Simplicity Bancorp, Inc. |
(Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement) |
Sincerely, | |
/s/Dustin Luton | |
Dustin Luton | |
President and Chief Executive Officer |
SIMPLICITY BANCORP, INC. |
1359 North Grand Avenue |
Covina, California 91724 |
(800) 524-2274 |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS |
To be held on October 29, 2014 |
1. | The election of three directors of Simplicity Bancorp, Inc.; | |
2. | The ratification of the appointment of Crowe Horwath LLP as the independent registered public accounting firm for Simplicity Bancorp, Inc. for the fiscal year ending June 30, 2015; | |
3. | An advisory, non-binding resolution with respect to the executive compensation described in this proxy statement; and |
BY ORDER OF THE BOARD OF DIRECTORS | ||
/s/ Nicole Perkins | ||
Nicole Perkins | ||
Corporate Secretary | ||
Covina, California | ||
September 18, 2014 |
1 | ||
1 | ||
1 | ||
4 | ||
32 | ||
34 | ||
35 | ||
36 | ||
36 | ||
36 | ||
36 |
2 |
Name and Address of Beneficial Owners | Amount of Shares Owned and Nature of Beneficial Ownership (1) | Percent of Shares of Common Stock Outstanding | |||
Castine Capital Management, LLC Paul Magidson Castine Partners II One International Place, Suite 2401 Boston, MA 02110(2) | 686,000 | 8.58% | |||
Wellington Management Company, LLP 280 Congress Street Boston, Massachusetts 02210 (3) | 768,305 | 9.75% | |||
Principal Financial Group Inc. Delaware Charter Guarantee and Trust Company dba Principal Trust Company 711 High Street Des Moines, IA 50392(4) | 709,621 | 9.14% | |||
Ryan Heslop Ariel Warszawski Firefly Value Partners, L.P. FVP GP, LLC Firefly Management Company GP, LLC FVP Master Fund, L.P. 551 Fifth Ave., 36th Floor New York, NY 10176(5) | 461,922 | 5.9% | |||
Bay Pond Partners, L.P Wellington Hedge Management, LLC 280 Congress Street Boston, MA 02210(6) | 548,211 | 6.96% | |||
MHC Mutual Conversion Fund, L.P. Clover Partners, L.P. Clover Investments, L.L.C. Michael C. Mewhinney c/o Clover Partners, L.P. 100 Crescent Court, Suite 575 Dallas, TX 75201(7) | 436,427 | 5.7% | |||
Sy Jacobs Jacobs Asset Management 11 East 26th Street, Suite 1900 New York, NY 10010(8) | 450,000 | 6.08% |
3 |
(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 or she 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) | Amount and percent of shares is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2014 by Castine Capital Management, LLC, Paul Magidson and Castine Partners II, LP. |
(3) | Amount and percent of shares is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2014 by Wellington Management Company, LLP. |
(4) | Amount and percent of shares is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 10, 2014, by Principal Financial Group Inc. and Principal Trust Company as Trustee for the Simplicity Bank Employee Stock Ownership Plan and the Simplicity Bank Employees’ Savings & Profit Sharing Plan. |
(5) | Amount and percent of shares is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2014 by Ryan Heslop, Ariel Warszawski, Firefly Value Partners, L.P., FVP GP, LLC, Firefly Management Company GP, LLC and FVP Master Fund, L.P. |
(6) | Amount and percent of shares is based on a Schedule 13G filed with the Securities and Exchange Commission on February 14, 2014 by Bay Pond Partners, L.P. and Wellington Hedge Management, LLC. |
(7) | Amount and percent of shares is based on a Schedule 13D filed with the Securities and Exchange Commission on February 24, 2014 by MHC Mutual Conversion Fund, L.P., Clover Partners, L.P., Clover Investments, L.L.C. and Michael C. Mewhinney. |
(8) | Amount and percent of shares is based on a Schedule 13G filed with the Securities and Exchange Commission on June 30, 2014 by Sy Jacobs and Jacobs Asset Management, LLC. |
4 |
Name (1) | Age (2) | Positions Held with Simplicity Bancorp, Inc. | Director Since (3) | Current Term to Expire | Shares of Common Stock Beneficially Owned (4)(5) | Percent of Class | |||||||
John H. Cochrane | 53 | Director | 2011 | 2014 | 7,000 | * | % | ||||||
Donald R. Voss | 64 | Chairman of the Board | 2011 | 2014 | 3,900 | (6) | * | ||||||
Dustin Luton | 44 | Director, President | 2012 | 2014 | 109,677 | (7) | 1.48 | ||||||
and Chief Executive Officer | |||||||||||||
Giovani O. Dacumos | 44 | Director | 2010 | 2015 | 6,898 | (8) | * | ||||||
Michael J. Sacher | 61 | Director | 2008 | 2015 | 25,959 | (9) | * | ||||||
Robert C. Steinbach | 61 | Director | 2000 | 2015 | 50,372 | (10) | * | ||||||
James L. Breeden | 71 | Director | 1987 | 2016 | 39,721 | (11) | * | ||||||
Laura G. Weisshar | 63 | Director | 2007 | 2016 | 31,732 | (12) | * | ||||||
