NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD JANUARY 17, 2013

NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of HomeTrust Bancshares, Inc. will be held as follows:

 

TIME AND DATE	10:00 a.m. local time Thursday, January 17, 2013
PLACE	Renaissance Hotel 31 Woodfin Street Asheville, North Carolina
ITEMS OF BUSINESS	(1)	The election of four directors.
	(2)	The approval of the HomeTrust Bancshares, Inc. 2013 Omnibus Incentive Plan.
	(3)	The approval of the HomeTrust Bancshares, Inc. Tax Benefits Preservation Plan.
	(4)	The ratification of the appointment of Dixon Hughes Goodman LLP as HomeTrust Bancshares, Inc.’s independent auditors for the fiscal year ending June 30, 2013.
RECORD DATE	Holders of record of HomeTrust Bancshares, Inc. common stock at the close of business on November 19, 2012 are entitled to vote at the annual meeting or any adjournment or postponement thereof.
PROXY VOTING	It is important that your shares be represented and voted at the annual meeting.  You can vote your shares by completing and returning the enclosed proxy card.  Registered stockholders, that is, stockholders who hold their stock in their own name, can also vote their shares over the internet or by telephone.  If your shares are held through a bank, broker or other nominee, check your proxy card to see if you can also vote by telephone or the internet.   Regardless of the number of shares you own, your vote is very important.  Please act today.

BY ORDER OF THE BOARD OF DIRECTORS         F. EDWARD BROADWELL, JR. Chairman of the Board and Chief Executive Officer

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Stockholders to be held on January 17, 2013:

The proxy statement and annual report to stockholders are available at

http://www.cfpproxy.com/7122

Asheville, North Carolina

December 5, 2012

 

 

 

 

HOMETRUST BANCSHARES, INC.

10 Woodfin Street

Asheville, North Carolina 28801

(828) 259-3939

_______________________________

PROXY STATEMENT

_______________________________

INTRODUCTION

The HomeTrust Bancshares, Inc. Board of Directors is using this proxy statement to solicit proxies from the holders of the Company’s common stock for use at the Company’s upcoming annual meeting of stockholders.  The annual meeting of stockholders will be held at 10:00 a.m., local time, on Thursday, January 17, 2013 at the Renaissance Hotel, located at 31 Woodfin Street, Asheville, North Carolina.  At the meeting, stockholders will be asked to vote on four proposals.  The proposals are set forth in the accompanying Notice of Annual Meeting of Stockholders and are described in more detail below.  Stockholders also will consider any other matters that may properly come before the meeting or any adjournment or postponement of the meeting, although the Board of Directors knows of no other business to be presented.  HomeTrust Bancshares, Inc. is referred to in this proxy statement from time to time as the “Company,” “HomeTrust Bancshares,” “we,” “us” or “our.”  Certain of the information in this proxy statement relates to HomeTrust Bank (sometimes referred to as the “Bank”), a wholly owned subsidiary of the Company.

 

By submitting your proxy, either by executing and returning the enclosed proxy card or by voting electronically via the internet or by telephone, you authorize the Company’s Board of Directors to represent you and vote your shares at the meeting in accordance with your instructions.  The Board of Directors also may vote your shares to adjourn the meeting from time to time and will be authorized to vote your shares at any adjournments or postponements of the meeting.

 

This proxy statement and the accompanying materials are first being sent to stockholders on or about December 5, 2012.

 

Your proxy vote is important.  Whether or not you plan to attend the meeting, please submit your proxy promptly in the enclosed envelope, via the internet or by telephone.

 

INFORMATION ABOUT THE ANNUAL MEETING

What is the purpose of the annual meeting?

 

At the annual meeting, stockholders will be asked to vote on the following proposals:

 

	Proposal 1.	The election of four directors of the Company.
	Proposal 2.	The approval of the HomeTrust Bancshares, Inc. 2013 Omnibus Incentive Plan (the “Omnibus Incentive Plan”).
	Proposal 3.	The approval of the HomeTrust Bancshares, Inc. Tax Benefits Preservation Plan (the “Tax Benefits Preservation Plan”).
	Proposal 4.	The ratification of the appointment of Dixon Hughes Goodman LLP as the Company’s independent auditors for the fiscal year ending June 30, 2013.

 

Stockholders also will transact any other business that may properly come before the meeting or any adjournment or postponement of the meeting.  Members of our management team will be present at the meeting to respond to appropriate questions from stockholders.

 

 

 

 

 

How does the Board of Directors recommend that I vote?

 

The Board of Directors recommends that you vote FOR the election of the director nominees named in this proxy statement, FOR the approval of the Omnibus Incentive Plan, FOR the approval of the Tax Benefits Preservation Plan and FOR the ratification of the appointment of Dixon Hughes Goodman LLP.

 

Who is entitled to vote?

 

The record date for the meeting is November 19, 2012.  Only stockholders of record at the close of business on that date are entitled to notice of and to vote at the meeting.  The only class of stock entitled to be voted at the meeting is the Company’s common stock.  Each outstanding share of common stock is entitled to one vote for all matters before the meeting; provided, however, that pursuant to Section D of Article 5 of the Company’s charter, no person who beneficially owns more than 10% of the shares of the Company’s common stock outstanding as of the record date may vote shares in excess of that amount.  At the close of business on the record date there were 21,160,000 shares of common stock outstanding.

 

What if my shares are held in “street name” by a broker?

 

If you are the beneficial owner of shares held in “street name” by a broker, your broker, as the record holder of the shares, is required to vote those shares in accordance with your instructions.  If you do not give instructions to your broker, your broker nevertheless will be entitled to vote the shares with respect to “discretionary” items, but will not be permitted to vote your shares with respect to any “non-discretionary” items.  In the case of non-discretionary items, the shares will be treated as “broker non-votes.”  Whether an item is discretionary is determined by the exchange rules governing your broker.  It is expected that the ratification of the appointment of Dixon Hughes Goodman LLP will be considered a discretionary item and that all other matters being voted upon will be considered non-discretionary items.

 

What if I hold shares through the HomeTrust Bank Employees’ 401(k) and Profit Sharing Account Plan?

 

Shares of HomeTrust Bancshares common stock purchased through the HomeTrust Bank Employees’ 401(k) and Profit Sharing Account Plan (the “401(k) plan”) are held as part of the 401(k) plan’s Employer Stock Fund.  The Employer Stock Fund is primarily comprised of shares of HomeTrust Bancshares common stock (generally 93%-97% of fund assets), with the remaining portion (generally 3%-7%) invested in a money market or similar account.  If you hold an interest in the Employer Stock Fund, the trustees of the 401(k) plan will provide instructions to you on how to exercise voting rights with respect to your proportionate interest in the Employer Stock Fund. The number of shares of common stock held in the Employer Stock Fund that the trustees votes for, withhold (in the case of the election of directors), against and abstain on each matter will be proportionate to the voting instructions given by the 401(k) plan participants. Where no voting instructions are given by the participant, the shares will be voted in the manner directed by the plan administrator, HomeTrust Bank.

 

How many shares must be present to hold the meeting?

 

A quorum must be present at the meeting for any business to be conducted.  The presence at the meeting, in person or by proxy, of the holders of at least one-third of the shares of the Company’s common stock outstanding on the record date will constitute a quorum.  Proxies received but marked as abstentions or broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting.

 

What if a quorum is not present at the meeting?

 

If a quorum is not present at the scheduled time of the meeting, the stockholders who are represented may adjourn the meeting until a quorum is present.  The time and place of the adjourned meeting will be announced at the time the adjournment is taken, and no other notice will be given.  An adjournment will have no effect on the business that may be conducted at the meeting.

 

 

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How do I vote?

 

1.   You may vote by mail.   If you properly complete and sign the accompanying proxy card and return it in the enclosed envelope, it will be voted in accordance with your instructions.

 

2.   You may vote by telephone.   If you are a registered stockholder, that is, if you hold your stock in your own name, you may vote by telephone by following the instructions included on the proxy card.  If you vote by telephone, you do not have to mail in your proxy card.

 

3.   You may vote on the internet.   If you are a registered stockholder, that is, if you hold your stock in your own name, you may vote on the internet by following the instructions included on the proxy card.  If you vote on the internet, you do not have to mail in your proxy card.

 

4.   You may vote in person at the meeting .   If you plan to attend the annual meeting and wish to vote in person, we will give you a ballot at the annual meeting.  However, if your shares are held in the name of your broker, bank or other nominee, you will need to obtain a proxy form from the institution that holds your shares indicating that you were the beneficial owner of the Company’s common stock on January 17, 2013, the record date for voting at the annual meeting.

 

Can I vote by telephone or on the internet if I am not a registered stockholder?

 

If your shares are held in “street name” by a broker or other nominee, you should check the voting form used by that firm to determine whether you will be able to vote by telephone or on the internet.

 

Can I change my vote after I submit my proxy?

 

If you are a registered stockholder, you may revoke your proxy and change your vote at any time before the polls close at the meeting by:

 

·

signing another proxy with a later date;

·

voting by telephone or on the internet -- your latest telephone or internet vote will be counted;

·

giving written notice of the revocation of your proxy to the Corporate Secretary of the Company prior to the annual meeting; or

·

voting in person at the annual meeting.

If you have instructed a broker, bank or other nominee to vote your shares, you must follow directions received from your nominee to change those instructions.

 

What if I do not specify how my shares are to be voted?

 

If you are a registered stockholder and you submit an executed proxy but do not indicate any voting instructions, your shares will be voted:

 

·

FOR the election of the four director nominees named in this proxy statement;

·

FOR the approval of the Omnibus Incentive Plan;

·

FOR the approval of the Tax Benefits Preservation Plan; and

·

FOR the ratification of the appointment of Dixon Hughes Goodman LLP as the Company’s independent auditors for the fiscal year ending June 30, 2013.

Will any other business be conducted at the annual meeting?

 

The Board of Directors knows of no other business that will be conducted at the meeting.  If any other proposal properly comes before the stockholders for a vote at the meeting, however, the proxy holders will vote your shares in accordance with their best judgment.

 

 

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How many votes are required to approve the proposals?

 

Director nominees who receive the highest number of votes for the positions to be filled will be elected.  The approval of the Omnibus Incentive Plan requires the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock.  The approval of the Tax Benefits Preservation Plan and the ratification of the appointment of Dixon Hughes Goodman LLP as the Company’s independent auditors each require the affirmative vote of a majority of the votes cast on the matter.

 

How will withheld votes and abstentions be treated?

 

If you withhold authority to vote for one or more director nominees or if you abstain from voting on any of the other proposals, your shares will still be included for purposes of determining whether a quorum is present.  If you abstain from voting on any of the proposals other than the election of directors, your shares will be included in the number of shares voting on that proposal and, consequently, your abstention will have the same practical effect as a vote against that proposal.

 

How will broker non-votes be treated?

 

Shares treated as broker non-votes on one or more proposals will be included for purposes of calculating the presence of a quorum.  Otherwise, shares represented by broker non-votes will be treated as shares not entitled to vote on a proposal.  Consequently, any broker non-votes will have the following effects:

 

	Proposal 1 Proposal 2	Broker non-votes will have no effect on the election of directors. Broker non-votes will be counted in determining the number of shares necessary for approval of the Omnibus Incentive Plan and will, therefore, have the effect of votes against approval of the Omnibus Incentive Plan.
	Proposals 3 and 4	Broker non-votes will not be counted in determining the number of shares necessary for approval of the Tax Benefits Preservation Plan or the ratification of the appointment of the Company’s independent auditors and will, therefore, reduce the absolute number, but not the percentage, of the affirmative votes required for the approval of each of these proposals.

Who can I call if I have questions?

 

If you have any questions, you can call our proxy solicitor, Regan & Associates, Inc., at 800-737-3426.

 

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STOCK OWNERSHIP

 

As of November 19, 2012, there were 21,160,000 shares of the Company’s common stock outstanding.  The following table sets forth, as of November 19, 2012, certain information as to those persons who were known by management to be beneficial owners of five percent or more of the outstanding shares of our common stock:

 

Name and Address of Beneficial Owner		Amount and Nature of Beneficial Ownership		Percent of Class
HomeTrust Bancshares, Inc. Employee Stock Ownership Plan 10 Woodfin Street Asheville, North Carolina 28801		1,058,000		5.00%

The following table sets forth, as of November 19, 2012, certain information as to the shares of common stock beneficially owned by our directors and named executive officers and by all directors and executive officers as a group.  The address of each person in the table is: c/o HomeTrust Bancshares, Inc., 10 Woodfin Street, Asheville, North Carolina 28801.

 

Name		Amount and Nature of Beneficial Ownership(1)		Percent of Class
Charles I. Abbitt, Jr.		5,265(2)		0.02%
Stan Allen		5,000		0.02%
Franklin V. Beam		20,000		0.09%
Sidney A. Biesecker		20,000		0.09%
F. Edward Broadwell, Jr.		179,500(2)(3)		0.85%
Robert. G. Dinsmore, Jr.		0		---
William T. Flynt		10,000		0.05%
J. Steven Goforth		10,000		0.05%
Craig C. Koontz		21,000		0.10%
Larry S. McDevitt		10,000		0.05%
F.K. McFarland, III		5,000		0.02%
Peggy C. Melville		20,000		0.09%
Howard L. Sellinger		24,250(2)		0.11%
Robert E. Shepherd, Sr.		5,000		0.02%
Dana L. Stonestreet		177,090(2)(4)		0.84%
Tony J. VunCannon		28,925(2)		0.14%
Directors and Executive Officers as a Group (18 persons)		542,005(2)		2.56%

_______________

(1)	Amounts include shares held directly, as well as shares held jointly with family members, in retirement accounts, in a fiduciary capacity, by certain family members, by certain related entities or by trusts of which the directors and executive officers are trustees or substantial beneficiaries, with respect to which shares the respective director or executive officer may be deemed to have sole or shared voting and/or dispositive powers. The holders may disclaim beneficial ownership of the included shares which are owned by or with family members, trusts or other entities.
(2)	Includes shares held in accounts under the 401(k) plan, as follows: Mr. Broadwell – 28,500 shares; Mr. Stonestreet – 55,290 shares; Mr. VunCannon – 20,425 shares; Mr. Abbitt – 5,265 shares; Mr. Sellinger – 14,250 shares; and all directors and executive officers as a group - 124,680 shares.
(3)	Includes 30,600 shares held by Mr. Broadwell’s spouse and 400 shares held by Mr. Broadwell’s spouse as custodian for their grandchildren.
(4)	Includes 10,800 shares held by Mr. Stonestreet’s spouse and 60,000 shares held in a brokerage account pursuant to which they may serve as security for a margin loan.

 

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PROPOSAL I

 

ELECTION OF DIRECTORS

 

The Company’s Board of Directors currently consists of 13 members, but will be reduced to 12 members as of the time of the annual meeting as a result of the retirement of Director Franklin V. Beam.  Mr. Beam’s term as a director will expire at the time of the annual meeting and he is not permitted to be re-nominated due to the mandatory director retirement provision of the Company’s bylaws.  Mr. Beam had been a director of the Bank since 2000 and of the Company since its formation in connection with the mutual-to-stock conversion of the Bank.  Mr. Beam is expected to continue serving the Bank as an emeritus director.

