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
x
|
Filed by a Party other than the Registrant
o
|
Check the appropriate box:
|
¨
|
Preliminary Proxy Statement
|
o
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
x
|
Definitive Proxy Statement
|
o
|
Definitive Additional Materials
|
o
|
Soliciting Material under §240.14a-12
|
POAGE BANKSHARES, INC.
|
(Name of Registrant as Specified In Its Charter)
|
N/A
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
|
Payment of Filing
Fee (Check the appropriate box):
|
x
|
No fee required.
|
o
|
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:
|
|
(2)
|
Aggregate number
of securities to which transaction applies:
|
|
(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):
|
|
(4)
|
Proposed maximum
aggregate value of transaction:
|
|
(5)
|
Total fee paid:
|
o
|
Fee paid previously with preliminary materials.
|
o
|
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:
|
|
(2)
|
Form, Schedule
or Registration Statement No.:
|
|
(3)
|
Filing Party:
|
|
(4)
|
Date Filed:
|
May 17, 2016
Dear Fellow Stockholder:
We cordially invite you to attend the Annual
Meeting of Stockholders of Poage Bankshares, Inc. The meeting will be held at Ashland Community & Technical College, Technology
Conference Room, 1400 College Drive, Ashland, Kentucky, on June 21, 2016 at 10:00 a.m., local time.
The enclosed Notice of Annual Meeting and
Proxy Statement describe the formal business to be transacted. During the meeting we will also report on the operations of Poage
Bankshares. Also enclosed is our 2015 Annual Report to Stockholders, which contains detailed information concerning our activities
and operating performance. Our directors and officers, as well as a representative of our independent registered public accounting
firm, will be present to respond to any questions that stockholders may have.
The business to be conducted at the Annual
Meeting consists of (i) the election of three directors, (ii) the consideration of an advisory, non-binding proposal with respect
to the executive compensation as described in the Proxy Statement, and (iii) the ratification of the appointment of Crowe Horwath
LLP to serve as the independent registered public accounting firm for the year ending December 31, 2016. The Board of Directors
has determined that the matters to be considered at the Annual Meeting are in the best interest of Poage Bankshares and its stockholders,
and the Board of Directors unanimously recommends a vote “FOR” each matter to be considered.
Please complete, sign
and date the enclosed proxy card and return it in the enclosed postage-paid envelope, even if you currently plan to attend the
meeting.
Your vote is important, regardless of the number of shares that you own. Voting by proxy will not prevent you from
voting in person, but will assure that your vote is counted if you are unable to attend the meeting.
Our Proxy Statement and the 2015 Annual
Report to Stockholders are available at
www.cstproxy.com/townsquarebank/2016
.
|
Sincerely,
|
|
|
|
|
|
Thomas Burnette
|
|
Chairman of the Board
|
Poage Bankshares, Inc.
1500 Carter Avenue
Ashland, Kentucky 41101
(606) 324-7196
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
The 2016 Annual Meeting of Stockholders
of Poage Bankshares, Inc. will be held at Ashland Community & Technical College, Technology Conference Room, 1400 College
Drive, Ashland, Kentucky, on June 21, 2016, at 10:00 a.m., local time.
A Proxy Card and a Proxy Statement for
the Annual Meeting are enclosed. The purpose of the Annual Meeting is to consider and vote upon:
|
1.
|
the election of three directors;
|
|
2.
|
the approval of an advisory, non-binding resolution with respect
to the executive compensation as described in the Proxy Statement;
|
|
3.
|
the ratification of the appointment of Crowe Horwath LLP to
serve as the independent registered public accounting firm for the year ending December
31, 2016; and
|
|
4.
|
such other matters as may properly come before the Annual Meeting,
or any adjournments thereof (
Note
: The Board of Directors is not aware of any
other business to come before the Annual Meeting.).
|
Any action may be taken on the foregoing
proposals at the Annual Meeting on the date specified above, or on the date or dates to which the Annual Meeting may be adjourned.
Stockholders of record at the close of business on May 6, 2016 are the stockholders entitled to vote at the Annual Meeting, and
any adjournments thereof.
EACH STOCKHOLDER, WHETHER HE OR SHE PLANS
TO ATTEND THE ANNUAL MEETING, IS REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD TODAY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. ANY PROXY GIVEN MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED. A PROXY MAY BE REVOKED BY FILING WITH THE SECRETARY A
WRITTEN REVOCATION OR A DULY EXECUTED PROXY CARD BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE ANNUAL MEETING MAY REVOKE
HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE ANNUAL MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE
SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER IN ORDER TO VOTE IN
PERSON AT THE ANNUAL MEETING.
|
By Order of the Board of Directors
|
|
|
|
|
|
James W. King
|
|
Secretary
|
Ashland, Kentucky
May 17, 2016
THE PROMPT RETURN OF PROXIES WILL SAVE THE EXPENSE OF FURTHER
REQUESTS FOR PROXIES. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE
UNITED STATES.
Poage Bankshares, Inc.
1500 Carter Avenue
Ashland, Kentucky 41101
(606) 324-7196
PROXY STATEMENT
FOR
2016 ANNUAL MEETING OF STOCKHOLDERS
To be Held on June 21, 2016
This Proxy Statement
is furnished in connection with the solicitation of proxies on behalf of the Board of Directors of Poage Bankshares, Inc. (“Poage
Bankshares,” “Company,” “we” or “us”) to be used at the Annual Meeting of Stockholders,
which will be held at Ashland Community & Technical College, Technology Conference Room, 1400 College Drive, Ashland, Kentucky,
on June 21, 2016, at 10:00 a.m., local time, and all adjournments of the Annual Meeting. The accompanying Notice of Annual Meeting
of Stockholders and this Proxy Statement are first being mailed to stockholders on or about May 17, 2016.
IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 21, 2016
The Notice of 2016 Annual
Meeting of Stockholders, the Proxy Statement for the 2016 Annual Meeting of Stockholders and the Company’s 2015 Annual Report
to Stockholders are each available on the Internet at
www.cstproxy.com/townsquarebank/2016
.
REVOCATION OF PROXIES
Stockholders who execute proxies in the
form solicited hereby retain the right to revoke them in the manner described below. Unless so revoked, the shares represented
by such proxies will be voted at the Annual Meeting and all adjournments thereof. Proxies solicited on behalf of the Board of
Directors of Poage Bankshares will be voted in accordance with the directions given thereon.
Please sign, date and return your
proxy card in the postage paid envelope provided. Where no instructions are indicated on the proxy card, signed and dated proxies
will be voted “FOR” the election of the nominees for director named herein, “FOR” the advisory, non-binding
resolution with respect to the executive compensation as described in this Proxy Statement and “FOR” the ratification
of the appointment of Crowe Horwath, LLP to serve as our independent registered public accounting firm for the year ending December
31, 2016.
Proxies may be revoked
by sending written notice of revocation to the Secretary of Poage Bankshares at the address shown above, by filing a duly executed
proxy bearing a later date, by following the Internet or telephone voting instructions on the enclosed proxy card or by voting
in person at the Annual Meeting. The presence at the Annual Meeting of any stockholder who had given a proxy shall not revoke
such proxy unless the stockholder delivers his or her ballot in person at the Annual Meeting or delivers a written revocation
to our Secretary before the voting of such proxy.
The deadline for telephone and Internet voting is 7:00 p.m., Eastern Time,
on June 20, 2016.
If you are a stockholder whose shares are
not registered in your name, you will need appropriate documentation from your record holder to vote in person at the Annual Meeting.
VOTING SECURITIES, PRINCIPAL HOLDERS,
AND VOTING
Voting Securities
Except as otherwise noted below, holders
of record of the shares of the Company’s common stock as of the close of business on May 6, 2016 are entitled to one vote
for each share then held. As of the close of business on May 6, 2016, there were 3,820,135 shares of common stock issued and outstanding.
Principal Holders
Persons and groups who beneficially own
in excess of 5% of the shares of common stock are required to file certain reports with the Securities and Exchange Commission
regarding such ownership. The following table sets forth, as of May 6, 2016, the shares of Company common stock beneficially owned
by our directors and executive officers, individually and as a group, and by each person who was known to us to be a beneficial
owner of more than 5% of the outstanding shares of common stock. The mailing address for each director and executive officer and
for the Town Square Bank Employee Stock Ownership Plan (the “ESOP”) is 1500 Carter Avenue, Ashland, Kentucky 41101.
Name and Address of Beneficial Owners
|
|
Amount
of Shares
Owned and Nature of
Beneficial Ownership
(1
)
(2)
|
|
|
Percent of Shares of
Common Stock
Outstanding
|
|
|
|
|
|
|
|
|
|
|
Greater
than 5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Town Square Bank ESOP
|
|
|
268,785
|
|
|
|
7.04
|
%
|
|
|
|
|
|
|
|
|
|
Joseph
Stilwell
Stilwell
Partners, L.P.
Stilwell
Value LLC
Stilwell
Value Partners VII, L.P
Stilwell
Activist Fund, L.P.
Stilwell
Activist Investments, L.P.
111
Broadway, 12
th
Floor
New
York, New York 10006
|
|
|
374,708
|
(3)
|
|
|
9.81
|
%
|
|
|
|
|
|
|
|
|
|
Ithan Creek Master Investors (Cayman), L.P.
Wellington Management Group LLP
Wellington
Group Holdings LLP
Wellington Investment Advisors Holdings LLP
Wellington Management Company LLP
|
|
|
|
|
|
|
|
|
c/o Wellington Management Company, LLP
|
|
|
|
|
|
|
|
|
280 Congress Street
|
|
|
|
|
|
|
|
|
Boston, Massachusetts 02210
|
|
|
316,716
|
(4)
|
|
|
8.29
|
%
|
|
|
|
|
|
|
|
|
|
Sandler O’Neill Asset Management, LLC
SOAM Holdings, LLC
Terry Maltese
|
|
|
|
|
|
|
|
|
150 East 52
nd
Street, 30
th
Floor
|
|
|
|
|
|
|
|
|
New York, New York 10022
|
|
|
227,200
|
(5)
|
|
|
5.95
|
%
|
|
|
|
|
|
|
|
|
|
Directors
and Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce VanHorn, President, Chief Executive Officer and
Director
|
|
|
34,707
|
(6)
|
|
|
*
|
|
Darryl E. Akers, Director
|
|
|
13,033
|
(7)
|
|
|
*
|
|
Stephen Burchett, Director
|
|
|
50
|
|
|
|
*
|
|
Thomas Burnette, Chairman of the Board
|
|
|
80,760
|
|
|
|
2.11
|
%
|
Everett B. Gevedon, Director
|
|
|
38,994
|
(8)
|
|
|
1.02
|
%
|
Daniel King III, Director
|
|
|
7,781
|
(9)
|
|
|
*
|
|
Stuart N. Moore, Director
|
|
|
58,161
|
(10)
|
|
|
1.52
|
%
|
Charles W. Robinson, Vice Chairman of the Board
|
|
|
48,287
|
(11)
|
|
|
1.26
|
%
|
John C. Stewart, Jr., Director
|
|
|
64,386
|
(12)
|
|
|
1.69
|
%
|
James W. King, Executive Vice President, Chief Information
Officer and Secretary
|
|
|
35,437
|
(13)
|
|
|
*
|
|
Jane Gilkerson, Executive Vice President and Chief Financial
Officer
|
|
|
3,102
|
(14)
|
|
|
*
|
|
Miles R. Armentrout, Executive Vice President and Chief
Credit Officer
|
|
|
21,345
|
(15)
|
|
|
*
|
|
Jeffery W. Clark, Senior Vice President and Controller
|
|
|
18,704
|
(16)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (13 persons)
|
|
|
424,747
|
|
|
|
11.12
|
%
|
______________________
|
(1)
|
In accordance with Rule 13d-3 under the Securities Exchange Act
of 1934, a person is deemed to be the beneficial owner for purposes of this table, of
any shares of common stock if he has shared voting or investment power with respect to
such security, or has a right to acquire beneficial ownership at any time within 60 days
from the date as of which beneficial ownership is being determined. 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, and includes
all shares held directly as well as by spouses and minor children, in trust and other
indirect ownership, over which shares the named individuals effectively exercise sole
or shared voting or investment power.
