SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material pursuant to Rule 14a-12
Harrodsburg First Financial Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing
fee is calculated and state how it was determined.)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
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|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[Harrodsburg First Financial Bancorp, Inc. Letterhead]
December 21, 2001
Dear Stockholder:
On behalf of the Board of Directors and management of Harrodsburg First
Financial Bancorp, Inc. (the "Company"), I cordially invite you to attend the
Annual Meeting of Stockholders to be held at the Ragged Edge Community Theater,
111 South Main Street, Harrodsburg, Kentucky, on January 28, 2002 at 5:30 p.m.,
Eastern Time. The attached Notice of Annual Meeting and Proxy Statement describe
the formal business to be transacted at the Annual Meeting. During the Annual
Meeting, the Chairman and Chief Executive Officer, Arthur L. Freeman, will
report on the operations of the Company. Directors and officers of the Company,
as well as a representative of Miller, Mayer, Sullivan & Stevens, LLP, certified
public accountants, will be present to respond to any questions stockholders may
have.
You will be asked to elect two directors and to ratify the appointment
of Miller, Mayer, Sullivan & Stevens, LLP as the Company's independent
accountants for the fiscal year ending September 30, 2002. The Board of
Directors has unanimously approved each of these proposals and recommends that
you vote FOR them.
Your vote is important, regardless of the number of shares you own and
regardless of whether you plan to attend the Annual Meeting. I encourage you to
read the enclosed proxy statement carefully and sign and return your enclosed
proxy card as promptly as possible because a failure to do so could cause a
delay in the Annual Meeting and additional expense to the Company. A
postage-paid return envelope is provided for your convenience. This will not
prevent you from voting in person, but it will assure that your vote will be
counted if you are unable to attend the Annual Meeting. If you do decide to
attend the Annual Meeting and feel for whatever reason that you want to change
your vote at that time, you will be able to do so. If you are planning to attend
the Annual Meeting, please let us know by marking the appropriate box on the
proxy card.
Sincerely,
/s/Jack D. Hood
-------------------------------------
Jack D. Hood
President and Chief Operating Officer
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HARRODSBURG FIRST FINANCIAL BANCORP, INC.
104 SOUTH CHILES STREET
HARRODSBURG, KENTUCKY 40330-1620
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 28, 2002
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of Harrodsburg First Financial Bancorp, Inc. (the "Company"), will be held at
the Ragged Edge Community Theater, 111 South Main Street, Harrodsburg, Kentucky,
on Monday, January 28, 2002, at 5:30 p.m., Eastern Time, for the following
purposes:
1. To elect two directors of the Company; and
2. To ratify the appointment of Miller, Mayer, Sullivan & Stevens, LLP as
independent public accountants of the Company for the fiscal year ending
September 30, 2002;
all as set forth in the Proxy Statement accompanying this notice, and to
transact such other business as may properly come before the Meeting and any
adjournments. The Board of Directors is not aware of any other business to come
before the Meeting. Stockholders of record at the close of business on December
6, 2001 are the stockholders entitled to vote at the Meeting and any
adjournments thereof.
A copy of the Company's Annual Report for the year ended September 30,
2001 is enclosed.
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. WE ENCOURAGE YOU TO VOTE BY PROXY SO THAT YOUR SHARES WILL BE REPRESENTED
AND VOTED AT THE MEETING EVEN IF YOU CANNOT ATTEND. ALL STOCKHOLDERS OF RECORD
CAN VOTE BY WRITTEN PROXY CARD. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES
ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM
YOUR RECORD HOLDER TO VOTE PERSONALLY AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Debbie C. Roach
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Debbie C. Roach
Secretary
Harrodsburg, Kentucky
December 21, 2001
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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PROXY STATEMENT
OF
HARRODSBURG FIRST FINANCIAL BANCORP, INC.
104 SOUTH CHILES STREET
HARRODSBURG, KENTUCKY 40330-1620
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ANNUAL MEETING OF STOCKHOLDERS
JANUARY 28, 2002
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Harrodsburg First Financial Bancorp,
Inc. (the "Company") to be used at the Annual Meeting of Stockholders of the
Company which will be held at the Ragged Edge Community Theater, 111 South Main
Street, Harrodsburg, Kentucky, on Monday, January 28, 2002, at 5:30 p.m.,
Eastern Time (the "Meeting"). The accompanying Notice of Annual Meeting of
Stockholders and this Proxy Statement are being first mailed to stockholders on
or about December 21, 2001.
