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. _____)
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Soliciting Material Pursuant to §240.14a-12 | |||
| Quaint Oak Bancorp, Inc. | ||
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April 4, 201211, 2014
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of Quaint Oak Bancorp, Inc. The meeting will be held at our headquarters, located at 501 Knowles Avenue, Southampton, Pennsylvania, 18966 on Wednesday, May 9, 201214, 2014 at 2:00 p.m., Eastern time. The matters to be considered by shareholders at the annual meeting are described in the accompanying materials.
It is very important that your shares be voted at the annual meeting regardless of the number you own or whether you are able to attend the meeting in person. We urge you to mark, sign, and date your proxy card today and return it in the envelope provided, even if you plan to attend the annual meeting. This will not prevent you from voting in person, but will ensure that your vote is counted if you are unable to attend.
On behalf of the Board of Directors and all of the employees of Quaint Oak Bancorp, I thank you for your continued interest and support.
Sincerely,
Robert T. Strong
President and Chief Executive Officer
QUAINT OAK BANCORP, INC. 501 Knowles Avenue Southampton, Pennsylvania 18966 | |||
| NOTICE OF ANNUAL MEETING OF SHAREHOLDERS | |||
TIME | 2:00 p.m., Eastern time, Wednesday, May | ||
PLACE | Quaint Oak Bank 501 Knowles Avenue Southampton, Pennsylvania 18966 | ||
| ITEMS OF BUSINESS | (1) | To elect their successors are elected and qualified; | |
| (2) | To ratify the appointment of registered public accounting firm for the fiscal year ending December 31, | ||
| To transact such other business, as may properly come before the meeting or at any adjournment thereof. We are not aware of any other such business. | |||
RECORD DATE | Holders of Quaint Oak Bancorp common stock of record at the close of business on March | ||
ANNUAL REPORT | Our | ||
PROXY VOTING | It is important that your shares be represented and voted at the meeting. You can vote your shares by completing and returning the proxy card sent to you. Most shareholders whose shares are held in “street” name with a broker or other nominee can also vote their shares over the Internet or by telephone. If Internet or telephone voting is available to you, voting instructions are printed on the voting instruction form you received. You can revoke a proxy at any time prior to its exercise at the meeting by following the instructions in the accompanying proxy statement. | ||
Southampton, Pennsylvania April | BY ORDER OF THE BOARD OF DIRECTORS   Diane J. Colyer Corporate Secretary | ||
| TABLE OF CONTENTS | |
| Page | |
About the Annual Meeting of Shareholders | 1 |
| Information with Respect to Nominees for Director, Continuing Directors and Executive Officers | 3 |
Election of Directors (Proposal One) | 3 |
Directors Whose Terms Are Continuing | 4 |
Executive Officers Who Are Not Also Directors | |
| 5 | |
Committees and Meetings of the Board of Directors | 6 |
Board Leadership Structure | 7 |
Board’s Role in Risk Oversight | 7 |
Director Compensation | 8 |
Directors’ Attendance at Annual Meetings | 8 |
Director Nominations | 9 |
Related Party Transactions | 9 |
Executive Compensation | 10 |
Summary Compensation Table | 10 |
Employment Agreements | 10 |
Retirement Benefits | 11 |
Outstanding Equity Awards at Fiscal Year-End | 12 |
| Ratification of Appointment of Independent Registered Public Accounting Firm (Proposal Two) | 12 |
| 13 | |
Audit Fees | |
| 13 | |
| Beneficial Ownership of Common Stock by Certain Beneficial Owners and Management | 14 |
Section 16(a) Beneficial Ownership Reporting Compliance | 15 |
Report of the Audit Committee | 16 |
| Shareholder Proposals, Nominations and Communications with the Board of Directors | 16 |
Annual Reports | 17 |
Other Matters | 17 |
PROXY STATEMENT
OF
QUAINT OAK BANCORP, INC.
| ABOUT THE ANNUAL MEETING OF SHAREHOLDERS |
We are furnishing this proxy statement to holders of common stock of Quaint Oak Bancorp, Inc., the parent holding company of Quaint Oak Bank. Proxies are being solicited on behalf of our Board of Directors for use at the Annual Meeting of Shareholders to be held at our headquarters located at 501 Knowles Avenue, Southampton, Pennsylvania, 18966 on Wednesday, May 9, 201214, 2014 at 2:00 p.m., Eastern time, and at any adjournment thereof for the purposes set forth in the attached Notice of Annual Meeting of Shareholders. This proxy statement is first being mailed to shareholders on or about April 4, 2012.11, 2014.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 9, 2012.14, 2014. This proxy statement and our 20112013 Annual Report are available on our website at www.quaintoak.com/www.quaintoak.com/investors/annual-meeting/.
What is the purpose of the annual meeting?
At our annual meeting, shareholders will act upon the matters outlined in the attached Notice of Annual Meeting of Shareholders, including the election of directors and the ratification of our independent registered public accounting firm. In addition, management will report on the performance of Quaint Oak Bancorp and respond to questions from shareholders.
Who is entitled to vote?
Only our shareholders of record as of the close of business on the voting record date for the meeting, March 23, 2012,21, 2014, are entitled to vote at the meeting. On the record date, we had 987,126917,649 shares of common stock issued and outstanding and no other class of equity securities outstanding. For each issued and outstanding share of common stock you own on the record date, you will be entitled to one vote on each matter to be voted on at the meeting, in person or by proxy.
How do I submit my proxy?
After you have carefully read this proxy statement, indicate on your proxy card how you want your shares to be voted. Then sign, date and mail your proxy card in the enclosed prepaid return envelope as soon as possible. This will enable that your shares will be represented and voted at the annual meeting.
If my shares are held in “street name” by my broker, could my broker automatically vote my shares?
Your broker may not vote on the election of directors, if you do not furnish instructions to your broker. You should use the voting instruction form provided by the institution that holds your shares to instruct your broker to vote your shares or else your shares may not be voted or may be considered “broker non-votes.”
Your broker may vote in his or her discretion on the ratification of the appointment of our independent registered public accounting firm if you do not furnish instructions. If your broker votes in his or her discretion on proposal two and you did not provide instructions on proposal one, then your shares will be considered “broker non-votes” on the election of directors.
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Can I attend the annual meeting and vote my shares in person?
Can I change my vote after I return my proxy card?