|
|
(2)
|
An aggregate of 42,832 shares held in the ESOP have been allocated
to participant accounts.
|
|
(3)
|
Based on a Schedule 13D filed with the Securities and Exchange
Commission on July 28, 2015.
|
|
(4)
|
Based on a Schedule 13G/A filed with the Securities and Exchange
Commission on February 11, 2016.
|
|
(5)
|
Based on a Schedule 13D filed with the Securities and Exchange
Commission on April 14, 2014.
|
|
(6)
|
Includes 18,450 shares held jointly with Mr. VanHorn’s wife,
over which Mr. VanHorn is deemed to have shared voting and dispositive power, 5,805 shares
held by an IRA for the benefit of Mr. VanHorn, 452 shares held by the ESOP and options
to purchase 8,000 shares of stock that have vested or will vest within 60 days of the
record date.
|
|
(7)
|
Includes 2,135 shares held by the ESOP, 1,618 unvested shares of
restricted stock, and options to purchase 7,200 shares of stock that have vested or will
vest within 60 days of the record date.
|
|
(8)
|
Includes 4,856 unvested shares of restricted stock and options
to purchase 7,200 shares of stock that have vested or will vest within 60 days of the
record date.
|
|
(9)
|
Includes 7,583 shares held jointly with Mr. King’s wife and
daughter, and 198 shares held in an IRA for the benefit of Mr. King’s wife, over
all of which he has shared voting and dispositive power together with his wife and daughter.
|
|
(10)
|
Includes 15,000 shares held by Mr. Moore’s wife, over which
he is deemed to have shared voting and dispositive power together with his wife, 4,856
unvested shares of restricted stock, and options to purchase 7,200 shares of stock that
have vested or will vest within 60 days of the record date.
|
|
(11)
|
Includes 15,000 shares held by Mr. Robinson’s wife, over
which he is deemed to have shared voting and dispositive power together with his wife,
4,856 unvested shares of restricted stock, and options to purchase 7,200 shares of stock
that have vested or will vest within 60 days of the record date.
|
|
(12)
|
Includes 11,460 shares held by Scorpio Assurance, a company controlled
by Mr. Stewart, over which he is deemed to have voting and dispositive power, 500 shares
held by the John C. Stewart, Jr. Living Trust, for which he serves as trustee, and 51,933
shares held by the John C. Stewart, Jr. and Mary Patricia Stewart Living Trust, for which
he serves as trustee.
|
|
(13)
|
Includes 3,531 shares held by the ESOP, 5,665 unvested shares
of restricted stock and options to purchase 15,000 shares of stock that have vested or
will vest within 60 days of the record date.
|
|
(14)
|
Includes 34 shares held jointly with Ms. Gilkerson’s husband,
over whom she is deemed to have shared voting and dispositive power, 214 shares held
by the ESOP and 2,854 shares held in an IRA for her benefit.
|
|
(15)
|
Includes 1,067 shares held by the ESOP, 5,665 unvested shares
of restricted stock and options to purchase 15,000 shares of stock that have vested or
will vest within 60 days of the record date.
|
|
(16)
|
Includes 886 shares held by the ESOP, 5,665 unvested shares of
restricted stock and options to purchase 7,350 shares of stock that have vested or will
vest within 60 days of the record date.
|
Quorum
The presence in person or by proxy of a
majority of the outstanding shares of common stock entitled to vote is necessary to constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be counted for purposes of determining that a quorum is present.
Limitations on Voting
In accordance with the
provisions of our Articles of Incorporation, record holders of common stock who beneficially own in excess of 10% of the outstanding
shares of common stock (the “Limit”) are not entitled to any vote with respect to the shares held in excess of the
Limit. Our Articles of Incorporation authorize the Board of Directors (i) to make all determinations necessary to implement and
apply the Limit, including determining whether persons or entities are acting in concert, and (ii) to demand that any person who
is reasonably believed to beneficially own stock in excess of the Limit supply information to us to enable the Board of Directors
to implement and apply the Limit.
Method of Counting Votes
As to the election of directors, the Proxy
Card being provided by the Board of Directors enables a stockholder to vote FOR ALL NOMINEES proposed by the Board, to WITHHOLD
AUTHORITY FOR ALL NOMINEES or to vote FOR ALL EXCEPT one or more of the nominees being proposed. Directors are elected by a plurality
of votes cast, without regard to either broker non-votes or proxies as to which the authority to vote for the nominees being proposed
is withheld. Plurality means that individuals who receive the highest number of votes cast are elected, up to the maximum number
of directors to be elected at the Annual Meeting.
In voting on the advisory, non-binding
resolution with respect to our executive compensation, a stockholder may: (i) vote FOR the proposal; (ii) vote AGAINST the proposal;
or (iii) ABSTAIN from voting on the proposal. To approve the proposal, the affirmative vote of a majority of the votes cast on
the matter at the Annual Meeting, without regard to broker non-votes or shares as to which the “ABSTAIN” box has been
selected on the proxy card, is required to approve this non-binding resolution. While this vote is required by law, it will neither
be binding on us or the Board of Directors, nor will it create or imply any change in the fiduciary duties of, or impose any additional
fiduciary duty on us or the Board of Directors.
As to the ratification of the appointment
of Crowe Horwath LLP to serve as our independent registered public accounting firm, by checking the appropriate box, a stockholder
may: (i) vote FOR the ratification; (ii) vote AGAINST the ratification; or (iii) ABSTAIN from voting on such ratification. The
affirmative vote of a majority of the votes cast on the matter at the Annual Meeting, without regard to broker non-votes or shares
as to which the “ABSTAIN” box has been selected on the proxy card, is required for the ratification.
If, at the time of
the Annual Meeting, there are not sufficient votes for a quorum or to approve or ratify any matter being presented, the Annual
Meeting may be adjourned in order to permit the further solicitation of proxies.
Proxies solicited
hereby will be returned to us and will be tabulated by the inspector of election designated by our Board of Directors.
Participants in the ESOP and Holders
of Non-Vested Restricted Stock
Participants in the ESOP will receive a
Vote Authorization Form that reflects all of the shares the participant may direct the trustees to vote on his or her behalf under
the plan. Under the terms of the ESOP, the ESOP trustee votes all shares held by the ESOP, but each ESOP participant may direct
the trustee how to vote the shares of Company common stock allocated to his or her account. The ESOP trustee will vote all unallocated
shares of Company common stock held by the ESOP and allocated shares for which no voting instructions are received in the same
proportion as shares for which it has received timely voting instructions.
The deadline for returning your ESOP Vote Authorization
Form is Tuesday, June 14, 2016
at 5:00 p.m., local time
.
Pursuant to the terms of the Poage Bankshares,
Inc. 2013 Equity Incentive Plan, a participant is entitled to direct how to vote the non-vested restricted shares of Company common
stock awarded to him or her.
PROPOSAL I — ELECTION OF DIRECTORS
Our Board of Directors
is comprised of eight members. Our Bylaws provide that directors are divided into three classes, with one class of directors elected
annually. Our directors are generally elected to serve for a three-year period and until their respective successors shall have
been elected and shall qualify. Three directors will be elected at the Annual Meeting to serve for a three-year period and until
their respective successors shall have been elected and shall qualify. The Nominating Committee of the Board of Directors has
nominated the following persons to serve as directors for three-year terms: Bruce VanHorn, Everett B. Gevedon and John C. Stewart,
Jr. Each of Messrs. Akers, Carver and King is currently a director of Poage Bankshares. Messrs. VanHorn, Gevedon and Stewart have
agreed to serve, if elected, and have consented to being named in this Proxy Statement.
The Board of Directors unanimously
recommends a vote “FOR” the election of all of the nominees.
The table below sets forth certain information
regarding the nominees, the directors continuing in office, and the executive officers who are not directors. It is intended that
the proxies solicited on behalf of the Board of Directors (other than proxies in which the vote is withheld as to any nominee)
will be voted at the Annual Meeting for the election of the proposed nominees. If a nominee is unable to serve, the shares represented
by all such proxies will be voted for the election of such substitute as the Board of Directors may determine. At this time, the
Board of Directors knows of no reason why any of the nominees might be unable to serve, if elected. There are no arrangements
or understandings between any of the nominees and any other person pursuant to which the nominees were selected.
Name
|
|
Position(s)
Held With Poage Bankshares
and/or
Town Square Bank
|
|
Age
(1)
|
|
|
Director
Since
(2)
|
|
|
Current Term
Expires
|
|
|
NOMINEES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce VanHorn.
|
|
President and Chief Executive Officer and Director
|
|
|
64
|
|
|
|
2013
|
|
|
|
2019
|
|
Everett B. Gevedon
|
|
Director
|
|
|
58
|
|
|
|
1998
|
|
|
|
2019
|
|
John
C. Stewart, Jr.
(3)
|
|
Director
|
|
|
69
|
|
|
|
2014
|
|
|
|
2019
|
|
|
CONTINUING DIRECTORS
|
|
Stuart N. Moore
|
|
Director
|
|
|
57
|
|
|
|
2005
|
|
|
|
2017
|
|
Charles W. Robinson
|
|
Vice Chairman of the Board
|
|
|
69
|
|
|
|
1996
|
|
|
|
2017
|
|
Thomas
Burnette
(3)
|
|
Chairman of the Board
|
|
|
65
|
|
|
|
2014
|
|
|
|
2017
|
|
Stephen S. Burchett
|
|
Director
|
|
|
49
|
|
|
|
2015
|
|
|
|
2018
|
|
Daniel King III
|
|
Director
|
|
|
66
|
|
|
|
2015
|
|
|
|
2018
|
|
|
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
|
|
Jane Gilkerson
|
|
Executive Vice President and Chief Financial Officer
|
|
|
54
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Jeffery W. Clark
|
|
Senior Vice President and Controller
|
|
|
57
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Miles R. Armentrout
|
|
Executive Vice President and Chief Credit Officer
|
|
|
59
|
|
|
|
N/A
|
|
|
|
N/A
|
|
James W. King
|
|
Executive Vice President, Chief Information Officer and Secretary
|
|
|
57
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
(1)
|
As of December 31, 2015.
|
|
(2)
|
Includes service with Poage Bankshares and Town Square Bank.
|
|
(3)
|
Before their appointment in 2014 in connection with the acquisition
of Town Square Financial Corporation, each of Messrs. Burnette and Stewart had served
as a director of Town Square Financial Corporation and Town Square Bank since 2011.
|
The biographies of each of the nominees,
continuing board members and executive officers are set forth below. With respect to directors and nominees, the biographies also
contain information regarding the person’s business experience and the experiences, qualifications, attributes or skills
that caused the Nominating Committee to determine that the person should serve as a director. Each director of Poage Bankshares,
except for Messrs. Akers and D. King, is also a director of Town Square Bank.