Jean M. Carandang | 49 | Chief Financial Officer | N/A | N/A | 33,227 | (13) | * | ||||||
Jeanne R. Thompson** | 67 | Chief Administrative Officer | N/A | N/A | 75,895 | (14) | 1.03 | ||||||
David G. Hanighen** | 56 | Chief Information Officer | N/A | N/A | 10,456 | (15) | * | ||||||
Robert R. Reed** | 45 | Chief Retail Banking Officer | N/A | N/A | 19,082 | (16) | * | ||||||
All nominees, directors and executive officers as a group (12 persons) | 4.62 | % |
* | Less than 1%. |
** | Ms. Thompson, Mr. Hanighen and Mr. Reed are officers of Simplicity Bank only. |
(1) | The mailing address for each person listed is 1359 North Grand Avenue, Covina, California 91724. |
(2) | As of September 5, 2014. |
(3) | For Director Breeden, reflects initial appointment to the Board of Directors of Kaiser Permanente Federal Credit Union, the predecessor to Simplicity Bank. Each director of Simplicity Bancorp, Inc. is also a director of Simplicity Bank. |
(4) | In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, a person is deemed to be the beneficial owner for purposes of this table, of any shares of common stock if he or she has voting or investment power with respect to such security, or has a right to acquire beneficial ownership at any time with 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. |
(5) | Includes the following amounts of unvested shares of restricted stock granted under the Simplicity Bancorp, Inc. 2004 Recognition and Retention Plan and the Simplicity Bancorp, Inc. 2011 Equity Incentive Plan: 832 shares for director Breeden, 832 shares for director Cochrane, 1,232 shares for director Dacumos, 832 shares for director Sacher, 832 shares for director Steinbach, 832 shares for director Voss, 832 shares for director Weisshar, 19,236 shares for Mr. Luton, 8,884 shares for Ms. Carandang, 7,361 shares for Ms. Thompson, 6,747 shares for Mr. Hanighen and 6,724 shares for Mr. Reed. |
(6) | Includes 1,000 shares of common stock held in a trust for Mr. Voss. |
(7) | Includes 13,713 shares of common stock held in the Simplicity Bank employee stock ownership plan, 6,446 shares of common stock held in the Simplicity Bank 401(k) Plan and 1,438 shares held in an IRA for Mr. Luton. Also, includes 47,964 stock options that have vested or will vest within 60 days after September 5, 2014. |
(8) | Includes 1,000 shares of common stock held by Mr. Dacumos’ spouse. |
(9) | Includes 5,878 shares of common stock held in a trust and 1,000 shares in a SEP IRA for Mr. Sacher. Includes 14,388 stock options that have vested or will vest within 60 days after September 5, 2014. |
(10) | Includes 30,207 shares held in a trust for Mr. Steinbach and 17,265 stock options that have vested or will vest within 60 days after September 5, 2014. |
(11) | Includes 1,896 shares of common stock held by Mr. Breeden’s spouse and 11,150 shares of common stock held in an IRA for Mr. Breeden. Includes 4,855 stock options that have vested or will vest within 60 days after September 5, 2014. |
(12) | Includes 11,568 shares of common stock held in a living trust. Includes 14,388 stock options that have vested or will vest within 60 days after September 5, 2014. |
(13) | Includes 8,281 shares of common stock held in the Simplicity Bank employee stock ownership plan and 7,306 shares of common stock held in the Simplicity Bank 401(k) Plan. Also, includes 5,395 stock options that have vested or will vest within 60 days after September 5, 2014. |
(14) | Includes 19,188 shares of common stock held in the Simplicity Bank employee stock ownership plan and 11,795 shares of common stock held in the Simplicity Bank 401(k) Plan. Includes 26,617 stock options that have vested or will vest within 60 days after September 5, 2014. |
(15) | Includes 2,241 shares of common stock in the Simplicity Bank employee stock ownership plan. |
(16) | Includes 4,586 shares of common stock in the Simplicity Bank employee stock ownership plan and 6,420 shares of common stock held in the Simplicity Bank 401(k) Plan. |
5 |
6 |
7 |
8 |
9 |
● | leading the search for individuals qualified to become members of the Board of Directors and to select director nominees to be presented for stockholder approval; |
● | developing and recommending to the Board of Directors other specific criteria not specified in its charter for the selection of individuals to be considered for election or re-election to the Board of Directors; |
● | adopting procedures for the submission of recommendations by stockholders for nominees to the Board of Directors; and |
● | annually reviewing the adequacy of its charter and recommending any proposed changes to the Board of Directors. |
