Unassociated Document
UNITED
STATES
SECURITIES
& EXCHANGE COMMISSION
WASHINGTON,
DC 20549
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 þ
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))
|
þ
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Definitive
Proxy Statement
|
£
|
Definitive
Additional Materials
|
£
|
Soliciting
Material Pursuant to § 240.14a-12.
|
Charter Financial
Corporation
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
£
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1) Title
of each class of securities to which transaction applies:
N/A
(2)
Aggregate number of securities to which transactions applies:
N/A
(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):
N/A
(4)
Proposed maximum aggregate value of transaction:
N/A
N/A
£
|
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.
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(1)
Amount Previously Paid:
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N/A
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(2)
Form, Schedule or Registration Statement
No.:
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N/A
N/A
N/A
January
28, 2011
Dear
Shareholder:
You are
cordially invited to attend the annual meeting of shareholders of Charter
Financial Corporation. The meeting will be held at the CharterBank
Corporate Center located at 1233 O.G. Skinner Drive, West Point, Georgia on
Wednesday, February 23, 2011 at 10:00 a.m., Eastern time.
The
notice of annual meeting and proxy statement appearing on the following pages
describe the formal business to be transacted at the
meeting. Officers of the Company, as well as a representative of
Dixon Hughes PLLC, the Company’s independent registered public accounting firm,
will be present to respond to appropriate questions of
shareholders.
It is
important that your shares are represented at this meeting, whether or not you
attend the meeting in person and regardless of the number of shares you
own. To make sure your shares are represented, we urge you to
complete and mail the enclosed proxy card promptly. If you attend the
meeting, you may vote in person even if you have previously mailed a proxy
card.
We look
forward to seeing you at the meeting.
Sincerely,
Robert L.
Johnson
President
and Chief Executive Officer
1233 O.G.
Skinner Drive
West
Point, Georgia 31833
706)
645-1391
______________________
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
______________________
TIME
AND DATE
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10:00
a.m., Eastern time, on Wednesday, February 23, 2011
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PLACE
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The
CharterBank Corporate Center, 1233 O.G. Skinner Drive, West Point,
Georgia
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ITEMS
OF BUSINESS
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(1)
To elect three directors to serve for a term of three years, and to elect
one director to serve for a term of two years.
(2)
To ratify the selection of Dixon Hughes PLLC as our independent registered
public accounting firm for fiscal year 2011.
(3)
To hold an advisory, non-binding vote on the executive compensation
described in the proxy statement.
(4)
To hold an advisory, non-binding vote on how frequently advisory votes on
our executive compensation should be held: once every year, once every two
years, or once every three years.
(5)
To transact such other business as may properly come before the meeting
and any adjournment or postponement thereof.
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RECORD
DATE
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To
vote, you must have been a shareholder at the close of business on
December 31, 2010.
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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 or voting instruction card sent to you. Voting
instructions are printed on your proxy or voting instruction card and included
in the accompanying proxy statement. You can revoke a proxy at any
time before its exercise at the meeting by following the instructions in the
proxy statement.
William C. Gladden
Corporate Secretary
Important
Notice Regarding the Availability of Proxy Materials for the Shareholders
Meeting to be Held on February 23, 2011: This Proxy Statement and our 2010
Annual Report can be found at www.chfnir.com.
Charter
Financial Corporation
Proxy
Statement
This
proxy statement is furnished in connection with the solicitation of proxies by
the Board of Directors of Charter Financial Corporation (the “Company” or
“Charter Financial”) to be used at the annual meeting of shareholders of the
Company. The Company is the holding company for CharterBank (the
“Bank”). The annual meeting will be held at the CharterBank Corporate
Center, 1233 O.G. Skinner Drive, West Point, Georgia on Wednesday, February 23,
2011 at 10:00 a.m., Eastern time. This proxy statement and the
enclosed proxy card are being mailed to shareholders of record on or about
January 28, 2011.
Voting
and Proxy Procedure
Who
Can Vote at the Meeting
You are
entitled to vote your Company common stock if the records of the Company show
that you held your shares as of the close of business on December 31,
2010. If your shares are held through a broker, bank or similar
holder of record, you are considered the beneficial owner of shares held in
“street name” and these proxy materials are being forwarded to you by your
broker or other holder of record. As the beneficial owner, you have
the right to direct your broker or other holder of record how to vote by filling
out a voting instruction form that accompanies these proxy
materials. Your broker, bank or other holder of record may allow you
to provide voting instructions by telephone or by the
Internet. Please see the voting instruction form provided by your
broker, bank or other holder of record that accompanies this proxy
statement.
As of the
close of business on December 31, 2010, there were 18,672,361 shares of Company common
stock outstanding, including 11,457,924 shares of common stock held by First
Charter, MHC, the mutual holding company for CharterBank. Each share
of common stock has one vote.
Attending
the Meeting
If you
were a shareholder as of the close of business on December 31, 2010, you may
attend the meeting. However, if your shares of Company common stock
are held in street name, you will need proof of ownership to be admitted to the
meeting. A recent brokerage statement or a letter from a bank or
broker are examples of proof of ownership. If you want to vote your
shares of Company common stock held in street name in person at the meeting, you
will have to get a written proxy in your name from the broker, bank or other
holder of record who holds your shares.
Quorum
and Vote Required for Proposals
Quorum. A
majority of the outstanding shares of common stock entitled to vote is required
to be represented at the meeting, in person or by proxy, to constitute a quorum
for the transaction of business.
Votes Required
for Proposals. At this year’s annual meeting, shareholders will elect
three directors to serve for a term of three years, and one director to serve
for a term of two years. In voting on the election of directors, you may vote in
favor of the nominees, withhold votes as to all nominees, or withhold votes as
to specific nominees. There is no cumulative voting for the election of
directors.
Directors
must be elected by a plurality of the votes cast at the annual meeting. This
means that the nominees receiving the greatest number of votes will be
elected.
In voting
on the ratification of the appointment of Dixon Hughes PLLC as the Company’s
independent registered public accounting firm, you may vote in favor of the
proposal, vote against the proposal or abstain from voting. To ratify the
selection of Dixon Hughes PLLC as our independent registered public accounting
firm for fiscal 2011, the affirmative vote of a majority of the shares
represented at the annual meeting and entitled to vote on the proposal is
required.
In voting
on the advisory, non-binding proposal to approve the executive compensation
described in this proxy statement, you may vote in favor of the advisory
proposal, vote against the advisory proposal or abstain from
voting. A majority of the shares represented at the annual meeting
and entitled to vote on this advisory proposal must be voted in favor of the
proposal for it to pass. While this vote is required by law, it will
neither be binding on the Board of Directors, nor will it create or imply any
change in the fiduciary duties of, or impose any additional fiduciary duty on
the Board of Directors.
In voting
on the advisory, non-binding vote on how frequently a shareholder vote on
executive compensation matters should be held, you may vote in favor of holding
such a vote once every year, once every two years or once every three years, or
you may abstain from voting. Generally, approval of any
proposal presented to the Company’s shareholders requires the affirmative vote
of a majority of the shares represented at the meeting and entitled to vote on
the proposal. However, because this vote is advisory and non-binding,
if none of the vote frequency options receives the affirmative vote of a
majority of the shares represented at the meeting and entitled to vote on the
proposal, the vote frequency option receiving the greatest number of votes will
be considered the frequency option recommended by the Company’s
shareholders. Even though this vote will not be binding on the Board
of Directors, and it will not create or imply any change in the fiduciary duties
of, or impose any additional fiduciary duty on, the Board of Directors, the
Board of Directors will take into account the outcome of this vote in making a
determination on the frequency that advisory votes on our executive compensation
will be included in our proxy statements.
Broker
Non-Votes. If you do not provide your broker or other record
holder with voting instructions on certain non-routine matters (e.g., the
election of directors and advisory votes on executive compensation matters),
your broker will not have discretion to vote your shares on these matters. A
“broker non-vote” occurs when your broker submits a proxy for the meeting with
respect to routine matters, but does not vote on non-routine matters because you
did not provide voting instructions on these matters. In the case of a routine
matter (e.g., the ratification of the independent auditors), your broker or
other holder of record is permitted to vote your shares in the record holder’s
discretion if you have not provided voting instructions.
How Votes Are
Counted. If you return valid proxy instructions or attend the meeting in
person, we will count your shares for purposes of determining whether there is a
quorum, even if you abstain from voting. Broker non-votes also will be counted
for purposes of determining the existence of a quorum.
In
counting votes for the election of directors, votes that are withheld and broker
non-votes will have no effect on the outcome of the election.
In
counting votes on the proposal to ratify the selection of the independent
registered public accountants, abstentions will have the same effect as a vote
against the proposal.
In
counting votes on the advisory, non-binding proposal to approve executive
compensation matters, abstentions will have the same effect as a vote against
the proposal and broker non-votes will have no effect on the outcome of the
vote.
In
counting votes on the advisory, non-binding vote on how frequently shareholders
vote on our executive compensation should be held, abstentions and broker
non-votes will have no effect on the outcome of the vote.
Vote by First
Charter, MHC. Because First Charter, MHC owns more than 50% of
the Company’s outstanding common stock, the votes that First Charter, MHC casts
will ensure the presence of a quorum and will control the outcome of the vote on
all proposals.
Voting
by Proxy
The
Company’s Board of Directors is sending you this proxy statement to request that
you allow your shares of Company common stock to be represented at the annual
meeting by the persons named in the enclosed proxy card. All shares
of Company common stock represented at the meeting by properly executed and
dated proxies will be voted according to the instructions indicated on the proxy
card. If you sign, date and return a proxy card without giving voting
instructions, your shares will be voted as recommended by the Company’s Board of
Directors.
The Board
of Directors recommends that you vote:
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·
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for each of the
nominees for director;
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·
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for ratification of the
appointment of Dixon Hughes PLLC as the Company’s
independent registered public accounting
firm;
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·
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for approval of the
advisory proposal to approve the executive compensation described in this
proxy statement; and
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·
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for holding advisory
votes on our executive compensation every three
years.
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If any
matters not described in this proxy statement are properly presented at the
annual meeting, the persons named in the proxy card will use their judgment to
determine how to vote your shares. This includes a motion to adjourn
or postpone the meeting to solicit additional proxies. If the annual
meeting is postponed or adjourned for less than 30 days, your Company common
stock may be voted by the persons named in the proxy card on the new meeting
date, provided you have not revoked your proxy. The Company does not
currently know of any other matters to be presented at the meeting.
You may
revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy, you must advise the Corporate
Secretary of the Company in writing before your common stock has been voted at
the annual meeting, deliver a later dated proxy or attend the meeting and vote
your shares in person by ballot. Attendance at the annual meeting
will not in itself constitute revocation of your proxy.
Corporate
Governance
General
The
Company periodically reviews its corporate governance policies and procedures to
ensure that the Company meets the highest standards of ethical conduct, reports
results with accuracy and transparency and maintains full compliance with the
laws, rules and regulations that govern the Company’s operations. As
part of this periodic corporate governance review, the Board of Directors
reviews and adopts best corporate governance policies and practices for the
Company.