 

Approximately one-third of the Company’s directors are elected annually.  Directors of the Company are elected to serve for a three-year term or until their respective successors are elected and qualified.

 

The following table sets forth certain information regarding the composition of the Company’s Board of Directors, including each director’s term of office.  The Board of Directors, acting on the recommendation of the Governance and Nominating Committee, has recommended and approved the nominations of Sidney A. Biesecker, Robert G. Dinsmore, Jr., Larry S. McDevitt and Peggy C. Melville to serve as directors, each for a term of three years to expire at the annual meeting of stockholders to be held in fiscal 2016, following the Company’s fiscal year ending June 30, 2015.  It is intended that the proxies solicited on behalf of the Board of Directors (other than proxies in which the authority to vote for a nominee is withheld) will be voted at the annual meeting FOR the election of these director nominees.  If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such substitute nominee as the Board of Directors may recommend, acting on the recommendations of the Governance and Nominating Committee.  At this time, the Board of Directors knows of no reason why any nominee might be unable to serve if elected.  Except as disclosed in this proxy statement, there are no arrangements or understandings between any nominee and any other person pursuant to which the nominee was selected.

 

Name		Age (1)		Position(s) Held in the Company and the Bank		Director Since (2)		Term of Office Expires in Fiscal
NOMINEES
Sidney A. Biesecker		61		Director, Senior Vice President and President for Industrial Federal Bank Division		2010		2016
Robert G. Dinsmore, Jr.		67		Director		2012		2016
Larry S. McDevitt		70		Director		1987		2016
Peggy C. Melville		68		Director		2006		2016
DIRECTORS REMAINING IN OFFICE
Stan Allen		59		Director, Senior Vice President and President for Cherryville Federal Bank Division		2010		2014
J. Steven Goforth		67		Director		2002		2014
Robert E. Shepherd, Sr.		71		Director		1988		2014
Dana L. Stonestreet		58		Director, President and Chief Operating Officer		2007		2014
F. Edward Broadwell, Jr.		73		Chairman and Chief Executive Officer		1965		2015
William T. Flynt		71		Director		2005		2015
Craig C. Koontz		62		Director		2010		2015
F. K. McFarland, III		55		Director		2003		2015

_________________________

(1)	As of June 30, 2012.

(2)	Includes service as a director of the Bank.

 

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Business Experience and Qualifications of Our Directors

 

The Board believes that the years of service that our directors have with us is one of their most important qualifications for service on our Board.  This service has given them extensive knowledge of the banking business and of the Company.  Furthermore, their service on our Board committees, especially in areas of audit, risk management and compensation, is critical to their ability to oversee the management of the Company by our executive officers.  Service on the Board by our Chief Executive Officer and our President is critical to aiding the outside directors’ understanding of the issues that are common in the banking business.  Each outside director brings special skills, experience and expertise to the Board as a result of their other business activities and associations.  The business experience of each of our directors for at least the past five years and the experience, qualifications, attributes, skills and areas of expertise of each director that further supports his or her service as a director are set forth below. Unless otherwise indicated, each director has held his or her current position for the past five years.

 

Sidney A. Biesecker .  Mr. Biesecker is a Senior Vice President of HomeTrust Bank and serves as President for HomeTrust Bank’s Industrial Federal Bank division, positions he has held since HomeTrust Bank’s acquisition of Industrial Federal Bank in February 2010.  Prior to the acquisition, Mr. Biesecker held various officer positions for Industrial Federal Bank since 1974, including President and Chief Executive Officer since 1990.  Mr. Biesecker has served as a director of Industrial Federal Bank since 1992.  Mr. Biesecker was appointed to the Board of Directors of HomeTrust Bank in 2010 and currently serves as Chairman of the Investment Committee of the Board of Directors.

 

From over 38 years working for Industrial Federal Bank, Mr. Biesecker brings to the Board extensive knowledge of nearly all areas of banking operations and experience in all aspects of risk management.

 

Robert G. Dinsmore, Jr.   Mr. Dinsmore was appointed as a director of HomeTrust Bancshares in August 2012 and became a director of HomeTrust Bank in November 2012 upon the retirement of Director Beam from the Bank’s Board of Directors.  Mr. Dinsmore is a certified public accountant and worked in various roles for KPMG for nearly 30 years, retiring as a partner in 1999.  Subsequent to that, Mr. Dinsmore worked as a consultant on general corporate matters and on U.S. and international tax and merger and acquisition matters for Zellweger Luwa, AG, a multi-national equipment manufacturer and air engineering services company based in Zurich, Switzerland (from 1999 to 2008), and for Bahnson Holdings, Inc., a specialty engineering, manufacturing and mechanical contracting company based in Winston-Salem, North Carolina (from 2008 to 2011).  From 2001 until it was acquired by another company in 2009, Mr. Dinsmore served as a director and audit committee chair of American Community Bancshares, Inc., the publicly held parent of Monroe, North Carolina-based American Community Bank.

 

Mr. Dinsmore’s background as a certified public accountant and his other business experience, including having previously served as a director and audit committee chair in the banking industry, are of great benefit to our Board of Directors.

 

Peggy C. Melville .  Ms. Melville retired as Senior Vice President and Chief Administration Officer of HomeTrust Bank in 2008, having joined the Bank in 1970.  Ms. Melville became a director of HomeTrust Bank in 2006 and served as Corporate Secretary of HomeTrust Bank until December 2011.  Ms. Melville has served as a leader and board member for numerous community organizations, including as Chair of the board of trustees of Haywood Community College, as a board member of AdvantageWest, a regional economic development partnership for Western North Carolina, as a board member of the Pigeon River Fund and as a former board member of Western North Carolina Tomorrow.

 

From her 38 years of working for HomeTrust Bank, Ms. Melville has invaluable institutional knowledge of HomeTrust Bank’s operations and its history, which serve her well as a Board member.

 

Larry S. McDevitt .  Mr. McDevitt has been an attorney in private practice in Asheville, North Carolina since 1968. He is a principal of, and past President of, The Van Winkle Law Firm.  While Mr. McDevitt’s principal focus as an attorney is civil litigation, he also has significant experience in representing businesses in general corporate matters, antitrust issues, mergers and acquisitions.  Mr. McDevitt has been recognized by his peers through designation or election to the American College of Trial Lawyers, The International Society of Barristers, American Corporate Counsel, Best Lawyers in America, Super Lawyer, and Legal Elite.  Mr. McDevitt also has

 

 

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headed or overseen numerous governmental and non-governmental agencies and organizations with substantial operating budgets, including through his past service as Mayor of Asheville, as an Asheville City Councilman, and as County Attorney for Buncombe County. Mr. McDevitt became a director of HomeTrust Bank in 1987 and currently serves as Chair of the Compensation Committee of the Board of Directors.

 

Mr. McDevitt brings to the Board a strong legal background from his nearly 45-year career as a practicing attorney.  In addition, his involvement with local government for over 35 years has given him a solid understanding of budgetary matters and issues facing the communities in which HomeTrust Bank operates.

 

Stan Allen .  Mr. Allen is a Senior Vice President of HomeTrust Bank and serves as President for HomeTrust Bank’s Cherryville Federal Bank division, positions he has held since the acquisition of Cherryville Federal Bank in September 2010.  Prior to the acquisition, Mr. Allen held various officer positions for Cherryville Federal Bank since 1978, including Senior Vice President, Secretary and Treasurer from 1990 to 1995, Senior Vice President and Secretary from 1995 to1996, Executive Vice President and Senior Loan Officer from 1996 to 1999 and President and Chief Executive Officer from 1999 to 2010.  Mr. Allen also has served as a director of Cherryville Federal Bank since 1989.  Mr. Allen was appointed to the Board of Directors of HomeTrust Bank in 2010.

 

From his 34 years at Cherryville Federal Bank, Mr. Allen brings a wealth of knowledge and experience to the Board in nearly all areas of banking operations as well as risk management.

 

J. Steven Goforth .  Since 1965, Mr. Goforth has served as President of Southco Industries, Inc., Shelby, North Carolina, which manufactures forestry truck bodies, serves as a dealer for truck equipment manufacturers and provides material handling products for the custom steel fabrication industry.  Mr. Goforth has served as a director of Shelby Savings Bank since 1988.  Mr. Goforth became a director of HomeTrust Bank in 2002.

 

As the owner and operator of several businesses outside of the banking industry, Mr. Goforth brings a different perspective to the HomeTrust Bank Board.

 

Robert E. Shepherd, Sr .  Mr. Shepherd retired in 2002 after serving for 29 years as Chief Executive Officer of Land-of-Sky Regional Council, a Western North Carolina planning and development organization comprised of four counties and 15 municipalities.  From 1969 to 1973, Mr. Shepherd served as Director of Development Planning and Research for the seven-county Economic Development Council of Northeastern Pennsylvania.  From 1966 to 1969, Mr. Shepherd worked as an agricultural economist for the U.S. Department of Agriculture and worked as an economist for the Department of Agriculture from 1963 to 1964.  From 1964 to 1966, Mr. Shepherd served as an intelligence officer for the U.S. Army at the Defense Intelligence Agency.  Mr. Shepherd has served as Chairman of national, state and regional church and civic groups, including the Blue Ridge Parkway Foundation, Western North Carolina Tomorrow, and the Givens Estates United Methodist Retirement Community.  Mr. Shepherd became a director of HomeTrust Bank in 1988.

 

From his career in government service, Mr. Shepherd brings to the Board extensive knowledge and experience in budgeting and other financial matters.  This background has served him well as a director of the Bank and as a member of the Audit, Compliance and Enterprise Risk Management Committee (the “ACER Committee”), of which he currently serves as Chairman.

 

Dana L. Stonestreet .  Since 2008, Mr. Stonestreet has served as President and Chief Operating Officer and as a director of HomeTrust Bank.  Mr. Stonestreet joined HomeTrust Bank in 1989 as its Chief Financial Officer and was promoted to Chief Operating Officer in 2003.  In addition, Mr. Stonestreet has served as President and Chief Operating Officer of HomeTrust Bancshares since HomeTrust Bank’s mutual-to-stock conversion.  Mr. Stonestreet began his career with Hurdman & Cranston (an accounting firm that was later merged into KPMG) as a certified public accountant.  Mr. Stonestreet also serves as a director and vice chair for the Asheville Area Chamber of Commerce, a director of United Way and a director of the HUB Community Economic Development Alliance Board.  In addition, Mr. Stonestreet has served as a director for RiverLink, the North Carolina Bankers Association and other community organizations.

 

Mr. Stonestreet’s 23 years of service with HomeTrust Bank give him in-depth knowledge of nearly all aspects of its operations.  Mr. Stonestreet’s accounting background and prior service as HomeTrust Bank’s Chief

 

 

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Financial Officer also provide him with a strong understanding of the various financial matters brought before the Board.

 

F. Edward Broadwell, Jr .  Mr. Broadwell has served as Chief Executive Officer and as a director of HomeTrust Bank since 1965, and has served as Chairman of the Board since 2002.  Mr. Broadwell also served as President of HomeTrust Bank from 1965 to 2008.  In addition, Mr. Broadwell has served as Chairman and Chief Executive Officer of HomeTrust Bancshares since HomeTrust Bank’s mutual-to-stock conversion.  During the span of his 47 years with HomeTrust Bank, Mr. Broadwell has overseen an increase in the number of employees from six to over 300, an increase in the number of banking offices from one to 20 and an increase in asset size from $10 million to over $1.7 billion.  Throughout his career, Mr. Broadwell has served on the boards of numerous industry associations including America’s Community Banks, the American Bankers Association, Chairman of the NC Bankers Association, and other financial services companies, including the Federal Home Loan Bank of Atlanta from 1987 to 1991 and Republic Mortgage Insurance Corporation and its affiliate, RMIC Corporation, from 1972 to 2008.  Mr. Broadwell also served on the Federal Reserve Board’s Thrift Institutions Advisory Council from 2008 to 2010, and served as its President in 2010.  He currently serves on the Federal Reserve Bank of Richmond’s Community Depository Institution Advisory Council.  In addition, Mr. Broadwell has served on the boards of numerous community organizations and has held several board positions with the University of North Carolina system, including its Board of Governors from 1995 to 2007 and the UNC-Chapel Hill Board of Visitors from 1992 to 1996 and currently serves on the Board of Trustees of Western Carolina University.

 

From his 47 years as Chief Executive Officer of HomeTrust Bank, Mr. Broadwell brings to the Board invaluable institutional knowledge, strong leadership skills and a wealth of industry experience.

 

William T. Flynt .  Mr. Flynt retired as Senior Vice President of HomeTrust Bank and President of its Home Savings Bank division in 2007, having held those positions since HomeTrust Bank’s acquisition of Home Savings Bank in March 2005 (after which Mr. Flynt became a director of HomeTrust Bank).   Prior to the acquisition, Mr. Flynt served as President of Home Savings Bank since 1976 and for the nine years prior to that served in administrative roles, including Vice President, prior to his appointment as President of Home Savings Bank.  Mr. Flynt continues to serve as Chairman of the Home Savings Bank partner bank board.  Mr. Flynt serves on the boards of numerous community organizations and is a Rockingham County commissioner.

 

Mr. Flynt’s 40 years of service with Home Savings Bank and then HomeTrust Bank have given him a strong understanding of banking operations and a deep understanding of industry issues, particularly in the mortgage lending area.

 

Craig C. Koontz .  In 2011, Mr. Koontz became the Information Technology Director of Eastern Region for Atrium Windows and Doors, Inc., a manufacturer of residential vinyl and aluminum windows and patio doors.  Prior to being promoted to this position, Mr. Koontz served as IT Director for Atrium’s North Carolina operations since 2002.  From 1999 to 2002, Mr. Koontz served as Corporate IT Project Manager for Lifestyle Furnishings International, and from 1978 to 1999 served as Vice President of Information Technology and Customer Service for Lexington Furniture Industries.  Mr. Koontz has served as a director of Industrial Federal Bank since 1990.  Mr. Koontz became a director of HomeTrust Bank in 2010.

 

Mr. Koontz has worked in the information technology field for approximately 40 years, 34 of which he has been involved with supporting systems that provide information used in financial reporting systems.  This has given Mr. Koontz a sound understanding of internal and external auditing matters, especially with regard to information technology.  Coupled with his knowledge of and experience with information technology matters in general, this has made Mr. Koontz a valued member of the Board.

 

F.K. McFarland, III . Since 1982, Mr. McFarland has been President and owner of McFarland Funeral Chapel, Inc.  Mr. McFarland has served on a number of other community boards, including the board of trustees of St. Luke’s Hospital, the zoning board for Tryon, North Carolina, the Hospice of the Carolina Foothills, the Polk County, North Carolina Chamber of Commerce, the American Cancer Society – Polk County Unit (as Chairman) and the McAlister Foundation, a philanthropic organization.  Mr. McFarland joined the Board of Directors of HomeTrust Bank in 2003.

 

 

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Mr. McFarland adds value to the Board through his experience as a small business owner and operator for nearly 30 years and his strong ties to the local community from his other board service.

 

Executive Officers Who Are Not Also Directors

 

Set forth below is a description of the business experience for at least the past five years of each executive officer who is not also a director of the Company.  Each executive officer’s age is as of June 30, 2012.