● | the highest personal and professional ethics and integrity and whose values are compatible with our values; |
● | experience and achievements that have given them the ability to exercise and develop good business judgment; |
● | a willingness to devote the necessary time to the work of the Board of Directors and its committees, which includes being available for board and committee meetings; |
● | a familiarity with the communities in which we operate and/or are actively engaged in community activities; |
● | involvement in other activities or interests that do not create a conflict with their responsibilities to us and our stockholders; and |
● | the capacity and desire to represent the balanced, best interests of our stockholders as a group, and not primarily a special interest group or constituency. |
10 |
● | a statement that the writer is a stockholder and is proposing a candidate for consideration by the governance/nominating committee; |
● | the name and address of the stockholder as they appear on our books, and number of shares of our common stock that are owned beneficially by such stockholder (if the stockholder is not a holder of record, appropriate evidence of the stockholder’s ownership will be required); |
● | the name, address and contact information for the candidate, and the number of shares of our common stock that are owned by the candidate (if the candidate is not a holder of record, appropriate evidence of the stockholder’s ownership should be provided); |
● | 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 proxy statement pursuant to Regulation 14A of the Securities Exchange Act of 1934; |
● | a statement detailing any relationship between the candidate and any customer, supplier or competitor of Simplicity Bancorp, Inc. or its affiliates; |
● | detailed information about any relationship or understanding between the proposing stockholder and the candidate; and |
● | a statement of the candidate that the candidate is willing to be considered and willing to serve as a director if nominated and elected. |
● | forward the communication to the director or directors to whom it is addressed; |
● | attempt to handle the inquiry directly, or forward the communication for response by another employee. For example, a request for information about us as a stock-related matter may be forwarded to our stockholder relations officer; or |
● | not forward the communication if it is primarily commercial in nature, relates to an improper or irrelevant topic, or is unduly hostile, threatening, illegal or otherwise inappropriate. |
11 |
● | reviewed and discussed with management and our independent registered public accounting firm, our audited consolidated financial statements for the fiscal year ended June 30, 2014; |
● | discussed with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61, as amended as adopted by the Public Accounting Oversight Board; and |
● | received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm their independence from us. |
This report has been provided by the audit committee. |
Michael J. Sacher, Chairman |
Giovani O. Dacumos Donald R. Voss |
12 |
● | Meeting the Demands of the Market – Our goal is to compensate our employees at competitive levels that position us as the employer of choice among our peers who provide similar financial services in the markets we serve. | |
● | Aligning with Stockholders – We use equity compensation as a key component of our compensation mix to develop a culture of ownership among our key personnel and to align their individual financial interests with the interests of our stockholders. | |
● | Driving Performance – We will base compensation in part on the attainment of company-wide, business unit and individual targets that return positive results to our bottom line. | |
● | Reflecting our Business Philosophy – Our approach to compensation reflects our values and the way we do business in the communities we serve. |
13 |
Name | Title | |
Dustin Luton | President and Chief Executive Officer of Simplicity Bancorp, Inc. and Simplicity Bank | |
Jean M. Carandang | Chief Financial Officer of Simplicity Bancorp, Inc. and Simplicity Bank | |
Jeanne R. Thompson | Chief Administrative Officer of Simplicity Bank | |
David G. Hanighen | Chief Information Officer of Simplicity Bank | |
Robert R. Reed | Chief Retail Banking Officer of Simplicity Bank |
14 |
● | Publicly traded financial institutions. | |
● | Locations in the states of California, Oregon and Washington. | |
● | $500 million - $2.0 billion in assets. | |
● | Comparable business model and performance results. |
● | Provident Financial Holdings | ● | Heritage Financial Corp. | ||
● | Pacific Continental Corp. | ● | Sierra Bancorp | ||