Director Nominees
Bruce VanHorn
was appointed
as Executive Vice President of Poage Bankshares and President of Town Square Bank in March 2014. He is also a member of the board
of directors of Town Square Bank, to which he was appointed in December 2014. Previously, he served as President, Chief Executive
Officer and Chairman of the Board of Town Square Financial Corporation and Town Square Bank. Mr. VanHorn has worked in the financial
industry since 1987. He began his banking career with Third National Bank serving as Vice President and Branch Administrator where
he was responsible for seven branches in the Boyd and Greenup County markets. Mr. VanHorn was one of the founders of Town Square
Bank and held the position of Executive Vice President and Chief Operations Officer. In July of 2001, he was promoted to President
and Chief Executive Officer and later named Chairman of the Board. Mr. VanHorn’s educational background includes an associate
degree in chemistry from the University of Kentucky, a Bachelor of Business Administration from Marshall University, and an MBA
from Morehead State University. He has also graduated from the Kentucky School of Banking at the University of Louisville and
the Graduate School of Banking at Louisiana State University. Mr. VanHorn is very active in several not-for profit organizations
within Boyd County, and currently is an officer within those organizations. Mr. VanHorn was selected to serve on the Board of
Directors because his broad banking experience and leadership skills provide insight as well as management skills for the Company
and because his involvement in community organizations is beneficial to Town Square Bank’s lending activities.
Everett B. Gevedon, MD
is
President and Chief Executive Officer of Family Allergy Services, Inc. in Ashland, Kentucky, a position he has held for 23 years.
Dr. Gevedon is a founding member and past Chairman of the Ashland Alliance, the new Chamber of Commerce and Economic Development
serving a two-county area. He also served as Chairman of the City of Ashland’s Economic Development Board for five years.
His other community service and business activities include current service on the Ashland City Park Board and the Boyd County
Board of Health. Dr. Gevedon has previously served as Chairman of the Ashland Tourism Commission and
as a board member of the Ashland Community College Foundation
and the Highlands Museum and Discovery Center. Dr. Gevedon has served as a director of Town Square Bank since 1998. He was selected
to serve as a director of Poage Bankshares because his long experience as President and Chief Executive Officer of a small business
provides insight with respect to the lending needs of owners and operators of small businesses in our market area. Further, his
extensive experience on area economic development boards provides insight into economic conditions and business development projects
within our market area, as well as contacts with area commercial loan prospects.
John C. Stewart, Jr.
was
appointed as a director in March 2014 in connection with the acquisition of Town Square Financial Corporation and Town Square
Bank after serving on the boards of directors of those institutions since 2011. He retired as President of Big Sandy Furniture,
Inc., a furniture retailer in Ashland, Kentucky, in April 2010 after dedicating 42 years to the company where he began his career
in 1968 as a salesperson. Mr. Stewart is a life-long resident of Ashland, Kentucky, and he graduated from the University of Kentucky
with a B. S. in Business/Economics. Mr. Stewart previously served on the Board of Directors for Community Trust and National City
Bank. Mr. Stewart is very active in civic and educational organizations within Boyd County, including service on the Executive
Committee of KDMC, as Chairman of the Board of ACTC, and as Financial Secretary of Holy Family Church and School. Mr. Stewart
was selected to serve as a director of Poage Bankshares because his extensive involvement in the management of a local business
provides insight as to the lending needs of owners and operators of small businesses in our market area.
Directors Continuing in Office
Stuart N. Moore, DMD
retired
from dentistry in 2006 after practicing for twenty-five years at Dr. Stuart N. Moore PSC in Ashland, Kentucky. He has served as
President of Jasmine Properties LLC in Ashland, Kentucky, which owns and manages residential and commercial rental properties,
since 1982. Dr. Moore obtained his real estate sales license in 1993 and was listed as a part-time real estate agent for various
real estate agencies in Ashland, Kentucky until placing his license in an inactive escrow status in 2013. Dr. Moore has served
on the board of directors of Town Square Bank since 2005, and was selected to serve as a director of Poage Bankshares because
his knowledge of real estate value from construction, comparable sales and income approaches are helpful in evaluating loan approvals,
as well as experience reviewing financial statements.
Charles W. Robinson
is a
certified public accountant who has worked extensively with businesses operating in our community. Mr. Robinson has worked in
public accounting since 1973, and has been employed at Charles W. Robinson P.S.C. CPA
in Ashland, Kentucky since 1984.
Mr. Robinson performed our audit before becoming a director in 1996. Mr. Robinson has served as a director of Town Square Bank
since 1996, and was selected to serve as a director of Poage Bankshares because his experience in public accounting and real estate
provides a broad and unique perspective on the challenges facing our organization and our business strategies and operations,
and because his experience as a certified public accountant provides unique insight into our financial accounting practices and
procedures, financial reporting and our relationship with our auditors.
Thomas Burnette
was appointed
as a director in March 2014 in connection with the acquisition of Town Square Financial Corporation and Town Square Bank after
serving on the boards of directors of those institutions since 2011, and was appointed as Vice Chairman of the Board of Directors
in December 2014. Mr. Burnette has been the President and Owner of Ashland Office Supply, Inc., an office supply retailer in Ashland,
Kentucky, since 1978. He is a graduate of Morehead State University. Mr. Burnette has served in a variety of capacities at civic
and community organizations in Boyd County, including the Ashland Kiwanis Club, Ashland National Little League, United Way of
Boyd and Greenup Counties, King’s Daughters’ Health Foundation, Community Hospice, the YMCA, the Boyd County Public
Library, Junior Achievement of the Ohio Valley, ACC Entrepreneur Center, the Ashland Planning Commission, the Woodlands Foundation
and the Kentucky Heart Institute and Kingsbrook Lifecare Center. He has also previously served as a director of the Bank of Ashland
and Fifth-Third Bank of Ashland. Mr. Burnette was selected to serve as a director of Poage Bankshares because his extensive involvement
in the management of a local business provides insight as to the lending needs of owners and operators of small businesses in
our market area. In addition, his extensive community service will be beneficial to Town Square Bank’s operations.
Stephen S. Burchett
was elected
as a director by shareholders in 2015. He has been a partner with the law firm of Offutt Nord Burchett, PLLC since 2002. As a
long practicing attorney in the area, he has repeatedly been named one of The Best Lawyers in America™ and a
Superlawyer
™
by Superlawyer Magazine™. Mr. Burchett has successfully represented a wide range of clients in complex litigation throughout
Central Appalachia. These clients include several of the Tri-States’ largest private employers such as publicly traded energy,
healthcare and industrial companies. He has also represented a number of clients in mergers and acquisitions and has experience
advising and providing legal guidance to boards of directors and officers. He is the only attorney practicing in the Tri-State
who is board-certified by the American Board of Professional Liability Attorneys™. He attended the University of Virginia
on the prestigious Jefferson Scholarship and received his law degree from the University of Kentucky where he was president of
the Student Bar Association. He has also served as a representative to the Kentucky Bar Association Board of Governors.
Mr. Burchett is one of three partners on the management committee of Offutt Nord Burchett, PLLC. Mr. Burchette was selected to
serve on the Board of Directors because his extensive legal background and significant legal expertise and financial management
experience provides insight to local lending as well as familiarity with the legal aspects of our business.
Daniel King III
was appointed
as a director effective March 17, 2015 to fill the vacancy resulting from J. Thomas Rupert’s death in November, 2014. Mr.
King has practiced law as a solo practitioner in Catlettsburg, Kentucky since 1978. He is also the Assistant Attorney for Boyd
County, a position he has held since 1985. Mr. King holds a bachelor’s degree from the University of Kentucky and a JD from
the University of Kentucky College of Law. Mr. King was appointed to the board of directors because his extensive experience as
a business attorney provides a unique perspective on our business and operations, and because his client service and community
service provide insight into the needs of members of our community, particularly in the Catlettsburg area into which the Company
recently expanded.
Executive Officers Who Are Not Directors
Jane Gilkerson
was appointed
as Executive Vice President and Chief Financial Officer of Poage Bankshares and Town Square Bank in March 2014 after serving as
Senior Vice President and Chief Financial Officer of Town Square Financial Corporation and Town Square Bank since February 2003.
Previously, Ms. Gilkerson worked for Hayflich & Steinberg CPA in Huntington, West Virginia, from February 2000 to February
2003. Before entering public accounting, Ms. Gilkerson worked in the banking industry since 1979. She is a Certified Public Accountant
licensed to practice in West Virginia. She holds a Bachelor of Business Administration in Accounting from Marshall University.
Ms. Gilkerson currently serves as Treasurer for Hope’s Place, a not-for-profit organization, in Ashland, Kentucky.
Jeffery W. Clark
is Senior
Vice President and Controller of Poage Bankshares and Town Square Bank. He served as Chief Financial Officer from September 2011
until March 2014 after serving as Senior Accountant since July 2011. He previously served as Vice President and Chief Financial
Officer of Ohio River Bank, Ironton, Ohio, since July 2007. Before his employment with Ohio River Bank, he served as Deputy
Treasurer with the Lawrence County, Ohio Treasurers Office since March 2006. Before his employment with the County Treasurers
Office, Mr. Clark served as Southeastern Ohio Market Area President for Classic Bank, Ashland, Kentucky since May 2003.
Before this position, Mr. Clark served as Controller of First Federal Savings Bank of Ironton, Ohio, since September 1986 and
Chief Financial Officer of its holding company, First Federal Financial Bancorp of Ironton, Ohio, since 1996.