Code
of Ethics and Business Conduct
The
Company has adopted a Code of Ethics and Business Conduct that is designed to
promote the highest standards of ethical conduct by the Company’s directors,
executive officers and employees. The Code of Ethics and Business
Conduct requires that the Company’s directors, executive officers and employees
avoid conflicts of interest, comply with all laws and other legal requirements,
conduct business in an honest and ethical manner and otherwise act with
integrity and in the Company’s best interest. Under the terms of the
Code of Ethics and Business Conduct, directors, executive officers and employees
are required to report any conduct that they believe in good faith to be an
actual or apparent violation of the Code of Ethics and Business
Conduct. A copy of the Code of Ethics and Business Conduct can be
found in the “About
Us—Corporate Investor Relations—Governance Documents” section of our
website, www.charterbank.net.
As a
mechanism to encourage compliance with the Code of Ethics and Business Conduct,
the Company has established procedures to receive, retain and treat complaints
regarding accounting, internal accounting controls and auditing
matters. These procedures ensure that individuals may submit concerns
regarding questionable accounting or auditing matters in a confidential and
anonymous manner. The Code of Ethics and Business Conduct also
prohibits the Company from retaliating against any director, executive officer
or employee who reports actual or apparent violations of the Code of Ethics and
Business Conduct.
In
addition, we have adopted a Code of Ethics for Senior Officers that is
applicable to our senior financial officers, including our principal executive
officer, principal financial officer, principal accounting officer and all
officers performing similar functions. A copy of the Code of Ethics
for Senior Officers can be found in the “About Us—Corporate Investor
Relations—Governance Documents” section of our website, www.charterbank.net.
Meetings
of the Board of Directors
The
Company conducts business through meetings of its Board of Directors and through
activities of its committees. During fiscal 2010, the Board of
Directors held 19 meetings. All directors attended at least 75% of
the total meetings of the Board of Directors and the Board committees on which
such directors served.
Board
Leadership Structure
The Board of Directors combines the
position of Chairman of the Board with the position of Chief Executive
Officer. The Board of Directors believes this structure provides an
efficient and effective leadership model for the Company. Combining the Chairman
of the Board and Chief Executive Officer positions fosters clear accountability,
effective decision-making, and alignment on corporate
strategy.
The Board
of Directors believes its administration of its risk oversight function is not
adversely affected by the Board’s leadership structure. To assure effective
independent oversight, the Board has adopted a number of governance practices to
enhance its independence, including holding executive sessions of the
independent directors after Board meetings, as needed. In addition,
the Personnel & Compensation Committee, comprised solely of independent
directors, conducts performance evaluations of the Chairman of the Board and
Chief Executive Officer. The Board, in conjunction with the Nominating &
Corporate Governance Committee, which is comprised solely of independent
directors, regularly reviews the Board’s leadership structure. As
part of this review, the Board has considered appointing a lead independent
director to lead executive sessions of the Board, and may create such a position
in the future if the Board determines that it would further strengthen the
Company’s corporate governance structure.
Board’s
Role in Risk Oversight
The
Board’s role in the Company’s risk oversight process includes receiving regular
reports from the Company’s Chief Risk Officer and other members of senior
management on areas of material risk to the Company, including operational,
financial, legal and regulatory, strategic and reputational risks. The Board of
Directors (or the appropriate Board committee in the case of risks that are
reviewed and discussed at committee meetings) receives these reports from the
Chief Risk Officer or other appropriate “risk owner” within the organization,
which enables the Board or the appropriate Board committee to identify, mitigate
and monitor the material business risks of the Company. When a
committee is charged with management of a particular risk, the Chairman of the
committee reports risk-related matters addressed by the committee at the next
meeting of the full Board of Directors. This enables the Board and its
committees to coordinate the risk oversight role, particularly with respect to
risk interrelationships.
Committees
of the Board of Directors
The
following table identifies our standing Audit, Nominating & Corporate
Governance and Personnel & Compensation Committees and their
members. All members of each committee are independent in accordance
with applicable rules of Nasdaq and the Securities and Exchange
Commission. Each committee operates under a written charter available
in the “About Us—Corporate
Investor Relations—Governance Documents” section of the Company’s
website, www.charterbank.net.
Director
|
|
Audit
Committee
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Personnel
&
Compensation
Committee
|
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Nominating
&
Corporate
Governance
Committee
|
David Z. Cauble,
III
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X*
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X
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X*
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Jane W.
Darden
|
|
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X
|
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X
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William B.
Hudson
|
|
|
|
X
|
|
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Thomas M.
Lane
|
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X
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X*
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X
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David L.
Strobel
|
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X
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|
|
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Number
of Meetings in fiscal 2010
|
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6
|
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3
|
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1
|
* Denotes
Chairperson.
Audit
Committee. The committee oversees and monitors the financial
reporting process and internal control system, reviews and evaluates the audit
performed by the outside independent registered public accounting firm, and
reports any substantive issues found during the audit to the Board of
Directors. The committee is directly responsible for the appointment,
compensation and oversight of the
work of
the independent certified public accounting firm. The committee will
also review and approve transactions (other than loans, which are approved by
the full Board of Directors) with related parties. The Board of
Directors has designated Thomas M. Lane as an audit committee financial expert
under the rules of the Securities and Exchange Commission. The report
of the Audit Committee required by the rules of the Securities and Exchange
Commission is included in this proxy statement under the heading “Audit
Committee Report.”
Personnel &
Compensation Committee. Our Personnel & Compensation
Committee (the “Compensation Committee”) is responsible for administering our
executive officer compensation program. The Compensation Committee determines
salary levels and amounts of incentive compensation for executive officers,
administers our 2001 Stock Option Plan and 2001 Recognition and Retention Plan,
including approval of grants to executive officers and non-employee directors,
and periodically reviews and approves all compensation decisions and programs
relating to our executive officers. The Compensation Committee approves the
compensation philosophy and objectives of Charter Financial Corporation and
CharterBank, and reviews and approves all compensation components of Charter
Financial Corporation’s Chief Executive Officer and other executive officers,
including base salary, annual incentives, long-term incentives/equity, benefits
and other perquisites. In addition to reviewing competitive market
values, the Compensation Committee examines total compensation mix, the
pay-for-performance relationship and how elements in the aggregate comprise the
executive’s total compensation package.
The
Compensation Committee has authority under its charter to engage the services of
independent third party advisers, including compensation consultants and legal
counsel, to assist it in reviewing and determining executive officer
compensation. The Compensation Committee’s charter requires that it
consider all factors required by the Securities and Exchange Commission in
selecting an independent third party adviser.
Nominating &
Corporate Governance Committee. Pursuant to the Nominating
& Corporate Governance Committee charter, the Company’s Nominating &
Corporate Governance Committee assists the Board of Directors in identifying
qualified individuals to serve as Board members, in determining the composition
of the Board of Directors and its committees, in monitoring a process to assess
Board effectiveness and in developing and implementing the Company’s corporate
governance guidelines. The Nominating & Corporate Governance
Committee also considers and recommends the nominees for director to stand for
election at the Company’s annual meeting of shareholders. The
procedures of the Nominating & Corporate Governance Committee required to be
disclosed by Securities and Exchange Commission rules are included in this proxy
statement under the heading “Nominating & Corporate Governance Committee
Procedures.”
Director
Attendance at the Annual Meeting
The Board
of Directors encourages each director to attend annual meetings of
shareholders. All of our directors attended the annual meeting of
shareholders in fiscal 2010.
Stock
Ownership
The
following table provides information as of January 5, 2011, with respect to
persons known by the Company to be the beneficial owners of more than 5% of the
Company’s outstanding common stock. A person may be considered to own
any shares of common stock over which he or she has, directly or indirectly,
sole or shared voting or investing power. Percentages are based on
18,672,361 shares of Company common stock issued and outstanding as of January
5, 2011.
Name
and Address
|
|
Number
of
Shares
Owned
|
|
Percent
of
Common
Stock
Outstanding
|
|
|
|
|
|
First
Charter, MHC
1233
O.G. Skinner Dr., West Point, Georgia 31833
|
|
11,457,924
|
|
61.4%
|
|
|
|
|
|
Sy
Jacobs
Jacobs
Asset Management, LLC
One
Fifth Avenue, New York, New York 10003
|
|
1,042,104(1)
|
|
5.6%
|
(1)
|
Based
on information contained in a Schedule 13G filed with the U.S. Securities
and Exchange Commission on October 8, 2010. Both Mr. Sy Jacobs
and Jacobs Asset Management, LLC reported shared voting and shared
dispositive power with respect to 1,042,104 shares of Charter Financial
common stock.
|
The
following table provides information as of January 5, 2011 about the shares of
Charter Financial common stock that may be considered to be beneficially owned
by each director, named executive officer listed in the Summary Compensation
Table and all directors and executive officers of the Company as a group. A
person may be considered to beneficially own any shares of common stock over
which he or she has, directly or indirectly, sole or shared voting or investment
power. Unless otherwise indicated, none of the shares listed are pledged as
security, and each of the named individuals has sole voting power and sole
investment power with respect to the number of shares
shown. Percentages are based on 18,672,361 shares of Company common
stock issued and outstanding as of January 5, 2011.
|
|
Total
Shares Beneficially Owned
|
|
Percent
of All Common Stock Outstanding
|
|
|
|
|
|
Directors
and Nominees:
|
|
|
|
|
Robert
L. Johnson
|
|
154,289
(1)
|
|
*
|
David
Z. Cauble, III
|
|
20,610
(2)
|
|
*
|
Jane
W. Darden
|
|
31,483
(3)
|
|
*
|
William
B. Hudson
|
|
17,402
(4)
|
|
*
|
Curti
M. Johnson
|
|
21,369
(5)
|
|
*
|
Thomas
M. Lane
|
|
22,081
(6)
|
|
*
|
Edward
D. Smith
|
|
1,000
(7)
|
|
*
|
David
L. Strobel
|
|
5,772
(8)
|
|
*
|
|
|
|
|
|
Named
Executive Officers Other Than Directors:
|
|
|
|
|
Curtis
R. Kollar
|
|
80,952 (9)
|
|
*
|
Lee
Washam
|
|
71,807
(10)
|
|
*
|
|
|
|
|
|
All
directors, nominees and executive officers as a group (10
persons)
|
|
426,765
|
|
2.3%
|
(1)
|
Includes
15,574 shares of unvested restricted stock, 10,746 shares held in the
ESOP, 7,865 shares held by Mr. Johnson’s 401(k) account, 22,578 shares
held in Mr. Johnson’s Individual Retirement Account, 2,500 shares held in
his spouse’s Individual Retirement Account, and 8,126 shares for which Mr.
Johnson is custodian.
|
(2)
|
Includes
800 shares of unvested restricted
stock.
|
(3)
|
Includes
800 shares of unvested restricted stock, 5,000 shares held by her spouse
and 5,325 shares held in trust for which Ms. Darden is
Trustee.
|
(4)
|
Includes
800 shares of unvested restricted stock and 200 shares held in an
Individual Retirement Account.
|
(5)
|
Includes
1,000 shares of unvested restricted stock, 1,000 shares for which Mr.
