UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
September 19, 2012
(Date of earliest event reported)
First Financial Service Corporation
(Exact name of registrant as specified in its charter)
Securities and Exchange Commission File Number: 0-18832
| KENTUCKY | 61-1168311 | |
| (State or other jurisdiction | (I.R.S. Employer Identification No.) | |
| of incorporation or organization) |
2323 Ring Road, Elizabethtown, Kentucky, 42701
(Address of principal executive offices) (Zip Code)
Registrant’s telephone, including area code: (270) 765-2131
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry into a Material Definitive Agreement |
On September 19, 2012, the board of directors of First Financial Service Corporation (the “Company”) adopted the 2012 Non-Employee Director Equity Compensation Program (the "Director Program"). The Director Program enables the Company to compensate nonemployee directors for their service on the boards of directors of the Company and First Federal Savings Bank of Elizabethtown (the “Bank”) with stock awards. The Company currently does not pay cash compensation to non-employee directors of the Company and the Bank pursuant to agreements with bank regulatory agencies. The board has reserved 200,000 of the shares authorized for issuance under the Company’s shareholder-approved 2006 Stock Option and Incentive Compensation Plan (“Plan”) for stock awards under the Director Program.
The Director Program provides that each non-employee director elected or continuing in office on the date of each annual meeting of the Company’s shareholders will automatically receive an award of restricted stock on that date having a value of $30,000, based on the closing sale price per share of the Company’s common stock on the award date, rounded up to the next whole number. The shares awarded will be subject to restrictions on transfer until the close of business on the day immediately preceding the first anniversary of the award date, or upon the occurrence of a Change of Control of the Company, as defined in the Plan. If a director ceases to serve as a member of the board for any reason, that director will automatically forfeit any unvested shares subject to an award.
On September 19, 2012, each of the Company’s eight non-employee directors continuing in office received an initial award of 8,241 restricted shares. The restrictions on transfer of these initial awards will expire at the close of business on the day immediately preceding the date of the Company’s 2013 annual meeting of shareholders or a Change of Control, and are subject to forfeiture as described above.
The foregoing summary description of the material terms of the Director Plan is qualified in its entirety by reference to the 2012 Non-Employee Director Equity Compensation Program, which his included as Exhibit 10.1 to this Report.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Number | Description | |
| 10.1 | 2012 Non-Employee Director Equity Compensation Program | |
| 10.2 | Restricted Stock Award Agreement |
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FIRST FINANCIAL SERVICE CORPORATION | ||
| Date: September 26, 2012 | By: | /s/ Gregory S. Schreacke |
| Gregory S. Schreacke | ||
| President | ||
| 3 |
Exhibit 10.1
First Financial Service Corporation
2012 Non-Employee Director Equity Compensation Program
| ARTICLE 1. | PURPOSE |
The purpose of this 2012 Non-Employee Director Equity Compensation Program ("Program") is to advance the interests of First Financial Service Corporation, a Kentucky corporation ("Company") and the bank holding company for First Federal Savings Bank of Elizabethtown (“Bank”), by compensating nonemployee Directors for their service on the boards of directors of the Company and the Bank with stock-based awards. This Program is also intended to enhance the Company's ability to attract and retain persons of outstanding ability to serve as directors of the Company and the Bank. Awards granted under this Program shall be granted pursuant to, and governed by the terms of, the Company’s 2006 Stock Option and Incentive Compensation Plan (“Plan”).
| ARTICLE 2. | DEFINITIONS AND CONSTRUCTION |
Capitalized terms not defined in this Program shall have the meanings set forth in the Plan. In addition, as used in this Program, terms defined parenthetically immediately after their use shall have the respective meanings provided by such definitions, and the terms set forth below shall have the following meanings:
(a) "Award Date" shall mean the date of each annual meeting of the Company’s shareholders, beginning in 2013, at which directors are elected for a term of at least one full year.
(b) “Award Date Market Value” shall mean the total number of Shares subject to an Award multiplied by the Fair Market Value on the Award Date.