Miles R. Armentrout
was appointed
Executive Vice President and Chief Credit Officer of Poage Bankshares and Town Square Bank in June 2012. He previously served
as Senior Vice President and Senior Loan Officer of Farmers and Merchants Bank, Miamisburg, Ohio, since 2011. Before his employment
with Farmers and Merchants Bank, he served as Executive Vice President and Senior Commercial Banking Officer with WesBanco Bank,
Wheeling, West Virginia, since 2007 and Executive Vice President and Chief Lending Officer for Oak Hill Banks, Jackson, Ohio,
since 2005. Before holding this position, he served as Regional President for the Western Ohio markets since 2003 and Senior Vice
President and Senior Loan Officer of Oak Hill subsidiary bank, Towne Bank, Cincinnati, Ohio, since 2001. Mr. Armentrout served
as Regional Executive of Sky Bank, Bowling Green, Ohio, since 1999 and as a Vice President and Commercial Loan Officer for Mid-American
Bank and Trust Company, Bowling Green, Ohio, since 1993. Before holding that position, he served in various lending management
and commercial lending positions with Farmers Banking Company,
Lakeview, Ohio, and BancOhio National Bank, Columbus, Ohio, since 1978.
James W. King
currently serves
as Executive Vice President, Chief Information Officer and Secretary. He has also served as a member of the board of directors
of Town Square Bank since 1997. Mr. King has been employed by Town Square Bank since 1983, and has held several positions before
being named Executive Vice President in 1997 and adding the title of Chief Information Officer in 2010.
Director Independence
The Board of Directors has determined that
each of the Company’s directors, except for Mr. VanHorn, is “independent” as defined in the listing standards
of the NASDAQ Stock Market. Mr. VanHorn is not independent by virtue of his current employment as President and Chief Executive
Officer.
In determining the independence of the
other directors, the Board of Directors considered the following facts, which are not required to be disclosed under “Transactions
With Certain Related Persons” pursuant to applicable Securities and Exchange Commission rules: that during the years ended
December 31, 2015, 2014 and 2013, Town Square Bank paid $98,033, $27,295 and $117,554, respectively, for office furniture and
supplies to Ashland Office Supplies, a company of which Director Thomas Burnette is President and owner. The Board of Directors
determined that the payment of market prices for office furniture and supplies does not interfere with Mr. Burnette’s exercise
of independent judgment in carrying out his responsibilities as a director.
Board Leadership Structure and Risk Oversight
To assure effective and independent oversight
of management, the Board of Directors has separated the roles of Chief Executive Officer and Chairman of the Board in recognition
of the differences between these two roles in management of the Company. The Chief Executive Officer is responsible for setting
the strategic direction for the Company and the day-to-day leadership and performance of the Company, while the Chairman of the
Board provides guidance to the Chief Executive Officer, sets the agenda for Board meetings and presides over meetings of the full
Board. The Chairman of the Board is an independent, non-management role. In addition, to minimize the risk involved with having
our President and Chief Executive Officer serve on the Board of Directors, the independent directors meet in executive sessions
periodically to discuss certain matters such as our independent audit and internal controls. We believe our structure is appropriate
given the relatively small size and simple operating philosophy of our organization.
The Board
of Directors is actively involved in oversight of risks that could affect Poage Bankshares. This oversight is conducted in part
through committees of the Board of Directors, but the full Board of Directors has retained responsibility for general oversight
of risks. The Board of Directors satisfies this responsibility through full reports by each committee chair regarding the committee’s
considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular
risks within Poage Bankshares and Town Square Bank, as well as through internal and external audits. Risks relating to the direct
operations of Town Square Bank are further overseen by the Board of Directors of Town Square Bank. The Board of Directors of Town
Square Bank also has additional committees that conduct risk oversight separate from Poage Bankshares.
Further, the Board
of Directors oversees risks through the establishment of policies and procedures that are designed to guide daily operations in
a manner consistent with applicable laws, regulations and risks acceptable to the organization.
Section 16(a) Beneficial Ownership Reporting Compliance
Our executive officers and directors and
beneficial owners of greater than 10% of the outstanding shares of common stock are required to file reports with the Securities
and Exchange Commission disclosing beneficial ownership and changes in beneficial ownership of our common stock. Securities and
Exchange Commission rules require disclosure if an executive officer, director or 10% beneficial owner fails to file these reports
on a timely basis. Based on our review of ownership reports required to be filed for the year ended December 31, 2015, no executive
officer, director or 10% beneficial owner of our shares of common stock failed to file ownership reports on a timely basis.
Code of Ethics
Poage Bankshares has adopted a Code of
Ethics that is applicable to its senior financial officers, including the principal executive officer, principal financial officer,
principal accounting officer and all officers performing similar functions. We have posted this Code of Ethics on our Internet
website at
www.townsquarebank.com
.
Attendance at Annual Meetings of Stockholders
Poage Bankshares does not have a written
policy regarding director attendance at annual meetings of stockholders, although directors are expected to attend these meetings
absent unavoidable scheduling conflicts.
All of our directors who were serving at the time of the 2015 Annual Meeting
of Stockholders attended that meeting.
Communications with the Board of Directors
Any stockholder who wishes to contact our
Board of Directors or an individual director may do so by writing to: Poage Bankshares, Inc., 1500 Carter Avenue, Ashland, Kentucky
41101, Attention: Secretary. The letter should indicate that the sender is a stockholder and if shares are not held of record,
should include appropriate evidence of stock ownership. Communications are reviewed by the Secretary and are then distributed
to the Board of Directors or the individual director, as appropriate, depending on the facts and circumstances outlined in the
communications received. The Secretary may attempt to handle an inquiry directly or forward a communication for response by the
director or directors to whom it is addressed. The Secretary has the authority not to forward a communication if it is primarily
commercial in nature, relates to an improper or irrelevant topic, or is unduly hostile, threatening, illegal or otherwise inappropriate.
Meetings and Committees of the Board of Directors
The business of Poage Bankshares is conducted
at regular and special meetings of the Board of Directors and its committees. In addition, the “independent” members
of the Board of Directors (as defined in the listing standards of the NASDAQ Stock Market) meet in executive sessions. The standing
committees of the Board of Directors of Poage Bankshares are the Audit, Compensation and Nominating Committees.
The Board of Directors held 12 regular
meetings, four special meetings and one annual meeting during the year ended December 31, 2015. No member of the Board of Directors
or any committee thereof attended fewer
than 75% of the aggregate of: (i) the total number of meetings of the Board
of Directors (held during the period for which he has been a director); and (ii) the total number of meetings held by all
committees on which he served (during the periods that he served).
Audit Committee.
The Audit
Committee is comprised of Directors Burnette, Gevedon, Stewart and Robinson, each of whom is “independent” in accordance
with applicable Securities and Exchange Commission rules and NASDAQ listing standards. Mr. Robinson serves as chair of the
Audit Committee. The Audit Committee also serves as the audit committee of the board of directors of Town Square Bank. The Board
of Directors has determined that Mr. Robinson qualifies as an “audit committee financial expert” as defined under
applicable Securities and Exchange Commission rules because Mr. Robinson is a certified public accountant and has nearly 40 years
of public accounting experience. In addition, each Audit Committee member has the ability to analyze and evaluate our financial
statements as well as an understanding of the Audit Committee’s functions. In addition, each Audit Committee member has
overseen and assessed the finances and financial reporting of various businesses that they own or with which they have been employed.
Our Board of Directors has adopted a written
charter for the Audit Committee, which is available on our Internet website at
www.townsquarebank.com
. As more fully described
in the Audit Committee Charter, the Audit Committee reviews the financial records and affairs of Poage Bankshares and monitors
adherence in accounting and financial reporting to accounting principles generally accepted in the United States of America. The
Audit Committee met five times during the year ended December 31, 2015.
Nominating Committee.
The
Nominating Committee is comprised of Directors Burnette, Gevedon, Moore and Robinson, each of whom is independent in accordance
with applicable Securities and Exchange Commission rules and NASDAQ listing standards. Mr. Moore serves as chair and Mr. Gevedon
serves as vice-chair of the Nominating Committee. The Nominating Committee operates under a written charter which is available
on our Internet website at
www.townsquarebank.com
. The Nominating Committee met once during the year ended December 31,
2015.
The Nominating Committee does not have
a formal policy or specific guidelines regarding diversity among board members. However, the Nominating Committee seeks members
who represent a mix of backgrounds that will reflect the diversity of our stockholders, employees, and customers, and experiences
that will enhance the quality of the Board of Directors’ deliberations and decisions. As the holding company for a community
bank, the Nominating Committee also seeks directors who can continue to strengthen Town Square Bank’s position in its community
and can assist Town Square Bank with business development through business and other community contacts. The Nominating Committee
considers the following criteria in evaluating and selecting candidates for nomination:
|
•
|
the extent to which the candidate would contribute to the
range of talent, skill and expertise appropriate for the Board of Directors;
|
|
•
|
the candidate’s relevant financial, regulatory and
business experience and skills, including knowledge of the banking and financial services
industries, familiarity with the operations of public companies and the ability to read
and understand financial statements;
|
|
•
|
the candidate’s familiarity with the Company’s
market areas, participation in local business, civic, or charitable organizations, and
ties to local businesses;
|
|
•
|
the candidate’s personal and professional integrity,
honesty and reputation;
|
|
•
|
the candidate’s ability to represent the best interests
of Poage Bankshares and its stockholders, including potential for conflicts of interest
with the candidate’s other endeavors;
|
|
•
|
the candidate’s ability to devote sufficient time
and energy to perform his or her duties, including the ability to attend meetings;
|
|
•
|
whether or not the candidate would be independent under
applicable Securities and Exchange Commission rules and NASDAQ listing standards for
purposes of service on the Board of Directors or on any particular committee; and
|
|
•
|
any other factors that the Nominating Committee deems relevant
to a candidate’s nomination, including the extent to which the candidate helps
the Board of Directors reflect the diversity of the Company’s stockholders, employees,
customers and communities, the current composition and size of the Board of Directors,
the balance of management and independent directors.
|
The Nominating Committee identifies nominees
by first evaluating the current members of the Board of Directors willing to continue in service, including the current members’
board and committee attendance and performance, length of board service, experience and contributions, and independence. Current
members of the Board of Directors with skills and experience that are relevant to the Company’s business and who are willing
to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the
board with that of obtaining a new perspective. If there is a vacancy on the Board of Directors because any member of the Board
of Directors does not wish to continue in service or if the Nominating Committee decides not to re-nominate a member for re-election,
the Nominating Committee would determine the desired skills and experience of a new nominee (including a review of the skills
set forth above), may solicit suggestions for director candidates from all board members and may engage in other search activities.