● | Pacific Mercantile Bancorp | ● | Bank of Marin Bancorp | ||
● | Heritage Oaks Bancorp | ● | Bridge Capital Holdings | ||
● | Banc of California, Inc. | ● | Bank of Commerce Holdings | ||
● | Pacific Premier Bancorp | ● | Riverview Bancorp, Inc. | ||
● | California United Bank | ● | Central Valley Community Bancorp | ||
● | FNB Bancorp | ● | First Northern Community Bancorp | ||
● | American River Bankshares | ● | Community West Bancshares | ||
● | Heritage Commerce Corp. |
● | base salary, which is designed to provide a reasonable level of predictable income commensurate with the market standards for the executive’s position; |
● | non-equity incentive compensation which is based on specified goals and benchmarks as designed by senior management and the compensation committee and approved by the compensation committee; |
● | long-term equity incentive compensation through grants of stock options and restricted stock awards, which align the interests of the named executive officers with those of our stockholders; |
● | severance benefits payable pursuant to an employment agreement with our President and Chief Executive Officer and an executive severance plan for which our named executive officers, other than the President and Chief Executive Officer, are eligible to participate; |
● | retirement benefits payable pursuant to our tax-qualified and non-qualified plans; and |
● | other broad-based benefits. |
15 |
16 |
17 |
18 |
19 |
Summary Compensation Table | |||||||||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Option Awards ($)(2) | Stock Awards ($)(2) | Non-equity incentive plan compensation ($)(3) | All other compensation ($)(4) | Total ($) | |||||||||||||||||||||||
Dustin Luton, | 2014 | 379,750 | — | — | 107,265 | 117,298 | 41,701 | 646,014 | |||||||||||||||||||||||
President and Chief Executive | 2013 | 390,698 | — | — | 135,610 | 97,344 | 35,741 | 659,393 | |||||||||||||||||||||||
Officer of Simplicity Bancorp, Inc. | 2012 | 337,266 | — | — | — | 103,873 | 39,172 | 480,311 | |||||||||||||||||||||||
and Simplicity Bank | |||||||||||||||||||||||||||||||
Jean M. Carandang, | 2014 | 219,920 | — | — | 53,426 | 53,691 | 45,129 | 372,166 | |||||||||||||||||||||||
Chief Financial Officer of | 2013 | 223,669 | — | — | 45,249 | 44,773 | 34,047 | 347,738 | |||||||||||||||||||||||
Simplicity Bancorp, Inc. and | 2012 | 187,132 | — | — | — | 34,415 | 36,000 | 257,547 | |||||||||||||||||||||||
Simplicity Bank | |||||||||||||||||||||||||||||||
Jeanne R. Thompson, | 2014 | 174,904 | — | — | 43,297 | 43,425 | 36,191 | 297,817 | |||||||||||||||||||||||
Chief Administrative Officer of | 2013 | 204,717 | — | — | 37,352 | 36,417 | 33,222 | 311,708 | |||||||||||||||||||||||
Simplicity Bank | 2012 | 161,410 | — | — | — | 28,507 | 30,197 | 220,114 | |||||||||||||||||||||||
David G. Hanighen | 2014 | 181,688 | — | — | 49,810 | 45,550 | 38,508 | 315,556 | |||||||||||||||||||||||
Chief Information Officer of | 2013 | 196,175 | — | — | 28,636 | 39,645 | 14,314 | 278,770 | |||||||||||||||||||||||
Simplicity Bank | 2012 | 119,475 | — | — | — | 22,296 | — | 141,771 | |||||||||||||||||||||||
Robert R. Reed (5) | 2014 | 170,500 | — | — | 43,528 | 35,060 | 35,306 | 284,394 | |||||||||||||||||||||||
Chief Retail Banking Officer | 2013 | 170,862 | — | — | 26,817 | 30,470 | 24,702 | 252,851 | |||||||||||||||||||||||
Simplicity Bank |
(1) | Includes reimbursement for unused earned time off and health insurance premiums in accordance with Simplicity Bank’s policies applicable to all employees. |
(2) | Represents the grant date fair value of the restricted stock received by the named executive officers under the 2011 Equity Incentive Plan. The restricted stock awards were granted in August 2013 based on the dollar amount of each named executive officer’s Long-Term Cash Award (as defined below) earned in 2013. The grant date fair value has been computed in accordance with the stock-based compensation accounting rules (FASB ASC Topic 718). A discussion of the assumptions used in calculating the award values may be found at Note 12 of our notes to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014. |
(3) | All cash incentive plan awards are reported for the fiscal year for which they were earned pursuant to the Annual Incentive Plan, which represents 70% of the incentive award that was earned in 2014 and 50% of the deferred amount attributable to the 2013 and 2012 incentive awards that were attributable to a relevant performance that was satisfied during the 2014 fiscal year. These awards are traditionally paid during the first quarter of a fiscal year. The amount reflected in this column does not include (i) any non-equity incentive compensation that was deferred as required under the Annual Incentive Plan and (ii) the Long-Term Cash Awards that were earned by the named executive officers under the long-term incentive program since the Long-Term Cash Awards were converted into restricted stock awards that were granted to the named executive officers on July 30, 2014. Please see “Benefit Plans-Annual Incentive Plan” and “Benefit Plans – Long-Term Incentive Program” for further details. |