(c) "Shares" shall mean shares of the Company's Stock.
| ARTICLE 3. | ADMINISTRATION |
3.1 Automatic Operation. This Program is designed to operate automatically and not require administration. However, to the extent administration is required, it shall be provided by the Committee or the Board pursuant to Section 4 of the Plan.
3.2 Section 16 Compliance. It is the intention of the Company that this Program and the administration of this Program comply in all respects with Section 16 of the Exchange Act and the rules and regulations thereunder. If any Program provision, or any aspect of the administration of this Program, is found not to be in compliance with Section 16 of the Exchange Act, the provision or aspect of administration shall be null and void to the extent permitted by law and deemed advisable by the Committee or the Board. In all events, this Program shall be construed in favor of its meeting the requirements of Rule 16b-3 promulgated under the Exchange Act.
| ARTICLE 4. | SHARES AVAILABLE UNDER THIS PROGRAM |
The number of Shares reserved for issuance as Awards pursuant to this Program is 200,000 Shares, subject to adjustment as provided in the Plan. If and to the extent Awards granted pursuant to this Program are forfeited for any reason, the Shares associated with such forfeited Awards shall again become available for Awards under this Program.
| 1 |
| ARTICLE 5. | AWARDS |
5.1 Automatic Grant of Restricted Stock. Subject to the terms and provisions of this Program and the Plan,
(a) each non-employee Director in office on the date this Program is adopted by the Board shall automatically receive, on such date (the “Initial Award Date”), an Award of Restricted Stock having a Award Date Market Value of $30,000 on the Initial Award Date, rounded up to the next whole number; and
(b) each non-employee Director elected or continuing in office on each subsequent Award Date shall automatically receive an Award of Restricted Stock having a Award Date Market Value of $30,000 on the Award Date, rounded up to the next whole number.
5.2 Vesting. Subject to the provisions of the Plan relating to a Change of Control, the Restricted Period of each Award shall lapse:
(a) in the case of Awards granted on the Initial Award Date, at the close of business on the day immediately preceding the date of the 2013 annual meeting of the Company’s shareholders;
(b) in the case of Awards granted on a subsequent Award Date, at the close of business on the day immediately preceding the first anniversary of the Award Date;
provided, however, that the Director continues to serve as a member of the Board as of the date of vesting. If a Director ceases to serve as a member of the Board for any reason, the Director shall have no rights with respect to that portion of an Award which is not then vested pursuant to the preceding sentence, and the Director shall automatically forfeit the unvested portion of the Award.
5.3 Award Agreement. Each Award shall be evidenced by an Award Agreement that shall specify the Restriction Period, the number of Shares to which the Award relates, and such other terms and conditions not inconsistent with the provisions of this Plan as determined by the Committee; provided, however, that such terms shall not vary the timing of Awards, including provisions dealing with forfeiture of such Awards granted thereunder.
| ARTICLE 6. | AMENDMENT, MODIFICATION, AND TERMINATION |
6.1 Termination Date. This Program shall terminate on the earliest to occur of (a) the date when all Shares available under this Program shall have been acquired pursuant to the exercise of Awards or (b) such other date as the Board may determine in accordance with Section 6.2.
6.2 Amendment, Modification and Termination. The Board may amend, modify or terminate this Program at any time, subject to the limitations set forth in Section 11.1 of the Plan.
********************
| 2 |
Exhibit 10.2
FIRST FINANCIAL SERVICE CORPORATION
2012 NON-EMPLOYEE DIRECTOR EQUITY COMPENSATION PROGRAM
Restricted Stock Award Agreement
First Financial Service Corporation ("the Company") grants as of _________________, 20___ (the "Grant Date") to ______________________________________ (the "Director" or "you") the number of shares set forth below, of the common stock of the Company under the Company’s 2012 Non-Employee Director Equity Compensation Program ("Program") and its 2006 Stock Option and Incentive Compensation Plan (“Plan”). Copies of the Program and the Plan are attached, and any capitalized terms used but not defined in this Agreement shall have the meaning given them in the Program or the Plan, as the case may be.