Yes. If you have not voted through your broker or other nominee, there are three ways you can change your vote or revoke your proxy after you have sent in your proxy card.
| First, you may complete and submit a new proxy. Any earlier proxies will be revoked automatically. |
| Second, you may send a written notice to the Secretary of Quaint Oak Bancorp, Inc., Ms. Diane J. Colyer, Corporate Secretary, Quaint Oak Bancorp, Inc., 501 Knowles Avenue, Southampton, Pennsylvania 18966, stating that you would like to revoke your proxy. |
| Third, you may attend the annual meeting and vote in person. Any earlier proxy will be revoked. However, attending the annual meeting without voting in person will not revoke your proxy. |
If your shares are held in street name and you have instructed a broker or other nominee to vote your shares, you must follow directions you receive from your broker or other nominee to change your vote.
What constitutes a quorum?
The presence at the annual meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the record date will constitute a quorum. Proxies received but marked as abstentions will be included in the calculation of the number of votes considered to be present at the meeting.
What are the Board of Directors’ recommendations?
The recommendations of the Board of Directors are set forth under the description of each proposal in this proxy statement. In summary, the Board of Directors recommends that you vote (i) FOR the nominees for director described herein and (ii) FOR ratification of the appointment of ParenteBeard LLCS.R. Snodgrass, P.C. as our independent registered public accounting firm for fiscal 2012.the year ended December 31, 2014.
The proxy solicited hereby, if properly signed and returned to us and not revoked prior to its use, will be voted in accordance with your instructions contained in the proxy. If no contrary instructions are given, each proxy signed and received will be voted in the manner recommended by the Board of Directors and, upon the transaction of such other business as may properly come before the meeting, in accordance with the best judgment of the persons appointed as proxies. Proxies solicited hereby may be exercised only at the annual meeting and any adjournment of the annual meeting and will not be used for any other meeting.
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What vote is required to approve each item?
Directors are elected by a plurality of the votes cast with a quorum, a majority of the outstanding shares entitled to vote represented in person or by proxy, present. The twothree persons who receive the greatest number of votes of the holders of common stock represented in person or by proxy at the annual meeting will be elected directors. The affirmative vote of a majority ofUnder the totalPennsylvania Business Corporation Law, abstentions and broker non-votes do not constitute votes cast isand will not affect the vote required for approval of the proposal to ratify the appointment of the independent registered public accounting firm. Abstentions are considered in determining the presence of a quorum, but will not affect the vote required on the proposals to be considered at the Annual Meeting. Under the Pennsylvania Business Corporation Law, an abstention or broker non-vote is not counted as a vote cast and accordingly, will have no effect on the vote to elect directors or ratify the appointment of our independent registered public accounting firm.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR, CONTINUING DIRECTORS AND EXECUTIVE OFFICERS |
Election of Directors (Proposal One)
Our Articles of Incorporation provide that the Board of Directors will be divided into three classes as nearly equal in number as the then total number of directors constituting the Board of Directors permits. The directors are elected by our shareholders for staggered terms, or until their successors are elected and qualified. At the annual meeting, shareholders of Quaint Oak Bancorp will be asked to elect one class of directors, consisting of twothree directors, for a three-year term expiring in 2015,2017, and until their successors are elected and qualified.
No director is related to any other director or executive officer by first cousin or closer, except Messrs. Ager and DiPiero who are brothers-in-law. Each nominee and each director whose term continues currently serves as a director of Quaint Oak Bancorp and its subsidiary, Quaint Oak Bank.
Unless otherwise directed, each proxy executed and returned by a shareholder will be voted for the election of the nominees for director listed below. If any person named as a nominee should be unable or unwilling to stand for election at the time of the annual meeting, the proxies will nominate and vote for any replacement nominee or nominees recommended by the Board of Directors. At this time, the Board of Directors knows of no reason why any of the nominees listed below may not be able to serve as a director if elected.
The following tables present information concerning the nominees for director and each director whose term continues, including tenure as a director. Terms as directors for Messrs. Ager, Augustine, DiPiero, Gant, Phillips, Spink and Strongall directors other than Mr. Clarke include service as a director of Quaint Oak Bank prior to the formation of Quaint Oak Bancorp in 2007. Ages are reflected as of March 23, 2012.21, 2014.
Nominees for Director for a Three-Year Term Expiring in 20152017
Name | Age and Principal Occupation During the Past Five Years/Public Directorships | |
George M. Ager | Director. | |
| Mr. |
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Nominees for Director for a Three-Year Term Expiring in 2017 (Continued) | ||||||||||||||||||||||||||||||||||||||||||
Name | Age and Principal Occupation During the Past Five Years/Public Directorships | |
| Mr. | ||
Marsh B. Spink | Director. Managing Partner of Lawn-Crest Realty, Philadelphia, Pennsylvania since 1962. Age 75. | |
| Mr. Spink has served as a Director since 1988 and |
The Board of Directors recommends that you vote FOR election of the
nominees for Director.
Directors Whose Terms Are Continuing
Directors with a Term ExpiringWhose Terms Expire in 20132015
Name | Age and Principal Occupation During the Past Five Years/Public Directorships | |
| Andrew E. DiPiero, Jr., Esq. | Director. Attorney with Baratta, Russell & Baratta, Huntingdon Valley, Pennsylvania since November 2011. Prior thereto, Partner with Stampone, D’Angelo, Renzi, DiPiero, Attorneys at Law, P.C., Cheltenham, Pennsylvania, since June 2004. Age 61. | |
| Mr. DiPiero has served as a Director since 1984 and holds the position of Chairman of the Audit Committee. He brings the expertise of a practicing attorney to the Board of Directors and has an insight into the Lehigh Valley market area, having represented numerous clients in that region. Additionally, he is AV rated by Martindale Hubbell and has been awarded the designation of Super Lawyer by Philadelphia Magazine for each of the last seven years. | ||
Robert J. Phillips | Chairman of the Board of Quaint Oak Bancorp and Quaint Oak Bank since 2007 and 1984, respectively. Partner, Phillips and Phillips Enterprises, Doylestown, Pennsylvania since March 2005. Previously, President, Shipping Connections, Inc., Bristol, Pennsylvania from October 1996 to October 2003. Age 67. | |
| Mr. Phillips has served as a director since 1968 and Chairman since 1984. Mr. Phillips also acts as a liaison to the Bank’s community serving in the position of Director of the Centennial Education Foundation along with being a Director and past President of the Southampton Business and Professional Association. He has been honored in 2010 with the Southampton Outstanding Citizen Citation. |
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Directors Whose Terms Expire in 2016
Name | Age and Principal Occupation During the Past Five Years/Public Directorships | |
John J. Augustine, CPA | Director. Chief Financial Officer of Quaint Oak Bancorp and Chief Financial Officer and Treasurer of Quaint Oak Bank since October 5, 2009 and | |
| Mr. Augustine has served as a Director since 2000. As a certified public accountant he brings extensive business and consulting experience to the Board. He has more than | ||
Kenneth R. Gant, MBA | Director. Non-employee Secretary/Treasurer of Quaint Oak Bank’s Board through July 2007. Currently, Associate Agent of Landis Agencies, Quakertown, Pennsylvania; previously, Owner, Gant Insurance Agency, Doylestown, Pennsylvania from September 2006 to January 2008. Prior thereto, Agency Development Manager, National Grange Insurance Company, Keene, New Hampshire from February 2005 to April 2006; consultant for Quaint Oak Bank from July 2003 to February 2005; previously Chief Operating | |
| Mr. Gant has served as a Director since 1986, and brings the perspective of risk management to the Board from his business life involvement, at many levels, in the insurance business. Mr. Gant has also earned his MBA degree which brings a higher view of business activities to his position as Director. Mr. Gant also holds the CIC (Certified Insurance Counselor) |
Robert T. Strong | Director. President and Chief Executive Officer of Quaint Oak Bancorp and Quaint Oak Bank since March 2007 and June 2001, respectively. Previously, Owner and President of Strong Financial Corporation, Southampton, | |
| Mr. Strong has served as a Director since 2000 and, having focused his professional career in banking brings an extensive background in financial institutions and leadership expertise to the Board. Mr. Strong also brings entrepreneurial business knowledge and experience to the Board through his prior ownership and operation of Strong Financial Corporation. He has extensive mortgage banking experience in the Bank’s market area and significant knowledge of the local real estate market. | ||
Executive Officers Who Are Not Also Directors
Set forth below is information with respect to the principal occupations during the last five years for the three executive officers of Quaint Oak Bancorp and Quaint Oak Bank who do not also serve as directors of Quaint Oak Bancorp. Ages are reflected as of March 23, 2012.21, 2014.
