereof, as
follows:
<TABLE>
<CAPTION>
VOTE FOR ALL
FOR WITHHELD EXCEPT
--- -------- -------
<S> <C> <C> <C> <C>
1. The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ] [ ]
LUTHER O. BECKETT DIANE E. RITCHIE JOHN SWINFORD
</TABLE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
________________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ABOVE-LISTED NOMINEES.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED ABOVE. IF ANY
OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE
NAMED IN THIS PROXY IN ACCORDANCE WITH THE DETERMINATION OF THE BOARD OF
DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY ON THE HOLDERS THEREOF TO VOTE WITH RESPECT TO THE ELECTION OF ANY
PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL
NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
Please be sure to sign and date Date _________________________
this proxy in the box below
_______________________________________________________________________________
Shareholders sign above. Co-holder (if any) sign above.
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
KENTUCKY FIRST BANCORP, INC.
CYNTHIANA, KENTUCKY
--------------------------------------------------------------------------------
Should the above signed be present and elect to vote at the Meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the Meeting of the stockholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated and of no further
force and effect.
The above signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a proxy
statement dated October 10, 2000 and an annual report.
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