Grant of Award. Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants to you a Restricted Stock Award in the amount of ____ shares of Stock (the "Shares"). These shares will be issued to you after you sign this Agreement, but are subject to forfeiture if you terminate employment with the Company.
Restriction Period. The Restricted Stock will vest at the close of business on the day immediately preceding the first anniversary of the Award Date stated above, provided you continue to serve as a member of the Board as of the date of vesting. However, your Restricted Stock will become fully vested if there is a Change in Control of the Company as defined in the Plan.
Taxation of Award. Your Restricted Stock will be taxable when it vests, at the value on the vesting date. See the attachment to this Agreement explaining your option to include the value of the shares in income within 30 days of the Grant Date. If you wish to make this election, please check below.
£ I elect to make an 83(b) tax election to include the value of Shares granted to me in income now.
Transfer Restrictions. Until such time as the Shares become vested as set forth above, the Shares shall not be transferred, pledged or disposed of except by will or the laws of descent and distribution, and are subject to forfeiture in accordance with this Agreement, the Program and the Plan.
Acknowledgments. By signing below, you acknowledge that you have received a copy of the Program and the Plan, and you hereby accept the Shares subject to all the terms and provisions of the Program and the Plan.
| FIRST FINANCIAL SERVICE CORPORATION | ||||
| By: | ||||
| Director | ||||
| Date: | Date: | |||
Important Information About Section 83(b) Election to Include Value of Restricted Stock Grant in Income at Grant Date:
As a recipient of a restricted stock grant under the First Financial Service Corporation Amended and Restated 2006 Stock Incentive Plan, you may make an election (called an "83(b) election") to recognize compensation income when the stock is granted, even though the stock is then subject to a risk of forfeiture (vesting). Making an 83(b) election causes current taxation of the fair market value of the stock granted, and withholding taxes are immediately due.
By making an 83(b) election, any later appreciation in the stock will be taxed as capital gain income, and your holding period for capital gain purposes will begin on the date of taxation. An 83(b) election must be made, if at all, within 30 days after the transfer of the stock to you.
The downside of making an 83(b) election is that the election is generally irrevocable. Also, if you forfeit the stock, you may not receive any deduction for the amount previously included in income.
To the extent an 83(b) election is not made, the Company will be treated as the owner of the stock that continues to be subject to restriction for tax purposes, so any dividends will be treated as compensation paid to you by the Company.
| -2- |
ELECTION TO INCLUDE VALUE
OF RESTRICTED STOCK AWARD IN GROSS INCOME
PURSUANT TO SECTION 83(b) OF THE INTERNAL REVENUE CODE
__________________________ [insert date]
The undersigned hereby elects, under IRC Section 83(b) to include in gross income, as compensation for services, the excess of the fair market value at the time of transfer of the property described below over the amount paid for such property.
The following information is supplied in accordance with Treasury Regulation §1.83-2(e):
1. The name, address and social security number of the undersigned:
Name: __________________________
Address: ________________________________________________
________________________________________________________
_________________________________________________________
SSN: __________________________________
2. The property with respect to which the election is being made is common stock of First Financial Service Corporation
3. The property was transferred on _____________________________ [insert date]. The taxable year for which election is made is calendar year 20____.
4. The nature of the restrictions or risks of forfeiture to which the property is subject is that if the undersigned ceases to serve as a director of the Company or its subsidiary, the undersigned's unvested restricted stock will be forfeited. The undersigned vests in the property at the close of business on the day immediately preceding the first anniversary of the above stated date on which the property was transferred, or upon a change in control as defined in the Company’s 2006 Stock Option and Incentive Compensation Plan.
5. The fair market value of property at the time of transfer (determined without regard to any lapse restriction) was $_____________.
6. The taxpayer received the property solely for the performance of services.
7. Copies of this statement have been have been furnished, as required by Reg 1.83-2(d), to First Financial Service Corporation and its subsidiary for which the services were performed.
| [Signature] |
| -3- |
Instructions for Filing: File this statement within 30 days from the Grant Date with IRS at the address you will use to file your 1040 for the tax year involved as stated in item 3 above, AND file it with your tax return for that year.
| -4- |