Diane J. Colyer, age 5355 years, has served as Chief Operating Officer of Quaint Oak Bancorp since October 2009, Treasurer of Quaint Oak Bancorp from July 2008 through May 2010, and Corporate Secretary since April 2007. Ms. Colyer also served as Chief Operating Officer of Quaint Oak Bank since
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October 2009 and Treasurer of Quaint Oak Bank from May 2009 through May 2010, System Security Officer since July 2000, Network Administrator since May 2001 and Corporate Secretary since April 2007. Ms. Colyer served as Operations Officer of Quaint Oak Bancorp from March 2007 to October 2009 and of Quaint Oak Bank from August 1999 to October 2009. From May 2002 through April 2006, Ms. Colyer served as Compliance Officer, Security Officer and Community Reinvestment Act Officer of Quaint Oak Bank. From April 2005 to April 2007, Ms. Colyer served as Assistant Secretary.
William R. Gonzalez, age 30 years, has served as Senior Vice President Business Development, Network Administrator, and Network Security Officer since May 2013. Mr. Gonzalez has served as President and Chief Executive Officer of Quaint Oak Real Estate, LLC and Quaint Oak Abstract, LLC since July 2009. Mr. Gonzalez served as Executive Vice President and Chief Operating Officer of Quaint Oak Mortgage, LLC from July 2009 through April 2013, and President and Chief Executive Officer since May 2013. Prior thereto, Mr. Gonzalez served as President and Chief Executive Officer of General Mortgage Company, LLC, First Continental Settlement Services, LLP, and Bellman & Radcliff Real Estate, LLC, Allentown, Pennsylvania through June 2009.
Curt T. Schulmeister, age 5456 years, has served as Chief Lending Officer of Quaint Oak Bank since February 2007. Previously, Mr. Schulmeister served as Executive Vice President and Chief Lending Officer of Earthstar Bank, Southampton, Pennsylvania since June 2001 until February 2007.2001.
Robert Farrer, age 4648 years, has served as Compliance Officer, Security Officer and Community Reinvestment Act Officer of Quaint Oak Bank since April 2006 and Chief Risk Officer since May 2010. Mr. Farrer served as Manager – Customer Service from December 2004 until May 2010, and Bank Secrecy Officer from April 2006 until May 2010.2010, Security Officer from April 2006 until May 2012 and Community Reinvestment Act Officer from April 2006 until May 2012. Prior thereto, Mr. Farrer served as Bank Branch Manager and Assistant Vice President of Bank of America, Jenkintown, Pennsylvania, from September 1986 to December 2004.
Committees and Meetings of the Board of Directors
The Board of Directors of Quaint Oak Bancorp has established a Compensation Committee, Audit Committee and Nominating and Corporate Governance Committee. During the fiscal year ended December 31, 2011,2013, the Board of Directors of Quaint Oak Bancorp held twelve regular meetings and one special meeting.meetings. No director attended fewer than 75% of the total number of Board meetings and committee meetings on which he served that were held during this period. The Board of Directors has determined that a majority of its members are independent directors as “independent director” is defined in the Nasdaq listing standards. Our independent directors are Messrs. Ager, Clarke, DiPiero, Gant, Phillips and Spink. In determining Mr. Ager’s independence, the Board considered that Mr. Ager’s spouse serves as a non-executive employee of Quaint Oak Bank in her capacity as Assistant Secretary/Deposit Services.
Compensation Committee. The members of the Compensation Committee wereare Messrs. Clarke, DiPiero and Phillips, in fiscal 2011.who is Chairman. The Compensation Committee reviews the compensation of our executive officers and met fivethree times in 2011.2013. No member of the Compensation Committee is a current or former officer or employee of Quaint Oak Bancorp or Quaint Oak Bank. The Compensation Committee has adopted a written charter which is available on our website at www.quaintoak.com under the Investor Relations heading.
Audit Committee. The primary purpose of the Audit Committee, as set forth in the committee’s charter, is to assist the Board of Directors in fulfilling its fiduciary responsibilities relating to corporate accounting and reporting practices. The Audit Committee reviews with management and the independent auditors the systems of internal control, reviews the annual financial statements, including the Annual Report on Form 10-K, and monitors our adherence in accounting and financial reporting to generally
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accepted accounting principles. The Audit Committee is comprised of three outside directors, Messrs., Gant, Phillips and DiPiero, Gant and Phillips.who is Chairman. The Board of Directors has not identified a member of the Audit Committee who meets the Securities and Exchange Commission’s definition of audit committee financial expert. The Board of Directors believes that the Audit Committee members have sufficient expertise to fulfill their fiduciary duties.
The Audit Committee meets on an as needed basis and met fourfive times in fiscal 2011.2013. The Board of Directors and the Audit Committee adopted an Audit Committee Charter which is available on our website at www.quaintoak.com under the Investor Relations heading.