(4) | The amounts in this column reflect the various benefits and payments received by the applicable named executive officer. A break-down of the various elements of compensation in this column is set forth in the table immediately provided below for the fiscal year ended June 30, 2014. |
(5) | Mr. Reed was not a named executive officer for the 2012 fiscal year. |
20 |
Name | Year | Perquisites ($)(1) | Employer Contributions to 401(k) Plan ($) | RRP Dividends ($)(2) | ESOP Allocation ($) | Total ($) | |||||||||||||||||
Dustin Luton | 2014 | — | 4,750 | 4,738 | 32,213 | 41,701 | |||||||||||||||||
Jean M. Carandang | 2014 | — | 10,039 | 2,877 | 32,213 | 45,129 | |||||||||||||||||
Jeanne R. Thompson | 2014 | — | 7,458 | 2,034 | 26,699 | 36,191 | |||||||||||||||||
David G. Hanighen | 2014 | — | 8,920 | 1,616 | 27,972 | 38,508 | |||||||||||||||||
Robert R. Reed | 2014 | — | 8,074 | 1,842 | 25,390 | 35,306 |
(1) | For the fiscal year ended June 30, 2014, no named executive officer received perquisites or personal benefits which exceeded $10,000. |
(2) | Represents dividends on unvested restricted stock awards granted pursuant to the 2011 Equity Incentive Plan and 2004 Recognition and Retention Plan. |
Grants of Plan-Based Awards For the Fiscal Year Ended June 30, 2014 | ||||||||||||||||||||||||||||||
Estimated future payouts under Non- | All other | All other | ||||||||||||||||||||||||||||
equity incentive plan awards | stock | option | Grant Date | |||||||||||||||||||||||||||
awards: | awards: | Exercise or | Fair Value | |||||||||||||||||||||||||||
number of | number of | base price | of | |||||||||||||||||||||||||||
shares of | securities | of | Stock and | |||||||||||||||||||||||||||
stock or | underlying | option | Option | |||||||||||||||||||||||||||
Name | Grant Dates | Threshold | Target | Maximum | units | options | awards | Awards | ||||||||||||||||||||||
($) | ($) | ($) | (#) | (#) | ($/Sh) | ($) | ||||||||||||||||||||||||
Dustin Luton | 7/1/2013(1) | — | 114,000 | 190,000 | — | — | — | — | ||||||||||||||||||||||
7/1/2013(2) | — | 114,000 | 190,000 | — | — | — | — | |||||||||||||||||||||||
8/28/2013(3) | — | — | — | 7,189 | — | — | 107,265 | |||||||||||||||||||||||
Jean M. Carandang | 7/1/2012(1) | — | 54,375 | 87,000 | — | — | — | — | ||||||||||||||||||||||
7/1/2012(2) | — | 54,375 | 87,000 | — | — | — | — | |||||||||||||||||||||||
8/8/2013(3) | — | — | — | 3,506 | — | — | 53,246 | |||||||||||||||||||||||
Jeanne R. Thompson | 7/1/2012(1) | — | 43,750 | 70,000 | — | — | — | — | ||||||||||||||||||||||
7/1/2012(2) | — | 43,750 | 70,000 | — | — | — | — | |||||||||||||||||||||||
8/8/2013(3) | — | — | — | 2,841 | — | — | 43,297 | |||||||||||||||||||||||
David G. Hanighen | 7/1/2012(1) | — | 45,250 | 72,400 | — | — | — | — | ||||||||||||||||||||||
7/1/2012(2) | — | 45,250 | 72,400 | — | — | — | — | |||||||||||||||||||||||
8/8/2013(3) | — | — | — | 3,268 | — | — | 49,810 | |||||||||||||||||||||||
Robert R. Reed | 7/1/2013(1) | — | 42,500 | 68,000 | — | — | — | — | ||||||||||||||||||||||
7/1/2013(2) | — | 42,500 | 68,000 | — | — | — | — | |||||||||||||||||||||||
8/8/2013(3) | — | — | — | 2,856 | — | — | 43,529 |
(1) | Represents target and maximum payments achievable under the Annual Incentive Plan, based upon the financial targets to be achieved during the fiscal year ended June 30, 2014. The dollar amounts include the 30% deferral required under the Annual Incentive Plan. |
(2) | Represents target and maximum payments achievable under the long-term incentive program, based on the financial targets to be achieved during the fiscal year ended June 30, 2014, which is referred to below as the Long-Term Cash Award. Each named executive officer’s Long-Term Cash Award was converted into equivalent grants of restricted stock awards on July 30, 2014. |
(3) | Represents the restricted stock awards that were granted under the 2011 Equity Incentive Plan on August 28, 2013 for Mr. Luton and August 8, 2013 for the other named executive officers, based on financial targets achieved during the fiscal year ended June 30, 2013 under the long-term incentive program. |
21 |
22 |
Company Goal | Threshold | Target | Maximum | Achieved | ||||