Tony J. VunCannon .  Mr. VunCannon, age 47, is a certified public accountant and has served as Senior Vice President, Chief Financial Officer and Treasurer of HomeTrust Bank since July 2006. From March 1997 to June 2006, Mr. VunCannon served as Vice President and Treasurer of HomeTrust Bank and from April 1992 to February 1997, Mr. VunCannon served as Controller of HomeTrust Bank.  In addition, Mr. VunCannon has served as Senior Vice President, Chief Financial Officer and Treasurer of HomeTrust Bancshares since HomeTrust Bank’s mutual-to-stock conversion.  Previously, Mr. VunCannon was employed by KPMG in Charlotte, North Carolina.

            Howard L. Sellinger .  Mr. Sellinger, age 59, has served as Senior Vice President and Chief Information Officer of HomeTrust Bank since July 2006.  Mr. Sellinger joined HomeTrust Bank in 1975 as a management trainee.  In 1988, he was named Operations Manager and was promoted to Vice President and Chief Information Officer in 1997.  In addition, Mr. Sellinger has served as Senior Vice President and Chief Information Officer of HomeTrust Bancshares since HomeTrust Bank’s mutual-to-stock conversion.

Charles I. Abbitt, Jr .  Mr. Abbitt, age 61, became Senior Vice President and Chief Risk Officer of HomeTrust Bank in December 2011, after having served as Senior Vice President and Chief Credit Officer of HomeTrust Bank since 2008.   In his role as Chief Risk Officer, Mr. Abbitt is responsible for enterprise risk management, including credit risk.  In addition, Mr. Abbitt has served as Senior Vice President and Chief Risk Officer of HomeTrust Bancshares since HomeTrust Bank’s mutual-to-stock conversion.  Prior to joining HomeTrust Bank, Mr. Abbitt served as Senior Vice President and Chief Credit Officer with the Federal Home Loan Bank of Atlanta from 2003 to 2007.  From 2002 to 2003, Mr. Abbitt served as a Senior Vice President and Senior Real Estate Credit Officer for Regions Financial Corp., Birmingham, Alabama.  From 1997 to 2002, Mr. Abbitt served as Senior Vice President and Senior Real Estate Credit Officer for First Union Corporation, Charlotte, North Carolina.

C. Hunter Westbrook .  Mr. Westbrook, 49, joined HomeTrust Bank in June 2012 as Senior Vice President and Chief Banking Officer.  Mr. Westbrook also holds these positions with HomeTrust Bancshares.  He began his career in banking with TCF Bank in Minneapolis and later joined TCF National Bank Illinois as Senior Vice President of Finance.  In 2004 he was promoted to Executive Vice President of Retail Banking for Illinois, Wisconsin and Indiana markets that included 250 branches and $4 billion in deposits.  He also served as President and Chief Executive Officer of First Community Bancshares in Texas, from 2006 to 2008, where he was responsible for repositioning the bank’s retail operating model and implemented the bank’s retail and corporate lending product offerings.  In his most recent role, Mr. Westbrook served as Executive Vice President and Chief Operations Officer from 2008 to 2010 and as President and Chief Executive Officer from 2010 to 2012 of Second Federal Savings and Loan Association of Chicago, where he significantly grew core operating revenue, net checking account balances, and repositioned the bank’s entire product line.

 

Teresa White .  Ms. White, age 55, joined HomeTrust Bank in May 2011 as Senior Vice President and Chief Administration Officer.  Ms. White was also appointed as Corporate Secretary of HomeTrust Bank in December 2011.  In addition, Ms. White has served as Senior Vice President, Chief Administration Officer and Corporate Secretary of HomeTrust Bancshares since HomeTrust Bank’s mutual-to-stock conversion.  Prior to joining HomeTrust Bank, since 2006, Ms. White served as Senior Vice President, Chief of Human Resources and Training Officer for Capital Bank, Raleigh, North Carolina, a publicly held community bank with approximately $1.7 billion in assets.  From 2005 to 2006, Ms. White served as Director, Corporate Human Resources, for Nash Finch Company, Edina, Minnesota, a leading food retail and distribution company.  From 2002 to 2005, Ms. White served as Director of Human Resources for ConAgra Foods Snack Foods Group, Edina, Minnesota, a division of ConAgra Foods.

 

 

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Director Independence

 

The Company’s Board of Directors has determined that the following directors, constituting a majority of the Board, are “independent directors,” as that term is defined in Rule 5605(a)(2) of the Marketplace Rules of the NASDAQ Stock Market (“NASDAQ”): Directors Beam, Dinsmore, Flynt, Goforth, Koontz, McFarland, Melville , McDevitt and Shepherd.

 

Board Leadership Structure and Role in Risk Oversight

 

Leadership Structure.   We currently combine the positions of Chief Executive Officer and Chairman into one position. We believe that this structure is appropriate because of the primarily singular operating environment of the Company and  HomeTrust Bank, with our predominant focus on being a provider of retail financial services. Having the Chief Executive Officer and Chairman involved in the daily operations of this focused line of operations improves the communication between management and the Board and ensures that the Board’s interest is represented in our daily operations, particularly with regard to risk management. Because the Chairman and Chief Executive Officer positions are currently combined, the Board of Directors decided to designate a non-management director (currently Director Beam) to serve as lead director. The lead director is responsible for presiding over executive sessions of the non-management directors held outside the presence of the Chairman, and for serving as a liaison between the non-management directors and the Chairman. While each partner bank division of HomeTrust Bank has its own board of directors, which is primarily concerned with the operations of the partner bank, at least one representative of each partner bank board serves on the Board of Directors of HomeTrust Bank.

 

Role in Risk Oversight.   Risk is inherent with the operation of every financial institution, and how well an institution manages risk can ultimately determine its success. We face a number of risks, including but not limited to credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day management of the risks we face, while the Board has ultimate responsibility for the oversight of risk management. The Board believes that risk management, including setting appropriate risk limits and monitoring mechanisms, is an integral component and cannot be separated from strategic planning, annual operating planning, and daily management of our business. Consistent with this approach as well as based on the belief that certain risks require an oversight focus that a Board committee can better provide, the Board has delegated the oversight of certain risk areas to certain risk areas. The responsibilities of the ACER Committee include enterprise risk management, which encompasses the primary risks faced by HomeTrust Bank in its operations. The responsibilities of the Compensation Committee include the consideration of risks in connection with incentive and other compensation programs. See “—Board Meetings and Committees.” These committees regularly provide reports of their activities and recommendations to the full Board. In addition, members of senior management regularly attend meetings of the Board to report to the Board on the primary areas of risk that we face.

 

Board Meetings and Committees

 

Except for Mr. Beam, who retired as a director of the Bank on November 19, 2012 pursuant to the mandatory director retirement provisions of the Bank’s bylaws and will retire as a director of the Company at the time of the annual meeting pursuant to the mandatory director retirement provisions of the Company’s bylaws, and Mr. Dinsmore, who became a director of the Company on August 28, 2012 and a director of the Bank on November 19, 2012 upon the retirement of Mr. Beam as a director of the Bank, the members of the Boards of Directors of the Bank and the Company are identical.  Meetings of the Company’s and the Bank’s Boards of Directors are generally held on a monthly basis.  During the fiscal year ended June 30, 2012, the Board of Directors of the Bank held 17 meetings.  The Board of Directors of the Company did not meet during the fiscal year ended June 30, 2012 and did not begin meeting on a regular basis until after the completion of the Bank’s mutual-to-stock conversion and the Company’s initial public offering in July 2012.  During fiscal year 2012, no incumbent director attended fewer than 75% of the aggregate of the total number of meetings of each Board and the total number of meetings held by the committees of each Board on which committees he or she served during the period in which he or she served.

 

The Company’s Board of Directors has the following standing committees, which are summarized below: ACER; Compensation; Executive; Governance and Nominating; and Investment.  While none of the standing committees of the Company’s Board of Directors met during the fiscal year ended June 30, 2012, as the Bank’s mutual-to-stock conversion and the Company’s initial public offering were completed subsequent to that date, the

 

 

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Bank’s Board of Directors has identical standing committees which met during fiscal year 2012 for the numbers of times indicated below.

 

Audit, Compliance and Enterprise Risk Management (ACER) Committee.   The ACER Committee is currently comprised of Directors Shepherd (Chairman), Beam, Dinsmore, Flynt, Goforth, McFarland, Melville and Koontz, each of whom is "independent," as independence for audit committee members is defined in the NASDAQ Marketplace Rules.  The Company’s Board of Directors has determined that Mr. Dinsmore is an “audit committee financial expert,” as defined in Item 407(d)(5) of Securities and Exchange Commission (“SEC”) Regulation S-K.

 

The ACER Committee operates under a written charter adopted by the Company’s Board of Directors, a copy of which is available on the Company’s website, located at www.hometrustbanking.com , by clicking “Investor Relations” and then “Governance Documents.”  The ACER Committee is appointed by the Company’s Board of Directors to provide assistance to the Board in fulfilling its oversight responsibility relating to: the integrity of the Company’s consolidated financial statements and the accounting and financial reporting processes; the systems of internal accounting and financial controls; compliance with legal and regulatory requirements and the Company’s policies; the annual independent audit of the Company’s consolidated financial statements and internal control over financial reporting; the independent auditors’ qualifications and independence; the performance of the Company’s internal audit department and independent auditors; the implementation and enforcement of the Company’s risk management policies and procedures; and any other areas of potential financial risk to the Company specified by its Board of Directors.  The ACER Committee also is responsible for hiring, retaining and terminating the Company’s independent auditors.  The ACER Committee of the Bank’s Board of Directors met four times in fiscal 2012.

 

Compensation Committee.   The Compensation Committee is currently comprised of Directors McDevitt (Chairman), Beam, Dinsmore, Goforth, Koontz, Melville and Shepherd, each of whom is an “independent director,” as that term is defined in the NASDAQ Marketplace Rules.  Messrs. Dinsmore and Goforth were appointed as members of the Compensation Committee on October 29, 2012.  The Compensation Committee is responsible for reviewing and evaluating executive compensation and administering the Company’s compensation and benefit programs.  The Compensation Committee also is responsible for:

 

·

reviewing from time to time the Company’s compensation plans and, if the Committee believes it to be appropriate, recommending that the Board amend these plans or adopt new plans;

 

·

overseeing the evaluation of management, and recommending to the Board the compensation for  executive officers, including salary, bonus, short-term incentives, long-term incentives and all other forms of compensation, including participation in tax-qualified and non-qualified benefit plans .  This includes evaluating performance following the end of incentive periods and recommending to the Board specific awards for executive officers;

 

·

reviewing and recommending to the Board the amount of the Company’s matching and profit sharing contributions under the 401(k) plan each year;

 

·

performing such duties and responsibilities as may be assigned to the Committee under the terms of any executive or employee compensation plan;

 

·

reviewing annually all employment contracts with the Company’s executive officers and recommend to the Board the amendment, extension or termination of such contracts as deemed appropriate, and consider any proposed new employment contracts with executive officers;

 

·

periodically reviewing and recommending to the Board the appropriate level of compensation and the appropriate mix of cash compensation and equity compensation for Board and Board committee service; and

 

·

making appropriate provisions for the professional development of the Company’s executive officers and directors and conduct succession planning for the Company’s executive management team.

 

 

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The Compensation Committee operates under a formal written charter, a copy of which is available on the Company’s website, located at www.hometrustbanking.com , by clicking “Investor Relations” and then “Governance Documents.”  In fiscal year 2012, the Compensation Committee of the Bank’s Board of Directors met 15 times.

 

The charter of the Compensation Committee authorizes the committee to retain a consultant to assist the committee in carrying out its responsibilities.  Pursuant to this authority, the Compensation Committee retained the consulting firm of Pearl Meyer & Partners.  For additional information regarding the role of Pearl Meyer & Partners, see “Executive Compensation—Compensation Discussion and Analysis-Role of Compensation Consultant.”

 

The charter of the Compensation Committee does not specifically provide for delegation of any of the authorities or responsibilities of the committee.  For a discussion of the role of executive offers in setting executive pay, see “Executive Compensation—Compensation Discussion and Analysis-Role of Executive Officers in Determining Compensation.”

 

Executive Committee.   The Executive Committee is currently comprised of Directors Broadwell (Chairman), Beam, Flynt, Shepherd and Stonestreet.     The Executive Committee meets on an as needed basis and is authorized to exercise the power of the Board of Directors between Board meetings, to the extent permitted by applicable law.  The Executive Committee of the Bank’s Board of Directors met once during fiscal year 2012.

 

Governance and Nominating Committee.   The Governance and Nominating Committee is currently comprised of Directors Beam (Chairman), McDevitt, Melville and Shepherd, each of whom is an “independent director,” as that term is defined in the NASDAQ Marketplace Rules.  The Governance and Nominating Committee is responsible for identifying and recommending director candidates to serve on the Board of Directors.  Final approval of director nominees is determined by the full Board, based on the recommendations of the Governance and Nominating Committee.  The nominees for election at the annual meeting identified in this proxy statement were recommended to the Board by the Governance and Nominating Committee.

 

The Governance and Nominating Committee operates under a formal written charter adopted by the Board, a copy of which is available on the Company’s website, located at www.hometrustbanking.com , by clicking “Investor Relations” and then “Governance Documents.”   The Governance and Nominating Committee has the following responsibilities under its charter:

 

·

recommend to the Board the appropriate size of the Board and assist in identifying, interviewing and recruiting candidates for the Board;

 

·

recommend candidates (including incumbents) for election and appointment to the Board of Directors, subject to the provisions set forth in the Company’s charter and bylaws relating to the nomination or appointment of directors, giving consideration to the candidate’s particular experience, qualifications, attributes or skills in view of the following criteria, as applicable: honesty / integrity /reputation, demonstrates commitment to the long-term success of the Corporation and its subsidiaries; has commitment and time to serve as a director; sound and seasoned business judgment; bank accounting expertise, experience as a CPA/CFO, and/or meets SEC “Audit Committee Financial Expert” definition; expertise in strategic thinking and planning; understanding of finance; board or executive leadership experience; financial management expertise; understanding and knowledge of banking industry and trends; enterprise risk management expertise; expertise in technology, including e-commerce and business continuity planning; CEO/COO experience; expertise in quality management initiatives; experience with mergers / acquisitions; experience with matters relating to human resources; crisis management expertise; and any other factors that the Committee may deem appropriate.  The Committee considers these criteria, and any other criteria established by the Board, in the context of an assessment of the operation and needs of the Board as a whole and the Board’s goal of maintaining diversity of backgrounds and experience among its members;

 

·

review nominations submitted by stockholders that have been addressed to the Company’s Corporate Secretary and that comply with the requirements of the Company’s charter and bylaws.  Nominations from stockholders will be considered and evaluated using the same criteria as all other nominations;

 

·

determine the criteria for the selection of the Chairperson and Vice Chairperson of the Board and make recommendations to the Board for these positions;

 

·

annually recommend to the Board committee assignments and committee chairs on all committees of the Board, and recommend committee members to fill vacancies on committees as necessary;

 

 

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·

recommend to the Board a set of corporate governance principles applicable to the Corporation, perform a review of those principles at least annually and perform the responsibilities assigned to the Committee under those principles. Implement other policies regarding corporate governance matters as deemed necessary or appropriate;

 

·

oversee an annual performance evaluation of the Board;

 

·

recommend advisory directors and emeritus directors;

 

·

review, at least annually, the Company’s Code of Ethics and Conduct and if appropriate, make recommendations for Board approval with respect to modifications or enhancements to the Code, and consider requested waivers from the Code, if any, for directors and executive officers; and

 

·

perform any other duties or responsibilities expressly delegated to the Committee by the Board.