Nominating and Corporate Governance Committee. The members of the Nominating and Corporate Governance Committee of Quaint Oak Bancorp for fiscal 20112013 were Messrs. Gant, Phillips and Spink.Spink, who is Chairman. The Nominating and Corporate Governance Committee met two timestwice during fiscal 2011.2013. Nominations for director of Quaint Oak Bancorp are reviewed by the Nominating and Corporate Governance Committee and submitted to the full Board of Directors for approval. The Charter of the Nominating and Corporate Governance Committee is available on our website at www.quaintoak.com under the Investor Relations heading.
Board Leadership Structure
Mr. Robert T. Strong serves as our President and Chief Executive Officer and Mr. Robert J. Phillips serves as our Chairman of the Board. The Board of Directors has determined that the separation of the offices of Chairman of the Board and President enhances Board independence and oversight. Further, the separation of the Chairman of the Board permits the President and Chief Executive Officer to better focus on his responsibilities of managing the daily operations of Quaint Oak Bancorp, enhancing shareholder value and expanding and strengthening our franchise while allowing the Chairman of the Board to lead the Board of Directors in its fundamental role of providing independent oversight and advice to management. Mr. Phillips is an independent director under the rules of the Nasdaq Stock Market.
Board’s Role in Risk Oversight
Risk is inherent with every business, particularly financial institutions. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputational risk. Management is responsible for the day-to-day management of the risks Quaint Oak Bancorp faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board of Directors ensures that the risk management processes designed and implemented by management are adequate and functioning as designed. In this regard, the Chairman of the Board meets regularly with management to discuss strategy and risks facing Quaint Oak Bancorp.
Two of our senior executive officers, Mr. Strong and Mr. Augustine, serve on our Board of Directors. Other members of our senior management attend the Board meetings and are available to address any questions or concerns raised by the Board on risk management or other matters. Quaint Oak Bank has established an Asset-Liability Committee (“ALCO”), Risk Management Committee and Loan Committee composed of members of the Board and senior management. The Chairman of the Board and independent directors work together to provide strong, independent oversight of the Company’sQuaint Oak Bancorp’s management and affairs.
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Director Compensation
Director Compensation Table. The following table sets forth total compensation paid to each director of Quaint Oak Bank during fiscal 2011,2013, other than Messrs. Strong and Augustine whose compensation is set forth below under “Executive Compensation.” Quaint Oak Bank does not have a defined benefit pension plan or retirement plan for the benefit of directors. We did not award any equity shares to our directors in 2011.2013.
Name | Fees Earned or Paid in Cash | All Other Compensation(1) | Total(2) | Fees Earned or Paid in Cash | Stock Awards(1) | Option Awards(1) | All Other Compensation(2) | Total | ||||||||||||||||||||||||
George M. Ager, Jr. | $ | 29,050 | $ | 69 | $ | 29,119 | $ | 30,475 | $ | 16,200 | $ | 9,510 | $ | 95 | $ | 56,280 | ||||||||||||||||
James J. Clarke, Ph.D. | 17,525 | 69 | 17,594 | 17,100 | 16,200 | 9,510 | 95 | 42,905 | ||||||||||||||||||||||||
Andrew E. DiPiero, Jr., Esq. | 17,525 | 69 | 17,594 | 18,700 | 16,200 | 9,510 | 95 | 44,505 | ||||||||||||||||||||||||
Kenneth R. Gant, MBA | 16,300 | 69 | 16,369 | 19,750 | 16,200 | 9,510 | 95 | 45,555 | ||||||||||||||||||||||||
Robert J. Phillips | 61,550 | 208 | 61,758 | 65,275 | 24,300 | 15,850 | 283 | 105,708 | ||||||||||||||||||||||||
Marsh B. Spink | 23,000 | 69 | 23,069 | 25,300 | 16,200 | 9,510 | 95 | 51,105 | ||||||||||||||||||||||||
________________________
| (1) | These amounts represent the aggregate grant date fair value of restricted stock awards and option grants during the year ended December 31, 2013, in accordance with FASB ASC Topic 718. The assumptions used for calculating the grant date fair value are set forth in Note 13 of our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC on March 27, 2014. These amounts do not represent actual amounts paid to or realized by our directors for these awards during fiscal year 2013. As of December 31, 2013, each of our non-employee directors had 1,000 shares of unvested restricted stock and an aggregate of 9,943 stock options, except for Mr. Phillips who had 1,500 shares of unvested restricted stock and an aggregate of 25,829 stock options. |
| (2) | Consists of dividends paid on shares of restricted stock that vested during |
During the year ended December 31, 2013, we made grants and awards of restricted stock conversion, no future grants or awards are permissible forand stock options to the member of our Board of Directors under the 2013 Stock Incentive Plan. Each of our non-employee directors underreceived a grant of 1,000 shares of restricted stock and an award of 3,000 stock options, except for Mr. Phillips, our Chairman of the 2008 Stock Option Plan or 2008 RecognitionBoard, who received a grant of 1,500 shares of restricted stock and Retention Plan unless previousan award of 5,000 stock options. The grants and awards of restricted stock and stock options are forfeited by our current non-employee directors.vesting at a rate of 20% per year commencing on May 8, 2014. The stock options have an exercise price of $16.20 per share and will expire on May 8, 2023.
Directors’ Attendance at Annual Meetings
Although we do not have a formal policy regarding attendance by members of the Board of Directors at annual meetings of shareholders, we expect that our directors will attend, absent a valid reason for not doing so. All of our directors attended our annual meeting of shareholders held in May 2011.2013.
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Director Nominations
The Nominating and Corporate Governance Committee’s charter sets forth certain criteria the committee may consider when recommending individuals for nomination to the Board including:
| ensuring that the Board of Directors, as a whole, is diverse by considering: |
| o | individuals with various and relevant career experience; |
| o | relevant technical skills; |
| o | industry knowledge and experience; |
| o | financial expertise (including expertise that could qualify a director as a “financial expert,” as that term is defined by the rules of the SEC); and |
| o | local or community ties, and |
| minimum individual qualifications, including: |
| o | strength of character; |
| o | mature judgment; |
| o | familiarity with our business and industry; |
o o | independence of thought; and an ability to work collegially. |
The committee also may consider the extent to which the candidate would fill a present need on the Board of Directors. The Nominating and Corporate Governance Committee will also consider candidates for director suggested by other directors, as well as our management and shareholders. A shareholder who desires to recommend a prospective nominee should notify our Corporate Secretary in writing providing whatever supporting material the shareholder considers appropriate. Procedures for shareholder nominations are discussed under “Shareholder Proposals, Nominations and Communications with the Board of Directors.”