In accordance with our Bylaws, a person
is not eligible for election or appointment to the Board of Directors: (a) if such person has been the subject of supervisory
action by a financial regulatory agency that resulted
in a cease and desist order or an agreement or other written
statement subject to public disclosure under 12 U.S.C. §1818(u), or any successor provision; (b) if such person has been
convicted of a crime involving dishonesty or breach of trust which is punishable by imprisonment for a term exceeding one year
under state or federal law; (c) if such person is currently charged in any information, indictment, or other complaint with the
commission of or participation in such a crime; or (d) if such person did not, at the time of his first election or appointment
to the Board of Directors maintain his principal residence within ten miles of an office of Poage Bankshares or any subsidiary
thereof for a period of at least one year before the date of his purported election or appointment to the Board of Directors,
provided that clause (d) shall not apply to full-time employees of Poage Bankshares or any of its subsidiaries. No person may
serve on the Board of Directors and at the same time be a director or officer of a co-operative bank, credit union, savings bank,
savings and loan association, trust company, bank holding company or banking association (in each case whether chartered by a
state, the federal government or any other jurisdiction), other than of a subsidiary of Poage Bankshares, that engages in business
activities or solicits customers, whether through a physical presence or electronically, in the same market area as Poage Bankshares
or any of its subsidiaries. No person shall be eligible for election or appointment to the Board of Directors if such person is
the nominee or representative, as that term is defined in the regulations of the Board of Governors of the Federal Reserve System,
of a company the directors, partners, trustees or 10% stockholders of which would not be eligible for election or appointment
to the Board of Directors under the foregoing restrictions. The Board of Directors has the power to construe and apply foregoing
restrictions and to make all determinations necessary or desirable to implement such provisions, including but not limited to
determinations as to whether a person is a nominee or representative of a person, a company or a group, whether a person or company
is included in a group, and whether a person is the nominee or representative of a group acting in concert. In addition, no person
shall be eligible for election, reelection, appointment or reappointment to the Board of Directors if, at the time of such election,
reelection, appointment or reappointment, such person shall have attained the age of 70.
During the year ended December 31, 2015,
we did not pay a fee to any third party to identify or evaluate or assist in identifying or evaluating potential nominees for
director.
The Nominating Committee may consider qualified
candidates for director recommended by our stockholders. Stockholders can recommend qualified candidates for director by writing
to our Secretary at 1500 Carter Avenue, Ashland, Kentucky 41101. In order for the Nominating Committee to consider a candidate
recommended by a stockholder, the Secretary must receive a submission not less than 150 days before the anniversary of the
prior year’s annual meeting. The submission must include the following:
|
•
|
the name, age, personal and business address of the candidate,
the principal occupation or employment of the candidate;
|
|
•
|
a statement of the candidate’s business and educational
experience;
|
|
•
|
such other information regarding the candidate as would
be required to be included in the Company’s proxy statement pursuant to Securities
and Exchange Commission Regulation 14A;
|
|
•
|
the candidate’s written consent to serve as a director;
|
|
•
|
a statement that the writer is a stockholder and is proposing
a candidate for consideration by the Nominating Committee;
|
|
•
|
the name and address of the stockholder, and the number
of shares of the Company’s common stock that are held of record by such stockholder;
and
|
|
•
|
a statement disclosing whether the stockholder is acting
with or on behalf of any other person, and, if applicable, the identity of such other
person.
|
Submissions that are received and that satisfy the above requirements
are forwarded to the Nominating Committee for further review and consideration, using the same criteria to evaluate the candidate
as it uses for evaluating other candidates that it considers.
It is important to distinguish between
the recommendations of nominees by stockholders pursuant to this policy from a nomination (whether by proxy solicitation or in
person at a meeting) by a stockholder. Stockholders have certain rights under applicable law with respect to nominations, and
any such nominations must comply with applicable law and provisions of the Bylaws of Poage Bankshares. See
“Stockholder
Proposals and Nominations.”
Compensation Committee.
The
Compensation Committee is comprised of Directors Burnette, Moore, Robinson and Stewart, each of whom is independent in accordance
with applicable Securities and Exchange Commission rules and NASDAQ listing standards. Mr. Stewart serves as chair of the Compensation
Committee. The Compensation Committee also serves as the compensation committee of the board of directors of Town Square Bank.
The Compensation Committee met two times during the year ended December 31, 2015.
The Compensation Committee is responsible
for establishing the compensation philosophy, developing compensation guidelines, establishing (or recommend to the entire Board
of Directors) the compensation of the Chief Executive Officer and the other senior executive officers. No executive officer who
is also a director participates with respect to decisions on his compensation. The Compensation Committee will also administer
any stock-based incentive or compensation plan that Poage Bankshares may adopt in the future.
The Compensation Committee operates under
a written charter which is available on our Internet website at
www.townsquarebank.com
. This charter sets forth the responsibilities
of the Compensation Committee and reflects the Compensation Committee’s commitment to create a compensation structure that
not only compensates senior management but also aligns the interests of senior management with those of our stockholders.
Our goal is to determine appropriate compensation
levels that will enable us to meet the following objectives:
|
•
|
to attract, retain and motivate an experienced, competent
executive management team;
|
|
•
|
to reward the executive management team for the enhancement
of stockholder value based on our annual earnings performance and the market price of
our stock;
|
|
•
|
to provide compensation rewards that are adequately balanced
between short-term and long-term performance goals;
|
|
•
|
to encourage ownership of our common stock through stock-based
compensation to all levels of management; and
|
|
•
|
to maintain compensation levels that are competitive with
other financial institutions, particularly those in our peer group based on asset size
and market area.
|
The Compensation Committee considers a
number of factors in its decisions regarding executive compensation, including, but not limited to, the level of responsibility
and performance of the individual executive officers, the overall performance of Poage Bankshares and a peer group analysis of
compensation paid at institutions of comparable size and complexity. The Compensation Committee also considers the recommendations
of the Chief Executive Officer with respect to the compensation of executive officers other than the Chief Executive Officer.
The base salary levels for our executive
officers are set to reflect the duties and levels of responsibilities inherent in the position and to reflect competitive conditions
in the banking business in the Company’s market area. Comparative salaries paid by other financial institutions are considered
in establishing the salary for our executive officers. The Compensation Committee has utilized bank compensation surveys compiled
by the America Bankers Association as well as other surveys prepared by trade groups and independent benefit consultants. In setting
the base salaries, the Compensation Committee also considers a number of factors relating to the executive officers, including
individual performance, job responsibilities, experience level, ability and the knowledge of the position. These factors are considered
subjectively and none of the factors are accorded a specific weight.
Audit Committee Report
The Audit Committee has issued a report
that states as follows:
|
•
|
We have reviewed and discussed with management our audited
consolidated financial statements for the year ended December 31, 2015;
|
|
•
|
We have discussed with the independent registered public
accounting firm the matters required to be discussed by Statement on Auditing Standards
No. 16, “Communication With Audit Committees;” and
|
|
•
|
We have received the written disclosures and the letter
from the independent registered public accounting firm required by PCAOB Rule 3526,
“Communication with Audit Committees Concerning Independence,” and have discussed
with the independent registered public accounting firm their independence.
|
Based on the review and discussions referred
to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included
in our Annual Report on Form 10-K for the year ended December 31, 2015 for filing with the Securities and Exchange Commission.
This report shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that Poage Bankshares specifically
incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.
This report has been
provided by the Audit Committee:
Charles W. Robinson,
Chair
Thomas Burnette
Everett B. Gevedon
Daniel King, III
John C. Stewart,
Jr.
Transactions With Certain Related Persons
Loans and Extensions of Credit
.
Federal law requires that all loans or extensions of credit to executive officers and directors must be made on substantially
the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with the
general public and must not involve more than the normal risk of repayment or present other unfavorable features. Federal regulations
adopted under this law permit executive officers and directors to receive the same terms that are widely available to other employees
as long as the director or executive officer is not given preferential treatment compared to the other participating employees.
Loans to executive officers must be approved by the full Board of Directors, regardless of amounts, for such purposes as first
and second mortgages on primary residences, consumer loans or commercial loans.
Town Square Bank historically made loans
to its employees through an employee loan program. Directors, executive officers and Federal Reserve Board Regulation O officers
were excluded from this program. The program applied to consumer loans, including automobile loans. Pursuant to this program,
Town Square Bank waived the $100 loan processing fee for loans made under the employee loan program. Except for the waived loan
processing fee, these loans were made in the ordinary course of business, were made 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. Before the acquisition, Town Square Bank made
loans to directors and officers under the same terms available to customers. Employees who were not subject to Federal Reserve
Board Regulation O were eligible through an employee loan program for a one percent (1.00%) reduction in interest rate on consumer
loans, and for a waiver of the origination fee on loans on primary residences.
All loans made by Town Square Bank to their
respective directors and executive officers were made in the ordinary course of business, were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related
to the respective institution, and did not involve more than the normal risk of collectability of present other unfavorable features.
Other Transactions.
Since
the beginning of our last fiscal year, there have been no transaction and there are no currently proposed transactions in which
we were or are to be a participant and the amount involved exceeds $120,000, and in which any of our executive officers and directors
had or will have a direct or indirect material interest.
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below sets forth the total compensation
paid to or earned by our President and Chief Executive Officer, former President and Chief Executive Officer and our other two
most highly compensated executive officers (the “named executive officers”) for the years ended December 31, 2015
and 2014.
Name and principal position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
(1)
($)
|
|
|
Option
Awards
($)
|
|
|
All
Other
Compensation
(2)
($)
|
|
|
Total ($)
|
|
Bruce VanHorn
|
|
2015
|
|
|
202,000
|
|
|
|
4,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
47,721
|
|
|
|
254,221
|
|
President and Chief Executive Officer
|
|
2014
|
|
|
154,109
|
|
|
|
—
|
|
|
|
—
|
|
|
|
38,200
|
|
|
|
7,018
|
|
|
|
199,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ralph E. Coffman, Jr.
|
|
2015
|
|
|
146,265
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
114,879
|
|
|
|
261,144
|
|
Former President and Chief
Executive Officer
(3)
|
|
2014
|
|
|
211,180
|
|
|
|
20,930
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15,435
|
|
|
|
247,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miles R. Armentrout
|
|
2015
|
|
|
152,852
|
|
|
|
2,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,955
|
|
|
|
161,807
|
|
Executive Vice President and Chief Credit Officer
|
|
2014
|
|
|
152,854
|
|
|
|
14,420
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,113
|
|
|
|
174,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James W. King
|
|
2015
|
|
|
121,746
|
|
|
|
2,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,200
|
|
|
|
132,446
|
|
Executive Vice President and Chief Information Officer
|
|
2014
|
|
|
121,746
|
|
|
|
3,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,633
|
|
|
|
132,379
|
|
|
(1)
|
These amounts represent the aggregate grant date fair value for
outstanding stock option awards granted during the year indicated computed in accordance
with FASB ASC Topic 718. The assumptions used to determine the value of stock option
awards are described in Note 18 of the notes to the consolidated financial statements
included in the Company’s Annual Report on Form 10-K for the year ended December
31, 2015. The stock option award amounts reported are grant date fair values computed
based upon the Black-Scholes option valuation model, which estimated the present dollar
value of the Company’s common stock options at the time of the grant. The actual
value, if any, that may be realized will depend on the excess of the stock price over
the exercise price on the date the option is exercised. Therefore, there is no assurance
that the value realized by an executive officer will be at or near the value shown above.