Johnson is custodian and 400 shares held by his spouse in an Individual
Retirement Account.
|
(6)
|
Includes
800 shares of unvested restricted stock and 21,281 shares held jointly
with Mr. Lane’s wife.
|
(7)
|
All
shares are held in Mr. Smith’s 401(k)
account.
|
(8)
|
Includes
800 shares of unvested restricted
stock.
|
(9)
|
Includes
7,500 shares of unvested restricted stock, 9,193 shares held in the ESOP,
22,299 shares held by Mr. Kollar’s 401(k) account, 10,270 shares held in
Mr. Kollar’s Individual Retirement Account, 10,000 shares held by his
spouse’s living trust, and 1,634 shares held in his spouse’s Individual
Retirement Account.
|
(10)
|
Includes
12,500 shares of unvested restricted stock, 10,206 shares held in the
ESOP, 523 shares held in a 401(k) account and 25,345 shares held in an
Individual Retirement Account.
|
Proposal
1 — Election of Directors
The Board of Directors of Charter
Financial is presently composed of seven members. Director William B.
Hudson will retire from the Board of Directors, effective as of the Annual
Meeting on February 23, 2011. The Board of Directors has nominated Edward D.
Smith for election as a director at the Annual Meeting to replace Mr. Hudson.
Mr. Smith was recommended for nomination by Mr. David Z. Cauble, III, an
independent member of the Company’s Board of Directors.
Pursuant
to Charter Financial’s bylaws, the Board is divided into three classes with
three-year staggered terms, with approximately one-third of the directors in
each class. To preserve the division of directors into three classes
as equal in number as possible, the Board nominated Mr. Smith to serve in the
class of directors with terms ending at the annual meeting to be held in 2013
and until their successors are elected and qualified, which is the class in
which Mr. Hudson currently serves.
The Board
has also nominated Robert L. Johnson, David Z. Cauble, III and David L. Strobel
for election to the Board of Directors to serve for three-year terms and until
their respective successors are elected and qualified. Each nominee
for election as director except for Mr. Smith is currently a member of the Board
of Directors.
All of
the directors and nominees are independent under the current listing standards
of the NASDAQ Stock Market, Inc., except for Robert L. Johnson, our President
and Chief Executive Officer, and Curti M. Johnson, who is the brother of Robert
L. Johnson. In determining the independence of the directors listed
above, the Board of Directors considered three commercial real-estate loans
totaling $9.2 million at September 30, 2010, for which director David L. Strobel
is a guarantor. The Board of Directors also considered a $1.2 million
construction contract between CharterBank and Shannon, Strobel & Weaver
Constructors and Engineers, Inc., a construction and engineering firm of which
Mr. Strobel is a one-third owner, executive vice president and general
manager.
It is
intended that the proxies solicited by the Board of Directors will be voted for
the election of the nominees named below unless other instructions are
provided. If any nominee is unable to serve, the persons named in the
proxy card will vote your shares to approve the election of any substitute
proposed by the Board of Directors. Alternatively, the Board of
Directors may adopt a resolution to reduce the size of the Board. At
this time, the Board of Directors knows of no reason why any nominee might be
unable to serve.
The Board of Directors recommends a
vote “FOR” the election of all nominees.
Information
regarding the nominees, directors continuing in office and executive officers
that are not also directors is provided below. Unless otherwise
stated, each individual has held his or her current occupation for the last five
years. With respect to directors, the biographies also contain
information regarding the person’s experience, qualifications, attributes or
skills that caused the Nominating & Corporate Governance Committee and the
Board of Directors to determine that the person should serve as a
director. For information regarding the process for selecting
nominees, see “Nominating & Corporate Governance Committee
Procedures.”
|
|
Position(s)
Held With
Charter
Financial Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominees
|
|
Robert
L. Johnson
|
|
President,
Chief Executive Officer and Director
|
|
57
|
|
1986
|
|
2011
|
David
Z. Cauble, III
|
|
Director
|
|
58
|
|
1996
|
|
2011
|
David
L. Strobel
|
|
Director
|
|
59
|
|
2003
|
|
2011
|
Edward
D. Smith
|
|
—
|
|
36
|
|
—
|
|
—
|
|
Directors
Continuing in Office
|
|
Jane
W. Darden
|
|
Director
|
|
60
|
|
1988
|
|
2012
|
Thomas
M. Lane
|
|
Director
|
|
56
|
|
1996
|
|
2012
|
Curti
M. Johnson
|
|
Director
|
|
51
|
|
2007
|
|
2013
|
|
Executive
Officers Who Are Not Directors
|
|
Curtis
R. Kollar
|
|
Senior
Vice President and Chief Financial Officer
|
|
58
|
|
|
|
|
Lee
Washam
|
|
President
of CharterBank
|
|
49
|
|
|
|
|
___________________________
(1) As
of December 31, 2010.
(2) Includes
service as a director of CharterBank prior to its mutual-to-stock
conversion.
Nominees
for Election as Directors
The
nominees standing for election are:
Robert L. Johnson. Mr.
Johnson has been the President and Chief Executive Officer of Charter Financial
since its inception in 2001, Chief Executive Officer of CharterBank since 1996
and President of CharterBank from 1996 to January 2007. On November 27, 2007,
Mr. Johnson was elected Chairman of the Board of Directors upon the retirement
of Mr. John W. Johnson, Jr. Prior to 1996, he served as Financial
Analyst, then Senior Vice President and Chief Financial Officer of
CharterBank. He began continuous service with CharterBank in 1984.
Mr. Johnson has an undergraduate degree from Vanderbilt University and a
Master’s Degree in Business Administration with a concentration in Finance from
the University of Alabama. He is a graduate of the Graduate School of Community
Bank Management. He also serves on the LaGrange College Board of Trustees and is
Chairman of The Charter Foundation. Mr. Johnson also is affiliated with the West
Point Rotary Club. Mr. Johnson is the brother of Curti M. Johnson, a director of
Charter Financial. Mr. Johnson provides the Board of Directors with
broad perspective on Charter Financial’s strategies, challenges and
opportunities as a result of his long affiliation with CharterBank in a variety
of senior management roles.
David Z. Cauble, III. Mr.
Cauble is self-employed as a food service consultant and investor. He was the
Owner and President of Vend-All Company in LaGrange, Georgia, until its sale in
1996. Previously he was Vice President-Sales in his family’s Coca-Cola Bottling
business. He is a graduate of Washington & Lee University, serves as
Chairman of Cobb Foundation, is a member of Young Presidents’ Organization, and
serves as a Junior Warden of the Episcopal Church in LaGrange. As a
manager and owner of several businesses and as an investor, Mr. Cauble provides
the Board of Directors
with
insight concerning the opportunities and risks associated with lending to
commercial companies and small businesses.
David L. Strobel. Mr. Strobel
has been the Executive Vice President and General Manager of Shannon, Strobel
& Weaver Constructors & Engineers, Inc. since 1977. He received his B.S.
in Mechanical Engineering from the University of Notre Dame in 1973, and is a
Registered Professional Engineer in 18 states. Mr. Strobel served as a member of
the Board of Directors of EBA Bancshares and Eagle Bank of Alabama from 1998
until their acquisition by CharterBank in 2003. In February 1999, he assumed the
position of chairman of EBA Bancshares. He joined the Board of Directors of
CharterBank and Charter Financial in August 2003. Mr. Strobel’s other
affiliations include the Auburn City Schools Board of Education and several
professional societies. Mr. Strobel’s experience in managing the
operations of a construction and engineering business provides the Board of
Directors with general business acumen, and his real estate and construction
knowledge and experience and prior service on the board of another financial
institution provides the Board of Directors with perspective and experience in
CharterBank’s lending operations.
Edward D. Smith. Mr. Smith is
co-owner and Executive Vice-President of Hutchinson Traylor, an insurance and
financial services firm. He has his resident and surplus lines
licenses in Life & Health and Property & Casualty insurance, and has
also earned his Series 6, 63 & 65 Securities Licenses and obtained the
Certified Insurance Counselor (CIC) designation. Prior to joining
Hutchinson Traylor, Mr. Smith served several years in the Financial Services
Division of Accenture, LLP. Mr. Smith attended Wake Forest University
where he graduated Magna Cum Laude from the Wayne Calloway School of Business
and Accountancy. Mr. Smith actively participates in several community
service organizations. He is a member of the Executive Committee and
chairs the Development Committee as part of his service on the Board of Trustees
of LaGrange College. He also serves as Past President of the
College’s Leadership Council. He is the Vice-Chair of the Downtown
LaGrange Development Authority and Past President of the Board of Directors for
both the LaGrange Rotary Club and the local Boys & Girls Club of West
Georgia. Mr. Smith’s extensive and diverse experience in insurance,
retirement planning and financial services, including employee benefits, as well
as his active role in the community served by CharterBank, will provide the
Board with valuable insight in these areas.
Directors
Continuing in Office
The
following directors have terms ending in 2012:
Jane W. Darden. Ms. Darden is
responsible for overall management, including bookkeeping, for family assets
which includes investments, timberland and cattle farming. She was
formerly employed in the banking field for five years, and has a B.A. in
Psychology from Converse College. Ms. Darden serves on Library
Committee, Stewardship Committee, Altar Guild and Meals on Wheels for First
United Methodist Church of West Point, Georgia. As a manager of a
variety of different businesses, and with her experience in banking, Ms. Darden
provides the Board of Directors with a number of different perspectives and
insights.
Thomas M. Lane. Mr. Lane is
Chief Financial Officer of Lanier Health Services. He was the Senior
Vice President and Treasurer of WestPoint Home, Inc. and its predecessors from
March 2000 until March 2007. He previously served as its Treasurer from 1997 to
1999. Prior to that time, he served as Controller of Budgets and Analysis for
WestPoint Pepperell, one of the predecessors of West Point Home, Inc. He had
been continuously employed in various financial and accounting positions with
WestPoint Home and its predecessor companies since June 1976. Mr. Lane received
his B.S. in Business Administration from Auburn University in
1976. Mr. Lane’s diverse senior management experiences in financial
and accounting roles for several large enterprises provide the Board of
Directors with
perspective
on CharterBank’s financial and accounting practices and procedures, financial
reporting, as well as Charter Financial’s relationship with its internal and
external accounting firms. In addition, Mr. Lane has been designated
as an audit committee financial expert by the Board of Directors.
The
following director has a term ending in 2013:
Curti M. Johnson. Mr. Johnson
serves as General Counsel of CharterBank. He is a member of both the
Georgia and Alabama Bar Association. Prior to joining CharterBank on a full-time
basis on January 3, 2011, Mr. Johnson was a partner in the law firm of Johnson,
Caldwell & McCoy in Lanett, Alabama, where he practiced law since 1990.
Prior to that time, Mr. Johnson was an associate attorney with Burr & Forman
in Birmingham, Alabama, for four years. Mr. Johnson served as a director for
Citizens BancGroup, a bank holding company in Valley, Alabama, from 1988 until
it was acquired by CharterBank in 1999. He served as Chairman of Citizens
BancGroup from 1996 through 1999. He received his B.A. degree from Vanderbilt
University and his law degree from the University of Virginia School of Law. Mr.