 

Nominations of persons for election to the Board of Directors may be made only by or at the direction of the Board of Directors or by any stockholder entitled to vote for the election of directors who complies with the notice procedures.  Pursuant to the Company’s bylaws, nominations for directors by stockholders must be made in writing and received by the Corporate Secretary of the Company at the Company’s principal executive offices no earlier than 120 days prior to the meeting date and no later than 90 days prior to the meeting date. If, however, less than 100 days’ notice or public announcement of the date of the meeting is given or made to stockholders, nominations must be received by the Company not later than the close of business on the tenth day following the earlier of the day on which notice of the date of the meeting was mailed or otherwise transmitted or the day on which public announcement of the date of the meeting was first made. In addition to meeting the applicable deadline, nominations must be accompanied by certain information specified in the Company’s bylaws.

 

The Governance and Nominating Committee of the Bank’s Board of Directors met five times during fiscal year 2012.

 

Investment Committee.   The Investment Committee is currently comprised of Directors Biesecker (Chairman), Allen, Flynt, Goforth and McFarland.  The Investment Committee is responsible for the approval of the Company’s investment strategies and for monitoring the Company’s investment performance.   During fiscal 2012, the Investment Committee of the Bank’s Board of Directors met once.

 

Stockholder Communications with Directors

 

Stockholders may communicate with the Board of Directors by writing to: Teresa White, Senior Vice President, Chief Administration Officer and Corporate Secretary, HomeTrust Bancshares, Inc., 10 Woodfin Street, Asheville, North Carolina 28801.

 

Board Member Attendance at Annual Stockholder Meetings

 

Although the Company does not have a formal policy regarding director attendance at annual stockholder meetings, directors are expected to attend these meetings absent extenuating circumstances.  The upcoming annual meeting is the Company’s first annual meeting of stockholders.

Director Compensation

 

Except for Mr. Beam, who retired as a director of the Bank on November 19, 2012 pursuant to the mandatory director retirement provisions of the Bank’s bylaws and will retire as a director of the Company at the time of the annual meeting pursuant to the mandatory director retirement provisions of the Company’s bylaws, and Mr. Dinsmore, who became a director of the Company on August 28, 2012 and a director of the Bank on November 19, 2012 upon the retirement of Mr. Beam as a director of the Bank, the members of the Boards of Directors of the Bank and the Company are identical.

 

 

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The following table sets forth certain information regarding the compensation earned by each individual who served on the Board of Directors of HomeTrust Bank during fiscal 2012 for his or her service as a director.  Mr. Dinsmore is not listed in the table because he did not become a director until after June 30, 2012.

 

Name			Fees Earned Or Paid in Cash ($)			Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4)			All Other Compensa- tion ($)(5)			Total ($)
Stan Allen(1)		$	39,100		$	---		$	---		$	39,100
Franklin V. Beam		$	50,000		$	3,165		$	34,299		$	87,464
Sidney A. Biesecker(1)		$	39,100		$	---		$	---		$	39,100
F. Edward Broadwell, Jr.(2)		$	38,500		$	739		$	5,000		$	44,239
William T. Flynt(3)		$	40,900		$	9,893		$	23,480		$	74,273
J. Steven Goforth		$	40,900		$	6,478		$	32,710		$	80,008
Craig C. Koontz		$	40,300		$	18,236		$	---		$	58,536
Larry S. McDevitt		$	47,600		$	27,928		$	5,000		$	80,528
F.K. McFarland, III		$	40,800		$	7,991		$	5,000		$	53,791
Peggy C. Melville(3)		$	49,400		$	14,805		$	5,000		$	69,205
Robert E. Shepherd, Sr.		$	50,000		$	1,751		$	5,000		$	56,751
Dana L. Stonestreet(2)		$	38,500		$	209		$	5,000		$	43,709

_______________

(1)	Each of Messrs. Allen and Biesecker also is employed by HomeTrust Bank as President of a partner bank operating division but is not considered an executive officer of HomeTrust Bank.  Information regarding compensation provided to Messrs. Allen and Biesecker during fiscal 2012 for their service as employees is provided under “Transactions with Related Persons.”
(2)	Compensation provided to Messrs. Broadwell and Stonestreet during fiscal 2012 for their service as executive officers is included in the summary compensation table, under “Executive Compensation-Summary Compensation Table.”
(3)	Mr. Flynt and Ms. Melville are former employees of HomeTrust Bank.  Information regarding compensation provided to them during fiscal 2012 relating to their service as former employees is provided under “Transactions with Related Persons.”
(4)	Represents the aggregate of (i) the change in the actuarial present value of the director’s accumulated benefit under HomeTrust Bank's Director Emeritus Plan (the "Director Emeritus Plan") from June 30, 2011 to June 30, 2012 and (ii) above market interest on amounts deferred under HomeTrust Bank's non-qualified deferred compensation plan (the "Deferred Compensation Plan"), respectively, as follows: Mr. Allen – (i) $0 and (ii) $0; Mr. Beam – (i) $2,426 and (ii) $739; Mr. Biesecker – (i) $0 and (ii) $0; Mr. Broadwell – (i) $0 and (ii) $739; Mr. Flynt – (i) $8,008 and (ii) $1,885; Mr. Goforth – (i) $(6,193), reflected as zero in the table per SEC rules and (ii) $6,478; Mr. Koontz - (i) $18,125 and (ii) $111; Mr. McDevitt – (i) $26,779 and (ii) $1,149; Mr. McFarland – (i) $7,301 and (ii) $690; Ms. Melville – (i) $13,766 and (ii) 1,039; Mr. Shepherd – (i) $0 and (ii) $1,751; and Mr. Stonestreet – (i) 0 and (ii) $209.    Messrs. Allen, Biesecker, Broadwell and Stonestreet currently do not participate in the Director Emeritus Plan.  Mr. Allen was a participant in the Director Emeritus Plan but his participation terminated during fiscal 2012.  See “—Director Emeritus Plan.”
(5)	For Messrs. Beam, Flynt and Goforth consists of (i) of contribution by HomeTrust Bank under the Deferred Compensation Plan of $5,000 each and (ii) distributions under the Director Emeritus Plan of $29,299, $18,480 and $27,710, respectively.  For Messrs. Broadwell, McDevitt, McFarland, Shepherd and Stonestreet and Ms. Melville, consists of contribution by HomeTrust Bank under the Deferred Compensation Plan of $5,000 each.

 

Director Retainer and Fees

 

During fiscal 2012, each director of HomeTrust Bank was paid an annual retainer of $7,000, $1,950 for each Board meeting attended and $600 for each Board committee meeting attended.  In November 2011, the Board reduced the fees for meetings attended by telephone, as follows: meeting length less than two hours, $100; meeting length two to four hours, $250; and meeting length over four hours, $600.  Certain of the directors of HomeTrust Bank serve on the partner boards of the partner banking divisions.  Mr. Flynt is a member of the Home Savings Bank partner board, Messrs. Beam and Goforth are members of the Shelby Savings Bank partner board, Mr. McFarland is a member of the Tryon Federal Bank partner board, Messrs. Biesecker and Koontz are members of the Industrial Federal Bank partner board and Mr. Allen is a member of the Cherryville Federal Bank partner board.  During fiscal 2012, the directors of HomeTrust Bank who serve as partner board members were not provided with additional compensation for such service. In addition, Mr. Broadwell and Ms. Melville serve as members of the Haywood West community advisory board and Mr. Biesecker is a member of the Industrial Federal community advisory board.  Messrs. Broadwell and Biesecker are not provided any additional compensation for their service on

 

 

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these community advisory boards and Ms. Melville is paid a fee of $200 for each meeting of the Haywood West community advisory board that she attends.

 

Director Emeritus Plan

 

Under the Director Emeritus Plan, upon termination of service as a director other than for cause, a participating director becomes an emeritus director and is entitled to be paid a monthly director emeritus fee as set forth in his or her joinder agreement to the Director Emeritus Plan, for the benefit period specified in the joinder agreement.  Directors Broadwell, Stonestreet, Allen and Biesecker do not currently participate in the Director Emeritus Plan, but instead are entitled to additional benefits under HomeTrust Bank's Executive Supplemental Retirement Income Plan (the "SERP").  Mr. Allen’s participation in the Director Emeritus Plan terminated during fiscal 2012 in exchange for an additional benefit under the SERP that is identical to the benefit he would have been entitled to under the Director Emeritus Plan.  See “Transactions with Related Persons—Stan Allen.”  The specific Director Emeritus Plan benefits of each of the directors who currently participate in the Director Emeritus Plan are described below.  Each participating director is 100% vested in his or her benefits under the Director Emeritus Plan.

 

Directors Koontz, McDevitt and Shepherd.   Under their joinder agreements, each of Directors Koontz, McDevitt and Shepherd is entitled to a 20-year director emeritus benefit in the annual amount of $30,000, with such amount increasing 5% per year after the first year of the benefit period.

 

Directors Melville and McFarland.   Under their joinder agreements, each of Directors Melville and McFarland is entitled to a 20-year director emeritus benefit in the annual amount of $16,193, with such amount increasing 5% per year after the first year of the benefit period.  Ms. Melville, who retired from HomeTrust Bank as an employee in 2008, also is entitled to a benefit under the SERP.  See “Transactions with Related Persons-Peggy C. Melville.”

 

Directors Beam and Goforth .  Under their joinder agreements, each of Directors Beam and Goforth is entitled to (i) a 20-year director emeritus benefit in the annual amount of $18,000, with such amount increasing 5% per year after the first year of the benefit period, and (ii) a 20-year director emeritus benefit, with the annual payout amount starting at $12,000 in Year 1 and increasing to $44,638 in Year 20.

 

Director Flynt.   Under his joinder agreement, Director Flynt is entitled to a 20-year director emeritus benefit, with the annual payout amount starting at $12,000 in Year 1 and increasing to $44,638 in Year 20.  Mr. Flynt, who retired from HomeTrust Bank as an employee in 2007, also is entitled to a benefit under the SERP.  See “Transactions with Related Persons-William T. Flynt.”

EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

 

Introduction . In this section, we provide an overview and analysis of our compensation programs, the material compensation policy decisions we have made under those programs, and the material factors that we considered in making those decisions. Following this section, you will find a series of tables containing specific information about compensation paid or payable to the following individuals, whom we refer to as our “named executive officers”:

 

·

F. Edward Broadwell, Jr., Chairman and Chief Executive Officer;

 

·

Dana L. Stonestreet, President and Chief Operating Officer;

 

·

Tony J. VunCannon, Senior Vice President, Chief Financial Officer and Treasurer;

 

·

Howard L. Sellinger, Senior Vice President and Chief Information Officer; and

 

·

Charles I. Abbitt, Jr., Senior Vice President and Chief Risk Officer.

 

 

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The discussion below is intended to help you understand the detailed information provided in those tables and put that information into context within our overall compensation program.

 

Compensation Philosophy and Objectives .  The Compensation Committee of the Board of Directors administers our compensation and benefit programs.  The Compensation Committee is responsible for setting and administering the policies which govern executive compensation. Our current compensation philosophy is designed to:

 

·

attract the right people and differentiate compensation based on performance;

 

·

retain top performers and reward them for helping us build and sustain our culture and values and achieve our business strategy and goals;

 

·

compensate our people in ways that inspire and motivate them, both individually and as a team, to execute our vision and drive for enduring customer satisfaction;

 

·

provide total compensation and learning and development opportunities that are competitive with that of other companies of similar size and complexity; and

 

·

properly align risk-taking and compensation.

 

While the primary components of our compensation program have been base salary and bonuses, the Compensation Committee also takes into account the full compensation package provided to the individual, including deferred compensation and retirement plan benefits, health benefits and other benefits. In setting the named executive officers’ compensation levels, the Compensation Committee typically reviews surveys of compensation paid to the executive officers of other community banks and thrifts based in North Carolina comparable to us in size.  The most recent such survey, which was reviewed in conjunction with a review of our compensation program subsequent to June 30, 2012 conducted by Pearl Meyer & Partners (see “-Role of Compensation Consultant”) included the following institutions, which ranged in asset size from $910 million to $3.7 billion:

 

First Financial Holdings, Inc.			First Bancorp
ViewPoint Financial Group, Inc.			Stellar One Corporation
Hampton Roads Bankshares, Inc.			Virginia Commerce Bancorp, Inc.
Yadkin Valley Financial Corporation			First Community Bancshares, Inc.
BNC Bancorp			Cardinal Financial Corporation
S.Y. Bancorp, Inc.			New Bridge Bancorp
Palmetto Bancshares, Inc.			Charter Financial Corporation
OmniAmerican Bancorp, Inc.			Middleburg Financial Corporation
HopFed Bancorp, Inc.			Peoples Bancorp of North Carolina, Inc.
Citizens South Banking Corporation			National Bankshares, Inc.
Franklin Financial Corporation			Security Federal Corporation
ECB Bancorp, Inc.

Base Salaries .  We provide the opportunity for our named executive officers and other executives to earn a competitive annual base salary. We do so in order to attract and retain an appropriate caliber of talent for the position. Our base salary levels reflect a combination of factors, including competitive pay levels, the executive’s experience and tenure, the executive’s individual performance and changes in responsibility. We generally review salary levels annually to recognize these factors. We do not target base salary at any particular percentage of total compensation.

 

Subsequent to June 30, 2012, each of Messrs. Broadwell, Stonestreet, VunCannon, Sellinger and Abbitt entered into an employment agreement with HomeTrust Bancshares, which provides for a minimum annual base salary of not less than $400,000, $317,500, $180,000, $180,000 and $180,000, respectively.  Prior to entering into their employment agreements with HomeTrust Bancshares, each of Messrs. Broadwell and Stonestreet had an employment agreement with HomeTrust Bank, which provided for a minimum annual base salary of $400,000 and

 

 

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$317,500, respectively.  Effective October 1, 2011, the base salaries of Messrs. VunCannon, Sellinger and Abbitt were increased by 20.0%, 9.8% and 9.8%, respectively (to $180,000 each), and, effective October 1, 2012, were further increased by 2.7% each, so that each of Messrs. VunCannon, Sellinger and Abbitt now has an annual base salary of $184,860.  These increases were based on merit and the need to stay market competitive.  Effective October 1, 2012, the base salaries of Messrs. Broadwell and Stonestreet increased by 5%, to $420,000 and $333,375, respectively.  These represent the first increases in the base salaries of Messrs. Broadwell and Stonestreet since 2009.  The Compensation Committee believes that the increases will keep the salary amounts of Messrs. Broadwell and Stonestreet competitive and at levels that appropriately reflect their experience and the breadth of their responsibilities.