All properly executed written proxies that are delivered pursuant to
this Proxy Statement will be voted on all matters that properly come before the
Meeting for a vote. If your signed proxy specifies instructions with respect to
matters being voted upon, your shares will be voted in accordance with your
instructions. If no instructions are specified, your shares will be voted (a)
FOR the election of the directors named in Proposal 1, (b) FOR Proposal 2
(ratification of independent public accountants); and (c) in the discretion of
the proxy holders, as to any other matters that may properly come before the
Meeting. Your proxy may be revoked at any time prior to being voted by: (i)
filing with the Secretary of the Company (Debbie C. Roach at 104 South Chiles
Street, Harrodsburg, Kentucky 40330-1620) written notice of such revocation,
(ii) submitting a duly executed proxy bearing a later date, or (iii) attending
the Meeting and giving the Secretary notice of your intention to vote in person.
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VOTING STOCK AND VOTE REQUIRED
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The Board of Directors has fixed the close of business on December 6,
2001 as the record date for the determination of stockholders who are entitled
to notice of, and to vote at, the Meeting. On the record date, there were
1,343,416 shares of the Company's common stock outstanding (the "Common Stock").
Each stockholder of record on the record date is entitled to one vote for each
share held.
The certificate of incorporation of the Company ("Certificate of
Incorporation") provides that in no event shall any record owner of any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who beneficially owns in excess of 10% of the then outstanding shares
of Common Stock (the "Limit") be entitled or permitted to any vote with respect
to the shares held in excess of the Limit. Beneficial ownership is determined
pursuant to the definition in the Certificate of Incorporation and includes
shares beneficially owned by such person or any of his or her affiliates or
associates (as such terms are defined in the Certificate of Incorporation),
shares which such person or his or her affiliates or associates have the right
to acquire upon the exercise of conversion rights or options, and shares as to
which such person and his or her affiliates or associates have or share
investment or voting power, but shall not include shares beneficially owned by
any employee stock ownership plan or similar plan of the issuer or any
subsidiary.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
Meeting. With respect to any matter, any shares for which a broker indicates on
the proxy that it does not have discretionary authority as to such shares to
vote on such matter (the "Broker Non- Votes") will not be considered present for
purposes of determining whether a quorum is present. In the event there are not
sufficient votes for a quorum or to ratify any proposals at the time of the
Meeting, the Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors, the proxy being provided by the Board
enables a stockholder to vote for the election of the nominees proposed by the
Board of Directors, as submitted as Proposal 1, or to withhold authority to vote
for the nominees being proposed. Directors are elected by a plurality of votes
of the shares present in person or represented by proxy at a meeting and
entitled to vote in the election of directors.
As to the ratification of the independent public accountants, which is
submitted as Proposal 2, a stockholder may: (i) vote "FOR" the ratification;
(ii) vote "AGAINST" the ratification; or (iii) "ABSTAIN" with respect to the
ratification. Unless otherwise required by law, Proposal 2 and all other matters
shall be determined by the affirmative vote of a majority of shares present in
person or represented by proxy and entitled to vote without regard to (a) Broker
Non-Votes, or (b) proxies marked "ABSTAIN" as to that matter.
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PRINCIPAL HOLDERS
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Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The following
table sets forth, as of the record date, persons or groups who own more than 5%
of the Common Stock. Other than as noted below, management knows of no person or
group that owns more than 5% of the outstanding shares of Common Stock at the
record date.
Percent of Shares
Amount and Nature of of Common Stock
Name of Beneficial Owner Beneficial Ownership Outstanding (%)
- ------------------------ -------------------- ---------------
First Financial Bank
Employee Stock Ownership Plan Trust
("ESOP")
104 South Chiles Street 174,570 13.0
Harrodsburg, Kentucky(1)
Jack D. Hood
104 South Chiles Street
Harrodsburg, Kentucky (2) 79,943 5.8
(footnotes on next page.)