|
|
(2)
|
For 2015, the amounts in this column reflect what Town Square
Bank paid for, or reimbursed, the applicable named executive officer for the various
benefits and perquisites as follows:
|
Name
|
|
Board
Fees
(1)
($)
|
|
|
Dividends
on
Restricted
Stock
(2)
($)
|
|
|
Auto
Expenses
(3)
($)
|
|
|
Life
Insurance
(4)
($)
|
|
|
Country
Club Dues
($)
|
|
|
Other
(5)
($)
|
|
|
Total All
Other
Compensation
($)
|
|
Bruce VanHorn
|
|
|
6,500
|
|
|
|
—
|
|
|
|
5,000
|
|
|
|
1,736
|
|
|
|
4,010
|
|
|
|
30,475
|
|
|
|
47,721
|
|
Ralph E. Coffman, Jr.
|
|
|
500
|
|
|
|
1,662
|
|
|
|
4,038
|
|
|
|
1,462
|
|
|
|
2,665
|
|
|
|
104,552
|
|
|
|
114,879
|
|
Miles R. Armentrout
|
|
|
—
|
|
|
|
1,397
|
|
|
|
—
|
|
|
|
1,548
|
|
|
|
4,010
|
|
|
|
—
|
|
|
|
6,955
|
|
James W. King
|
|
|
700
|
|
|
|
1,397
|
|
|
|
—
|
|
|
|
2,093
|
|
|
|
4,010
|
|
|
|
—
|
|
|
|
8,200
|
|
|
(1)
|
Represents fees paid for service on the Board of Directors of
Poage Bankshares and the Board of Directors of Town Square Bank.
|
|
(2)
|
Represents dividends paid on non-vested restricted stock awards.
|
|
(3)
|
Represents amount paid for the named executive officer’s
use of an automobile.
|
|
(4)
|
Represents imputed income from life insurance premiums paid by
Town Square Bank.
|
|
(5)
|
Represents retention payment of $30,000 and cell phone reimbursement
of $475 for Mr. VanHorn and severance payment of $104,099 and spousal expenses related
to business travel of $453 for Mr. Coffman.
|
|
(3)
|
Mr. Coffman resigned effective August 21, 2015.
|
Benefit Plans and Agreements
Employment Agreement with Mr. VanHorn.
Town Square Bank entered into an employment agreement (the “Agreement”) with Bruce VanHorn (“Executive”),
dated March 18, 2014. The Agreement has an initial term of three years. Commencing on May 1, 2014 and on each anniversary date
thereafter, the Agreement will be extended for a period of one year in addition to the then-remaining term, unless a notice is
provided to Executive that the Agreement will not be extended further. The current base salary for Executive is $202,000. In addition
to base salary, Executive received a retention bonus of $30,000 on March 18, 2014, $30,000 on March 18, 2015 and $30,000 on March
18, 2016, and he will be eligible for a subsequent retention payment of $30,000 each, provided Executive is employed with Town
Square Bank on the following employment date: March 18, 2017. The Agreement also provides that Executive is entitled to the continued
use of an automobile, with maintenance and insurance coverage provided by Town Square Bank. Town Square Bank also reimburses or
pays Executive amounts sufficient to establish or maintain membership in a country club or any other club or organization that
will benefit Town Square Bank. Executive is entitled to participate in incentive compensation and bonus programs, employee benefit
plans, medical, life insurance and disability income plans, retirement, vacation, and expense reimbursement plans and other benefit
plans or credit card privileges which Town Square Bank may from time to time have in effect for its senior executives.
Certain events resulting in Executive’s
termination or resignation entitle Executive to payments of severance benefits following termination of employment. In the event
of Executive’s involuntary termination for reasons other than for cause, change in control or retirement, or if the Executive
resigns during the term of the Agreement following (a) failure to appoint Executive to the executive position set forth in
the Agreement, (b) relocation of Executive’s office by more than 20 miles, (c) a material reduction in the benefits
or perquisites paid to Executive unless such reduction is part of a reduction that is generally applicable to officers or employees
of Town Square Bank, (d) a liquidation or dissolution of Town Square Bank, or (e) a material breach of the Agreement by Town
Square Bank, then Executive would be entitled to a severance payment in the form of a cash lump sum equal to (a) one times
the sum of (i) the highest rate of base salary paid to Executive at any time, (ii) the highest bonus paid to Executive
with respect to the three completed fiscal years before the date of termination, and (iii) the remaining retention payments that
have not yet been paid. Internal Revenue Code Section 409A may require that a portion of the above payments cannot be made
until six months after termination of employment if Executive is a “key employee” under Internal Revenue Service rules.
In addition, Executive would be entitled, at no expense to Executive, to the continuation of life insurance and non-taxable medical
and dental coverage for one year.
In the event of a change in control of
Town Square Bank or Poage Bankshares followed by Executive’s involuntary termination other than for cause or retirement,
or resignation for one of the reasons set forth above within 18 months thereafter, Executive would be entitled to a severance
payment in the form of a cash lump sum equal to (a) three times the sum of (i) the highest rate of base salary paid
to Executive at any time, (ii) the highest bonus paid to Executive with respect to the three completed fiscal years before
the change of control, and (iii) the remaining retention payments that have not yet been paid. In addition, Executive would be
entitled, at no expense to Executive, to the continuation of life insurance and non-taxable medical and dental coverage for thirty-six
months following the termination of employment. If payments made to Executive include an “excess parachute payment”
as defined in Section 280G of the Internal Revenue Code, such payments will be cutback by the minimum dollar amount necessary
to avoid this result.
Upon termination of Executive’s employment,
Executive will be subject to certain restrictions on his ability to compete, or to solicit business or employees of Town Square
Bank and Poage Bankshares for a period of two years following termination of employment. The covenant not to compete will not
apply if Executive’s termination of employment occurs after a change in control of Town Square Bank or Poage Bankshares.
Change in Control Agreement with
Mr. Armentrout
. On January 19, 2016, Town Square Bank entered into a change in control agreement with Miles R. Armentrout.
The agreement has a fixed term of one year and may be extended at the discretion of the Board of Directors of the Bank. However,
if Poage Bankshares enters into a definitive agreement to engage in a transaction that would be considered a change in control,
or a change in control otherwise occurs, the agreement will automatically renew for a period of one year following the effective
time of the change in control, except if the definitive agreement is terminated or the change in control does not occur, the term
of the agreement will not renew.
If the executive’s employment is
terminated after a change in control during the term of the Agreement either by Town Square Bank for a reason other than cause
or by the executive for good reason (as defined in the agreement), then Town Square Bank will pay the executive an amount equal
to one time’s the executive’s annual base salary at the time of the change in control in a lump sum. In addition to
the cash severance payment, the executive would be entitled to the continuation of non-taxable medical and dental coverage for
twelve months following the executive’s termination of employment. If payments made to the executive constitute an “excess
parachute payment” as defined under Section 280G of the Internal Revenue Code, the payments will be reduced to avoid this
result.
Change in Control Agreement with
Mr. King
. On December 12, 2011, Town Square Bank entered into a change in control agreement with James W. King. The
change in control agreement provides a benefit in the event of an involuntary termination of employment or resignation for good
reason following a change in control. The agreement defines good reason as:
|
•
|
the failure to appoint the executive to his executive position
(as defined in the agreement);
|
|
•
|
a material change in the executive’s position to become
one of lesser responsibility, importance or scope than the position the executive held
immediately before the change in control;
|
|
•
|
the relocation of the executive’s principal place
of employment by more than 30 miles from its location as of the date of the agreement;
|
|
•
|
a material reduction in the executive’s base salary
and benefits; or
|
|
•
|
the liquidation or dissolution of Town Square Bank, other
than a liquidation or dissolution caused by reorganizations that do not affect the status
of the executive.
|
The severance payment is an amount equal
to three times the sum of the executive’s base salary and the highest bonus earned during the prior three years, payable
in a lump sum, and the continuation of non-taxable medical and dental coverage for a three-year period. The amount of the payment
to be made in connection with a change in control will be reduced, if necessary, to an amount that is $1.00 less than the amount
that would otherwise be an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986,
as amended (the “Section 280G Limit”). Should Mr. King have his employment terminated in connection with a change
in control as of December 31, 2015, Mr. King would receive a maximum cash severance payment of approximately $365,238 based upon
his current level of compensation, and such amounts may be reduced pursuant to his Section 280G Limit.
Executive Supplemental Retirement
Plan with Mr. King.
Town Square Bank has purchased an insurance policy on the life of Mr. King and has entered into an
Executive Supplemental Retirement Plan (the “Plan”) with Mr. King. The insurance policy is owned by Town Square Bank,
which paid the premium due on the policy in a single lump sum. The amount of the premium paid for the life insurance policy was
$365,405. Under the Executive Supplemental Retirement Plan, upon the executive’s death while he was employed, the executive’s
beneficiary will be paid a death benefit equal to the executive’s Pre-Retirement Account, as defined in the Plan. If Mr.
King had died as of December 31, 2015, his beneficiaries would have received a death benefit of approximately $264,961.
If Mr. King remains in the employment of
Town Square Bank until normal retirement age (age 65), he shall receive the balance in the Pre-Retirement Account in 240 equal
monthly installments commencing 30 days following the date of the executive’s retirement. If he terminates employment following
a change in control, then he shall receive the benefits as if the executive had attained normal retirement age. If a termination
of employment following a change in control had occurred as of December 31, 2015, Mr. King would have been entitled to receive,
beginning at normal retirement age (as defined in the agreement), an estimated monthly benefit of $3,981, which would be payable
for 240 months.
Split Dollar Agreement.
Town
Square Bank has purchased an insurance policy on the life of Mr. King and has entered into endorsement Split Dollar Agreement
with Mr. King. The policy is owned by Town Square Bank,
which paid the premium due on the policy in a single lump sum.
The amount of the premium paid for the life insurance policy was $365,405. Under the Split Dollar Agreement, upon the executive’s
death while he is an executive of Town Square Bank, the executive’s beneficiary will be paid a death benefit equal to 80%
of the total death proceeds of the life insurance policy minus the cash surrender value of the policy. If Mr. King had died as
of December 31, 2015, his beneficiaries would have received a death benefit of $498,017.
If Mr. King dies after he terminates
employment for any reason, including retirement, his beneficiary will be entitled to a reduced benefit, which will be determined
based on the number of full years the executive has been employed since the date of hire. When Mr. King attains the age of
55, his beneficiary will be entitled to the full death benefit, as described above.
The Split Dollar Agreement may be terminated
if the executive’s employment is terminated for cause (as defined in the agreement) or upon Town Square Bank’s cancellation
of the life insurance policies. Upon termination, the executive will have an option to purchase the insurance policies for an
amount equal to the greater of the cash value of the policies or the amount of premiums paid by Town Square Bank.
Retirement Plans
401(k) Plan.
Town Square
Bank participates in the Pentegra Defined Contribution Plan for Financial Institutions, a tax-qualified defined contribution plan
for eligible employees (the “401(k) Plan”). Employees who have completed two consecutive months of service and attained
the age of 21 will be eligible to participate in the 401(k) Plan.