 

Bonuses . Historically, annual incentive compensation has been paid to executives and other employees from an incentive compensation pool based on the adjusted pre-tax income of HomeTrust Bank.  In determining the amount of adjusted pre-tax income to be allocated to the incentive compensation pool, the Compensation Committee, subject to the approval of the HomeTrust Bank Board of Directors, has taken into account the overall strength of HomeTrust Bank’s financial performance. The bonuses, if any, awarded to Messrs. Broadwell and Stonestreet from this pool have been set by the Compensation Committee, after giving consideration to bank performance and individual performance, subject to approval by the Board of Directors. The bonuses, if any, awarded to the other executive officers have been awarded from the pool in amounts recommended by Messrs. Broadwell and Stonestreet, after giving consideration to bank performance and individual performance. For fiscal 2012, Messrs. Broadwell and Stonestreet were each awarded a bonus of $150,000 and Messrs. VunCannon, Sellinger and Abbitt were each awarded a bonus of $54,000. The bonuses reflect HomeTrust Bank’s overall improved operating performance in fiscal 2012, the completion of HomeTrust Bank’s mutual-to-stock conversion and the raising of over $200 million in capital through HomeTrust Bancshares’ initial public stock offering and each named executive officer’s relative contributions to these successes.

 

In August 2012, the HomeTrust Bancshares Board of Directors, based on the recommendation of the Compensation Committee, adopted the HomeTrust Bancshares, Inc. Strategic Operating Committee Incentive Plan (the “SOC Incentive Plan”).  Under the SOC Incentive Plan, beginning with the fiscal year ending June 30, 2013, each member of our strategic operating committee (comprised of our executive officers), will be eligible to earn an annual cash bonus ranging from 50% to 150% of his or her targeted incentive award opportunity based upon the extent to which certain weighted performance goals have been achieved relative to a targeted level of performance.  An executive officer will receive a payout of 50% of his or her targeted incentive award opportunity if actual performance under all performance goals is at the threshold (minimum) level of performance, 100% of his or her targeted incentive award opportunity if actual performance under all performance goals is at the targeted level of performance, and 150% of his or her targeted incentive award opportunity if actual performance under all performance goals is at or above the stretch (maximum) level of performance.

 

For fiscal 2013, the targeted incentive award opportunities under the SOC Incentive Plan for the named executive officers are as follows: Mr. Broadwell, 55% of annual base salary; Mr. Stonestreet, 55% of annual base salary; Mr. VunCannon, 30% of annual base salary; Mr. Abbitt, 30% of annual base salary; and Mr. Sellinger, 30% of annual base salary.  For Messrs. Broadwell and Stonestreet, the SOC Incentive Plan performance measures and weightings are as follows: net income (40% weighting); return on assets compared to peers (40% weighting); and subjective assessment of company performance by the Compensation Committee (20% weighting).  For each of the other executive officers, the performance measures and weightings are as follows: net income (24% weighting); return on assets compared to peers (24% weighting); subjective assessment of company performance by the Compensation Committee (12% weighting); and team/individual goals (40% weighting).

 

The Committee may award discretionary bonuses in addition to the incentive award opportunities under the SOC Incentive Plan as well as reduce or eliminate any bonuses under the SOC Incentive Plan at the Committee’s discretion. The SOC Incentive Plan contains a clawback provision, which provides that if we are required to restate our financial statements due to our material non-compliance with any financial reporting requirement, a participant must, unless otherwise determined in the sole discretion of the Committee, reimburse us to the extent any incentive payment to the participant was calculated based on financial results that were required to be restated.

 

Deferred Compensation Plan .  Under HomeTrust Bank’s Deferred Compensation Plan, directors and a select group of employees can elect to defer a portion of their cash compensation.  Each of the named executive officers other than Mr. Abbitt participates in this plan.  See “—Deferred Compensation Plan.”

 

 

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Executive Medical Care Plan .  HomeTrust Bank maintains an Executive Medical Care Plan (the “EMCP”), which is a nonqualified, deferred compensation plan under which certain key employees are given the opportunity to contribute toward, and to receive employer contributions toward, certain health and long-term care benefits, including the payment of health and long-term care plan premiums and the reimbursement of medical expenses.   Each of the named executive officers other than Mr. Abbitt currently participates in the EMCP.  For additional information regarding the EMCP and the EMCP benefits of each of the participating named executive officers, see “—Executive Medical Care Plan.”

 

Executive Supplemental Retirement Income Plan (SERP) .  Under HomeTrust Bank’s SERP, a participating executive is entitled to receive an annual supplemental retirement income benefit as specified in his or her joinder agreement to the SERP master agreement, payable monthly, commencing on his or her benefit eligibility date or on the date specified in his or her joinder agreement.  Unless a different date is specified in the executive’s joinder agreement, the benefit eligibility date is the first day of the month next following the later of the month in which the executive attains age 55 or separates from service with the Bank (subject to a six-month delay for employees subject to Section 409A of the Internal Revenue Code to the extent necessary to comply with Section 409A) for any reason other than cause.  Each of the named executive officers other than Mr. Abbitt currently participates in the SERP.  For additional information regarding the SERP and the specific terms of the SERP benefits of each of the participating named executive officers, see “—Executive Supplemental Retirement Income Plan.”

 

401(k) Plan . Participation in our 401(k) plan is available to all of our employees who meet minimum eligibility requirements. This plan allows our employees to save money for retirement in a tax-advantaged manner.  During fiscal 2012, we matched employee contributions, to the extent allowed under qualified plan limitations, dollar for dollar up to 6% of compensation. Our matching contributions for fiscal 2012 under this plan to the named executive officers are reflected in the summary compensation table under the “All Other Compensation” column.  See “—Other Benefits-401(k) Plan” for additional information on our 401(k) plan.

 

Other Employee Benefits . Other benefits, in which all employees generally may participate, include the following: medical and dental insurance coverage, vision care coverage, group life insurance coverage and long- and short-term disability insurance coverage.  HomeTrust Bank reimburses executive officers for the premium paid for long-term disability insurance.

 

Perquisites and Other Personal Benefits . Other than providing each of Messrs. Broadwell and Stonestreet with a company automobile, we currently do not provide the named executive officers with any perquisites or other personal benefits.

 

Equity-Based Plans .  In connection with HomeTrust Bank’s mutual-to-stock conversion and HomeTrust Bancshares’ initial public stock offering, we established an employee stock ownership plan.  The employee stock ownership plan gives eligible employees an equity interest in HomeTrust Bancshares and an additional retirement benefit in the form of HomeTrust Bancshares common stock.  For additional information regarding the employee stock ownership plan, see “—Other Benefits-Employee Stock Ownership Plan.”  At the annual meeting, stockholders will be asked to approve the Omnibus Incentive Plan, which will allow for the grant of stock options, stock appreciation rights, restricted stock, restricted share units and cash awards to eligible participants.  See “Proposal II.  Approval of the Omnibus Incentive Plan.”  We believe that the establishment of the employee stock ownership plan and, if approved by stockholders, the Omnibus Incentive Plan, is consistent with our compensation philosophy and objectives in that these plans will help us to attract and retain qualified personnel and motivate these individuals to enhance our long-term performance by aligning their interests with the interests of our stockholders.

 

Payments upon Termination or Change in Control .  Each of the named executive officers has entered into an employment agreement with HomeTrust Bancshares that provides for certain payments and benefits if the executive’s employment is terminated under certain scenarios, including, but not limited to, following a change in control.  See “—Employment Agreements with Named Executive Officers.”  These employment agreements thus

 

 

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require a “double trigger” in order for any payments or benefits under the agreements to be provided to the executive in connection with or following a change in control - in other words, both a change in control and an involuntary termination of employment (which includes a voluntary termination by the executive following a material reduction in his duties, responsibilities or benefits) must occur.  The purpose of providing the change in control payments is to attract and retain top level executives of the highest caliber and mitigate the risk to these executives that their employment will be involuntarily terminated in the event we are acquired.  At the same time, a change in control, by itself, will not automatically trigger a payout, as our intention is to induce the executive to remain employed following a change in control so long as the acquiror so desires without a material reduction in the executive’s duties, responsibilities or benefits.

 

Role of Executive Officers in Determining Compensation .  Messrs. Broadwell and Stonestreet recommend to the Compensation Committee compensation of the named executive officers other than themselves.  Messrs. Broadwell and Stonestreet are not involved with any aspect of determining their own compensation.

 

Role of Compensation Consultant .  During fiscal 2012, the Compensation Committee engaged Pearl Meyer & Partners to review our compensation programs and arrangements.  As a result of this review, the base salaries of the named executive officers were increased.  See “-Base Salaries.”  The Compensation Committee also consulted with Pearl Meyer & Partners in connection with the adoption of the SOC Incentive Plan.  See “-Bonuses.”

 

 

 

 

 

 

 

 

 

 

 

Summary Compensation Table

 

The following table sets forth information concerning the compensation paid to or earned by the named executive officers for fiscal years 2012 and 2011:

 

Name and Principal Position		Year		Salary ($)		Bonus ($)(1)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(2)		All Other Compensation ($)(3)		Total Compensation ($)
F. Edward Broadwell, Jr.,		2012		$400,000		$150,000		$  93,594		$102,189		$745,783
Chairman and Chief Executive Officer		2011		$400,000		$         ---		$    2,614		$126,243		$528,857
Dana L. Stonestreet,		2012		$317,500		$150,000		$102,857		$136,572		$706,929
President and Chief Operating Officer		2011		$317,500		$         ---		$  10,776		$  72,238		$400,514
Tony J. VunCannon,		2012		$172,500		$  54,000		$  13,051		$  56,284		$295,835
Senior Vice President, Chief Financial Officer and Treasurer		2011		$146,875		$  45,000		$    8,930		$  35,830		$236,635
Howard L. Sellinger,		2012		$176,000		$  54,000		$  20,627		$  69,346		$319,973
Senior Vice President and Chief Information Officer		2011		$163,000		$  35,000		$    1,111		$  33,305		$232,416
Charles I. Abbitt, Jr.,		2012		$176,000		$  54,000		$         ---		$  24,461		$254,461
Senior Vice President and Chief Risk Officer		2011		$163,000		$  35,000		$         ---		$  14,028		$212,028

_____________________

F. Edward Broadwell, Jr.

Termination Scenario		Total Compensation and Health and Other Insurance Benefits Continuation ($)				Payout of Unused Paid Time Off ($)				Life Insurance Benefit ($)				Payment of 299% of “Base Amount” ($)
If termination for cause occurs		$	---			$	10,000			$	---			$	---
If voluntary termination occurs that does not constitute “involuntary termination” under Employment Agreement		$	---			$	10,000			$	---			$	---
If “involuntary termination” under Employment Agreement occurs, but not within the six months preceding, at the time of or following a change in control		$	1,012,578	(1)		$	10,000			$	---			$	---
If “involuntary termination” under Employment Agreement occurs within the six months preceding, at the time of or following a change in control		$	---			$	10,000			$	---			$	3,204,770	(2)
If termination occurs as a result of death, not within six months before, or 12 months after, a change in control		$	169,402	(3)		$	10,000			$	585,000			$	---
If termination occurs as a result of death within six months before, or 12 months after, a change in control		$	---			$	10,000			$	585,000			$	3,204,770	(4)
If termination occurs as a result of disability, not during the one year period following a change in control		$	715,677	(5)		$	---	(6)		$	---			$	---
If termination occurs as a result of disability during the one year period following a change in control		$	---	(7)		$	10,000			$	---			$	3,204,770	(7)

Dana L. Stonestreet

Termination Scenario		Total Compensation and Health and Other Insurance Benefits Continuation ($)				Payout of Unused Paid Time Off ($)				Life Insurance Benefit ($)				Payment of 299% of “Base Amount” ($)
If termination for cause occurs		$	---			$	10,000			$	---			$	---
If voluntary termination occurs that does not constitute “involuntary termination” under Employment Agreement		$	---			$	10,000			$	---			$	---
If “involuntary termination” under Employment Agreement occurs, but not within the six months preceding, at the time of or following a change in control		$	1,681,429	(1)		$	10,000			$	---			$	---
If “involuntary termination” under Employment Agreement occurs within the six months preceding, at the time of or following a change in control		$	---			$	10,000			$	---			$	2,077,955	(2)
If termination occurs as a result of death, not within six months before, or 12 months after, a change in control		$	135,828	(3)		$	10,000			$	788,000			$	---
If termination occurs as a result of death within six months before, or 12 months after, a change in control		$	---			$	10,000			$	788,000			$	2,077,955	(4)
If termination occurs as a result of disability, not during the one year period following a change in control		$	1,079,934	(5)		$	---	(6)		$	---			$	---
If termination occurs as a result of disability during the one year period following a change in control		$	---	(7)		$	10,000			$	---			$	2,077,955	(7)

Tony J. VunCannon

 

Termination Scenario		Total Compensation and Health and Other Insurance Benefits Continuation ($)				Payout of Unused Paid Time Off ($)				Life Insurance Benefit ($)				Payment of 299% of “Base Amount” ($)
If termination for cause occurs		$	---			$	10,000			$	---			$	---
If voluntary termination occurs that does not constitute “involuntary termination” under Employment Agreement		$	---			$	10,000			$	---			$	---
If “involuntary termination” under Employment Agreement occurs, but not within the six months preceding, at the time of or following a change in control		$	530,174	(1)		$	10,000			$	---			$	---
If “involuntary termination” under Employment Agreement occurs within the six months preceding, at the time of or following a change in control		$	---			$	10,000			$	---			$	773,172	(2)
If termination occurs as a result of death, not within six months before, or 12 months after, a change in control		$	61,250	(3)		$	10,000			$	490,000			$	---
If termination occurs as a result of death within six months before, or 12 months after, a change in control		$	---			$	10,000			$	490,000			$	773,172	(4)
If termination occurs as a result of disability, not during the one year period following a change in control		$	120,000	(5)		$	---	(6)		$	---			$	---
If termination occurs as a result of disability during the one year period following a change in control		$	---	(7)		$	10,000			$	---			$	773,172	(7)

Howard L. Sellinger

Termination Scenario		Total Compensation and Health and Other Insurance Benefits Continuation ($)				Payout of Unused Paid Time Off ($)				Life Insurance Benefit ($)				Payment of 299% of “Base Amount” ($)
If termination for cause occurs		$	---			$	10,000			$	---			$	---
If voluntary termination occurs that does not constitute “involuntary termination” under Employment Agreement		$	---			$	10,000			$	---			$	---
If “involuntary termination” under Employment Agreement occurs, but not within the six months preceding, at the time of or following a change in control		$	503,528	(1)		$	10,000			$	---			$	---
If “involuntary termination” under Employment Agreement occurs within the six months preceding, at the time of or following a change in control		$	---			$	10,000			$	---			$	1,121,760	(2)
If termination occurs as a result of death, not within six months before, or 12 months after, a change in control		$	60,625	(3)		$	10,000			$	485,000			$	---
If termination occurs as a result of death within six months before, or 12 months after, a change in control		$	---			$	10,000			$	485,000			$	1,121,760	(4)
If termination occurs as a result of disability, not during the one year period following a change in control		$	115,000	(5)		$	---	(6)		$	---			$	---
If termination occurs as a result of disability during the one year period following a change in control		$	---	(7)		$	10,000			$	---			$	1,121,760	(7)

Charles I. Abbitt, Jr.