2
_____________________
(1) The ESOP purchased such shares for the exclusive benefit of plan
participants with funds borrowed from the Company. These shares are
held in a suspense account and will be allocated among ESOP
participants annually on the basis of compensation as the ESOP debt is
repaid. The board of directors of the Bank has appointed a committee
consisting of non-employee directors Coleman, Letton and Shryock to
serve as the ESOP administrative committee ("ESOP Committee") and to
serve as the ESOP trustees ("ESOP Trustee"). The ESOP Committee or the
Board instructs the ESOP Trustee regarding investment of ESOP plan
assets. The ESOP Trustee must vote all shares allocated to participant
accounts under the ESOP as directed by participants. Unallocated shares
and shares for which no timely voting direction is received, will be
voted by the ESOP Trustee as directed by the ESOP Committee. As of the
record date, 69,238 shares have been allocated under the ESOP to
participant accounts.
(2) See "Proposal 1 - Election of Directors."
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the 1934 Act requires the Company's directors and
executive officers to file reports of ownership and changes in ownership of
their equity securities of the Company with the Securities and Exchange
Commission and to furnish the Company with copies of such reports. To the best
of the Company's knowledge, all of the filings by the Company's directors and
executive officers were made on a timely basis during the 2001 fiscal year. The
Company is not aware of other beneficial owners of more than ten percent of its
Common Stock.
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PROPOSAL 1 - ELECTION OF DIRECTORS
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The Certificate of Incorporation requires that directors be divided
into three classes, as nearly equal in number as possible, each class to serve
for a three year period, with approximately one-third of the directors elected
each year. The Board of Directors currently consists of six members, each of
whom also serves as a director of First Financial Bank (the "Bank").
Wickliffe T. Asbury, Sr., and James W. Dunn (the "Nominees") have been
nominated by the Board of Directors for a term of three years (the "Nominees").
Mr. Asbury currently serves as a director of the Company. Mr. Dunn currently
serves as a director of the Bank. The Nominees will serve for their respective
terms or until his or her successor has been elected and qualified.
The persons named as proxies in the enclosed proxy card intend to vote
for the election of the Nominees, unless the proxy card is marked to indicate
that such authorization is expressly withheld. Should the Nominees withdraw or
be unable to serve (which the Board of Directors does not expect) or should any
other vacancy occur in the Board of Directors, it is the intention of the
persons named in the enclosed proxy card to vote for the election of such person
as may be recommended to the Board of Directors by the Nominating Committee of
the Board. If there are no substitute nominees, the size of the Board of
Directors may be reduced. Beneficial ownership of directors (including the
Nominees) and executive officers of the Company, as a group, is also shown in
this table.
3
Shares of
Common Stock
Year First Current Beneficially Percent
Elected or Term to Owned as of Owned
Name and Title Age(1) Appointed(2) Expire December 6, 2001(3) (%)
- -------------- ------ ------------ ------ ------------------- -------
BOARD NOMINEES FOR TERM TO EXPIRE IN 2005
Wickliffe T. Asbury, Sr.
Executive Vice President
of the Bank and Director 50 1989 2002 42,109 3.1
James W. Dunn
Nominee -- -- -- 293 *
DIRECTORS CONTINUING IN OFFICE
Arthur L. Freeman
Chairman of the Board,
Chief Executive Officer,
and Director 51 1999 2003 7,204 *
Jack D. Hood
President,
Chief Operating Officer,
and Director 52 1976 2003 79,943 5.8
W. Dudley Shryock
Director 45 1998 2003 16,562(4) 1.2
Jack L. Coleman, Jr.
Director 47 1991 2004 27,851(4) 2.1
Thomas Les Letton
Director 49 1985 2004 29,995(4) 2.2
All directors (including
the Nominees) and
executive officers of the
Company as a group
(9 persons) -- -- -- 256,860 17.6
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(1) At September 30, 2001.
(2) Refers to the year the individual first became a director of the Company or
the Bank.
(3) The share amounts also include shares of Common Stock that the following
persons may acquire through the exercise of stock options within 60 days of
record date: Wickliffe T. Asbury, Sr. - 25,000; Arthur L. Freeman - 3,000;
Jack D. Hood - 30,000; W. Dudley Shryock - 10,000; Jack L. Coleman, Jr. -
10,000; and Thomas Les Letton - 10,000.