ROAA | 0.42% | 0.53% | 0.64% | 0.64% | ||||
Nonperforming Assets | 1.75% | 1.50% | 1.25% | 0.90% | ||||
Core Deposit Growth | $16,600,000 | $20,000,000 | $25,000,000 | $33,032,000 | ||||
Gross Loans | $745,000,000 | $775,000,000 | $805,000,000 | $724,017,000 | ||||
Customer Service Metric(1) | 4.00 | 4.20 | 4.40 | 4.05 |
(1) | Customer service metric was established internally by Simplicity Bank and approved by the compensation committee. The results are based on a survey of Simplicity Bank customers. |
23 |
24 |
Name | Long-Term Cash Award ($) | Equivalent Restricted Stock Award Grant (#) | ||||||
Dustin Luton (1) | 112,786 | 6,902 | ||||||
Jean M. Carandang (1) | 54,719 | 3,349 | ||||||
Jeanne R. Thompson (1) | 44,032 | 2,695 | ||||||
David G. Hanighen (1) | 47,573 | 2,912 | ||||||
Robert R. Reed (1) | 40,757 | 2,495 |
(1) | The number of restricted stock awards for each named executive officer was determined based on the $16.34 fair market value of Simplicity Bancorp, Inc. common stock on July 30, 2014. |
25 |
Outstanding Equity Awards at Year Ended June 30, 2014 | |||||||||||||||||||||||||
Name | Grant Date | Number of securities underlying unexercised options exercisable (#) | Number of securities underlying unexercised options unexercisable (#) | Option exercise price ($) | 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 ($)(1) | ||||||||||||||||||
Dustin Luton | 11/15/2006 | 28,776 | — | 24.19 | 11/15/2016 | — | — | ||||||||||||||||||
01/30/2009 | 14,388 | — | 10.85 | 01/30/2019 | — | — | |||||||||||||||||||
06/28/2011 | 4,800 | 3,200 | (2) | 12.30 | 06/28/2021 | 800 | (3) | 13,960 | |||||||||||||||||
07/25/2012 | — | — | — | — | 7,710 | (4) | 134,539 | ||||||||||||||||||
08/28/2013 | — | — | — | — | 7,189 | (4) | 125,448 | ||||||||||||||||||
Jean M. Carandang | 01/30/2009 | 5,395 | — | 10.85 | 01/30/2019 | — | — | ||||||||||||||||||
06/28/2011 | — | — | — | — | 800 | (3) | 13,960 | ||||||||||||||||||
07/25/2012 | — | — | — | — | 2,572 | (4) | 44,881 | ||||||||||||||||||
08/08/2013 | — | — | — | — | 3,506 | (4) | 61,179 | ||||||||||||||||||
Jeanne R. Thompson | 11/16/2004 | 15,826 | — | 20.16 | 11/16/2014 | — | — | ||||||||||||||||||
01/30/2009 | 10,791 | — | 10.85 | 01/30/2019 | — | — | |||||||||||||||||||
06/28/2011 | — | — | — | — | 800 | (3) | 13,960 | ||||||||||||||||||
07/25/2012 | — | — | — | — | 2,124 | (4) | 37,063 | ||||||||||||||||||
08/08/2013 | — | — | — | — | 2,841 | (4) | 49,575 | ||||||||||||||||||
David G. Hanighen | 07/25/2012 | — | — | — | — | 1,628 | (4) | 28,408 | |||||||||||||||||
08/08/2013 | — | — | — | — | 3,268 | (4) | 57,026 | ||||||||||||||||||
Robert R. Reed | 06/28/2011 | — | — | — | — | 800 | (3) | 13,960 | |||||||||||||||||
07/25/2012 | — | — | — | — | 1,524 | (4) | 26,593 | ||||||||||||||||||
08/08/2013 | — | — | — | — | 2,856 | (4) | 49,837 |
(1) | This amount is based on the fair market value of Simplicity Bancorp, Inc. common stock of $17.45 on June 30, 2014. |
(2) | Stock option awards vest 20% per year commencing on June 28, 2012, such that the stock options will become fully vested on June 28, 2016. |
(3) | Restricted stock awards will vest as follows: 400 shares will vest on each of June 28, 2015 and June 28, 2016. |
(4) | Restricted stock awards vest 20% per year commencing on the one year anniversary of the grant date. |
26 |
Option Exercises and Stock Vested for the Fiscal Year Ended June 30, 2014 | ||||||||||||||||
Option awards | Stock awards | |||||||||||||||
Name | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting ($)(1) | ||||||||||||
Dustin Luton | — | — | 2,328 | 35,426 | ||||||||||||
Jean M. Carandang | — | — | 2,483 | 40,590 | ||||||||||||
Jeanne R. Thompson | — | — | 931 | 14,820 | ||||||||||||
David G. Hanighen | — | — | 407 | 6,003 | ||||||||||||
Robert R. Reed | — | — | 782 | 12,623 |
(1) | The value realized on vesting represents the fair market value of our common stock on the day the restricted stock awards vested. |
27 |
28 |
Voluntary Resignation ($) | Early Retirement ($) | Normal Retirement ($) | Involuntary Termination or Resignation for “Good Reason” ($) | Involuntary Termination for Cause ($) | Termination after Change in Control ($) | Disability ($) | Death ($) | |||||||||||||||||||||||||
Dustin Luton | ||||||||||||||||||||||||||||||||
Employment Agreement (1) | ― | ― | ― | 400,926 | ― | 998,501 | 380,000 | 400,926 | ||||||||||||||||||||||||
Annual Incentive Plan (2) | ― | ― | ― | ― | ― | 49,927 | 49,927 | 49,927 | ||||||||||||||||||||||||
Unvested Stock Option Awards (3) | ― | ― | ― | ― | ― | 16,480 | 16,480 | 16,480 | ||||||||||||||||||||||||