Termination Scenario		Total Compensation and Health and Other Insurance Benefits Continuation ($)				Payout of Unused Paid Time Off ($)				Life Insurance Benefit ($)				Payment of 299% of “Base Amount” ($)
If termination for cause occurs		$	---			$	14,374			$	---			$	---
If voluntary termination occurs that does not constitute “involuntary termination” under Employment Agreement		$	---			$	14,374			$	---			$	---
If “involuntary termination” under Employment Agreement occurs, but not within the six months preceding, at the time of or following a change in control		$	474,215	(1)		$	14,374			$	---			$	---
If “involuntary termination” under Employment Agreement occurs within the six months preceding, at the time of or following a change in control		$	---			$	14,374			$	---			$	542,742	(2)
If termination occurs as a result of death, not within six months before, or 12 months after, a change in control		$	55,625	(3)		$	14,374			$	445,000			$	---
If termination occurs as a result of death within six months before, or 12 months after, a change in control		$	---			$	14,374			$	445,000			$	542,742	(4)
If termination occurs as a result of disability, not during the one year period following a change in control		$	75,000	(5)		$	11,851	(6)		$	---			$	---
If termination occurs as a result of disability during the one year period following a change in control		$	---	(7)		$	14,374			$	---			$	542,742	(7)

Compensation Committee Report

 

The Compensation Committee of the HomeTrust Bancshares Board of Directors has reviewed and discussed the Compensation Discussion and Analysis contained above with management and, based on such review and discussion, the Compensation Committee recommended to the HomeTrust Bancshares Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

 

Submitted by the following members of the Compensation Committee of the HomeTrust Bancshares Board of Directors:

 

Franklin V. Beam

Craig C. Koontz

Peggy C. Melville

Larry S. McDevitt

Robert E. Shepherd, Sr.

Compensation Committee Interlocks and Insider Participation

 

The members of the Compensation Committee of the Board of Directors during the fiscal year ended June 30, 2012 consisted of Directors McDevitt (Chairman), Beam, Koontz, Melville and Shepherd.  As discussed under "Transactions with Related Persons," Ms. Melville is a former officer of HomeTrust Bank, having retired as Senior Vice President and Chief Administration Officer in 2008.  As also discussed under “Transactions with Related Persons,” Mr. McDevitt is a principal of a law firm to which HomeTrust Bank made payments during the fiscal year ended June 30, 2012.

 

 

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TRANSACTIONS WITH RELATED PERSONS

 

Review and Approval of Related Party Transactions.   The charter of the ACER Committee of the HomeTrust Bancshares Board of Directors provides that the committee is to review and approve all related party transactions (defined as transactions requiring disclosure under Item 404 of SEC Regulation S-K) on an ongoing basis.

 

Loans. HomeTrust Bank has followed a policy of granting loans to officers and directors, which fully complies with all applicable federal regulations.  Loans to directors and executive officers are made in the ordinary course of business and on substantially the same terms and conditions, including interest rates and collateral, as those of comparable transactions with persons not related to HomeTrust Bank prevailing at the time, in accordance with our underwriting guidelines, and do not involve more than the normal risk of collectibility or present other unfavorable features.

 

All loans to directors and executive officers and their related persons totaled approximately $726,325 at June 30, 2012, and were performing in accordance with their terms at that date.

 

Stan Allen. Director Stan Allen is employed by HomeTrust Bank as President of the Cherryville Federal Bank banking division.  For his services as an employee of HomeTrust Bank during fiscal 2012, Mr. Allen received a salary of $127,813, a bonus of $19,500, a payout for unused time off of $6,724, an employer contribution to his 401(k) plan account of $9,374, tax related reimbursements of $14,430, life insurance premiums paid on his behalf of $54 and reimbursement of long-term disability insurance premiums that he paid of $1,229.  Mr. Allen also received above market interest on amounts deferred under the EMCP of $2,926.  In addition, during fiscal 2012, Mr. Allen received a payout of his benefit under the Cherryville Federal Savings Bank Director Emeritus Plan of $44,026.  Mr. Allen participated in the HomeTrust Bank Director Emeritus Plan during fiscal 2012, but his participation terminated during fiscal 2012 in exchange for an additional benefit under the SERP that is identical to the benefit he would have been entitled to under the HomeTrust Bank Director Emeritus Plan.  Under his joinder agreement to the SERP, Mr. Allen’s supplemental retirement income benefit will be comprised of the following: (1) a 20-year annual benefit, payable monthly, of $84,500; and (2) a separate, additional 15-year retirement benefit, payable monthly, in the annual amount of $43,500.  The additional benefit was added subsequent to June 30, 2011 in exchange for the termination of his participation in the HomeTrust Bank Director Emeritus Plan as described above.  Mr. Allen first became a participant in the SERP during fiscal 2011.  The increase from June 30, 2011 to June 30, 2012 in the actuarial present value of his accumulated benefit under the SERP was $192,734, using a 5% discount rate and assuming that he will retire in 2014.

 

Sidney A. Biesecker. Director Sidney A. Biesecker is employed by HomeTrust Bank as President of the Industrial Federal Bank banking division.  For his services as an employee during fiscal 2012, Mr. Biesecker received a salary of $170,100, a bonus of $26,000, a payout for unused time off of $6,000, an employer contribution to his 401(k) plan account of $11,469, tax related reimbursements of $9,945, life insurance premiums paid on his behalf of $80 and reimbursement of long-term disability insurance premiums that he paid of $2,144.  Mr. Biesecker also received above market interest on amounts deferred under the Deferred Compensation Plan and the EMCP of $92 and $5,542, respectively.  In addition, Mr. Biesecker is a participant in the SERP.  Under his joinder agreement to the SERP, Mr. Biesecker’s supplemental retirement income benefit will be comprised of the following: (1) a 20-year annual benefit, payable monthly, of $150,000; and (2) a separate, additional 20-year retirement benefit, payable monthly, in the initial annual amount of $30,000 subject to an annual increase of 5% per year commencing with the second year of the payout period.  Mr. Biesecker first became a participant in the SERP during fiscal 2010.  Mr. Biesecker has an additional retirement benefit under a Supplemental Income Agreement that he originally entered into with Industrial Federal Bank in 1996, which HomeTrust Bank assumed in connection with its acquisition of Industrial Federal Bank in fiscal 2010.  The increase from June 30, 2011 to June 30, 2012 in the actuarial present value of his aggregate accumulated benefit under the SERP and the Supplemental Income Agreement was $356,593, using a 5% discount rate and assuming that he will retire in 2016.

 

William T. Flynt. Director William T. Flynt retired as an employee of HomeTrust Bank in 2007.  Mr. Flynt is a participant in the SERP.  Under his joinder agreement to the SERP, Mr. Flynt’s supplemental retirement income benefit is comprised of the following: (1) a 20-year annual benefit, payable monthly, of $133,200; and (2) a separate, additional 20-year retirement benefit, payable monthly, in the initial annual amount of $18,000 subject to an annual increase of 4% per year commencing with the second year of the payout period and continuing through the 15 th year of the payout period.  The actuarial present value of Mr. Flynt’s accumulated benefit under the SERP decreased by $61,783 from June 30, 2011 to June 30, 2012.  During fiscal 2012, Mr. Flynt received a payout under the SERP of $133,200.  In addition, during fiscal 2012, Mr. Flynt received above-market interest on amounts deferred under the EMCP of $6,508.

 

Peggy C. Melville.   Director Peggy C. Melville retired as an employee of HomeTrust Bank in 2008.  Ms. Melville is a participant in the SERP.  Under her joinder agreement to the SERP, Ms. Melville’s supplemental retirement income benefit is comprised of a 20-year annual benefit, payable monthly, of $172,650.  During fiscal 2012, Ms. Melville received payments under the SERP totaling $172,650. The actuarial present value of Ms. Melville’s accumulated benefit under the SERP decreased by $69,072 from June 30, 2011 to June 30, 2012.  During fiscal 2012, Ms. Melville also received payments under HomeTrust Bank’s Management Capital Growth Recognition Plan of $75,219, which she earned while an employee of HomeTrust Bank.  In addition, during fiscal 2012, Ms. Melville received above-market interest of $10,253 on amounts earned while an employee that were deferred under the Deferred Compensation Plan and above-market interest of $9,681 on amounts deferred under the EMCP while an employee under the  EMCP.

 

Larry S. McDevitt.   Director Larry S. McDevitt is a principal of The Van Winkle Law Firm, which has represented HomeTrust Bank in connection with various matters.  During the fiscal year ended June 30, 2012, the fees paid by HomeTrust Bank to The Van Winkle Law Firm totaled $645,797.

 

 

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of HomeTrust Bancshares. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

 

Because our common stock became registered under the Securities Exchange Act of 1934 subsequent to June 30, 2012, the Section 16(a) filing requirements were not applicable during the fiscal year ended June 30, 2012 to our officers, directors and any greater than 10% beneficial owners.

 

REPORT OF THE AUDIT, COMPLIANCE AND ENTERPRISE RISK MANAGEMENT

COMMITTEE OF THE BOARD OF DIRECTORS

 

The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference in such filing.

 

The ACER Committee has reviewed and discussed the audited financial statements of HomeTrust Bank for the fiscal year ended June 30, 2012 with management.  The ACER Committee has discussed with Dixon Hughes Goodman LLP, HomeTrust Bank’s independent auditors, the matters required to be discussed by Statement on Auditing Standards No. 114, The Auditor’s Communication With Those Charged With Governance.

 

The ACER Committee has also received the written disclosures and the letter from Dixon Hughes Goodman LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding Dixon Hughes Goodman LLP's communications with the ACER Committee concerning independence as currently in effect and discussed with Dixon Hughes Goodman LLP their independence.

 

Based on the ACER Committee’s review and discussions noted above, the ACER Committee recommended to the HomeTrust Bancshares Inc. Board of Directors that HomeTrust Bank’s audited financial statements be included in HomeTrust Bancshares Inc.’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012, for filing with the SEC.

 

The foregoing report is furnished by the following members of the ACER Committee of the HomeTrust Bancshares, Inc. Board of Directors.

 

Robert E. Shepherd, Sr. (Chairman)

Franklin V. Beam

Robert G. Dinsmore, Jr.

William T. Flynt

J. Steven Goforth

Craig C. Koontz

F.K. McFarland III

Peggy C. Melville

 

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PROPOSAL II

APPROVAL OF THE OMNIBUS INCENTIVE PLAN

Purpose

 

The purpose of the HomeTrust Bancshares, Inc. 2013 Omnibus Incentive Plan is to promote the long-term growth and profitability of the Company, to provide plan participants with an incentive to achieve corporate objectives, to attract and retain individuals of outstanding competence and to provide plan participants with incentives that are closely linked to the interests of the Company’s stockholders.

 

As noted below, if approved by the Company’s stockholders at the annual meeting, the Omnibus Incentive Plan would authorize up to 2,962,400 shares of common stock to be utilized for awards of stock options, stock appreciation rights and restricted stock awards (which may be in the form of shares of common stock or share units giving the participant the right to receive shares of common stock at a specified future date), with no more than 2,116,000 shares utilized for stock options and stock appreciation rights and no more than 846,400 shares utilized for restricted stock awards.  The 2,116,000 shares and 846,400 shares represent 10% and 4%, respectively, of the total number of shares issued by the Company in connection with the Bank’s mutual-to-stock conversion and the Company’s initial public offering, which were completed on July 10, 2012.

 

The principal features of the Omnibus Incentive Plan are discussed below.  The discussion is only a summary and is qualified in its entirety by reference to the full text of the Omnibus Incentive Plan, a copy of which is attached to this proxy statement as Appendix A.  You should read the Omnibus Incentive Plan in its entirety.

 

General

 

The Omnibus Incentive Plan provides for the grant of the following types of awards to directors, emeritus directors, officers, employees and advisory directors of the Company and its subsidiaries who are selected to receive awards (collectively referred to below as “participants”):

 

·

options to purchase shares of common stock, which may be either “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code (“incentive stock options”) or non-statutory options which do not satisfy the provisions of Section 422 of the Internal Revenue Code (“non-qualified stock options”) (incentive stock options and non-qualified stock options are together referred to as “stock options” or “options”);

 

·

stock appreciation rights;

 

·

restricted stock awards, which may be in the form of shares of common stock or share units giving the participant the right to receive shares of common stock at a specified future date; and

 

·

cash awards.

 

Subject to adjustments described below under “—Changes in Capitalization,” the number of shares of common stock available for awards under the Omnibus Incentive Plan is 2,962,400, with no more than 2,116,000 shares utilized for stock options and stock appreciation rights and no more than 846,400 shares utilized for restricted stock awards.  Shares will be considered issued only if actually issued upon the exercise of a stock option or stock appreciation right or in connection with a restricted stock award.  Any award subsequently forfeited, in whole or in part, will not be considered issued.  If any award terminates, expires or lapses for any reason, any shares subject to the award will again be available for future awards under the Omnibus Incentive Plan.  Shares used to pay the exercise price of a stock option and shares used to satisfy tax withholding obligations will not be available for future awards.  To the extent shares are delivered pursuant to the exercise of a stock option or stock appreciation right, the number of underlying shares as to which the exercise related will count against the number of shares available for future awards, as opposed to only counting the shares actually issued.

 

 

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Under the Omnibus Incentive Plan, during any calendar year, the maximum aggregate number of shares with respect to which stock options and stock appreciation rights may be granted to any one individual is 529,000, and the maximum aggregate number of shares with respect to which restricted stock awards may be granted to any one individual is 211,600, in each case subject to adjustments described below under “—Changes in Capitalization.”  During any calendar year, no participant may be granted cash awards in the aggregate in excess of $2,000,000.

 

Because the Company is seeking stockholder approval of the Omnibus Incentive Plan within one year following the completion of the Bank’s mutual-to-stock conversion, the regulations of the Office of the Comptroller of the Currency require the Omnibus Incentive Plan to contain the following additional restrictions:

 

·

no participant may receive options and stock appreciation rights with respect to more than 529,000 shares;

 

·

no Participant may receive restricted stock awards with respect to more than 211,600 shares;

 

·

no director, director emeritus or advisory director who is not also an employee of the Company or its affiliates may receive options and stock appreciation rights with respect to more than 105,800 shares, and all such directors, directors emeritus and advisory directors as a group may not receive options and stock appreciation rights with respect to more than 634,800 shares;

 

·

no award other than a cash award may vest beginning earlier than one year from the effective date of the Omnibus Incentive Plan (the effective date will be January 17, 2013 if the Omnibus Incentive Plan is approved by stockholders at the annual meeting), and all awards other than cash awards must vest in annual installments of not more than 20% of the total award; and

 

·

executive officers and directors must exercise or forfeit their stock options if the Bank becomes critically undercapitalized, is subject to appropriate Federal banking agency enforcement action or receives a capital directive.

 

As noted above, a participant may be a director, emeritus director, officer, employee or advisory director of the Company or any of its subsidiaries.  The total number of such individuals is currently approximately 374.

 

Administration of the Omnibus Incentive Plan

 

The Omnibus Incentive Plan will be administered by a committee (referred to below as the “Plan Committee”) of two or more members of the Company’s Board of Directors, each of whom qualifies as (i) an “outside director,” within the meaning of Section 162(m) of the Internal Revenue Code, (ii) a “Non-Employee Director,” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, and (iii) an “independent director” under the NASDAQ Marketplace Rules.  Plan Committee members will serve at the discretion of the Company’s Board of Directors and may be removed by the Board at any time. The Compensation Committee of the Company’s Board of Directors has been designated by the Board to serve as the Plan Committee if the Omnibus Incentive Plan is approved by stockholders at the annual meeting.     