(4) Excludes 174,570 shares of Common Stock held by the ESOP for which such
individual serves as a member of the ESOP Committee or Trustee Committee
and has shared voting power. Such individual disclaims beneficial ownership
with respect to such shares held in a fiduciary capacity.
* Less than 1% of the Common Stock outstanding.
4
Biographical Information
The business experience of each director and executive officer of the
Company is set forth below. All directors and executive officers have held their
present positions for five years unless otherwise stated.
Nominees:
Wickliffe T. Asbury, Sr. is an Executive Vice President of the Bank.
Mr. Asbury is also a member of the Anderson County Habitat For Humanity and the
Finance Committee for Lawrenceburg- Anderson County Community Park.
James W. Dunn has been a member of the Board of Directors of the Bank
since May 2000. Mr. Dunn is retired and was the deputy commissioner for
employment services for the Commonwealth of Kentucky. He was also co-owner and
President of Joy Temporary Services. Mr. Dunn currently serves on the board of
directors and is a member of the executive committee of the Bluegrass State
Skills Corporation. Additionally, Mr. Dunn is a member of the Mercer Chamber of
Commerce and serves on the review board of Juvenile Justice.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
ABOVE NOMINEES FOR DIRECTORS.
Continuing Directors:
Arthur L. Freeman was named Chairman and Chief Executive Officer of the
Company and the Bank, effective October 1, 1999. Mr. Freeman is a member of the
Board of Directors of Citizens Financial Bank, a majority owned subsidiary of
the Company. From January 1998 to September 1999, Mr. Freeman was Commissioner
of the Kentucky Department of Financial Institutions. Prior to his appointment
as Commissioner, he was the Vice President and Director of Thrift Membership for
the Kentucky Bankers Association ("KBA"), following the merger of the Kentucky
League of Savings Institutions with the KBA in 1995. Mr. Freeman served as
President and Executive Director of the Kentucky League for five years and Vice
President for two years. He is also past Treasurer of the State YMCA of
Kentucky, past Director of the Kentucky School Boards Association and Kentucky
School Boards Insurance Trust, founding Director of the Kentucky School Boards
Liquid Asset Fund, past Chairman of the Harrodsburg Board of Education, past
President of the Mercer Chamber of Commerce, past Director of the Mercer Unit of
the American Cancer Society, past Director of the Wilderness Trail YMCA, past
Director of the Harrodsburg Municipal Housing Authority, and a past Director of
the State Bank and Trust Company.
Jack D. Hood is the President and Chief Operating Officer of the
Company and the Bank. Mr. Hood is the Treasurer of the Mercer County Extension
Office and a member of the Harrodsburg Rotary Club. Additionally, Mr. Hood was a
past Director of the Kentucky League of Savings Institutions and past President
of Financial Institution Services of Kentucky.
W. Dudley Shryock is a certified public accountant, practicing in
Lawrenceburg, Kentucky. Mr. Shryock is treasurer for the Anderson County Fiscal
Court.
Jack L. Coleman, Jr. has been a partner and majority stockholder of
Coleman's Lumber Yard for 28 years. He has also been a member of the Kentucky
House of Representatives for 9 years. Mr. Coleman is a member of the Mercer
County Chamber of Commerce.
5
Thomas Les Letton is the President of The Letton Company, Inc., a real
estate investment company, Thomas Travel, Inc., a travel agency, and Old Bridge,
Inc., a golf course and development company, all located in Danville, Kentucky.
He is also the secretary of W.F.L., Inc. and affiliates which owns thirteen Papa
Johns Pizza franchises.
Certain Executive Officers Who Are Not Directors:
Teresa W. Noel, 45, is a Vice President and Treasurer of the Company
and has been with the Bank since 1975, and has been an officer since 1989. Ms.
Noel is active in the Harrodsburg High School Band Boosters and serves on the
Harrodsburg City School Board.
Debbie C. Roach, 52, is a Vice President and Secretary of the Company
and has been with the Bank since 1970, and an officer since 1979.