Unvested Restricted Stock Awards (4) | ― | ― | ― | ― | ― | 273,947 | 273,947 | 273,947 | ||||||||||||||||||||||||
Jean M. Carandang | ||||||||||||||||||||||||||||||||
Severance Plan (1) | ― | ― | ― | 218,798 | ― | 526,546 | ― | ― | ||||||||||||||||||||||||
Annual Incentive Plan (2) | ― | ― | ― | ― | ― | 24,430 | 24,430 | 24,430 | ||||||||||||||||||||||||
Unvested Restricted Stock Awards (4) | ― | ― | ― | ― | ― | 120,021 | 120,021 | 120,021 | ||||||||||||||||||||||||
Jeanne R. Thompson | ||||||||||||||||||||||||||||||||
Severance Plan (1) | ― | ― | ― | 183,588 | ― | 437,496 | ― | ― | ||||||||||||||||||||||||
Annual Incentive Plan (2) | ― | ― | 19,704 | ― | ― | 19,704 | 19,704 | 19,704 | ||||||||||||||||||||||||
Unvested Restricted Stock Awards (4) | ― | ― | ― | ― | ― | 100,599 | 100,599 | 100,599 | ||||||||||||||||||||||||
David G. Hanighen | ||||||||||||||||||||||||||||||||
Severance Plan(1) | ― | ― | ― | 184,366 | ― | 446,498 | ― | ― | ||||||||||||||||||||||||
Annual Incentive Plan (2) | ― | ― | ― | ― | ― | 21,743 | 21,743 | 21,743 | ||||||||||||||||||||||||
Unvested Restricted Stock Awards (4) | ― | ― | ― | ― | ― | 85,435 | 85,435 | 85,435 | ||||||||||||||||||||||||
Robert R. Reed | ||||||||||||||||||||||||||||||||
Severance Plan(1) | ― | ― | ― | 171,398 | ― | 404,224 | ― | ― | ||||||||||||||||||||||||
Annual Incentive Plan (2) | ― | ― | ― | ― | ― | 18,757 | 18,757 | 18,757 | ||||||||||||||||||||||||
Unvested Restricted Stock Awards (4) | ― | ― | ― | ― | ― | 90,391 | 90,391 | 90,391 |
29 |
(1) | Amount reflects the severance benefits payable to Mr. Luton as stipulated under his employment agreement and to each named executive officer, other than Mr. Luton, as stipulated under the Severance Plan. The amount provided in the disability column does not reflect any reduction in benefits as a result of any disability insurance provided by Simplicity Bank to Mr. Luton. Please see the descriptions of each Employment Agreement set forth under “Executive Compensation-Benefit Plans” for further details. |
(2) | Amount reflects the portion of the named executive officer’s incentive compensation award that was deferred in accordance with the terms of the Annual Incentive Plan. The named executive officer (or beneficiary) will be eligible to receive the deferred payment in accordance with the terms of the Annual Incentive Plan in the event of death, disability, a change in control of Simplicity Bancorp, Inc. or Simplicity Bank or termination of employment following the attainment of age 65 during the applicable performance period. |
(3) | This amount represents the difference between the fair market value of the Simplicity Bancorp, Inc. common stock at June 30, 2014 and the exercise price of stock option awards that become vested and exercisable as a result of Mr. Luton’s termination of employment following a change in control, death, or disability. The fair market value of a share of Simplicity Bancorp, Inc. common stock was $17.45 on June 30, 2014. |
(4) | This amount represents the fair market value of the named executive officer’s restricted stock that become vested as a result of his or her termination of employment following a change in control, death, or disability. The fair market value of each share of Simplicity Bancorp, Inc. common stock was $17.45 on June 30, 2014. |
30 |
Director Compensation | ||||||||||||||||||||
Name | Fees earned or paid in cash ($) | Stock awards ($)(1)(2) | Option awards ($)(1) | All other compensation ($)(3) | Total ($) | |||||||||||||||
James L. Breeden | 42,375 | 15,001 | — | 311 | 57,687 | |||||||||||||||
John H. Cochrane | 33,167 | 15,001 | — | 311 | 48,479 | |||||||||||||||
Giovani O. Dacumos | 37,000 | 15,001 | — | 509 | 52,510 | |||||||||||||||
Michael J. Sacher | 44,500 | 15,001 | — | 426 | 59,927 | |||||||||||||||
Robert C. Steinbach | 44,500 | 15,001 | — | 311 | 59,812 | |||||||||||||||
Donald R. Voss | 48,167 | 15,001 | — | 311 | 63,479 | |||||||||||||||
Laura G. Weisshar | 33,833 | 15,001 | — | 311 | 49,145 |
(1) | As of June 30, 2014, the directors had the following outstanding equity awards: Mr. Breeden had 832 restricted stock awards and 4,855 stock option awards; Mr. Cochrane had 832 restricted stock awards; Mr. Dacumos had 1,232 restricted stock awards; Mr. Sacher had 832 restricted stock awards and 14,388 stock option awards; Mr. Steinbach had 832 restricted stock awards and 17,265 stock option awards; Mr. Voss had 832 restricted stock awards; and Ms. Weisshar had 832 restricted stock awards and 14,388 stock option awards. |