Johnson is Vice President and founding board member of the Chattahoochee Fuller
Center Project, Inc. Mr. Johnson is the brother of Robert L. Johnson, our
Chairman of the Board and Chief Executive Officer. Mr. Johnson’s
legal expertise provides the Board of Directors with insight on legal matters
involving CharterBank, and his local contacts with customers and businesses
assist CharterBank with business generation and product offerings.
Executive
Officers Who are Not Directors
Curtis R.
Kollar. Mr. Kollar is a Certified Public Accountant (CPA) and
Certified Management Accountant (CMA). He has been the Vice President &
Treasurer of CharterBank since 1991 and was named Chief Financial Officer of
Charter Financial in October of 2001 and of CharterBank in January of 2001. He
has an undergraduate degree from Ohio Wesleyan University and an M.S. in
Accounting from Syracuse University. He is a graduate of the Graduate School of
Community Bank Management. Mr. Kollar has 24 years experience in the banking
field. Mr. Kollar serves as treasurer of West Point First United Methodist
Church and he is President of the Board of Directors of the Chattahoochee Valley
Hospital Society, a member of the LaGrange Choral Society and a past President
of the West Point Rotary Club.
Lee Washam. Mr.
Washam has been President of CharterBank since January of 2007. Before that, he
served as Executive Vice President for six years. Mr. Washam is the former
Executive Vice President of Flag Bank, LaGrange, Georgia and has over 26 years
of banking experience. He received his B.S. in Business Administration from
LaGrange College in 1983 and is a 1995 graduate of The Graduate School of
Banking at Louisiana State University. Mr. Washam’s current affiliations
include: LaGrange Lions Club, Leadership Troup, Georgia Community Bankers
Association, the Board of Governors of Highland Country Club and Finance
Committee for New Community Church.
Proposal
2 — Ratification of Independent Registered Public Accounting Firm
The Audit
Committee of the Board of Directors has appointed Dixon Hughes PLLC to be its
independent registered public accounting firm for the 2011 fiscal year, subject
to ratification by the shareholders. A representative of Dixon Hughes
PLLC is expected to be present at the annual meeting to respond to appropriate
questions from shareholders and will have the opportunity to make a statement
should he or she desire to do so.
The Board
of Directors is submitting the selection of Dixon Hughes PLLC as the Company’s
independent registered public accounting firm to the shareholders for
ratification pursuant to the
Company’s
bylaws and as a matter of good corporate practice. If the
ratification of the appointment of Dixon Hughes PLLC is not approved by a
majority of the votes present and entitled to vote at the annual meeting, other
independent registered public accounting firms may be considered by the Audit
Committee of the Board of Directors. Even if the selection is
ratified, the Audit Committee in its discretion may direct the appointment of a
different independent registered public accounting firm at any time during the
year if it determines that such change is in the best interests of the Company
and its shareholders.
The
Board of Directors recommends that shareholders vote “FOR” the ratification of
the appointment of Dixon Hughes PLLC as the Company’s independent registered
public accounting firm.
Audit
Fees
The
following table sets forth the fees billed to the Company for the fiscal years
ended September 30, 2010 and 2009 by Dixon Hughes PLLC.
|
|
2010
|
|
|
2009
|
|
Audit
fees (1)
|
|
$ |
539,500 |
|
|
$ |
260,200 |
|
Audit-related
fees (2)
|
|
$ |
15,950 |
|
|
$ |
50,600 |
|
Tax
fees (3)
|
|
$ |
89,515 |
|
|
$ |
47,250 |
|
All
other fees
|
|
$ |
— |
|
|
$ |
— |
|
(1)
|
Includes
audit of consolidated financial statements, services relating to
registration statements and regulatory applications (including Form S-1
and Office of Thrift Supervision Form MHC-2 and related amendments), and
comfort letter requirements relating to the Company’s 2010 common stock
offering, audit requirements relating to Rule 3-05 of Regulation S-X,
quarterly review services, audit reporting requirements under loss-sharing
agreements with the Federal Deposit Insurance Corporation, and review of
Forms 10-K and 10-Q.
|
(2)
|
Includes
acquisition accounting and other technical accounting consultations, and
excludes audit fees of $13,400 in 2010 and $13,000 in 2009 relating to
First Charter, MHC.
|
(3)
|
Includes
income tax return preparation, quarterly tax estimate services, assistance
with taxing authority audit examinations, and corporate tax
planning.
|
Pre-Approval
of Services by the Independent Registered Public Accounting Firm
The Audit
Committee is responsible for appointing, setting compensation and overseeing the
work of the independent registered public accounting firm. In
accordance with its charter, the Audit Committee approves, in advance, all audit
and permissible non-audit services to be performed by the independent registered
public accounting firm. Such approval process ensures that the
external auditor does not provide any non-audit services to the Company that are
prohibited by law or regulation.
In
addition, the Audit Committee has established a policy regarding pre-approval of
all audit and permissible non-audit services provided by the independent
registered public accounting firm. Requests for services by the
independent registered public accounting firm for compliance with the auditor
services policy must be specific as to the particular services to be
provided. The request may be made with respect to either specific
services or a type of service for predictable or recurring
services. During the year ended September 30, 2010, all services were
approved, in advance, by the Audit Committee in compliance with these
procedures.
Audit
Committee Report
The
Company’s management is responsible for the Company’s internal controls and
financial reporting process. The Company’s independent registered
public accounting firm is responsible for performing an independent audit of the
Company’s consolidated financial statements and issuing an opinion on the
conformity of those financial statements with generally accepted accounting
principles. The Audit Committee oversees the Company’s internal
controls and financial reporting process on behalf of the Board of
Directors.
In this
context, the Audit Committee has met and held discussions with management and
the independent registered public accounting firm. Management
represented to the Audit Committee that the Company’s consolidated financial
statements were prepared in accordance with generally accepted accounting
principles and the Audit Committee has reviewed and discussed the consolidated
financial statements with management and the independent registered public
accounting firm. The Audit Committee discussed with the independent
registered public accounting firm matters required to be discussed by Statement
on Auditing Standards No. 61, as amended, as adopted by the Public Company
Accounting Oversight Board, including the quality, not just the acceptability,
of the accounting principles, the reasonableness of significant judgments and
the clarity of the disclosures in the financial statements.
In
addition, the Audit Committee has 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 the independent registered public accounting
firm’s independence, and has discussed such independence with the independent
registered public accounting firm. In concluding that the registered
public accounting firm is independent, the Audit Committee considered, among
other factors, whether the non-audit services provided by the firm were
compatible with its independence.
The Audit
Committee discussed with the Company’s independent registered public accounting
firm the overall scope and plans for their audit. The Audit Committee
meets with the independent registered public accounting firm, with and without
management present, to discuss the results of their audit, their evaluation of
the Company’s internal controls, and the overall quality of the Company’s
financial reporting. The Audit Committee meets regularly with the
internal auditor to discuss the overall scope and plans for respective internal
audits. The Audit Committee also discusses the results of
internal audit examinations, including any co-sourced or outsourced examination
reports.
In performing all of these functions,
the Audit Committee acts only in an oversight capacity. In its
oversight role, the Audit Committee relies on the work and assurances of the
Company’s management, which has the primary responsibility for financial
statements and reports, and of the independent registered public accounting firm
who, in their report, express an opinion on the conformity of the Company’s
financial statements to generally accepted accounting principles. The
Audit Committee reviews with management the Company’s major financial risk
exposures and the steps management has taken to monitor, mitigate, and control
such exposures. Management has the responsibility for the
implementation of these activities.
In
reliance on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors, and the board has approved, that the
audited consolidated financial statements be included in the Company’s Annual
Report on Form 10-K for the year ended September 30, 2010, for filing with the
Securities and Exchange Commission. The Audit Committee also has
approved, subject to
shareholder
ratification, the selection of the Company’s independent registered public
accounting firm for the fiscal year ending September 30, 2011.
Audit
Committee of the Board of Directors of
Charter
Financial Corporation
David Z.
Cauble, III, Chair
Thomas M.
Lane
David L.
Strobel
Proposal
3 — Advisory Vote On Executive Compensation
The
compensation of our principal executive officer and our two other most highly
compensated executive officers (“named executive officers”) is described below
under the heading “Executive Compensation.” Shareholders are urged to read the
Executive Compensation section of this proxy statement, which discusses our
compensation policies and procedures with respect to our named executive
officers.
In
accordance with recently adopted changes to Section 14A of the Securities
Exchange Act of 1934 (the “Exchange Act”), shareholders will be asked at the
annual meeting to provide their support with respect to the compensation of our
named executive officers by voting on the following advisory, non-binding
resolution:
RESOLVED,
that the shareholders of Charter Financial Corporation approve, on an advisory
basis, the compensation of Charter Financial Corporation’s named executive
officers described in the Executive Compensation section of Charter Financial
Corporation’s Proxy Statement.
This
advisory vote, commonly referred to as a “say-on-pay” advisory vote, is
non-binding on the Board of Directors. Although non-binding, the
Board of Directors and the Personnel and Compensation Committee value
constructive dialogue on executive compensation and other important governance
topics with our shareholders and encourages all shareholders to vote their
shares on this matter. The Board of Directors and the Personnel &
Compensation Committee will review the voting results and take them into
consideration when making future decisions regarding our executive compensation
programs.
Unless
otherwise instructed, validly executed proxies will be voted “FOR” this
resolution.
The
Board of Directors unanimously recommends that you vote “FOR” the resolution set
forth in Proposal Three.
Proposal
4 — Frequency of Advisory Votes On Executive Compensation
In
accordance with recently adopted changes to Section 14A of the Exchange Act, we
are providing a shareholder advisory vote to approve the compensation of our
named executive officers (the “say-on-pay” advisory vote in Proposal Three
above) this year and will do so at least once every three years
thereafter. Pursuant to recently adopted changes to Section 14A of
the Exchange Act, at the 2011 Annual Meeting, we are also asking shareholders to
vote on whether future “say-on-pay” advisory votes on executive compensation
should occur every year, every two years or every three years.
After
careful consideration, the Board of Directors recommends that future shareholder
“say-on-pay” advisory votes on executive compensation be conducted every three
years. Although the Board of Directors recommends a
“say-on-pay” vote every three years, shareholders will be able to specify one of
four choices for this proposal on the proxy card: one year, two years, three
years or “abstain”. Shareholders are not voting to approve or disapprove of the
Board of Directors’ recommendation.
Although
this advisory vote regarding the frequency of say-on-pay votes is non-binding on
the Board of Directors, the Board of Directors and the Personnel &
Compensation Committee will review the voting results and take them into
consideration when deciding how often to conduct future say-on-pay shareholder
advisory votes.
Unless
otherwise instructed, validly executed proxies will be voted “FOR” the Three
Year frequency option.
The
Board of Directors unanimously recommends that you vote “FOR” the Three Year
frequency option.
Executive
Compensation
Summary Compensation
Table
The
following table sets forth for the years ended September 30, 2010 and 2009
certain information as to the total remuneration paid by Charter Financial to
Robert L. Johnson, President and Chief Executive Officer, and the two other most
highly compensated executive officers of Charter Financial (“Named Executive
Officers”).