 

The Plan Committee will have the authority to:

 

·

select participants and grant awards, determine the number of shares subject to awards other than cash awards to be granted, the amount of cash to be subject to cash awards and establish the terms and conditions of awards;

 

·

interpret the Omnibus Incentive Plan and determine all questions that may arise under the Omnibus Incentive Plan as to eligibility for participation;

 

·

with the consent of the participant, to the extent deemed necessary by the Plan Committee, modify the terms of any outstanding award or accelerate or defer the vesting date of the award;

 

 

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·

adopt rules and regulations and prescribe forms for the operation and administration of the Omnibus Incentive Plan; and

 

·

take any other action not inconsistent with the provisions of the Omnibus Incentive Plan that the Plan Committee may deem necessary or appropriate.

 

General Terms of Awards

 

Stock Options.   Stock options may be granted to participants at any time and from time to time by the Plan Committee.  Each option grant will be evidenced by an award agreement that specifies the exercise price, the exercise period, the number of shares to which the option pertains, the vesting schedule, and such other provisions as the Plan Committee determines. In addition, the award agreement will specify whether the option is intended to be an incentive stock option (which may only be granted to employees) or a non-qualified stock option.  The exercise price must not be less than the fair market value of a share of the Company’s common stock on the date of grant, provided that the exercise price of an incentive stock option granted to a holder of more than 10% of the outstanding shares of the Company’s common stock must not be less than 110% of the fair market value of a share of the Company’s common stock on the date of grant.  The fair market value is the closing sale price of the Company’s common stock on the NASDAQ Stock Market on the applicable date, or if the applicable date is not a trading day, on the trading day immediately preceding the applicable date.  The exercise period of a non-qualified stock option may not exceed 15 years from the grant date and the exercise period of an incentive stock option may not exceed ten years from the grant date, provided that the exercise period of an incentive stock option granted to a holder of more than 10% of the outstanding shares of the Company’s common stock may not exceed five years from the grant date.

 

A participant will be permitted to pay the exercise price of his or her option in cash, or, if and to the extent permitted by the Plan Committee, by delivering shares of the Company’s   common stock that he or she already owns having an aggregate fair market value equal to the aggregate exercise price, by the Company withholding shares otherwise issuable upon the exercise having an aggregate fair market value on the date the option is exercised equal to the aggregate exercise price to be paid or by a combination of the foregoing methods. The participant also will be permitted to pay the exercise price through a cashless exercise facilitated through a broker.  The minimum number of shares which may be acquired upon exercise at any time is 100 or, if less, the total number of shares as to which the option has not yet been exercised.

 

The termination of a participant’s service with the Company will affect his or her ability to exercise options granted under the Omnibus Incentive Plan.  “Service” is defined in the Omnibus Incentive Plan to mean, unless the Plan Committee provides otherwise in the award agreement, service in any capacity as a director, emeritus director, officer, employee or advisory director of the Company or any subsidiary.  Upon termination of service of a participant other than for cause or due to death, disability or a change in control, unless otherwise determined by the Plan Committee and specified in the award agreement, all outstanding unvested options granted to the participant will be forfeited and all outstanding vested options granted to the participant will remain exercisable for three months (one year, if the participant’s termination is due to retirement, defined as termination of employment after attainment of age 59 ½ other than for cause) following the termination date, but in no event beyond the expiration date of the option.  Upon termination of service of a participant due to death or disability, unless otherwise determined by the Plan Committee and specified in the award agreement, all outstanding unvested options granted to the participant will vest in full, and all outstanding options granted to the participant (regardless of whether previously vested or unvested) will remain exercisable for one year following the termination, but in no event beyond the expiration date of the option.  Upon termination of service of a participant for cause, all outstanding vested and unvested options granted to the participant will immediately be forfeited.

 

Stock Appreciation Rights.   Stock appreciation rights may be granted to participants at any time and from time to time as determined by the Plan Committee.  Each stock appreciation right will be evidenced by an award agreement that specifies the terms of the award, including the number of shares subject to the award, vesting conditions, exercise price (which must be equal to at least 100% of the fair market value of a share of the Company’s common stock on the date of grant) and the exercise period (which may not exceed 15 years). A stock appreciation right may be granted in tandem with a stock option or be granted independently of any option. In the case of a stock appreciation right that is granted in tandem with a stock option, the exercise of one award will

 

 

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reduce, on a one-to-one basis, the number of shares covered by the other award.  The plan provisions on the vesting and exercising of stock appreciation rights after termination of service are essentially the same as those applicable to stock options.

 

The exercise of a stock appreciation right will entitle its holder to receive an amount of cash or shares of the Company’s   common stock having a value equal to (1) the difference between the fair market value of a share of the Company’s common stock on the date of exercise over the exercise price, multiplied by (2) the number of shares with respect to which the stock appreciation right is exercised.   The minimum number of shares as to which a stock appreciation right may be exercised is 100 or, if less, the total number of shares as to which the stock appreciation right has not yet been exercised.

 

Restricted Stock Awards. Restricted stock awards may be granted to participants at any time and from time to time as determined by the Plan Committee.  Restricted stock awards may be in the form of shares of the Company’s common stock that are subject to forfeiture and limits on transfer until the shares vest or in the form of restricted stock units, which are rights to receive shares of the Company’s common stock at a specified future date that are subject to forfeiture and limits on transfer until the units vest.  Each restricted stock award will be evidenced by an award agreement that specifies the terms of the award, including the number of shares or units covered by the award, the amount (if any) that the participant must pay to the Company in consideration for the issuance of such shares or units, the vesting conditions, including whether the award is subject to vesting based in part upon the achievement of performance goals (which may, but need not, include performance goals intended to qualify the award as "performance-based compensation" under Section 162(m) of the Internal Revenue Code (see "-Qualified Performance-Based Compensation")), and, in the case of restricted stock units, the circumstances pursuant to which the units will be converted to shares of stock.

 

During the vesting period, unless specified otherwise in the applicable award agreement, a holder of shares of restricted stock will have all the rights of a stockholder, including the right to vote and the right to receive dividends paid with respect to those shares.  A holder of restricted stock units will not have voting rights with respect to the underlying shares until those shares are issued but, unless otherwise provided in the applicable award agreement, will have the right to receive dividend equivalents in the case of any dividends paid on the Company’s common stock.  Shares of restricted stock and restricted stock units generally may not be sold, assigned, transferred, pledged or otherwise encumbered by the participant during the restricted period.

 

Unless otherwise determined by the Plan Committee and specified in the award agreement: (i) if a participant terminates service with the Company for any reason other than death, disability or a change in control, any unvested shares of restricted stock or any unvested restricted stock units held by the participant will be forfeited; and (ii) if a participant terminates service with the Company due to death or disability, any unvested shares of restricted stock or any unvested restricted stock units held by the participant will vest in full.

 

Prohibition on Repricing of Stock Options and Stock Appreciation Rights

 

Other than as described under “—Changes in Capitalization,” neither the Company’s Board of Directors nor the Plan Committee may amend or modify the exercise price of a stock option or stock appreciation right, or cancel the stock option or stock appreciation right at a time when the exercise price is greater than the fair market value of the Company’s common stock in exchange for another award.             

 

Transferability of Awards

 

A stock option, stock appreciation right or restricted stock award may be transferred upon the death of the participant to whom it is awarded, by will or the laws of inheritance.  A stock option, stock appreciation right or restricted stock award may be transferred during the lifetime of the participant to whom it is awarded only pursuant to a domestic relations order, provided that the participant may apply to the Plan Committee for approval to transfer to a family member all or any portion of an unexercised non-qualified stock option or a stock appreciation right or all or any portion of an unvested restricted stock award.

 

Cash Awards    

 

The Plan Committee also may grant cash awards to any participant. The Plan Committee will determine the terms and conditions of cash awards, including, without limitation, any performance criteria which must be satisfied

 

 

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(which may, but need not, include performance goals intended to qualify the award as “performance-based compensation” under Section 162(m) of the Internal Revenue Code, as discussed under “Qualified Performance-Based Compensation”).

 

Qualified Performance-Based Compensation

 

Section 162(m) of the Internal Revenue Code generally disallows federal income tax deductions for compensation in excess of $1 million per year paid to each of the Company’s Chief Executive Officer and its three most highly compensated executive officers other than the Chief Executive Officer and the Chief Financial Officer.  Compensation that qualifies as “performance-based compensation” under Section 162(m) generally is not subject to the $1 million deduction limit. Stock options and stock appreciation rights generally automatically qualify as “performance based compensation,” provided that certain grant procedures are followed and that, like the Omnibus Incentive Plan, the plan places limits on the number of stock options and stock appreciation rights that can be granted to an individual during a specified time period (see annual limits on awards to individuals under “—General”).  In addition to the limitations on awards to individuals and satisfying grant procedure requirements, one of the conditions necessary to qualify awards other than stock options and stock appreciation rights as “performance-based compensation” (to the extent the particular award is intended to so qualify) is that the award be subject to one or more pre-established performance goals and that the material criteria relating to such performance goals be disclosed to, and approved by, stockholders before the incentive compensation is paid.

 

For any awards under the Omnibus Incentive Plan, other than stock options and stock appreciation rights, that are intended to meet the definition of “performance-based compensation” the Plan Committee will subject the vesting and payability of the award to the achievement of one or more pre-established performance goals (referred to as “qualifying performance goals”) based upon one or more of the following performance criteria (referred to as “qualifying performance measures”): earnings and earnings per share (before or after taxes and whether or not excluding specific items, including but not limited to stock or other compensation expense); net income and net income per share (before or after taxes and whether or not excluding specific items, including but not limited to stock or other compensation expense); pre-tax, pre-provision earnings and pre-tax, pre-provision earnings per share; core pre-tax, pre-provision earnings and core pre-tax, pre-provision earnings per share; pre-tax, pre-provision earnings or core pre-tax, pre-provision earnings to risk-weighted assets; revenues; profits (net profit, gross profit, operating profit, economic profit, profit margins or other corporate profit measures, in total or with respect to specific categories or business units); operating or cash earnings and operating or cash earnings per share; cash (cash flow, cash generation or other cash measures); return measures (including, but not limited to, total stockholder return, return on average assets, return on average stockholders’ equity, return on investment and cash return on tangible equity); net interest income; net interest income on a tax equivalent basis; net interest margin; net interest margin on a tax equivalent basis; net non-interest expense to average assets; interest-sensitivity gap levels; expense targets, efficiency ratio or other expense measures; assets under management; levels of assets, loans (in total or with respect to specific categories of loans) and/or deposits (in total or with respect to specific categories of deposit accounts, and with respect to number of account relationships or account balance amounts); market share; growth in target market relationships; investments; value of assets; asset quality levels; charge-offs; loan-loss reserves; non-performing assets; business expansion or consolidation (acquisitions and divestitures); strategic plan development and implementation; internal rate of return; share price; regulatory compliance; satisfactory internal or external audits; book value and book value per share; tangible stockholders’ equity and tangible book value per share; tangible common equity and tangible common equity per share; tangible common equity to tangible assets; tangible common equity to risk-weighted assets; improvement of financial ratings; and achievement of balance sheet or income statement objectives, or other financial accounting or quantitative objectives established by the Plan Committee.

 

Any qualifying performance measure(s) may be used to measure the performance of the Company as a whole or any subsidiary or business unit of the Company or any combination of both. Performance may be measured in absolute terms and/or relative to the performance of a group of other companies or a published or special index that the Plan Committee, in its sole discretion, deems appropriate. In the agreement evidencing the award, the Plan Committee may provide for accelerated vesting of any award based on the achievement of qualifying performance goal(s), subject, in the case of restricted stock awards, to the minimum time-based vesting conditions required by the regulations of the Office of the Comptroller of the Currency.

 

 

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The Plan Committee may provide in the agreement evidencing an award that any evaluation of attainment of a qualifying performance goal may include or exclude the effects of any of the following events that occurs during the relevant period: (i) extraordinary, unusual and/or non-recurring items of gain or loss; (ii) asset write-downs; (iii) litigation or claim judgments or settlements; (iv) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results; (v) any reorganization and restructuring programs; and (vi) acquisitions or divestitures.

 

In the event that applicable tax and/or securities laws change to permit Plan Committee discretion to alter the governing qualifying performance measures without obtaining stockholder approval, the Plan Committee has sole discretion under the Omnibus Incentive Plan to make such changes without obtaining stockholder approval. The Plan Committee may, in its discretion, also grant performance-based awards under the Omnibus Incentive Plan that are not intended to satisfy, and do not satisfy, the requirements of “performance-based compensation” under Section 162(m) of the Internal Revenue Code.

 

Changes in Capitalization

 

In the event of any recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, exchange of shares or other securities, stock dividend or other special and nonrecurring dividend or distribution (whether in the form of cash, securities or other property), liquidation, dissolution, or other similar corporate transaction or event, that affects the shares of the Company’s common stock such that an adjustment is appropriate in order to prevent dilution or enlargement of rights, then the Plan Committee must, in such manner as it may deem equitable, adjust the number of shares as to which future awards may be made under the Omnibus Incentive Plan and the number of shares subject to and exercise prices of outstanding awards.

 

Change in Control

 

Unless provided otherwise in the terms of the applicable award agreement, upon the occurrence of a change in control of the Company, all outstanding unvested stock options, stock appreciation rights and restricted stock awards granted under the Omnibus Incentive Plan will vest in full.  The term “change in control” is defined in the Omnibus Incentive Plan as the occurrence of any of the following events: (i) any third person or group becomes the beneficial owner of shares of the Company with respect to which 25% or more of the total number of votes for the election of the Board of Directors may be cast (other than a tax-qualified plan of the Company or any affiliate); (ii) as a result of, or in connection with, any cash tender offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, the individuals who were members of the Company’s Board of Directors on the date of adoption of the Omnibus Incentive Plan (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date of adoption of the Omnibus Incentive Plan whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the nominating committee serving under an Incumbent Board, will be considered a member of the Incumbent Board ; or (iii) a tender offer or exchange offer for 25% or more of the total outstanding shares of the Company’s common stock is completed (other than such an offer by the Company).  Notwithstanding the foregoing, with respect to any award that is subject to Section 409A of the Internal Revenue Code and for which payment with respect to the award is determined solely by reference to whether a change in control has occurred, the term “change in control” means (for purposes of determining whether a payment is due) the first to occur of a “change in the ownership of the Company,” a “change in the effective control of the Company” or a “change in the ownership of a substantial portion of the Company’s assets,” as those phrases are determined under Section 409A of the Internal Revenue Code.

 

Duration and Modification of the Omnibus Incentive Plan

 

The Omnibus Incentive Plan will remain in effect for a term of 15 years, after which no further awards may be made. The Company’s Board of Directors may at any time suspend or terminate or amend or revise the Omnibus Incentive Plan in whole or in part, except, in the case of an amendment or revision, to the extent stockholder approval is required under the Internal Revenue Code or the rules of any stock exchange or automated quotation system on which the Company’s common stock may then be listed or traded or on which the Company seeks to list or trade its common stock.  To the extent the regulations of the Office of the Comptroller of the Currency are

 

 

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changed subsequent to the effective date of the Omnibus Incentive Plan, the Company’s Board of Directors will have the right, but not the obligation, to amend or revise the Omnibus Incentive Plan without stockholder approval to conform to the revised regulations.