(2) | Represents the grant date fair value of the restricted stock received under the 2011 Equity Incentive Plan. The grant date fair value has been computed in accordance with the stock-based compensation accounting rules (FASB ASC Topic 718). A discussion of the assumptions used in calculating the award values may be found at Note 12 of our notes to our consolidated financial statements in the Annual Report on Form 10-K for the fiscal year ended June 30, 2014. |
(3) | This amount represents dividends received in 2014 on unvested stock awards granted pursuant to the 2004 Recognition and Retention Plan and 2011 Equity Incentive Plan. For the fiscal year ended June 30, 2014, no director received perquisites or personal benefits which exceeded $10,000. |
31 |
2014 | 2013 | |||||||
Audit Fees | $ | 209,500 | $ | 201,550 | ||||
Audit Related Fees | $ | — | $ | — | ||||
All Other Fees | $ | 27,147 | $ | 25,686 |
32 |
33 |
34 |
35 |
Stockholder Relations | ||
Simplicity Bancorp, Inc. | ||
1359 North Grand Avenue | ||
Covina, California 91724 | ||
Phone: (800) 524-2274 | ||
Fax: (626) 646-2032 | ||
www.simplicitybancorp.com |
BY ORDER OF THE BOARD OF DIRECTORS | ||
/s/ Nicole Perkins | ||
Nicole Perkins | ||
Corporate Secretary | ||
Covina, California | ||
September 18, 2014 |
36 |
SIMPLICITY BANCORP, INC. | VOTE BY INTERNET -www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | |||
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. | |||
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||
M78369-P56128 | KEEP THIS PORTION FOR YOUR RECORDS | |
DETACH AND RETURN THIS PORTION ONLY | ||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
SIMPLICITY BANCORP, INC.
The Board of Directors recommends a vote“FOR” Proposals 1, 2 and 3. | For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ![]() | |||||||||
o | o | o | ||||||||||||
1. | The election as Directors of all nominees listed below (except as marked to the contrary) each to serve for the terms ending as listed below. | |||||||||||||
Nominees: | ||||||||||||||
01) John H. Cochrane | ||||||||||||||
02) Donald R. Voss | ||||||||||||||
03) Dustin Luton | ||||||||||||||
For | Against | Abstain | ||||||||||||
2. | The approval of Crowe Horwath LLP as the Company’s independent registered public accounting firm for the year ending June 30, 2015. | o | o | o | ||||||||||
3. | An advisory, non-binding resolution with respect to our executive compensation. | o | o | o | ||||||||||
For address changes and/or comments, please check this box and write them on the back where indicated. | o | |||||||||||||
Please indicate if you plan to attend this meeting. | o | o | ||||||||||||
Yes | No | |||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.
M78370-P56128
REVOCABLE PROXY SIMPLICITY BANCORP, INC. ANNUAL MEETING OF STOCKHOLDERS October 29, 2014 THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS | |||||||
The undersigned hereby appoints the full Board of Directors, with full powers of substitution to act as attorneys and proxies for the undersigned to vote all shares of common stock of Simplicity Bancorp, Inc. (the “Company”) which the undersigned may be entitled to vote at the Annual Meeting of Stockholders to be held at Hilton Hotel Pasadena, 168 South Los Robles, Pasadena, California, at 5:00 p.m. (pacific time) on Wednesday, October 29, 2014 and at any adjournment or postponement thereof. The Board of Directors is authorized to cast all votes to which the undersigned is entitled as specified on the reverse side. Should the undersigned be present and elect to vote at the annual meeting or at any adjournment thereof and after notification to the Secretary of Simplicity Bancorp, Inc. at the annual meeting of the stockholder’s decision to terminate this proxy, then the power of said attorneys and proxies shall be deemed terminated and of no further force and effect. This proxy may also be revoked by sending written notice to the Secretary of Simplicity Bancorp, Inc. at the address set forth on the Notice of Annual Meeting of Stockholders, or by the filing of a later dated proxy prior to a vote being taken on a particular proposal at the annual meeting. The undersigned acknowledges receipt from Simplicity Bancorp, Inc. prior to the execution of this proxy of a notice of the annual meeting, audited financial statements and a proxy statement dated September 18, 2014. | |||||||
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED ON THE REVERSE SIDE. IF ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THE ABOVE-NAMED PROXIES AT THE DIRECTION OF A MAJORITY OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. | |||||||
Address Changes/Comments: | |||||||
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) | |||||||
Please complete and date this proxy and return it promptly in the enclosed postage-prepaid envelope. | |||||||