Name
and principal position
|
|
Year
|
|
Salary ($)(1)
|
|
|
Bonus
($)
|
|
|
|
Option awards
($)(3)
|
|
Non-equity
incentive plan compensation ($)
|
|
Change in pension
value and nonqualified deferred compensation earnings ($)(4)
|
|
All other
compensation ($)(6)
|
|
Total
($)
|
Robert
L. Johnson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President,
Chief Executive
|
|
2010
|
|
$ |
323,480 |
(5) |
|
$ |
158,157 |
|
$ |
— |
|
$ |
110,000 |
|
$ |
— |
|
$ |
24,013 |
|
$ |
117,915 |
|
$ |
733,565 |
Officer
and Director
|
|
2009
|
|
|
315,311 |
|
|
|
— |
|
|
— |
|
|
45,140 |
|
|
— |
|
|
76,955 |
|
|
136,357 |
|
|
573,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Curtis
R. Kollar
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior
Vice President and
|
|
2010
|
|
|
150,697 |
|
|
|
43,498 |
|
|
76,500 |
|
|
55,000 |
|
|
— |
|
|
5,435 |
|
|
42,212 |
|
|
373,342 |
Chief
Financial Officer
|
|
2009
|
|
|
147,854 |
|
|
|
— |
|
|
— |
|
|
19,444 |
|
|
— |
|
|
15,868 |
|
|
39,385 |
|
|
222,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lee
Washam
|
|
2010
|
|
|
194,308 |
|
|
|
60,078 |
|
|
76,500 |
|
|
66,000 |
|
|
— |
|
|
11,535 |
|
|
64,919 |
|
|
473,340 |
President
of Charter Bank
|
|
2009
|
|
|
189,302 |
|
|
|
— |
|
|
— |
|
|
18,300 |
|
|
— |
|
|
33,661 |
|
|
64,726 |
|
|
305,989 |
(1)
|
Includes
$16,039, $13,041, and $9,863, of elective deferrals to Charter Financial’s
401(k) plan by Messrs. Johnson, Kollar, and Washam,
respectively.
|
(2)
|
The
amounts shown reflect the aggregate grant date fair value for outstanding
restricted stock awards granted during the year indicated, computed in
accordance with Financial Accounting Standards Board Accounting Standards
Codification Topic 718, Stock Compensation (“ASC Topic 718”). The amounts
represented were calculated based upon Charter Financial’s stock price of
$10.20 on the date of grant.
|
(3)
|
The
amounts shown reflect the aggregate grant date fair value of option awards
granted during the year indicated, computed in accordance with ASC Topic
718. For 2010, the option valuations were based upon the
Black-Scholes valuation model using the following assumptions (1) expected
term of option, 7 years; (2) annual volatility of common stock, 23.90%;
(3) expected dividend yield of common stock, 1.99%; and (4) risk-free
interest rate, 2.92% per annum, which resulted in a valuation of $2.20 per
option. For 2009, the option valuations were based upon the
Black-Scholes valuation model using the following assumptions (1) expected
term of option, 8 years; (2) annual volatility of common stock, 42.13%;
(3) expected dividend yield of common stock, 11.75%; and (4) risk-free
interest rate, 3.21% per annum, which resulted in a valuation of $.61 per
option.
|
(4)
|
Reflects
change in value in Salary Continuation Agreements
only.
|
(5)
|
Includes
director fees in the amount of
$39,400.
|
Footnotes
continue on following page.
(6)
|
All
other compensation was comprised of the following elements for the fiscal
year ended September 30, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
Stock Ownership Plan
|
$ 16,850
|
|
$ 14,905
|
|
$ 16,130
|
|
Dividends
and Interest on Restricted Stock(1)
|
83,476
|
|
23,181
|
|
38,635
|
|
Automobile
|
3,206
|
|
—
|
|
3,824
|
|
Country
Club Dues
|
2,483
|
|
—
|
|
3,459
|
|
Executive
Health Benefits
|
219
|
|
—
|
|
—
|
|
Life
Insurance (Split Dollar and Group Term)
|
11,273
|
|
3,718
|
|
2,463
|
|
Long-term
Disability Premiums
|
408
|
|
408
|
|
408
|
|
Total
|
117,915
|
|
42,212
|
|
64,919
|
|
(1)
|
Reflects
dividends and interest paid on shares of restricted common stock that
vested during 2010, which we reported as taxable compensation on the Named
Executive’s Officer’s Form W-2.
|
Incentive
Compensation Plan. Charter Financial maintains an incentive
compensation plan that provides for an incentive bonus based on performance as
measured by goal attainment. Pay-outs under the incentive
compensation plan are determined based on achievement of pre-established fiscal
year budget targets for categories of strategic criteria in comparison to actual
results. For the fiscal year ended September 30, 2010, the
performance target was set at approximately $6.8 million in pre-tax net income,
with the attainment of approximately $4.4 million in pre-tax net income set as a
threshold level below which no incentive bonus would be paid and approximately
$7.3 million in net income set as the “stretch” goal that would have resulted in
payment of bonuses in excess of target. In fiscal year 2010, Charter
Financial recognized over $8.0 million in pre-tax net income largely due to
purchase accounting gains in connection with an FDIC-assisted
acquisition. Because the purchase accounting gains would have
resulted in large incentive compensation awards under the plan (with associated
significant non-interest expense to Charter Financial), the board of directors
chose not to apply the performance metrics in the plan. However, in
recognition of the success of plan participants in consummating the acquisition
and integrating the operations of the failed bank, as well as the success of the
Charter Financial’s recent equity offering, the board granted the named
executive officers the discretionary bonuses reflected in the Summary
Compensation Table.
Stock-Based
Benefit Plans. Charter Financial has implemented two
stock-based incentive plans that are discussed below. The purpose of
the plans is to better align the interests of our management and Board of
Directors with those of our shareholders, provide performance incentives to our
senior officers and directors, and to encourage the retention of key employees
and directors by facilitating the purchase of our stock through the exercise of
options as well as the ownership of our stock through restricted stock
awards.
2001 Stock Option
Plan. A total of 707,943 shares have been reserved for
issuance under the 2001 Stock Option Plan. Stock option awards may be
made to eligible employees and directors of CharterBank or Charter
Financial. Pursuant to the plan, option grants may be made that are
intended to qualify as incentive stock options as well as options that do not so
qualify. Incentive stock options may only be granted to
employees. The plan is administered by a committee consisting of the
members of the Personnel & Compensation Committee of Charter
Financial. Unless the Personnel & Compensation Committee provides
otherwise, stock options will vest no more rapidly than 20% per year, commencing
on the first anniversary of initial shareholder approval of the plan, provided
that all awards will become fully vested in the event of the award recipient’s
death, disability, retirement or a change of control. A stock option
may generally be exercised for a period of ten years, except in certain
circumstances. The exercise price of stock options will be at least
equal to 100% of the fair market value of the underlying common stock on the
date of grant.
2001 Recognition and Retention
Plan. The maximum number of shares of Charter Federal common
stock available for awards under the 2001 Recognition and Retention Plan is
283,177 shares.
Stock
awards may be made to eligible employees and directors of CharterBank or Charter
Financial. The plan is administered by a committee consisting of the
members of the Personnel & Compensation Committee of Charter
Financial. Unless the Personnel & Compensation Committee provides
otherwise, shares of common stock subject to an award will become vested at the
rate of 20% per year, commencing 20 calendar days after the end of the calendar
quarter that includes the first anniversary of the plan’s effective date, and
will become fully vested on the 20th calendar day after the end of the calendar
quarter that includes the fifth anniversary of the plan’s effective date,
provided that all awards will become fully vested in the event of the award
recipient’s death, disability, termination of service upon retirement, or upon a
change in control. Unless the Committee determines otherwise, any
cash dividends or distributions declared and paid with respect to shares subject
to an award that are allocated to an eligible director or employee in connection
with such award will be subject to the same vesting and other restrictions as
the shares to which the award relates, and will be invested for the benefit of
the eligible director or employee in money market accounts or certificates of
deposit. Any dividends or distributions declared and paid in property
other than cash with respect to shares of common stock will be subject to the
same vesting and other restrictions as the shares to which the award
relates. All voting rights pertaining to unvested shares related to
an award or to shares that are contained in the fund established under the plan
and not allocated in connection with an award will be exercised by the funding
agent in such manner as to reflect the voting directions given for all other
outstanding shares, except for shares voted by First Charter, MHC. An
award is not transferable by the eligible director or employee other than by
will or the laws of descent and distribution, and the shares granted pursuant to
such award and held in the trust will be distributable, during the lifetime of
the recipient, only to the recipient.
Outstanding
Equity Awards at Year End. The following table
sets forth information with respect to outstanding equity awards as of September
30, 2010 for the Named Executive Officers. All equity awards
reflected in this table were granted pursuant to Charter Financial Corporation’s
2001 Recognition and Retention Plan or 2001 Stock Option Plan, described
above.
|
|
|
|
|
|
|
Number
of securities underlying unexercised options (#)
exercisable
|
|
Number
of securities underlying unexercised options (#)
unexercisable
|
|
|
Equity
incentive plan awards: number of securities underlying
unexercised earned options (#)
|
|
Option
exercise price ($)
|
|
|
|
Number
of shares or units of stock that have not vested (#)
|
|
|
Market value of
shares or units of stock that have not vested ($)(1)
|
|
Equity
incentive plan awards: number of unearned shares, units or other rights
that have not vested (#)
|
|
Equity
incentive plan awards: market or payout value of unearned shares, units or
other rights that have not vested ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
L. Johnson
|
|
|
— |
|
|
50,000 |
(2) |
|
|
— |
|
$ |
10.20 |
|
|
|
|
15,574 |
(3) |
|
$ |
127,707 |
|
|
— |
|
|
— |
|
|
|
— |
|
|
74,000 |
(4) |
|
|
— |
|
$ |
11.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Curtis
R. Kollar
|
|
|
— |
|
|
25,000 |
(5) |
|
|
— |
|
$ |
10.20 |
|
|
|
|
7,500 |
(6) |
|
$ |
61,500 |
|
|
— |
|
|
— |
|
|
|
— |
|
|
31,875 |
(4) |
|
|
— |
|
$ |
11.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lee
Washam
|
|
|
— |
|
|
30,000 |
(7) |
|
|
— |
|
$ |
10.20 |
|
|
|
|
7,500 |
(8) |
|
$ |
61,500 |
|
|
— |
|
|
— |
|
|
|
— |
|
|
30,000 |
(4) |
|
|
— |
|
$ |
11.00 |
|
|
|
|
5,000 |
(9) |
|
$ |
41,000 |
|
|
— |
|
|
— |
(1)
|
Based
on the $8.20 per share trading price of our common stock on September 30,
2010.
|
(2)
|
1,000
options vest in 2013, and the remaining options vest in 5 equal annual
installments commencing on June 22,
2015.
|
(3)
|
5,191,
5,192 and 5,191 restricted stock awards will vest on July 27, 2011, July
27, 2012 and July 27, 2013,
respectively.
|
(4)
|
All
options vest in five equal annual installments commencing on January 27,
2014.
|
(5)
|
9,800
options vest on each of June 22, 2015 and June 22, 2016, and 5,400 options
vest on June 22, 2017.
|
(6)
|
Restricted
stock awards vest in five equal installments commencing on June 22,
2011.
|
(7)
|
600
options vest on June 22, 2013, and the remaining options vest in three
equal annual installments beginning on June 22,
2015.
|
(8)
|
Restricted
stock awards vest in three equal installments commencing on June 22,
2013.
|
(9)
|
2,500
restricted stock awards vest on each of January 30, 2011 and
2012.
|
Salary
Continuation Plan. CharterBank entered into Salary
Continuation Plan Agreements with Messrs. Robert L. Johnson, Curtis R. Kollar,
and Lee Washam, effective as of January 1, 2009. On the date of the
executive’s separation from service on or after attainment of normal retirement
age (the later of age 65 or ten years of service) for reasons other than death,
disability, termination for cause or other circumstances specified in the plan,
or upon a separation from service within two years after a change in control,
the executive will receive an annual benefit equal to a percentage (50% for Mr.