Under the 401(k) Plan, a participant may
elect to defer, on a pre-tax basis, up to 75% of his or her salary in any plan year, subject to limits imposed by the Internal
Revenue Code. For 2014, the salary deferral contribution limit is $17,500, provided, however, that a participant over age 50 may
contribute an additional $5,500 to the 401(k) Plan. During 2014, Town Square Bank provided an employer matching contribution equal
to 50% of a participant’s 401(k) contributions up to 6% of a participant’s annual salary. A participant is always
100% vested in his or her salary deferral contributions and a participant will become 100% vested in employer contributions after
completing three years of service. Generally, unless the participant elects otherwise, the participant’s account balance
will be distributed as a result of a participant’s termination of employment with Town Square Bank.
Defined Benefit Pension Plan.
Town
Square Bank participates in the Pentegra Defined Benefit Plan for Financial Institutions, a multi-employer pension plan (the “Pension
Plan”). The Pension Plan covers all eligible employees meeting certain service and age requirements that were employed by
Town Square Bank before January 1, 2007. Effective January 1, 2007, the Pension Plan was amended to provide that employees
hired after December 31, 2006 would not be eligible to participate in the Pension Plan. No new or additional benefits accrue
under the Pension Plan. During the year ended December 31, 2015, Town Square Bank recognized $87,252 as a pension expense.
Employee Stock Ownership Plan.
Town
Square Bank has adopted an employee stock ownership plan for eligible employees. Eligible employees who have attained age 21 and
completed one year of service are eligible to participate in the employee stock ownership plan.
The employee stock ownership plan trustee
purchased, on behalf of the employee stock ownership plan, 269,790 shares of common stock issued in the offering. The employee
stock ownership plan funded its stock purchase with a $2.7 million loan from Poage Bankshares, to be repaid over 20 years. The
loan will be repaid principally through Town Square Bank’s contribution to the employee stock ownership plan and dividends
payable on common stock held by the employee stock ownership plan over the 20-year term of the loan. The interest rate for the
employee stock ownership plan loan is an adjustable rate equal to the prime rate, as published in
The Wall Street Journal
,
on the first business day of the calendar year.
The trustee holds the shares purchased
by the employee stock ownership plan in an unallocated suspense account, and shares will be released from the suspense account
on a pro-rata basis as we repay the loan. The trustee will allocate the shares released among participants on the basis of each
participant’s proportional share of compensation relative to all participants. A participant will become 100% vested in
his or her account balance after
completing three years of service. Participants also become
fully vested automatically upon normal retirement, death or disability, a change in control, or termination of the employee stock
ownership plan. Generally, participants will receive distributions from the employee stock ownership plan upon separation from
service. The employee stock ownership plan reallocates any unvested shares forfeited upon termination of employment among the
remaining participants.
The employee stock ownership plan permits
participants to direct the trustee as to how to vote the shares of common stock allocated to their accounts. The trustee votes
unallocated shares and allocated shares for which participants do not provide instructions on any matter in the same ratio as
those shares for which participants provide instructions, subject to fulfillment of the trustee’s fiduciary responsibilities.
Under applicable accounting requirements,
Town Square Bank records a compensation expense for the employee stock ownership plan at the fair market value of the shares as
they are committed to be released from the unallocated suspense account to participants’ accounts, which may be more or
less than the original issue price. The compensation expense resulting from the release of the common stock from the suspense
account and allocation to plan participants results in a corresponding reduction in the Company’s earnings.
Outstanding Equity Awards at Fiscal
Year-End
The following table provides information
concerning unexercised options and stock awards that had not vested as of December 31, 2015 for each named executive officer other
than Ralph E. Coffman, Jr. He did not have any unexercised options and stock awards that had not vested as of December 31, 2015.
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(1)
|
|
|
Option
Exercise
Price ($)
|
|
|
Option
Expiration Date
|
|
Number
of
Shares or
Units of Stock
That Have
Not
Vested (#)
(2)
|
|
|
Market
Value
of Shares or
Units of Stock
That Have Not
Vested ($)
(3)
|
|
Bruce VanHorn
|
|
|
8,000
|
|
|
|
12,000
|
|
|
|
14.16
|
|
|
3/18/2024
|
|
|
—
|
|
|
|
—
|
|
Miles R. Armentrout
|
|
|
10,000
|
|
|
|
15,000
|
|
|
|
15.00
|
|
|
5/10/2023
|
|
|
5,665
|
|
|
|
96,872
|
|
James W. King
|
|
|
10,000
|
|
|
|
15,000
|
|
|
|
15.00
|
|
|
5/10/2023
|
|
|
5,665
|
|
|
|
96,872
|
|
|
(1)
|
Stock options vest at the rate of
20% per year commencing May 21, 2014 (March 18, 2015 for Mr. VanHorn), one year from
the date of grant, and continuing on each anniversary thereafter through May 21, 2018
(March 18, 2019 for Mr. VanHorn), five years from the date of grant.
|
|
(2)
|
Restricted stock vests at the rate
of 20% per year commencing April 16, 2014, one year from the date of grant, and continuing
on each anniversary thereafter through April 16, 2018.
|
|
(3)
|
Reflects the closing market price
of the stock on December 31, 2015 ($17.10) multiplied by the number of shares of restricted
stock held by the named executive officer on such date.
|
Stock Benefit Plan
2013 Equity Incentive Plan.
In
January 2013, the Company’s stockholders approved the Poage Bankshares, Inc. 2013 Equity Incentive Plan (the “Equity
Incentive Plan”), which provides officers, employees, and directors of Poage Bankshares and Town Square Bank with additional
incentives to promote the Company’s growth and performance. Most of the companies that the Company competes with for directors
and management-level employees are public companies that offer equity compensation as part of their overall director and officer
compensation programs. By approving the Equity Incentive Plan, the Company’s stockholders have given the Company flexibility
needed to continue to attract and retain highly qualified officers and directors by offering a competitive compensation program
that is linked to the performance of the Company’s common stock.
The Equity Incentive Plan authorizes the
issuance or delivery of up to 472,132 shares of Poage Bankshares common stock pursuant to grants of restricted stock awards, incentive
stock options, and non-qualified stock options; provided, however, that the maximum number of shares of stock that may be delivered
pursuant to the
exercise of stock options is 337,237 (all of which may be granted
as incentive stock options) and the maximum number of shares of stock that may be issued as restricted stock awards is 134,895.
The Equity Incentive Plan is administered
by the members of the Company’s Compensation Committee of the Board of Directors (the “Committee”) who are “Disinterested
Board Members,” as defined in the Equity Incentive Plan. The Committee has the authority and discretion to select the persons
who will receive awards; establish the terms and conditions relating to each award; adopt rules and regulations relating to the
Equity Incentive Plan; and interpret the Equity Incentive Plan. The Equity Incentive Plan also permits the Committee to delegate
all or any portion of its responsibilities and powers.
The Company’s employees and outside
directors are eligible to receive awards under the Equity Incentive Plan. Awards may be granted in a combination of restricted
stock awards, incentive stock options, and non-qualified stock options. The exercise price of stock options granted under the
Equity Incentive Plan may not be less than the fair market value on the date the stock option is granted. Stock options are subject
to vesting conditions and restrictions as determined by the Committee. Stock awards under the Equity Incentive Plan will be granted
only in whole shares of common stock. All restricted stock and stock option grants will be subject to conditions established by
the Committee that are set forth in the award agreement.
All stock options and restricted stock
awards are subject to time-based vesting and vest over a five-year period, with 20% of the awards vesting each year. The recipients
of restricted stock awards are entitled to receive the cash dividends paid on all restricted stock awards, whether such awards
are vested or not.
Securities Authorized for Issuance Under Stock-Based Compensation
Plans.
The following table sets forth information
as of December 31, 2015 about common stock that may be issued under the Company’s equity compensation plans.
|
|
Number of
securities
to be
issued upon exercise
of outstanding
options, warrants
and rights
|
|
|
Weighted-
average
exercise
price of
outstanding
options,
warrants and
rights
|
|
|
Number of securities
remaining available for
issuance under stock-
based compensation
plans (excluding
securities reflected in
first column
|
|
Equity
compensation plans approved by stockholders
(1)
|
|
|
205,500
|
|
|
$
|
14.93
|
|
|
|
49,987
|
|
Equity compensation plans not approved by stockholders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
|
205,500
|
|
|
$
|
14.93
|
|
|
|
49,987
|
|
|
(1)
|
These awards were granted pursuant to the Equity Incentive
Plan.
|
Director Compensation
The following table sets forth for the
fiscal year ended December 31, 2015 certain information as to the total remuneration we paid to our directors other than to our
named executive officers. Information with respect to director compensation paid to directors who are also named executive officers
is included above in
“—Executive Compensation—Summary Compensation Table.”
Name
|
|
Fees earned
or paid
in
cash ($)
|
|
|
Stock awards
($)
|
|
|
Option awards
($)
|
|
|
All
other
compensation
(1)
($)
|
|
|
Total ($)
|
|
Darryl Akers.
|
|
|
18,200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30,875
|
|
|
|
49,075
|
|
Stephen Burchett
|
|
|
8,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,000
|
|
Thomas Burnette
|
|
|
27,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27,750
|
|
Thomas P. Carver II
(2)
|
|
|
43,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,198
|
|
|
|
44,198
|
|
Everett B. Gevedon
|
|
|
25,100
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,594
|
|
|
|
27,694
|
|
Daniel King III
|
|
|
15,100
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15,100
|
|
Stuart N. Moore
|
|
|
25,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,230
|
|
|
|
28,830
|
|
Charles W. Robinson
|
|
|
27,100
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,787
|
|
|
|
30,887
|
|
John C. Stewart, Jr
|
|
|
27,100
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27,100
|
|
|
(1)
|
Represents long term care insurance premiums paid by Town
Square Bank on behalf of each director, except Messrs. Burchett, Burnette, Carver, King
and Stewart. The amount for Mr. Akers only, includes $24,300 for consulting services
and $4,118 of life insurance premiums paid by Town Square Bank. In addition, the amounts
include dividends paid on non-vested restricted stock awards in the amount of $1,197
for each director,
except the amount for Messrs. Akers, Burchett, Burnette, King
and Stewart is $399, $0, $0, $0 and $0, respectively.
|
|
(2)
|
Mr. Carver passed away on February 7, 2016.
|
Director Fees
Each person who serves as a director of
Poage Bankshares, other than Messrs. Akers and King, also serves as a director of Town Square Bank and earns director and committee
fees in his capacity as a director or committee member of Poage Bankshares and Town Square Bank. However, if a Poage Bankshares
meeting immediately precedes or follows a Town Square Bank meeting the directors will only be paid for one meeting. All
director fees are paid by Town Square Bank. Each director or committee member is paid only if in attendance in person or by telephone.
Employee directors are only paid for special meetings if they are held after 5:00 p.m.
Each director of Town Square Bank is paid
a regular monthly meeting fee of $1,400, except that Mr. Carver received, and Mr. Burnette currently receives, $2,500 as Chairman
of the Board, Mr. Burnette received, and Mr. Robinson currently receives, $1,450 as Vice-Chairman of the Board and Mr. VanHorn
receives $1,450. Each non-employee director receives $500 per committee meeting, except that each non-employee director receives
$150 per meeting of the Directors Loan Committee.