Meetings and Committees of the Board of Directors
The Company's Board of Directors conducts its business through meetings
of the Board and through activities of its committees. All committees act for
both the Company and the Bank. During the fiscal year ended September 30, 2001,
the Board of Directors held 12 regular meetings and no special meetings. No
director attended fewer than 75% of the total meetings of the Board of Directors
of the Company and committees on which such director served during the fiscal
year ended September 30, 2001. In addition to other committees, as of September
30, 2001, the Company had a Nominating Committee, a Salary Committee, and an
Audit Committee.
The Nominating Committee is comprised of directors Coleman, Freeman,
Hood, Letton and Shryock. Nominations to the Board of Directors made by
stockholders must be made in writing to the Secretary and received by the
Company not less than 60 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders of the Company. Notice to the Company
of such nominations must include certain information required pursuant to the
Certificate of Incorporation. The Nominating Committee, which is not a standing
committee, met once during the 2001 fiscal year.
The Salary Committee is comprised of directors Coleman, Letton, Shryock
and James W. Dunn. The committee meets to review salaries and performance of
officers and employees and recommends compensation adjustments and promotions.
The committee met once during the fiscal year ended September 30, 2001.
The Audit Committee is comprised of directors Coleman, Letton, Shryock
and James W. Dunn. The Audit Committee meets once a year before a regular board
meeting with the auditors of the Company to discuss the results of the annual
audit and any related matters. The Board of Directors has determined that each
of the members of the Audit Committee is independent in accordance with rules of
the Nasdaq Stock Market. The Board of Directors has adopted a written Audit
Committee Charter. The Audit Committee is a standing committee and responsible
for developing and maintaining the Company's audit program. In addition to one
regularly scheduled meeting annually, the Audit committee is available either as
a group or individually to discuss any matters that might affect the financial
statements, internal controls or other financial aspects of the operations of
the Company.
6
Audit Committee Report
Review of Audited Financial Statements with Management.
The Audit Committee reviewed and discussed the audited financial
statement for the year ended September 30, 2001 with the management of the
Company.
Review of Financial Statements and Other Matters with Independent
Accountant.
The Audit Committee discussed with Miller, Mayer, Sullivan & Stevens
LLP ("Miller, Mayer, Sullivan & Stevens"), the Company's independent
accountants, the matters required to be discussed by the statement on Auditing
Standards No. 61 (Communications with Audit Committees), as may be modified or
supplemented. The Audit Committee has received the written disclosures and the
letter from Miller, Mayer, Sullivan & Stevens required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees), as may be
modified or supplemented, and has discussed with Miller, Mayer, Sullivan &
Stevens its independence.
Recommendation that Financial Statements be Included in Annual Report.
Based on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-KSB for the
year ended September 30, 2001, for filing with the Securities and Exchange
Commission.
Audit Committee:
W. Dudley Shryock, Chairman
Jack L. Coleman, Jr.
Thomas Les Letton
James W. Dunn
Audit Fees
The aggregate fees billed by Miller, Mayer, Sullivan & Stevens for
professional services rendered for the audit of the Company's consolidated
annual financial statements for the 2001 fiscal year and the reviews of the
financial statements included in the Company's Forms 10-QSB were approximately
$25,000.
Financial Information Systems Design and Implementation Fees
For the 2001 fiscal year, Miller, Mayer, Sullivan & Stevens rendered no
professional services to the Company or its subsidiaries for financial
information systems design and implementation. Accordingly, for the 2001 fiscal
year, there were no fees billed by Miller, Mayer, Sullivan & Stevens to the
Company or its subsidiaries.
7
All Other Fees
The aggregate fees billed by Miller, Mayer, Sullivan & Stevens to the
Company and its consolidated subsidiaries for all other services other than
those covered under "Audit Fees" for the 2001 fiscal year were approximately
$15,000.
The Audit Committee considered whether the provision of the non-audit
services listed under "Financial Information Systems Design and Implementation
Fees" and "All Other Fees" above was compatible with maintaining Miller, Mayer,
Sullivan & Stevens' independence.
Director Compensation
In the fiscal year ended September 30, 2001, each member of the Board
of Directors of the Company received a fee of $750 per month, which included a
fee of $250 per month from the Bank. As Director Emeritus, Mr. Burgin received a
fee of $500 per month. No additional fees are paid for committee meetings. For
the fiscal year ended September 30, 2001, fees paid to all directors totaled
approximately $60,000.