Johnson, 10% for Mr. Kollar and 30% for Mr. Washam) of the executive’s average
base salary for the highest three consecutive calendar years ending on the
earlier of the executive’ normal retirement age or the date of the executive’s
separation from service within two years after a change in control, payable in
equal monthly installments for 15 years beginning on the first day of the month
after the executive’s normal retirement date.
Upon the
executive’s early retirement date (defined as the executive’s separation from
service upon or following the completion of ten years of service and attainment
of age 62, but before normal retirement age, for reasons other than death,
disability, termination for cause or other circumstances specified in the plan,
or upon a separation from service within two years after a change in control),
the executive will be entitled to an amount equal to the accrual balance (as
defined in the plan) earned as of the last day of the month immediately
preceding the executive’s early retirement date, payable in 180 equal monthly
installments beginning on the first day of the month after the executive’s early
retirement date. Upon the executive’s early termination date
(defined as separation from service upon or following completion of
ten years of service but before reaching his early retirement date or normal
retirement date, for reasons other than death, disability, termination for cause
or other circumstances specified in the plan, or separation from service within
two years after a change in control), the executive will receive an amount equal
to the accrual balance earned as of the last day of the plan year immediately
preceding or coinciding with the executive’s early termination date, payable in
180 equal monthly installments beginning on the first day of the month after the
executive’s normal retirement age.
In the
event the executive becomes disabled before reaching normal retirement age, the
executive will receive an annual amount equal to the normal retirement benefit
computed as if the executive had continued in the employ of CharterBank at the
rate of the annual base salary in effect at the date of his disability
determination until attainment of normal retirement age. The
disability benefit will be payable in equal monthly installments for 15 years
beginning on the first day of the month after the executive’s disability
determination.
In the
event of separation from service within two years after a change in control, the
executive will receive an amount equal to the normal retirement benefit or the
executive’s accrual balance as of the last day of the plan year preceding the
change in control’s effective date, whichever is greater, payable in 180 equal
monthly installments beginning on the first day of the month after the month
after the executive’s separation from service.
The
distribution of Mr. Johnson’s benefit under his Salary Continuation Plan
Agreement is subject to the following reduction: in the event Mr.
Johnson’s benefit under the Benefit Restoration Plan (described below) is paid
in 120 equal monthly installments, then each of the last 120 monthly
installments payable under Mr. Johnson’s Salary Continuation Plan Agreement will
be reduced by each corresponding monthly installment payment paid under the
Benefit Restoration Plan during such 120-month period. If Mr.
Johnson’s benefit under the Benefit Restoration Plan is paid in a lump sum, then
each monthly installment under Mr. Johnson’s Salary Continuation Plan Agreement
will be reduced by the amount of the monthly payment that would have been made
under the Benefit Restoration Plan if 180 equal monthly installments with a
present value equal to such lump sum had been paid under the Benefit Restoration
Plan.
Benefit
Restoration Plan. CharterBank established the Benefit
Restoration Plan in order to provide restorative payments to selected executives
who are prevented from receiving the full benefits contemplated by the ESOP’s
benefit formula and the full matching contribution under our 401(k)
plan. Robert L. Johnson, is the only participant in the
plan. The restorative payments under the Benefit Restoration Plan
consist of payments in lieu of shares that cannot be allocated to the
participant under the employee stock ownership plan and payments for employer
matching contributions that cannot be allocated under the 401(k) plan due to the
legal limitations imposed on tax-qualified plans. Also, in the
case of a participant who retires before the repayment in full of the employee
stock ownership plan’s loan, the restorative payments include a payment in lieu
of the shares that would have been allocated if employment had continued through
the full term of the loan.
Due to
the complicated nature of the computation of benefits under the Benefit
Restoration Plan, the Personnel & Compensation Committee decided to freeze
the plan, effective January 2009. At that time, the Personnel &
Compensation Committee implemented the Salary Continuation Plan for the benefit
of Messrs. Johnson, Washam and Kollar.
Split Dollar Life
Insurance Plans. In 2006, CharterBank entered into an
endorsement split-dollar life insurance plan covering the Named Executive
Officers that provided death benefits to each such
executive’s beneficiaries. CharterBank purchased a life
insurance policy on the life of each executive in an amount sufficient to
provide for the benefits under the plan. The executive has the right to
designate the beneficiary who will receive his share of the proceeds payable
upon his death. The policies are owned by CharterBank, which pays
each premium due on the policies. Upon the death of a covered
executive, the proceeds of the policy are divided between the executive’s
beneficiary, who is entitled to $100,000 on the executive’s death, and
CharterBank, which is entitled to the remainder of the death
benefit. Upon the occurrence of certain events specified in each
plan, such as the executive’s termination of employment with
CharterBank for any reason, total cessation of CharterBank’s business,
bankruptcy, receivership or dissolution of CharterBank, receipt by CharterBank
of written notification from the executive requesting to terminate the
participation agreement, surrender, lapse, or other termination of the policy on
the life of the executive by CharterBank, the executive’s participation in the
plan will terminate and all death proceeds will be paid solely to
CharterBank. CharterBank has the right to terminate each policy at
any time and for any reason.
In 2010,
CharterBank entered into endorsement split dollar agreements with Messrs.
Johnson, Washam and Kollar that increased the death benefit payable to their
beneficiaries by $2,000,000, $1,000,000 and $500,000, respectively, or, if less,
the net amount at risk under the policy, assuming their death occurs while
employed. For these purposes, the net amount at risk is the
difference between the death benefit payable under the policy and the cash value
of the policy. If the executive dies after retirement but before his
80th
birthday, the executive’s beneficiary will receive 25% of the net amount at risk
under the policy, assuming the agreement is still in effect. In the
event the executive dies after retirement and after his 80th
birthday but before his 85th
birthday, in the case of Messrs. Johnson and Washam, the executive’s beneficiary
will receive the lesser of $250,000 and the net amount at risk. In
the event either Mr. Johnson or Washam retires and dies after age 85, his
beneficiary will be entitled to a death benefit equal to the lesser of $100,000
or the net amount at risk. In the case of Mr. Kollar, if his death
occurs after retirement and after he attains age 80, his beneficiary will be
entitled to a death benefit equal to the lesser of $100,000 or the net amount at
risk, assuming the agreement remains in effect.
Director
Compensation
The
following table provides the compensation received by individuals who served as
directors of the Company during the 2010 fiscal year and who are not also
executive officers of the Company.
|
|
Fees
earned or paid in cash(1)
|
|
|
|
|
|
|
|
All
other compensation(6)
|
|
|
|
|
Jane
W. Darden
|
|
$ |
41,800 |
|
|
$ |
5,100 |
|
$ |
11,000 |
|
|
$ |
1,748 |
|
|
$ |
59,648 |
|
Thomas
M. Lane
|
|
|
41,000 |
|
|
|
5,100 |
|
|
11,000 |
|
|
|
1,702 |
|
|
|
58,802 |
|
Curti
M. Johnson
|
|
|
40,800 |
|
|
|
10,200 |
|
|
11,000 |
|
|
|
— |
|
|
|
62,000 |
|
David
Z. Cauble, III
|
|
|
42,000 |
|
|
|
5,100 |
|
|
11,000 |
|
|
|
1,722 |
|
|
|
59,822 |
|
William
B. Hudson
|
|
|
37,700 |
|
|
|
5,100 |
|
|
11,000 |
|
|
|
1,608 |
|
|
|
55,408 |
|
David
L. Strobel
|
|
|
39,500 |
|
|
|
5,100 |
|
|
11,000 |
|
|
|
1,731 |
|
|
|
57,331 |
|
(1)
|
See
table below for breakdown of fees earned in the fiscal year ended
September 30, 2010.
|
(2)
|
The
amounts shown reflect the aggregate grant date fair value for outstanding
restricted stock awards granted, computed in accordance with ASC Topic
718. The amounts represented were calculated based upon Charter
Financial’s stock price of $10.20 on the date of
grant.
|
(3)
|
At
September 30, 2010, each director shown had 800 unvested shares or
restricted stock, except for director Curti Johnson, who had 1,000
unvested shares of restricted
stock.
|
(4)
|
The
amounts shown reflect the aggregate grant date fair value of option awards
granted during the year indicated, computed in accordance with ASC Topic
718. For 2010, the option valuations were based upon the
Black-Scholes valuation model using the following assumptions (1) expected
term of option, 7 years; (2) annual volatility of common stock, 23.90%;
(3) expected dividend yield of common stock, 1.99%; and (4) risk-free
interest rate, 2.92% per annum, which resulted in a valuation of $2.20 per
option. For 2009, the option valuations were based upon the
Black-Scholes valuation model using the following assumptions (1) expected
term of option, 8 years; (2) annual volatility of common stock, 42.13%;
(3) expected dividend yield of common stock, 11.75%; and (4) risk-free
interest rate, 3.21% per annum, which resulted in a valuation of $.61 per
option.
|
(5)
|
At
September 30, 2010, directors Darden, Cauble and Hudson each had 16,000
stock options outstanding, and directors Lane, Johnson and Strobel had
13,600, 10,000 and 13,000 stock options outstanding,
respectively.
|
(6)
|
Represents
income recognized when dividends on stock awards are distributed when the
underlying award vests and, for all directors other than Messrs. Johnson
and Hudson, payments for life insurance reported as taxable compensation
on the individual’s Form 1099.
|
|
|
Fees
Earned or Paid in Cash
|
|
|
Charter
Bank Board Fee
($)
|
|
First
Charter, MHC Board Fee
($)
|
|
Charter
Financial Board Fee
($)
|
|
Charter
Bank Committee Fees
($)
|
|
Charter
Financial Committee Fees
($)
|
Jane
W. Darden
|
|
14,000
|
|
10,000
|
|
13,200
|
|
3,800
|
|
800
|
Thomas
M. Lane
|
|
14,000
|
|
10,000
|
|
13,400
|
|
1,000
|
|
2,600
|
Curti
M. Johnson
|
|
14,000
|
|
10,000
|
|
13,400
|
|
2,800
|
|
600
|
David
Z. Cauble, III
|
|
14,000
|
|
10,000
|
|
13,400
|
|
2,000
|
|
2,600
|
William
B. Hudson
|
|
13,000
|
|
9,500
|
|
13,000
|
|
1,200
|
|
1,000
|
David
L. Strobel
|
|
13,000
|
|
9,500
|
|
13,000
|
|
3,200
|
|
800
|
Director
Fees. Each individual who serves as a director of Charter
Financial Corporation currently also serves as a director of First Charter, MHC
and CharterBank and earns director fees in each capacity.