Related Party Transactions
Year Ended December 31, | ||||||||
2011 | 2010 | |||||||
Audit Fees | $ | 73,804 | $ | 63,073 | ||||
Tax fees (1) | 13,368 | 12,859 | ||||||
All other fees | -- | -- | ||||||
Total | $ | 87,172 | $ | 75,932 | ||||
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| EXECUTIVE COMPENSATION |
Summary Compensation Table
The following table shows the compensation paid by Quaint Oak Bank to our President and Chief Executive Officer and ourthe other two highest compensated executive officers of us or Quaint Oak Bank for the years ended December 31, 20112013 and 2010. We did not award any equity shares to our named executive officers in fiscal 2011 or 2010.2012.
| Stock | Option | All Other | ||||||||||||||||||||||||||
| Name and Principal Position | Year | Salary | Bonus(1) | Awawrds(2) | Awards(2) | Compensation(3) | Total | |||||||||||||||||||||
Robert T. Strong President and Chief Executive Officer | 2013 2012 | $ | 242,000 234,000 | $ | 24,777 44,143 | $ | 81,000 -- | $ | 47,550 -- | $ | 24,066 20,261 | $ | 419,393 298,404 | |||||||||||||||
John J. Augustine Chief Financial Officer | 2013 2012 | 160,000 154,500 | 11,150 19,380 | 56,700 -- | 31,700 -- | 17,936 13,045 | 277,486 186,924 | |||||||||||||||||||||
Curt T. Schulmeister Chief Lending Officer Quaint Oak Bank | 2013 2012 | 135,000 131,000 | 7,744 15,211 | 25,920 -- | 15,850 -- | 13,343 10,415 | 197,857 156,626 | |||||||||||||||||||||
| (1) | Reflects bonus for the fiscal year, paid in the following fiscal year. |
| (2) | Reflects the grant date fair value in accordance with FASB ASC Topic 718 for awards of restricted stock and stock options that were granted during the fiscal year. The valuation of the restricted stock awards is based on a grant date fair value of $16.20. The assumptions used in valuing the stock option awards are set forth in Note 13 to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2013. |
| (3) | Includes the fair market value of the shares of Quaint Oak Bancorp common stock allocated to the employee stock ownership plan accounts of Messrs. Strong, Augustine and Schulmeister during fiscal |
Narrative to Summary Compensation Table. The Compensation Committee approved a base salary of $227,500$242,000 for Mr. Strong in 2011,2013, an increase of $7,500 from$8,000, or 3.4%, over his base salary for 2010.2012. The dollar amount of his base salary was determined by the Compensation Committee’s review of the local market for chief executive officer compensation and was intended to ensure that Quaint Oak Bank remained competitive in attracting and retaining a qualified chief executive officer. The Compensation Committee approved a bonus pool for all employees for fiscal 20112013 which was paid in 2012.2014. In determining the amount of the bonus pool allocated to Mr. Strong, the Compensation Committee utilized a performance matrix. The matrix consisted of the following five targets: loan growth; deposit growth; efficiency ratio; Texas Ratio; and Camel rating, in addition to a limited discretionary amount. The Compensation Committee also considered the awards of restricted stock and grants of stock options to Mr. Strong during the year ended December 31, 2013. In addition, in fiscal 2011,2013, Mr. Strong received dues and membership fees for a local country club as a means of supporting business development.
Employment AgreementAgreements
Quaint Oak Bank entered into an amended and restated employment agreement with Mr. Strong dated as of December 10, 2008.2008, and an employment agreement with Mr. Augustine dated as of September 14, 2012. The employment agreement hasagreements have a three-year term which is automatically extended each year for a successive additional one-year period, unless eithera party to the agreement gives written notice not less than thirty (30) days nor more than ninety (90) days prior to the annual anniversary date, not to extend the employment term.
The employment agreement providesagreements provide for a minimum base salarysalaries of $220,000 and $154,500 to be paid to Mr.Messrs. Strong and Augustine, respectively, which may be increased from time to time by the
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Board of Directors. Mr. Strong isThe executives are also eligible for a bonus in such amount as determined by the Board of Directors at their discretion. The agreement also provides that Mr. Strong may participateagreements provide for participation in employee benefit plans, currently consisting of life insurance, medical and dental, shall be reimbursedreimbursement for expenses incurred in performing histheir duties as Presidentofficers of Quaint Oak Bank and Chief Executive Officer and shall be entitled to four weeks of paid vacation each year and ten days of paid sick leave subject to such increases as approved by the Board of Directors may approve.Directors.
The employment agreement isagreements are terminable with or without cause by Quaint Oak Bank. The executive has no right to compensation or other benefits pursuant to the employment agreement for any period after termination by Quaint Oak Bank for cause, as defined in the agreement.agreements. In the event that the employment agreement isagreements are terminated by Quaint Oak Bank other than for cause or by Mr. Strongthe executives as a result of certain adverse actions which are taken with respect to histheir employment following a change in control, as defined, of Quaint Oak Bank, then Mr. Strongthe executives will be entitled to a lump sum cash severance amount equal to 2.99 times histheir average annual compensation for the last three calendar years, subject to reduction pursuant to Section 280G of the Code, as set forth below.
A change in control is generally defined in the employment agreement to mean a change in the ownership or effective control of Quaint Oak Bancorp or Quaint Oak Bank or a change in the ownership of a substantial portion of the assets of Quaint Oak Bancorp or Quaint Oak Bank, in each case as provided under Section 409A of the Code and the regulations thereunder.
The employment agreement providesagreements provide that, in the event any of the payments to be made thereunder are deemed to constitute “parachute payments” within the meaning of Section 280G of the Code, then such payments and benefits shall be reduced by the minimum necessary to result in the payments not exceeding three times Mr. Strong’sthe executive’s average annual compensation from Quaint Oak Bank that was includable in his gross income during the most recent five taxable years ending prior to the year in which the change in control occurs. As a result, the severance payment in the event of a change in control will not be subject to a 20% excise tax, and Quaint Oak Bank will be able to deduct such payment as compensation expense for federal income tax purposes.
In the event that prior to a change in control the employment agreement is terminated by Quaint Oak Bank other than for cause or Mr. Strong’sthe executive’s death or disability, or by Mr. Strongthe executive for “good reason,” as defined, then Quaint Oak Bank will pay Mr. Strongthe executive a lump sum cash severance payment equal to three times his current base salary within 30 days following his termination. Upon his death or disability, Quaint Oak Bank shall pay Mr. Strongthe executive or his estate or legal representative, a lump sum cash severance payment equal to one times his current base salary within 30 days following histhe date of termination of employment, plus a lump sum equal to the prorated portion of the bonus that would have been paid if he had remained employed for the full calendar year, based upon the portion of the year that he was able to perform his duties prior to his death or disability.