Director Plans
Director Supplemental Retirement
Plans.
Town Square Bank has purchased insurance policies on the lives of Messrs. Carver, Gevedon, Moore and Robinson and
has entered into a Director Supplemental Retirement Plan (the “Plan”) with each of Messrs. Carver, Gevedon, Moore
and Robinson. The insurance policies are owned by Town Square Bank, which paid each premium due on the policies in a single lump
sum. The amount of the premiums paid for the life insurance policies was $220,000, $60,845, $121,000 and $115,504, respectively,
on behalf of Messrs. Carver, Gevedon, Moore and Robinson. Under the Director Supplemental Retirement Plans, upon a director’s
death, the director’s beneficiary will be paid a death benefit equal to the director’s accrued liability retirement
plan, as defined in the plan. If the directors had died as of December 31, 2015, the beneficiaries of Messrs. Carver, Gevedon,
Moore and Robinson would have received a death benefit of approximately $93,750, $32,581, $37,677 and $125,051, respectively.
Upon Mr. Carver’s death on February 7, 2015, $95,581 was paid to his beneficiary pursuant to the terms of the plan.
If Messrs. Gevedon, Moore and Robinson
remain in the service of Town Square Bank until normal retirement age (age 70), each shall receive an annual benefit payable over
thirteen years (fourteen years for Mr. Robinson) in monthly installments commencing thirty (30) days following the date of
the director’s retirement. If a director terminates employment following a change in control, then the director shall receive
the benefits as if the director had attained normal retirement age. If a termination of employment following a change in control
had occurred as of December 31, 2015, Messrs. Gevedon, Moore and Robinson would have received, beginning at normal retirement
age (as defined in the plan), amounts specified in an exhibit to each director’s agreement, which provides for different
payment amounts in different years. The first year’s payment amounts are $12,921, $8,655 and $11,832, respectively, which
would be payable for up to thirteen years (fourteen for Mr. Robinson).
PROPOSAL II — ADVISORY (NON-BINDING)
VOTE ON EXECUTIVE COMPENSATION
The compensation of our named executive
officers is described above under
“Executive Compensation.”
Stockholders are urged to read the
“Executive
Compensation”
section of this Proxy Statement, which discusses our compensation policies and procedures with respect
to our named executive officers.
In accordance with Section 14A of the Securities
Exchange Act of 1934, stockholders are being asked at the Annual Meeting to provide their support with respect to the compensation
of our Named Executive Officers by voting on the following advisory (non-binding) resolution:
“RESOLVED, that the stockholders
of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers as described in
the “Executive Compensation” section of the Proxy Statement.”
This advisory vote, commonly known as a
“say-on-pay” advisory vote, gives stockholders the opportunity to endorse or not endorse the Company’s executive
pay program. Although non-binding, the Board of Directors and the Compensation Committee value constructive dialogue with our
stockholders on executive compensation and other important governance topics and encourage all stockholders to vote their shares
on this matter. The Board of Directors and the Compensation Committee will review the voting results and take them into consideration
when making future decisions regarding our executive compensation programs. At the Company’s 2013 Annual Meeting of Stockholders,
the stockholders of the Company adopted a non-binding resolution that the “say-on-pay” vote would be conducted every
year. Accordingly, the Board of Directors presents the “say-on-pay” advisory vote to the stockholders on an annual
basis. The “say-on-pay” advisory vote will next be presented to the stockholders at the 2017 Annual Meeting of Stockholders.
The Board of Directors unanimously recommends
a vote “FOR” the approval of the advisory (non-binding) resolution.
PROPOSAL III — RATIFICATION OF
APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Crowe Horwath LLP served as our independent
registered public accounting firm for the year ended December 31, 2015. The Audit Committee of Poage Bankshares has approved the
engagement of Crowe Horwath LLP to serve as our independent registered public accounting firm for the year ending December 31,
2016, subject to the ratification of the engagement by our stockholders at the Annual Meeting. A representative of Crowe Horwath
LLP is expected to attend the Annual Meeting and may respond to appropriate questions and make a statement if he or she so desires.
Even if the engagement of Crowe Horwath
LLP is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public
accounting firm at any time during the year if it determines that such change would be in the best interests of Poage Bankshares
and its stockholders.
Set forth below is certain information
concerning aggregate fees billed for professional services rendered by Crowe Horwath LLP during the years ended December 31, 2015
and December 31, 2014.
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Audit Fees
|
|
$
|
102,400
|
|
|
$
|
78,000
|
|
Audit-Related Fees
|
|
$
|
102,541
|
|
|
$
|
101,911
|
|
Tax Fees
|
|
$
|
16,514
|
|
|
$
|
—
|
|
All Other Fees
|
|
$
|
7,479
|
|
|
$
|
—
|
|
Audit Fees.
Audit fees represent
the aggregate fees billed to us for professional services rendered for the audit of our annual financial statements, review of
the financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided in connection
with statutory and regulatory filings and engagements.
Audit-Related Fees.
Audit-related
fees billed to us during the year ended December 31, 2015 were for services rendered in connection with the acquisition of Commonwealth
Bank, F.S.B. Audit-related fees billed to us during the year ended December 31, 2014 were for services rendered in connection
with the acquisition of Town Square Financial Corporation.
Tax Fees
.
Tax fees billed
to us during the year ended December 31, 2015 were for services rendered in connection with the acquisition of Commonwealth Bank,
F.S.B.
All Other Fees
.
Other fees
billed to us during the year ended December 31, 2015 were related to the acquisition of Commonwealth Bank, F.S.B.
The Audit Committee has considered whether
the provision of non-audit services, which relate primarily to tax compliance services and tax advice rendered, is compatible
with maintaining the independence of Crowe Horwath LLP. The Audit Committee concluded that performing such services does not affect
the independence of Crowe Horwath LLP in performing its function as our independent registered public accounting firm.
The Audit Committee’s policy is to
pre-approve all audit and non-audit services provided by the independent registered public accounting firm, either by approving
an engagement before the engagement or pursuant to a pre-approval policy with respect to particular services. These services may
include audit services, audit-related services, tax services and other services. The Audit Committee may delegate pre-approval
authority to one or more members of the Audit Committee when expedition of services is necessary. The independent registered public
accounting firm and management are required to periodically report to the full Audit Committee regarding the extent of services
provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services
performed to date. The audit-related fees and all other fees described above were approved as part of our engagement of Crowe
Horwath LLP.
The Board of Directors unanimously recommends
a vote “FOR” the ratification of Crowe Horwath LLP to serve as the independent registered public accounting firm for
the year ending December 31, 2016.
STOCKHOLDER PROPOSALS AND NOMINATIONS
In order to be eligible for inclusion in
the proxy materials for our 2017 Annual Meeting of Stockholders, any stockholder proposal to take action at such meeting must
be received at the Company’s executive office, 1500 Carter Avenue, Ashland, Kentucky 41101, no later than January 17, 2017,
which is 120 days before the first anniversary of the date we expect to mail these proxy materials. If the date of the 2017 Annual
Meeting of Stockholders is changed by more than 30 days, any stockholder proposal must be received at a reasonable time before
we print or mail proxy materials for such meeting. Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934.
In order to be considered at our 2017 Annual
Meeting of Stockholders, but not included in proxy materials, a stockholder proposal to take action at such meeting or a director
nomination must be received at our executive office not more than 90 days and not less than 80 days before the date of such meeting;
provided, that if less than 90
days’ notice of such meeting is given to stockholders,
such stockholder proposal must be received at our executive office not later than the 10
th
day following the date on
which notice of such meeting was mailed to stockholders or was otherwise disclosed in a press release reported by a nationally
recognized news service, in a document publicly filed or furnished with the Securities and Exchange Commission, or on our website.
The notice with respect
to stockholder proposals that are not nominations for director must set forth as to each matter: (i) a brief description
of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting;
(ii) the name and address of such stockholder as they appear on the books of Poage Bankshares and of the beneficial owner,
if any, on whose behalf the proposal is made; (iii) the class or series and number of shares of capital stock which are owned
beneficially or of record by such stockholder and such beneficial owner; (iv) a description of all arrangements or understandings
between such stockholder and any other person or persons (including their names) in connection with the proposal of such business
by such stockholder and any material interest of such stockholder in such business; and (v) a representation that such stockholder
intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.
A notice with respect to director nominations
must include (a) as to each person whom the stockholder proposes to nominate for election as a director, (i) all information
relating to such person that would indicate such person’s qualification to serve on the Board of Directors of Poage Bankshares;
(ii) an affidavit that such person would not be disqualified under the provisions of Article II, Section 12 of our Bylaws (see
“Meetings of the Board of Directors—Nominating Committee”
); (iii) such information relating to such person
that is required to be disclosed in connection with solicitations of proxies for election of directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, and (iv) a written consent of each proposed
nominee to be named as a nominee and to serve as a director if elected; and (b) as to the stockholder giving the notice:
(i) the name and address of such stockholder as they appear on the Company’s books and of the beneficial owner, if
any, on whose behalf the nomination is made; (ii) the class or series and number of shares of capital stock which are owned
beneficially or of record by such stockholder and such beneficial owner; (iii) a description of all arrangements or understandings
between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by such stockholder; (iv) a representation that such stockholder intends to appear in person
or by proxy at the meeting to nominate the persons named in its notice; and (v) any other information relating to such stockholder
that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations
of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934.
Nothing in this Proxy Statement shall be
deemed to require us to include in our proxy statement and proxy relating to an annual meeting any stockholder proposal that does
not meet all of the requirements for inclusion established by the Securities and Exchange Commission in effect at the time such
proposal is received.
OTHER MATTERS
The Board of Directors is not aware of
any business to come before the Annual Meeting other than the matters described above in this Proxy Statement. However, if any
matters should properly come before the Annual Meeting, it is intended that the Board of Directors, as holders of the proxies,
will act as determined by a majority vote.
MISCELLANEOUS
The Company will bear the cost of solicitation
of proxies and 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 Poage Bankshares common stock. In addition to solicitations by
mail, directors, officers and regular employees of Poage Bankshares may solicit proxies personally or by telephone without additional
compensation.
A COPY OF THE COMPANY’S 2015 ANNUAL
REPORT TO STOCKHOLDERS WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY,
1500 CARTER AVENUE, ASHLAND, KENTUCKY 41101 OR BY CALLING (606) 324-7196.
References to our website address throughout
this Proxy Statement and the accompanying materials are for informational purposes only, or to fulfill specific disclosure requirements
of the Securities and Exchange Commission’s rules. These references are not intended to, and do not, incorporate the contents
of our website by reference into this Proxy Statement or the accompanying materials.
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
|
|
James W. King
|
|
Secretary
|
Ashland, Kentucky
May 17, 2016
Poage Bankshares, Inc. (delisted) (NASDAQ:PBSK)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Poage Bankshares, Inc. (delisted) (NASDAQ:PBSK)
Historical Stock Chart
Von Jul 2023 bis Jul 2024