Each
non-employee director of First Charter, MHC, other than the board chairman, is
paid an annual retainer of $8,000. Robert L. Johnson, as the Chairman
of the Board of First Charter, MHC, is paid an annual retainer of $9,000. The
Board of Directors of First Charter, MHC meets quarterly. Board
members receive $500 for each meeting attended.
Charter
Financial Corporation pays board members an annual retainer of $10,000 per year
and committee chairmen also receive an additional retainer of $1,000 per
year. Board members also receive $200 per board meeting
attended and $200 per committee meeting attended. Charter
Financial Corporation has three standing committees: the Audit
Committee, the Nominating & Corporate Governance Committee and the Personnel
& Compensation Committee.
The
directors of CharterBank, other than the Chairman of the Board, receive an
annual retainer of $8,000, and the Chairman of the Board of CharterBank receives
an annual retainer of $9,000. The directors also receive $500 for
each board meeting attended and $200 for each committee meeting
attended. Committee chairs also receive an additional
$1,000 annual retainer.
Split Dollar Life
Insurance Plans. CharterBank entered into an endorsement
split-dollar life insurance plan with each Director, other than Curti Johnson
and William Hudson, to provide death benefits to each participant’s
beneficiaries. CharterBank purchased life insurance policies on the
life of each participant in an amount sufficient to provide for the benefits
under the plan. The participant has the right to designate the beneficiary who
will receive the participant’s share of the proceeds payable upon his
death. The policies are owned by CharterBank which pays each premium
due on the policies. Upon the death of a participant, the proceeds of
the policies are divided between the participant’s beneficiary, who is entitled
to $100,000 as of the participant’s date of death, and CharterBank, which is
entitled to the remainder of the death proceeds. Upon the occurrence
of certain events specified in each plan, such as the participant’s termination
of service with CharterBank for any reason, total cessation of
CharterBank’s business, bankruptcy, receivership or dissolution of CharterBank,
receipt by CharterBank of written notification of a request to terminate the
participation agreement from the participant, surrender, lapse, or other
termination of the policy on the life of the participant by CharterBank, the
Director’s participation in the plan will terminate and all death proceeds will
be paid solely to CharterBank.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s executive
officers and directors, and persons who own more than 10% of any registered
class of the Company’s equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Executive
officers, directors and greater than 10% shareholders are required by regulation
to furnish the Company with copies of all Section 16(a) reports they
file.
Based
solely on the Company’s review of copies of the reports it has received and
written representations provided to it from the individuals required to file the
reports, the Company believes that each of its executive officers and directors
has complied with applicable reporting requirements for transactions in Charter
Financial common stock during the fiscal year ended September 30, 2010, except
that each director and executive officer that is required to file Section 16(a)
reports filed one late report on Form 3.
Transactions
With Certain Related Persons
The law firm of Johnson, Caldwell &
McCoy, of which director Curt Johnson is a partner, provides legal services to
CharterBank on a regular basis. Legal fees for services rendered to CharterBank
by Johnson, Caldwell & McCoy during fiscal 2010 equaled approximately
$243,925.
At
September 30, 2010, loans and open lines of credit to executive officers,
directors and their associates totaled approximately $9.32
million. Federal law requires that all loans or extensions of credit
to executive officers and directors must be made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with the general public and must not involve more
than the normal risk of repayment or present other unfavorable
features. Federal regulations adopted under this law permit executive
officers and directors to receive the same terms that are widely available to
other employees as long as the director or executive officer is not given
preferential treatment compared to the other participating employees. Loans to
executive officers must be approved by the full Board of Directors regardless of
amounts.
CharterBank
makes loans to its directors, executive officers and employees through an
employee loan program. The program applies only to first or second mortgage
loans on a primary or secondary residence, and provides for an origination fee
of $500 compared to our usual origination fee of 1% of the amount of the
loan. Except for the reduced origination fee, these loans were made
in the ordinary course of business, were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and did not involve more than the
normal risk of collectability or present other unfavorable
features.
The
following table sets forth loans made by CharterBank to its directors and
executive officers where the largest amount of all indebtedness outstanding
during the years ended September 30, 2010 and 2009, and all amounts of interest
payable during each year, respectively, exceeded $120,000, and where the
borrowers received reduced origination fees, as described above.
|
|
|
|
Nature
Of
Transaction
(1)
|
|
Largest
Aggregate
Balance
from 10/01/09 to 9/30/10
|
|
|
|
|
Principal
Balance
9/30/10
|
|
Principal
Paid
10/01/09
to
9/30/10
|
|
Interest
Paid
10/01/09
to
9/30/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
L. Johnson
|
|
Officer/CEO
|
|
S/F
Mortgage
|
|
$ |
718,579.86 |
|
|
4.625 |
% |
|
$ |
— |
|
$ |
718,579.86 |
|
$ |
24,914.21 |
Curtis
R. Kollar
|
|
Officer/CFO
|
|
S/F
Mortgage
|
|
|
615,732.18 |
|
|
5.950 |
|
|
|
— |
|
|
615,732.18 |
|
|
33,238.37 |
|
|
|
|
Nature
Of
Transaction
(1)
|
|
Largest
Aggregate
Balance
from 10/01/08 to 9/30/09
|
|
|
|
|
Principal
Balance
9/30/09
|
|
Principal
Paid
10/01/08
to
9/30/09
|
|
Interest
Paid
10/01/08
to
9/30/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
L. Johnson
|
|
Officer/CEO
|
|
S/F
Mortgage
|
|
$ |
718,580.90 |
|
|
4.625 |
% |
|
$ |
718,579.86 |
|
$ |
1.04 |
|
$ |
30,464.79 |
Curtis
R. Kollar
|
|
Officer/CFO
|
|
S/F
Mortgage
|
|
|
649,346.71 |
|
|
5.950 |
|
|
|
615,732.18 |
|
|
31,279.99 |
|
|
40,593.33 |
Lee
W. Washam
|
|
Officer/President
|
|
S/F
Mortgage
|
|
|
251,117.41 |
|
|
4.750 |
|
|
|
— |
|
|
251,117.41 |
|
|
4,068.77 |
Policies and
Procedures for Approval of Related Persons Transactions. Pursuant to Charter
Financial Corporation’s Policy and Procedures for Approval of Related Person
Transactions, the Audit Committee periodically reviews, no less frequently than
twice a year, a summary of transactions in excess of $50,000 with our directors,
executive officers and their family members, for the purpose of determining
whether the transactions are within our policies and should be ratified and
approved. Additionally, pursuant to our Code of Ethics and Business
Conduct, all of our executive officers and directors must disclose any existing
or emerging conflicts of interest to our Chairman of the Board and Chief
Executive Officer. Such potential conflicts of interest include, but
are not limited to, the following: (i) our conducting business with or competing
against an organization in which a family member of an executive officer or
director has an ownership or employment interest and (ii) the ownership of more
than 1% of the outstanding securities or 5% of total assets of any business
entity that does business with or is in competition with us.
Nominating
& Corporate Governance Committee Procedures
General
It is the
policy of the Nominating & Corporate Governance Committee (“Nominating
Committee”) of the Board of Directors of the Company to consider director
candidates recommended by shareholders who appear to be qualified to serve on
the Company’s Board of Directors. The Nominating Committee may choose
not to consider an unsolicited recommendation if no vacancy exists on the Board
of Directors and the Nominating Committee does not perceive a need to increase
the size of the Board of Directors. To avoid the unnecessary use of
the Nominating Committee’s resources, the Nominating Committee will consider
only those director candidates recommended in accordance with the procedures set
forth below.
Procedures
to be Followed by Shareholders
To submit a recommendation of a
director candidate to the Nominating Committee, a shareholder should submit the
following information in writing to the main office of the Company, addressed to
the Chairman of the Nominating & Corporate Governance Committee, care of the
Corporate Secretary, 1233 O.G. Skinner Drive, P.O. Box 472, West Point,
Georgia 31833:
|
(1)
|
A
statement that the writer is a shareholder and is proposing a candidate
for consideration by the Nominating & Corporate Governance
Committee;
|
|
(2)
|
The
name and address of the shareholder as they appear on the Company’s books,
and number of shares of the Company’s common stock that are owned
beneficially by the shareholder (if the shareholder is not a holder of
record, appropriate evidence of the shareholder’s ownership will be
required);
|
|
(3)
|
The
name, address and contact information for the candidate, and the number of
shares of common stock of the Company that are owned by the candidate (if
the candidate is not a holder of record, appropriate evidence of the
candidate’s share ownership should be
provided);
|
|
(4)
|
A
statement of the candidate’s business and educational
experience;
|
|
(5)
|
Such
other information regarding the candidate as would be required to be
included in the proxy statement pursuant to Securities and Exchange
Commission Regulation 14A;
|
|
(6)
|
A
statement detailing any relationship between the candidate and any
customer, supplier or competitor of the
Company;
|
|
(7)
|
Detailed
information about any relationship or understanding between the proposing
shareholder and the candidate; and
|
|
(8)
|
A
statement that the candidate is willing to be considered and willing to
serve as a Director if nominated and
elected.
|
To be considered for nomination by the
Board of Directors, the submission of a candidate for Director by a shareholder
must be received by the Corporate Secretary at least 150 days prior to the
anniversary date of the proxy statement relating to the preceding year’s annual
meeting of shareholders
Process for Identifying and
Evaluating Nominees
The process that the Nominating
Committee follows to identify and evaluate individuals to be nominated for
election to the Board of Directors is as follows:
Identification. For
purposes of identifying nominees for the Board of Directors, the Nominating
Committee relies on personal contacts of the committee members and other members
of the Board of Directors, as well as its knowledge of members of the
communities served by CharterBank. The Nominating Committee will also
consider director candidates recommended by shareholders in accordance with the
policy and procedures set forth above. The Nominating Committee has
not previously used an independent search firm to identify
nominees.
Evaluation. In
evaluating potential nominees, the Nominating Committee determines whether the
candidate is eligible and qualified for service on the Board of Directors by
evaluating the candidate under certain criteria, which are described
below. If such individual fulfills these criteria, the Nominating
Committee will conduct a check of the individual’s background and interview the
candidate to further assess the qualities of the prospective nominee and the
contributions he or she would make to the Board of Directors.