Retirement Benefits
Retirement benefits are an important element of a competitive compensation program for attracting senior executives, especially in the financial services industry. Our executive compensation program currently includes (i) a 401(k) profit sharing plan which enables our employees to supplement their retirement savings with elective deferral contributions and with matching and discretionary contributions by us, and (ii) an employee stock ownership plan that allows participants to accumulate retirement benefits in the form of employer stock at no current cost to the participant.
401(k) and Profit Sharing Plan. We adopted the Quaint Oak Bank 401(k) Plan effective May 1, 2012. To participate in the 401(k) Plan, eligible employees must have completed three months of full time service and attained age 21. Participating employees may make elective salary reduction contributions of up to $17,500, of their eligible compensation for 2013. Quaint Oak Bank may contribute
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a matching contribution to the plan in an amount it determines each year. We are also permitted to make discretionary profit sharing contributions to be allocated to participant accounts.
Employee Stock Ownership Plan. In connection with the initial public offering of Quaint Oak Bancorp in July 2007, we established an employee stock ownership plan for our eligible employees. The employee stock ownership plan acquired 111,090 shares of Quaint Oak Bancorp’s common stock utilizing a $1.0 million loan from Quaint Oak Bancorp. The original loan to the employee stock ownership plan hashad a term of 15 yearsyears. We may, at our discretion, make additional contributions in the form of debt service which reduces the principal and sharesthe term of the loan. Shares are released for allocation to employees’ accounts as the debt service payments are made. Shares released from the suspense account are allocated to each eligible participant's plan account pro rata based on compensation. Forfeitures may be used for the payment of expenses or be reallocated among the remaining participants. Participants become 100% vested after six years of service or normal retirement age. Participants also become fully vested in their account balances upon a change in control (as defined), death or disability. Benefits may be payable upon retirement or separation from service.
Outstanding Equity Awards at Fiscal Year-End
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options | Exercise Price | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | Number of Securities Underlying Unexercised Options | Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(3) | |||||||||||||||||||||||||||||||||
Exercisable | Unexercisable | |||||||||||||||||||||||||||||||||||||||||
| Name | Exercisable | Unexercisable | Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(3) | ||||||||||||||||||||||||||||||||||||
| Robert T. Strong | 20,829 | 13,886 | $ | 10.00 | 5/14/2018 | 5,555 | $ | 46,662 | 34,715 -- | -- 15,000 | ||||||||||||||||||||||||||||||||
| John T. Augustine | 4,165 | 2,778 | 10.00 | 5/14/2018 | 1,112 | 9,341 | ||||||||||||||||||||||||||||||||||||
John J. Augustine | 6,943 -- | -- 10,000 | 10.00 16.20 | 5/14/2018(1) 5/8/2023(2) | 3,500 | 56,700 | ||||||||||||||||||||||||||||||||||||
| Curt T. Schulmeister | 1,122 | 1,122 | 10.00 | 5/14/2018 | 450 | 3,780 | 1,870 -- | 374 5,000 | 10.00 16.20 | 5/14/2018(1) 5/8/2023(2) | 1,750 | 28,350 | ||||||||||||||||||||||||||||||
___________________
| (1) | Granted pursuant to our 2008 Stock Option Plan and vesting at a rate of |
| (2) | Granted pursuant to our 2013 Stock Incentive Plan and vesting at a rate of 20% per year commencing on May 8, 2014. |
| (3) | Calculated by multiplying the closing market price of our common stock on December |
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Proposal Two) |
Our Audit Committee has appointed S.R. Snodgrass, P.C., independent registered public accounting firm, to perform the audit of Quaint Oak Bancorp’s financial statements for the year ending December 31, 2014, and further directed that their selection be submitted for ratification by the shareholders at the annual meeting.
We have been advised by S.R. Snodgrass, P.C. that neither that firm nor any of its associates has any relationship with Quaint Oak Bancorp or Quaint Oak Bank other than the usual relationship that exists between independent registered public accounting firms and their clients. S.R. Snodgrass, P.C. will have one or more representatives at the annual meeting who will have an opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions.
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In determining whether to appoint S.R. Snodgrass, P.C. as our independent registered public accounting firm, the Audit Committee considered whether the provision of services, other than auditing services, by S.R. Snodgrass, P.C. is compatible with maintaining their independence. Each new engagement of S.R. Snodgrass, P.C. was approved in advance by the Audit Committee, and none of those engagements made use of the de minimis exception to pre-approval contained in the SEC’s rules.
Change in Auditors
On July 10, 2013, Quaint Oak Bancorp notified ParenteBeard LLC that it had been dismissed as Quaint Oak Bancorp’s independent registered public accounting firm. Quaint Oak Bancorp’s principal audit personnel at ParenteBeard LLC had resigned from ParenteBeard LLC. The decision to change Quaint Oak Bancorp’s independent registered public accounting firm was approved by the Audit Committee of Quaint Oak Bancorp’s Board of Directors.
ParenteBeard LLC performed an audit of Quaint Oak Bancorp’s consolidated financial statements for the year ended December 31, 2012. ParenteBeard LLC’s report did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles.
During the year ended December 31, 2012, and from December 31, 2012 through July 10, 2013, there were no (i) disagreements between Quaint Oak Bancorp and ParenteBeard LLC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to its satisfaction, would have caused ParenteBeard LLC to make reference to the subject matter of such disagreements in connection with its report.
Audit Fees
The following table sets forth the aggregate fees paid by us to S.R. Snodgrass, P.C. for professional services in connection with the audit of Quaint Oak Bancorp’s consolidated financial statements for fiscal 2013 and the fees paid by us to S.R. Snodgrass, P.C. for tax services during fiscal 2013 and as well as the fees paid by us to ParenteBeard LLC for services rendered in connection with the audit of Quaint Oak Bancorp’s financial statements for fiscal 2012 and for tax services. No fees were paid by us to S.R. Snodgrass, P.C. or ParenteBeard LLC for audited-related services or any other services rendered by S.R. Snodgrass, P.C. or ParenteBeard LLC during fiscal 2013 or 2012, respectively.
Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
Audit Fees(1) | $ | 71,176 | $ | 82,674 | ||||
Audit-related fees | -- | -- | ||||||
Tax fees (2) | 750 | 18,675 | ||||||
All other fees | -- | -- | ||||||
Total | $ | 71,926 | $ | 101,349 | ||||
| ____________________ |
| (1) | Audit fees consist of fees for professional services rendered for the audit of Quaint Oak Bancorp's financial statements, review of financial statements included in Quaint Oak Bancorp's quarterly reports, financial and compliance audits required by HUD, and for services normally provided by the independent auditor in connection with statutory and regulatory filings or engagements. |
(2) Tax fees consist primarily of fees paid in connection with preparing federal and state income tax returns and other tax, audit and related services.