Under the Company's 1996 Stock Option Plan, each non-employee director
and Messrs. Asbury and Hood were granted options to acquire shares of Common
Stock. As of January 27, 2001, all such options have vested. Additionally, in
1999 under the plan, Mr. Freeman was granted options to acquire 5,000 shares of
Common Stock. The exercise price of the options is the fair market value of the
Company's Common Stock on the date of grant. The options granted to Mr. Freeman
are exercisable at the rate of 20% commencing on November 15, 1999.
Executive Compensation
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by (i) Chairman of the Board of the
Company and the Chief Executive Officer, and (ii) the President and Chief
Operating Officer of the Company (collectively, the "Named Executive Officers").
No other executive officer of the Company had a salary and bonus during the
fiscal year ended September 30, 2001 that exceeded $100,000 for services
rendered in all capacities to the Company and the Bank.
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------------- ------------
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary($) Bonus Compensation($)(2) Options(#)(3) Compensation($)
- --------------------------- ---- --------- ----- ------------------ ------------- ---------------
Arthur L. Freeman
Chairman of the Board and 2001 97,875 -- 9,000 -- 14,388(4)
Chief Executive Officer(1) 2000 93,600 -- 9,000 5,000 --
Jack D. Hood 2001 93,600 -- 9,000 -- 13,454(5)
President and Chief 2000 93,600 -- 9,000 -- 20,181
Operating Officer 1999 92,700 -- 9,000 -- 24,128
(footnotes on next page.)
8
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(1) Effective October 1, 1999, Arthur L. Freeman became Chairman of the
Board and Chief Executive Officer of the Company and the Bank. Prior to
October 1, 1999, Mr. Freeman was not employed by the Company or the
Bank.
(2) Constitutes director fees.
(3) See "-- Stock Awards".
(4) Includes $1,558 in 401(k) matching contributions made by the Company
and 1,283 shares allocated to Mr. Freemen's account pursuant to the
ESOP at a cost of $10.00 per share (with an aggregate market value of
$15,268).
(5) Includes $1,494 in 401(k) matching contributions made by the Company
and 1,196 shares allocated to Mr. Hood's account pursuant to the ESOP
at a cost of $10.00 per share (with an aggregate market value of
$14,232).
Employment Agreement. The Bank entered into employment agreements (the
"Agreements") with Arthur L. Freeman, Chairman of the Board and Chief Executive
Officer and Jack D. Hood, President and Chief Operating Officer of the Bank (the
"named executive officers"). The Agreements have a three year term. Under the
Agreements, the named executive officers employment may be terminated by the
Bank for "just cause" as defined in the Agreements. If the Bank terminates the
named executive officers without just cause, such individuals will be entitled
to a continuation of their salary from the date of termination through the
remaining term of the Agreements but not less than one year's salary. In the
event of the termination of employment in connection with any change in control
of the Bank during the term of the Agreements, the named executive officers will
be paid in a lump sum an amount equal to 2.99 times their five year average
taxable compensation. In the event of a change in control at September 30, 2001,
Messrs. Freeman and Hood would have been entitled to a lump sum payment of
approximately $298,000 and $281,000, respectively.
Stock Awards. The following table sets forth information with respect
to previously awarded stock options to purchase the Common Stock granted to
Messrs. Freeman and Hood and held by them as of September 30, 2001. The Company
has not granted to Messrs. Freeman and Hood any stock appreciation rights.
Aggregated Option Exercises in Last Fiscal Year, and FY-End Option Values
- ---------------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Shares Acquired Value Options at FY-End (#) at FY-End ($)
Name on Exercise(#) Realized ($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- -------------- --------------- ------------------------- -------------------------
Arthur L. Freeman -- -- 2,000 / 3,000 -- / -- (1)
Jack D. Hood -- -- 30,000 / - -- / -- (2)
- ---------------------
(1) Based upon an exercise price of $13.50 per share and estimated price of
$11.90 at September 30, 2001.
(2) Based upon an exercise price of $16.50 per share and estimated price of
$11.90 at September 30, 2001.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
The Bank, like many financial institutions, has followed a policy of
granting various types of loans to officers, directors, and employees. The loans
have been made in the ordinary course of business and on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for
9
comparable transactions with the Bank's other customers, and do not involve more
than the normal risk of collectibility, or present other unfavorable features.