Qualifications
The Nominating Committee has adopted
a set of criteria that it considers when it selects individuals to be nominated
for election to the Board of Directors. A candidate must meet certain
basic eligibility requirements set forth in the Nominating Committee’s Criteria
for Director Nominees, which include the following:
|
·
|
A
person is not qualified to serve as director if he or she: (1) is under
indictment for, or has ever been convicted of, a criminal offense
involving dishonesty or breach of trust and the penalty for such offense
could be imprisonment for more than one year, (2) is a person against whom
a banking agency has, within the past ten years, issued a cease and desist
order for conduct involving dishonesty or breach of trust and that order
is final and not subject to appeal, or (3) has been found either by a
regulatory agency whose decision is final and not subject to appeal or by
a court to have (i) breached a fiduciary duty involving personal profit,
or (ii) committed a willful violation of any law, rule or regulation
governing banking, securities, commodities or insurance, or any final
cease and desist order issued by a banking, securities, commodities or
insurance regulatory agency.
|
|
·
|
No
person may serve on the Board of Directors and at the same time be a
director or officer of another co-operative bank, credit union, savings
bank, savings and loan association, trust company, bank holding company or
banking association (in each case whether chartered by a state, the
federal government or any other jurisdiction) that engages in business
activities in the same market area as the Company or any of its
subsidiaries.
|
Selection
Considerations
If the
candidate is deemed eligible for election to the Board of Directors, the
Nominating Committee will consider the following additional criteria in
selecting nominees, as described in more detail in the Nominating Committee’s
Criteria for Director Nominees:
|
·
|
familiarity
with and participation in local
community;
|
|
·
|
shareholder
interests and dedication; and
|
The
Nominating Committee will also consider any other factors it deems relevant to a
candidate’s nomination, including the extent to which the candidate helps the
Board of Directors reflect the diversity of the Company’s shareholders,
employees, customers and communities. We do not maintain a specific
diversity policy, but the diversity of the Board of Directors is considered in
our review of candidates. Diversity includes not only gender and ethnicity, but
the various perspectives that come from having differing viewpoints, geographic
and cultural backgrounds, and life experiences.
The
Nominating Committee also may consider the current composition and size of the
Board of Directors, the balance of management and independent directors, and the
need for audit committee expertise. The Nominating Committee will
maintain at least one director on the Board of Directors who meets the
definition of “audit committee financial expert” under Securities and Exchange
Commission regulations.
The
Nominating Committee may weight the foregoing criteria differently in different
situations, depending on the composition of the Board of Directors at the
time.
With respect to nominating an
existing director for re-election to the Board of Directors, the Nominating
Committee will consider and review an existing director’s board and committee
attendance and performance; length of board service; experience, skills and
contributions that the existing director brings to the board; and
independence.
Submission
of Business Proposals and Stockholder Nominations
Shareholder
Proposals for Inclusion in Proxy Statement. In order to be
eligible for inclusion in our proxy materials for our Annual Meeting of
Shareholders in 2012, any shareholder proposal to take action at such meeting
must be received at our executive office, 1233 O.G. Skinner Drive, West Point,
Georgia 31833, no later than September 30, 2011. Any such proposals
shall be subject to the requirements of the proxy rules adopted under the
Securities Exchange Act of 1934.
Advanced Notice
of Nominations and Other Business to be Conducted at an Annual Meeting of
Shareholders. Under our bylaws, a shareholder must follow certain
procedures to nominate persons for election as directors or to introduce an item
of business at a meeting of shareholders. These procedures provide,
generally, that shareholders desiring to make nominations for directors, or to
bring a proper subject of business before the meeting, must do so by a written
notice received not later than 5 days in advance of such meeting by the
Corporate Secretary of Charter Financial.
Shareholder
Communications
The
Company encourages shareholder communications to the Board of Directors and/or
individual directors. All communications from shareholders should be
addressed to Charter Financial Corporation, 1233 O.G. Skinner Drive, West Point,
Georgia 31833. Communications to the Board of Directors should be in
the care of William C. Gladden, Corporate Secretary. Communications
to individual directors should be sent to such director at the Company’s
address. Shareholders who wish to communicate with a committee of the
Board of Directors should send their communications to the care of the
Chairperson of the particular committee, with a copy to the Chairperson of the
Nominating & Corporate Governance Committee. It is in the
discretion of the Nominating & Corporate Governance Committee whether any
communication sent to the full Board of Directors should be brought before the
full Board.
Miscellaneous
The
Company will pay the cost of this proxy solicitation. 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 the Company. Additionally, directors, officers
and other employees of the Company may solicit proxies personally or by
telephone without receiving additional compensation.
The
Company’s Annual Report to Shareholders has been included with this proxy
statement. Any shareholder who has not received a copy of the Annual
Report may obtain a copy by writing to the Corporate Secretary of the
Company. The Annual Report is not to be treated as part of the proxy
solicitation material or as having been incorporated by reference into this
proxy statement.
If you
and others who share your address own your shares in “street name,” your broker
or other holder of record may be sending only one annual report and proxy
statement to your address. This practice, known as “householding,” is
designed to reduce our printing and postage costs. However, if a
shareholder residing at such an address wishes to receive a separate annual
report or proxy statement in the future, he or she should contact the broker or
other holder of record. If you own your shares in “street name” and
are receiving multiple copies of our annual report and proxy statement, you can
request householding by contacting your broker or other holder of
record.
Whether
or not you plan to attend the annual meeting, please vote by marking, signing,
dating and promptly returning the enclosed proxy card in the enclosed
envelope.
BY ORDER OF THE BOARD OF
DIRECTORS
William C. Gladden
Corporate Secretary
West
Point, Georgia
January
28, 2011
STOCKHOLDER
INFORMATION
Charter
Financial stock trades on the NASDAQ exchange under the symbol
CHFN. First Charter, MHC, a mutual holding company, owns 11,457,924
shares, or 61.4% of our outstanding common stock. When Charter
Financial pays dividends to its stock holders, it is required to pay dividends
to First Charter, MHC, unless First Charter, MHC elects to waive
dividends. Any decision to waive dividends will be subject to
regulatory approval by the Office of Thrift Supervision.
Investor
Relations
Investor
Relations
Charter
Financial Corporation
PO
Box 472
West
Point, GA 31833
|
Independent
Accountants
Dixon
Hughes, PLLC
225
Peachtree St, NE
Suite
600
Atlanta,
GA 30303
|
Stock
Transfer Agent
American
Stock Transfer
59
Maiden Lane
Plaza
Level
New
York, NY 10038
|
www.charterbank.net
(706)645-3202
|
www.dixon-hughes.com
(404)575-8900
|
www.amstock.com
(800)937.5449
|
For more
information about CharterBank, our products, services and locations, please
visit our web site at:
www.CharterBank.net
Dear ESOP
Participant:
On behalf
of the Board of Directors of Charter Financial Corporation (the “Company”), I am
forwarding you the attached vote
authorization form to convey your voting instructions to the Trustee of the
Employee Stock Ownership Plan (the “ESOP”) on the proposals to be presented at
the Company’s Annual Meeting of Shareholders to be held on February 23,
2011. Also enclosed is a Notice and Proxy Statement for the Annual
Meeting of Shareholders and a copy of the Company’s Annual Report to
Shareholders.
As a
participant in the our ESOP, you are entitled to instruct the ESOP Trustee how
to vote the shares of Company common stock allocated to your
account. Please fill out and sign the enclosed Vote Authorization
Form in a timely manner in order to ensure your vote is counted.
The ESOP
Trustee will vote the unallocated shares and the allocated but unvoted shares of
Company common stock held in the ESOP Trust in a manner calculated to most
accurately reflect the voting instructions received from ESOP participants
(i.e., generally in proportion to the votes it received on allocated voted
shares of Company common stock), subject to its fiduciary duties under the
Employee Retirement Income Security Act of 1974, as amended. If you
do not direct the ESOP Trustee how to vote your shares of Company common stock,
the ESOP Trustee will vote your shares in a manner calculated to most accurately
reflect the instructions it receives from other participants, subject to the
ESOP Trustees fiduciary duties.
To direct
the ESOP Trustee how to vote your shares of Company common stock, please
complete and sign the attached vote authorization form and return it in the
enclosed postage-paid envelope so that it is received no later than February 16,
2011. Your voting instructions will not be revealed, directly
or indirectly, to any employee or director of the Company or
CharterBank.
Sincerely,
Robert L. Johnson
President
and Chief Executive Officer
VOTE
AUTHORIZATION FORM
CHARTER
FINANCIAL CORPORATION – ESOP
ANNUAL
MEETING OF SHAREHOLDERS
February
23, 2011
10:00
a.m., Georgia Time
_______________________________
The
undersigned hereby directs the Trustee(s) to vote all shares of common stock of
Charter Financial Corporation (the “Company”) credited to the undersigned’s
account(s), for which the undersigned is entitled to vote at the Annual Meeting
of Shareholders to be held on February 23, 2011, at 10:00 a.m., local time, at
the CharterBank Corporate Center, 1233 O.G. Skinner Drive, West Point, Georgia,
and at any and all adjournments thereof, as follows:
|
1.
|
The
election as directors of all nominees listed (unless the “For All Except”
box is marked and the instructions below are complied
with).
|
Robert L.
Johnson (2014 class), David Z. Cauble (2014 class), III, David L. Strobel (2014
class), and Edward D. Smith (2013 class)
|
FOR
|
|
WITHHOLD
|
|
FOR
ALL
EXCEPT
|
|
|
|
|
|
|
|
|
|
o
|
|
o
|
|
o
|
|
INSTRUCTION: To
withhold your vote for any individual nominee, mark “FOR ALL EXCEPT” and write
that nominee’s name on the line provided below.
|
2.
|
The
ratification of the appointment of Dixon Hughes PLLC as independent
registered public accounting firm of Charter Financial Corporation for the
fiscal year ending September 30,
2011.
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
|
|
|
|
o
|
|
o
|
|
o
|
|
|
3.
|
To
consider and act upon a non-binding advisory resolution regarding the
compensation of the Company’s named executive
officers.
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|
|
|
|
|
|
o
|
|
o
|
|
o
|
|
|
4.
|
To
consider and vote upon the frequency at which the Company should include
an advisory vote regarding the compensation of the Company’s named
executive officers in its proxy statement for shareholder
consideration.
|
ONE
YEAR
|
|
TWO
YEARS
|
|
THREE
YEARS
|
|
ABSTAIN
|
|
|
|
|
|
|
|
o
|
|
o
|
|
o
|
|
o
|
If any
other business is brought before the Annual Meeting, this form will be voted by
the Trustee in a manner intended to represent the best interest of participants
and beneficiaries of the ESOP. At the present time, the Company knows
of no other business to be brought before the Annual Meeting.
If you do
not return this form in a timely manner, shares representing your interest in
said plan will be voted in a manner calculated to most accurately reflect the
instructions the Trustee has received from participants regarding voting shares
of allocated Company stock, subject to the determination that such a vote is for
the exclusive benefit of plan participants and
beneficiaries. Abstentions will be similarly treated, but solely with
respect to the proposal for which an abstention is marked.
IF
NO INSTRUCTIONS ARE SPECIFIED AND THIS FORM IS RETURNED SIGNED, THIS VOTE
AUTHORIZATION FORM WILL BE CONSIDERED A VOTE FOR EACH OF THE FIRST THREE LISTED
PROPOSALS, AND A VOTE TO HOLD AN ADVISORY VOTE “EVERY THREE YEARS” IN VOTING ON
THE FOURTH PROPOSAL.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE FIRST THREE LISTED
PROPOSALS, AND A VOTE TO HOLD AN ADVISORY VOTE “EVERY THREE YEARS” IN VOTING ON
THE FOURTH PROPOSAL.
Date:_____________________________ __________________________________
Participant sign above
PLEASE
COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS VOTING INSTRUCTION CARD IN
THE
ENCLOSED POSTAGE-PAID ENVELOPE.