The Audit Committee selects our independent registered public accounting firm and pre-approves all audit services to be provided by it to Quaint Oak Bancorp. The Audit Committee also reviews and pre-approves all audit-related and non-audit related services rendered by our independent registered public accounting firm in accordance with the Audit Committee’s charter. In its review of these services and related fees and terms, the Audit Committee considers, among other things, the possible effect of the performance of such services on the independence of our independent registered public accounting firm. The Audit Committee separately approves other individual engagements as necessary. The chair of the
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Audit Committee has been delegated the authority to approve audit-related and non-audit related services in lieu of the full Audit Committee, and presents all such previously-approved engagements to the full Audit Committee.
The Board of Directors recommends that you vote FOR the ratification of the appointment
of S.R. Snodgrass, P.C. as our independent registered public accounting firm
for the fiscal year ending December 31, 2014.
BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
The following table sets forth, as of March 23, 2012,21, 2014, the voting record date, certain information as to our common stock beneficially owned by (a) each person or entity, including any “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934 who or which was known to us to be the beneficial owner of more than 5% of our issued and outstanding common stock, (b) our directors, (c) certain executive officers, and (d) all directors and executive officers as a group.
Common Stock Beneficially Owned as of March 23, 2012(1) | Common Stock Beneficially Owned as of March 21, 2014(1) | |||||||||||||||
Name of Beneficial Owner | Amount | Percentage(2) | Amount | Percentage(2) | ||||||||||||
Black River BancVenture, Inc. 8245 Tournament Drive, Suite 270 Memphis, Tennessee 38125 | 75,712 | (3) | 7.7 | % | ||||||||||||
Banc Funds Co LLC 20 North Wacker Drive Suite 3300 Chicago, Illinois 60606 | 61,000 | (3) | 6.6 | % | ||||||||||||
Phil Lifschitz 7 Tulane Drive Livingston, New Jersey 07039 | 91,753 | (4) | 9.9 | |||||||||||||
Quaint Oak Bancorp, Inc. Employee Stock Ownership Plan Trust 501 Knowles Avenue Southampton, Pennsylvania 18966 | 111,090 | (4) | 11.3 | 111,090 | (5) | 12.1 | ||||||||||
| Directors: | ||||||||||||||||
George M. Ager, Jr. | 19,361 | (5)(6) | 1.9 | 19,238 | (6)(7) | 2.1 | ||||||||||
John J. Augustine, CPA | 23,182 | (5)(7) | 2.3 | 31,990 | (6)(8) | 3.5 | ||||||||||
James J. Clarke, Ph.D. | 14,431 | (5) | 1.5 | 22,220 | (6) | 2.4 | ||||||||||
Andrew E. DiPiero, Jr., Esq. | 14,331 | (5)(8) | 1.4 | 17,320 | (6)(9) | 1.9 | ||||||||||
Kenneth R. Gant, MBA | 19,931 | (5)(9) | 2.0 | 22,920 | (6)(10) | 2.5 | ||||||||||
Robert J. Phillips | 34,994 | (5)(10) | 3.5 | 41,660 | (6)(11) | 4.4 | ||||||||||
Marsh B. Spink | 21,331 | (5)(11) | 2.1 | 24,320 | (6)(12) | 2.6 | ||||||||||
Robert T. Strong | 86,652 | (5)(12) | 8.5 | 105,909 | (6)(13) | 11.1 | ||||||||||
| Other Named Executive Officer: | ||||||||||||||||
Curt T. Schulmeister | 9,280 | (5)(13) | * | 14,310 | (6)(14) | 1.6 | ||||||||||
| All directors and executive officers as a group (11 persons) | 258,301 | (14) | 24.1 | % | ||||||||||||
| All directors and executive officers as a group (12 persons) | 321,185 | (15) | 31.0 | % | ||||||||||||
| (1) | Based upon filings made with the Securities and Exchange Commission and information furnished by the respective individuals. |
| (2) | Each beneficial owner’s percentage ownership is determined by assuming that options held by such person (but not those held by any other person) and that are exercisable within 60 days of the voting record date have been exercised. |
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| (3) | Based on the Schedule 13G filed on February 18, 2014, ownership includes 25,500 shares owned by Banc Fund VII L.P. (“BF VII”) and 61,000 shares owned by Banc Fund VIII L.P. (“BF VIII”), all of which are Illinois limited partnerships and have sole voting and dispositive power over the shares. The general partners of BF VII and BF VIII are MidBanc VII L.P. (“MidBanc VII”) and MidBanc VIII L.P. (“MidBanc VIII”), respectively, all of which are Illinois limited partnerships. The general partner of MidBanc VII and MidBanc VIII is The Banc Funds Company, L.L.C. (“TBFC”), an Illinois corporation whose principal shareholder and manager is Charles J. Moore, the controlling member of TBFC and each of the Partnership entities directly or indirectly controlled by TBFC. |
| (4) |
| (5) | Mr. John J. Augustine and Ms. Diane J. Colyer act as trustees of the Quaint Oak Bancorp, Inc. Employee Stock Ownership Plan Trust. As of March |
| Includes shares held in trust by Quaint Oak Bancorp’s 2008 Recognition and Retention Plan (“RRP”) which have been awarded to the directors and officers and over which they may provide voting instructions to the RRP trustees and stock options which have been granted to the directors and officers under Quaint Oak Bancorp’s 2008 Stock Option Plan and which are exercisable within 60 days of the voting record date as follows: |
Name | RRP Shares | Stock Options | |||||||
| George M. Ager, Jr. | 1,350 | (a) | 6,738 | (a) | |||||
| John J. Augustine, CPA | 1,112 | 5,554 | |||||||
| James J. Clarke, Ph.D. | 1,112 | 5,554 | |||||||
| Andrew E. DiPiero, Jr., Esq. | 1,112 | 5,554 | |||||||
| Kenneth R. Gant, MBA | 1,112 | 5,554 | |||||||
| Robert J. Phillips | 3,333 | 16,663 | |||||||
| Marsh B. Spink | 1,112 | 5,554 | |||||||
| Robert T. Strong | 5,555 | 27,772 | |||||||
| Curt T. Schulmeister | 451 | 1,496 | |||||||
| All directors and executive officers as a group (11 persons) | 16,824 | 83,304 | |||||||
Name | Stock Options | RRP Shares | |||||||
| George M. Ager, Jr. | 9,023 | (a) | 1,000 | ||||||
| John J. Augustine, CPA | 8,943 | 3,500 | |||||||
| James J. Clarke, Ph.D. | 7,543 | 1,000 | |||||||
| Andrew E. DiPiero, Jr., Esq. | 7,543 | 1,000 | |||||||
| Kenneth R. Gant, MBA | 7,543 | 1,000 | |||||||
| Robert J. Phillips | 21,829 | 1,500 | |||||||
| Marsh B. Spink | 7,543 | 1,000 | |||||||
| Robert T. Strong | 37,715 | 5,000 | |||||||
| Curt T. Schulmeister | 3,244 | 1,750 | |||||||
| All directors and executive officers as a group (12 persons) | 117,508 | 21,550 | |||||||
| ____________________ |
| (a) | Includes |
| Includes |
| Includes 1,500 shares held by Mr. Augustine’s spouse, 11,100 shares held in Mr. Augustine’s individual retirement account and |
| Includes 1,000 shares held by Mr. DiPiero’s spouse and 5,000 shares held in Mr. DiPiero’s individual retirement account. |
| Includes 10,000 shares held in Mr. Gant’s individual retirement account and 1,600 shares held by Mr. Gant’s children. |
| Includes 9,042 shares held jointly with Mr. Phillips’s spouse, 330 shares held by his spouse and 628 shares held in Mr. Phillips’s individual retirement account. |
| Includes 1,000 shares held jointly with Mr. Spink’s son. |
| Includes |
| Includes 2,000 shares held in Mr. Schulmeister’s individual retirement account and |
| Includes an aggregate of |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than 10% of Quaint Oak Bancorp, Inc.’s common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by regulation to furnish us with copies of all
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Section 16(a) forms they file. Other than the Quaint Oak Bancorp, Inc. Employee Stock Ownership Plan and Mr. Strong, we know of no person who owns 10% or more of our common stock.