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PROPOSAL 2 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
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Miller, Mayer, Sullivan & Stevens was the Company's independent
accountants for the 2001 fiscal year. The Board of Directors has appointed
Miller, Mayer, Sullivan & Stevens as its independent accountants for the fiscal
year ending September 30, 2002, subject to ratification by the Company's
stockholders. A representative of Miller, Mayer, Sullivan & Stevens is expected
to be present at the Meeting to respond to stockholders' questions and will have
the opportunity to make a statement if he or she so desires.
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT PUBLIC ACCOUNTANTS
REQUIRES THE APPROVAL OF A MAJORITY OF THE SHARES PRESENT AND ENTITLED TO VOTE
BY THE STOCKHOLDERS OF THE COMPANY AT THE MEETING. THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF
MILLER, MAYER, SULLIVAN & STEVENS AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2002.
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STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be considered for inclusion in the Company's proxy
statement for the annual meeting of stockholders to be held in 2003, all
stockholder proposals must be submitted to the Secretary at the Company's
office, 104 South Chiles Street, Harrodsburg, Kentucky 40330-1620, on or before
August 22, 2002. Under the Company's bylaws, in order to be considered for
possible action by stockholders at the 2003 annual meeting of stockholders,
stockholder proposals not included in the Company's proxy statement must be
submitted to the Secretary of the Company, at the address set forth above, no
later than November 28, 2002.
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OTHER MATTERS
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The Board of Directors does not know of any other matters that are
likely to be brought before the Meeting. If any other matters, not now known,
properly come before the Meeting or any adjournments, the persons named in the
enclosed proxy card, or their substitutes, will vote the proxy in accordance
with their judgment on such matters.
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
10
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FORM 10-KSB
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A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2001, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO
STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY,
HARRODSBURG FIRST FINANCIAL BANCORP, INC., 104 SOUTH CHILES STREET, HARRODSBURG,
KENTUCKY 40330-1620.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Debbie C. Roach
----------------------------------
Debbie C. Roach
Secretary
Harrodsburg, Kentucky
December 21, 2001
11
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HARRODSBURG FIRST FINANCIAL BANCORP, INC.
104 SOUTH CHILES STREET
HARRODSBURG, KENTUCKY 40330-1620
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ANNUAL MEETING OF STOCKHOLDERS
JANUARY 28, 2001
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The undersigned hereby appoints the Board of Directors of Harrodsburg
First Financial Bancorp, Inc. (the "Company"), or its designee, with full powers
of substitution, to act as attorneys and proxies for the undersigned, to vote
all shares of common stock of the Company which the undersigned is entitled to
vote at the Annual Meeting of Stockholders (the "Meeting"), to be held at the
Ragged Edge Community Theater, 111 South Main Street, Harrodsburg, Kentucky, on
Monday, January 28, 2001, at 5:30 p.m., Eastern Time, and at any and all
adjournments thereof, in the following manner:
FOR WITHHELD
--- --------
1. The election as directors of the nominees
listed below for a three-year term: |_| |_|
Wickliffe T. Asbury, Sr.
James W. Dunn
INSTRUCTIONS: To withhold your vote for any individual nominee, insert
the nominee's name on the line provided below.
-----------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The ratification of the appointment of Miller,
Mayer, Sullivan & Stevens, LLP as
independent public accountants of the Company
for the fiscal year ending September 30, 2002. |_| |_| |_|
In their discretion, such attorneys and proxies are authorized to vote upon such
other business as may properly come before the Meeting or any adjournments
thereof.
The Board of Directors recommends a vote "FOR" all of the above listed
propositions. ---
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elects to vote at the Meeting, or
at any adjournments thereof, and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this Proxy,
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke this Proxy by filing a
subsequently dated Proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this Proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this Proxy of a Notice of Annual Meeting of Stockholders, an Annual
Report to Stockholders and a Proxy Statement dated December 21, 2001.
Dated: |_| Check box if you plan to attend the
------------------ Meeting
- ------------------------------------ -----------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------------ -----------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this Proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
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