Based solely on review of the copies of such forms furnished to us, or written representations from our officers and directors, we believe that during, and with respect to, fiscal 2011,2013, our officers and directors complied in all respects with the reporting requirements promulgated under Section 16(a) except that Messrs. Ager, Augustine, Farrer.
| REPORT OF THE AUDIT COMMITTEE |
The Audit Committee has reviewed and Schulmeisterdiscussed Quaint Oak Bancorp’s audited consolidated financial statements with management. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed in PCAOB Auditing Standard No. 16, (Communications with Audit Committees). The Audit Committee has received the written disclosures and Ms. Colyer were each late filing one Form 4 reporting tax withholding on distribution of sharesthe letter from the RRP.independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with the independent accountant their independence. Based on the review and discussions referred to above in this report, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in Quaint Oak Bancorp’s Annual Report on Form 10-K for fiscal year ended December 31, 2013, for filing with the Securities and Exchange Commission.
| Members of the Audit Committee |
| Andrew E. DiPiero, Jr., Esq., Chairman |
| Kenneth R. Gant, MBA |
| Robert J. Phillips |
SHAREHOLDER PROPOSALS, NOMINATIONS AND COMMUNICATIONS WITH THE BOARD OF DIRECTORS |
Shareholder Proposals. Any proposal which a shareholder wishes to have included in the proxy materials of Quaint Oak Bancorp relating to the next annual meeting of shareholders, which is scheduled to be held in May 2013,2015, must be received at our principal executive offices located at 501 Knowles Avenue, Southampton, Pennsylvania 18966, Attention: Diane J. Colyer, Corporate Secretary, no later than December 5, 2012.12, 2014. If such proposal is in compliance with all of the requirements of Rule 14a-8 under the Exchange Act, it will be included in the proxy statement and set forth on the form of proxy issued for such annual meeting of shareholders. It is urged that any such proposals be sent certified mail, return receipt requested.
Shareholder proposals which are not submitted for inclusion in our proxy materials pursuant to Rule 14a-8 under the 1934 Act may be brought before an annual meeting pursuant to Section 2.10 of our Bylaws, which provides that the shareholder must give timely notice thereof in writing to the Corporate Secretary. To be timely with respect to the annual meeting of shareholders scheduled to be held in May 2013,2015, a shareholder’s notice must be delivered to, or mailed and received at, our principal executive offices no later than December 5, 2012.12, 2014. A shareholder’s notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the annual meeting the information required by Section 2.10 of our Bylaws.
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Shareholder Nominations. Our Bylaws provide that, subject to the rights of the holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, all nominations for election to the Board of Directors, other than those made by the Board or the Nominating Committee thereof, shall be made by a shareholder who has complied with the notice provisions in the Bylaws. Written notice of a shareholder nomination generally must be communicated to the attention of the Corporate Secretary and either delivered to, or mailed and received at, our principal executive offices not later than, with respect to an annual meeting of shareholders, 120 days prior to the anniversary date of the mailing of proxy materials by us in connection with the immediately preceding annual meeting of shareholders. For our annual meeting in 2013,2015, this notice must be received by December 5, 2012.12, 2014. Each written notice of a shareholder nomination is required to set forth certain information specified in Section 3.12 of Quaint Oak Bancorp’s Bylaws. We did not receive any shareholder nominations with respect to this annual meeting.
Other Shareholder Communications. Our Board of Directors has adopted a formal process by which shareholders may communicate with the Board. Shareholders who wish to communicate with our Board of Directors may do so by sending written communications addressed to the Board of Directors of Quaint Oak Bancorp, Inc., c/o Diane J. Colyer, Corporate Secretary, 501 Knowles Avenue, Southampton, Pennsylvania 18966.
| ANNUAL REPORTS |
A copy of our Annual Report to Shareholders for the year ended December 31, 20112013 accompanies this proxy statement. Such annual report is not part of the proxy solicitation materials.
Upon receipt of a written request, we will furnish to any shareholder without charge a copy of our Annual Report on Form 10-K (without exhibits) for fiscal 20112013 required to be filed with the Securities and Exchange Commission. In addition, upon written request, we will furnish copies of the exhibits to the Annual Report on Form 10-K for a fee that covers our reasonable expenses in furnishing such exhibits. Such written requests should be directed to Diane J. Colyer, Corporate Secretary, Quaint Oak Bancorp, 501 Knowles Avenue, Southampton, Pennsylvania 18966. The Form 10-K is not part of the proxy solicitation materials.
| OTHER MATTERS |
Management 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 other matters should properly come before the meeting, it is intended that the proxies solicited hereby will be voted with respect to those other matters in accordance with the judgment of the persons voting the proxies.
The cost of the solicitation of proxies will be borne by Quaint Oak Bancorp. We will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending the proxy materials to the beneficial owners of our common stock. In addition to solicitations by mail, our directors, officers and employees may solicit proxies personally or by telephone without additional compensation.
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QUAINT OAK BANCORP, INC.
RECOGNITION AND RETENTION PLAN
VOTING INSTRUCTION BALLOT
| ____________________ | ||
x Please Mark Votes | ANNUAL MEETING OF SHAREHOLDERS | |
As in This Example | ____________________ | |