 

Federal Income Tax Consequences

 

The following discussion is intended for the information of stockholders considering how to vote on approval of the Omnibus Incentive Plan, and not as tax guidance to plan participants. Under current federal income tax laws, awards of stock options, stock appreciation rights, restricted stock and restricted stock units will generally have the following federal income tax consequences:

 

(1)

The grant of a stock option will not, by itself, result in the recognition of taxable income to the participant or entitle the Company to a deduction at the time of grant.

 

(2)

If the participant exercises an incentive stock option, the exercise of the option will generally not, by itself, result in the recognition of taxable income by the participant or entitle the Company to a deduction at the time of exercise. However, the difference between the exercise price and the fair market value of the shares of common stock acquired on the date of exercise is an item of adjustment included for purposes of calculating the participant’s alternative minimum tax.   If the participant does not hold the shares of common stock acquired upon exercise of an incentive stock option for at least one year after the exercise of the stock option or two years after the grant of the stock option, whichever is later, the participant will recognize ordinary (compensation) income upon disposition of the shares in an amount equal to the difference between the exercise price and the fair market value of the shares on the date of exercise of the stock option. If this happens, the Company will be entitled to a corresponding deduction in the amount of ordinary income, if any, that the participant recognizes. The participant also will recognize a capital gain (loss) to the extent the sale price exceeds (is less than) the fair market value of the shares of common stock on the date of exercise of the stock option. The Company will not be entitled to a corresponding deduction for any such capital gain. The capital gain (loss) will be characterized as short-term if the participant does not hold the shares for more than one year after the exercise of the stock option and long-term if the participant does hold the shares for more than one year after the exercise of the stock option.   If the participant holds the shares of common stock acquired upon exercise of an incentive stock option for one year after the stock option is exercised and two years after the option is granted, the participant will recognize a capital gain (loss) upon disposition of the shares to the extent the sale price exceeds (is less than) the exercise price. This capital gain (loss) will be characterized as short-term if the participant does not hold the shares for more than one year after the exercise of the stock option and long-term if the participant does hold the shares for more than one year after the exercise of the stock option. The Company will not be entitled to a corresponding deduction for any such capital gain.

 

(3)

If the participant exercises a non-qualified stock option, the participant will recognize ordinary (compensation) income on the date of exercise in an amount equal to the difference between the fair market value on the date of exercise of the shares of common stock acquired pursuant to the exercise and the exercise price of the non-qualified stock option. The Company will be allowed a deduction in the amount of any ordinary income recognized by the participant upon exercise of the non-qualified stock option. When the participant sells the shares acquired upon exercise of a non-qualified stock option, the participant will recognize a capital gain (loss) to the extent of any appreciation (depreciation) in value of the shares from the date of exercise to the date of sale. The Company will not be entitled to a corresponding deduction for any such capital gain. The capital gain (loss) will be short-term if the participant does not hold the shares for more than one year after the exercise of the stock option and long-term if the participant does hold the shares for more than one year after the exercise of the stock option.

 

 

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(4)

The grant of a stock appreciation right will not, by itself, result in the recognition of taxable income to the participant or entitle the Company to a deduction at the time of grant. If the participant exercises a stock appreciation right, the participant will recognize ordinary (compensation) income on the date of exercise in an amount equal to the difference between the fair market value on the date of exercise of the shares of common stock underlying the stock appreciation right being exercised and the exercise price of the stock appreciation right.  The Company will be entitled to a corresponding tax deduction. To the extent the stock appreciation right is settled in shares of common stock, when the participant sells the shares, the participant will recognize a capital gain (loss) to the extent of any appreciation (depreciation) in value of the shares from the date of exercise. The Company will not be entitled to a corresponding deduction for any such capital gain. The capital gain (loss) will be short-term if the participant does not hold the shares for more than one year after the exercise of the stock appreciation right and long-term if the participant does hold the shares for more than one year after the exercise of the stock appreciation right.

 

(5)

The grant of shares of restricted stock will not, by itself, result in the recognition of taxable income to the participant or entitle the Company to a deduction at the time of grant. Holders of shares of restricted stock will recognize ordinary (compensation) income on the date that the shares of restricted stock are no longer subject to a substantial risk of forfeiture, in an amount equal to the fair market value of the shares on that date. A holder of restricted stock may generally elect under Section 83(b) of the Internal Revenue Code to recognize ordinary income in the amount of the fair market value of the shares of restricted stock on the date of grant.  The Company will be entitled to a tax deduction equal to the amount of ordinary income recognized by the holder. When the participant disposes of shares granted as restricted stock, the difference between the amount received by the participant upon the disposition and the fair market value of the shares on the date the participant recognized ordinary income will be treated as a capital gain or loss. The capital gain or loss will be short-term if the participant does not hold the shares for more than one year after recognition of ordinary income and long-term if the participant does hold the shares for more than one year after the recognition of ordinary income. The holding period begins when the shares of restricted stock vest, unless a Section 83(b) election is made, in which case the holding period begins upon the restricted stock grant date.  The Company will not be entitled to a corresponding deduction for any such capital gain. Holders of shares of restricted stock also will recognize ordinary income equal to any dividend when such payments are received, even if the restricted stock remains subject to a substantial risk of forfeiture.

 

(6)

The grant of restricted stock units will not, by itself, result in the recognition of taxable income to the participant or entitle the Company to a deduction at the time of grant. Upon issuance of the underlying shares, the participant will generally recognize ordinary (compensation) income in the amount of the fair market value of the shares issued to the participant. The Company will be entitled to a tax deduction equal to the amount of ordinary income recognized by the participant. When the participant disposes of any shares of common stock issued upon settlement of the restricted stock units, the difference between the amount received by the participant upon the disposition and the fair market value of the shares on the date the participant recognized ordinary income with respect to the shares will be treated as a capital gain or loss. The capital gain or loss will be short-term if the participant does not hold the shares for more than one year after recognition of ordinary income and long-term if the participant does hold the shares for more than one year after the recognition of ordinary income. The Company will not be entitled to a corresponding deduction for any such capital gain.

 

Proposed Awards under the Omnibus Incentive Plan

 

No awards have been proposed under the Omnibus Incentive Plan as of the date of this proxy statement.

 

 

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Board Recommendation

 

The Company’s Board of Directors unanimously recommends that stockholders vote FOR approval of the Omnibus Incentive Plan.

 

PROPOSAL III

 

APPROVAL OF THE TAX BENEFITS PRESERVATION PLAN

 

On September 25, 2012, the Company’s Board of Directors adopted the HomeTrust Bancshares, Inc. Tax Benefits Preservation Plan, dated as of September 25, 2012, between the Company and Registrar and Transfer Company, as rights agent, in order to preserve valuable tax benefits of the Company that otherwise might become unavailable due to events beyond the Company’s control.  The Tax Benefits Preservation Plan is currently in effect but will expire if it is not approved by the Company’s stockholders prior to September 25, 2013.

 

Background and Reasons for the Proposal

 

The purpose of the Tax Benefits Preservation Plan is to protect our substantial tax assets.  As of September 30, 2012 we had approximately $43.7 million of federal operating losses (“NOLs”).  Our ability to use our NOLs and other pre-ownership change losses (collectively, “Pre-Change Losses”) to offset future taxable income will be limited if we experience an “ownership change” as defined in Section 382 of the Internal Revenue Code.  In general, an ownership change occurs if, among other things, the stockholders (or specified groups of stockholders) who own or have owned, directly or indirectly, 5% or more of a corporation’s common stock or are otherwise treated as 5% stockholders under Section 382 and U.S. Treasury regulations promulgated thereunder increase their aggregate percentage ownership of that corporation’s stock by more than 50 percentage points over the lowest percentage of the stock owned by these stockholders over a rolling three-year period.  If we experience an ownership change our Pre-Change Losses will be subject to an annual limitation on their use, which is generally equal to the fair market value of our outstanding stock immediately before the ownership change multiplied by the long-term tax-exempt rate, which was 2.87% for ownership changes occurring in November 2012.  Depending on the size of the annual limitation (which is in part a function of our market capitalization at the time of the ownership change) and the remaining carryforward period for our Pre-Change Losses (U.S. federal net operating losses generally may be carried forward for a period of 20 years), we could realize a permanent loss of some or all of our Pre-Change Losses, which could have a material adverse effect on our results of operations and financial condition.

 

Our Board of Directors adopted the Tax Benefits Preservation Plan to reduce the likelihood that we will experience an ownership change.  In general terms, the Tax Benefits Preservation Plan discourages (1) any person or group from becoming a beneficial owner of 4.99% or more of the Company’s then-outstanding shares of common stock and (2) any existing 4.99% or greater stockholder from acquiring additional shares of Company common stock.  While adoption of the Tax Benefits Preservation Plan should reduce the likelihood that future transactions in our stock will result in an ownership change under Section 382, there can be no assurance that the Tax Benefits Preservation Plan will be effective to deter a stockholder from increasing its ownership interests beyond the limits set by the Tax Benefits Preservation Plan or that an ownership change will not occur in the future.

 

Description of the Tax Benefits Preservation Plan

 

The following description of the Tax Benefits Preservation Plan is qualified in its entirety by reference to the full text of the Tax Benefits Preservation Plan, a copy of which is attached to this proxy statement as Appendix B.  You should read the Tax Benefits Preservation Plan in its entirety.

 

Rights.   On September 25, 2012, in connection with the adoption of the Tax Benefits Preservation Plan, the Company’s Board of Directors declared a dividend of one preferred share purchase right (a “Right”) in respect of each share of the Company’s common stock outstanding at the close of business on October 9, 2012 (the “Rights Record Date”) and to become outstanding between the Rights Record Date and the earlier of the Distribution Date and the Expiration Date (as such terms are defined below).   Each Right represents the right to purchase, upon the

 

 

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terms and subject to the conditions set forth in the Tax Benefits Preservation Plan, 1/1,000th of a share of the Company’s Junior Participating Preferred Stock, Series A (“Series A Preferred Stock”), for $16.14 (the “Purchase Price”), subject to adjustment as provided in the Tax Benefits Preservation Plan.   The Series A Preferred Stock is designed so that each 1/1,000th of a share of Series A Preferred Stock has economic and voting terms similar to those of one share of the Company’s common stock.

 

Distribution Date.   Initially, the Rights will be attached to all shares of Company common stock then outstanding, and no separate Right certificates will be distributed.  On or after the Distribution Date, the Rights will separate from the shares of common stock and become exercisable.

 

The “Distribution Date” will occur on the earlier of (i) the close of business on the tenth business day after a Shares Acquisition Date (as defined below) and (ii) the close of business on the tenth business day (or such later day as may be designated prior to a Shares Acquisition Date by the Company’s Board of Directors) after the date of the commencement of a tender or exchange offer by any person if, upon consummation of the offer, such person would or could be an Acquiring Person (as defined below).

 

A “Shares Acquisition Date” is the date of the first public announcement by the Company or an Acquiring Person indicating that an Acquiring Person has become such.

 

An “Acquiring Person” means any person who or which, together with its affiliates, beneficially owns 4.99% or more of the Company’s common stock (or any other securities of the Company then outstanding that would be treated as “stock” under Section 382 of the Internal Revenue Code), other than (i) the U.S. Government; (ii) the Company or any subsidiary or employee benefit plan or compensation arrangement of the Company; (iii) any person or entity who or which, together with its affiliates, was on the Rights Record Date, the beneficial owner of 4.99% or more of the Company’s common stock, unless that person or entity subsequently increases their beneficial ownership percentage (other than as a result of any stock dividend, stock split or similar transaction or stock repurchase by the Company); (iv) any person or entity who or which the Company’s Board of Directors determines, in its sole discretion, has inadvertently become a 4.99% or greater stockholder so long as such person or entity promptly divests sufficient shares to no longer be a 4.99% or greater stockholder; (v) any person or entity who or which has become the beneficial owner of 4.99% or more of the Company’s common stock as a result of an acquisition of shares of common stock by the Company which, by reducing the number of shares outstanding, increased the proportionate number of shares beneficially owned by that person or entity, provided that the person or entity does not acquire any additional shares other than as a result of any stock dividend, stock split or similar transaction; and (vi) any person or entity who or which has become a 4.99% or greater stockholder if the Company’s Board of Directors in good faith determines that the attainment of such status has not jeopardized or endangered the Company’s utilization of the Tax Benefits.

 

Flip-In .  From and after a Shares Acquisition Date, (i) Rights owned by the Acquiring Person and its affiliates and certain of their transferees will automatically be void; and (ii) each other Right will automatically become a Right to buy, for the Purchase Price, in lieu of Series A Preferred Stock, that number of shares of the Company’s common stock equal to (a) the Purchase Price multiplied by the number of 1/1000ths of a share of Series A Preferred Stock for which the Right is then exercisable divided by (b) 50% of the then-current per share market price of the Company’s common stock.

 

Exchange.   At any time after a Shares Acquisition Date, the Company’s Board of Directors may, at its option, exchange all or part of the then outstanding and exercisable Rights for shares of common stock at an exchange ratio of one share of common stock per Right, subject to adjustments and limitations described in the Tax Benefits Preservation Plan.  The Board may enter into a trust agreement pursuant to which the Company would deposit into a trust shares of common stock that would be distributable to stockholders (excluding the Acquiring Person and its affiliates) in the event the exchange is implemented.  This feature is intended to facilitate a more orderly distribution of shares of common stock in the event that a Shares Acquisition Date occurs.

 

Redemption.   At any time prior to the Distribution Date, the Company’s Board of Directors may, at its option, redeem all, but not fewer than all, of the then outstanding Rights at a redemption price of $0.0001 per Right.

 

 

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Amendments. The Company may from time to time before the Distribution Date supplement or amend the Tax Benefits Preservation Plan without the approval of any holders of Rights.

 

After the Distribution Date, the Tax Benefits Preservation Plan may not be amended in any manner that would adversely affect the interests of the holders of Rights.

 

Expiration. The Rights will expire on the earliest of (i) September 25, 2015, (ii) the time at which all Rights have been redeemed by the Company, (iii) the time at which all Rights have been exchanged by the Company, (iv) such time as the Company’s Board of Directors determines, in its sole discretion, that the Rights and the Plan are no longer necessary for the preservation of existence of the Tax Benefits, (v) a date prior to a Shares Acquisition Date on which the Board determines, in its sole discretion, that the Rights and the Plan are no longer in the best interests of the Company and its stockholders and (vi) the close of business on September 25, 2013, unless the Plan is approved by the Company’s stockholders at a meeting of stockholders held prior to such date .

 

Additional Considerations

 

Continued Risk of Ownership Change.   The Tax Benefits Preservation Plan is intended to reduce the likelihood of an ownership change by discouraging persons from acquiring 4.99% or more of the outstanding shares of the Company’s common stock.  It does not place an absolute bar on the attainment of such an ownership interest, however, and we cannot assure you that it will prevent the occurrence of an ownership change.

 

Potential Effects on Liquidity. The Tax Benefits Preservation Plan restricts a stockholder’s ability to acquire, directly or indirectly, additional shares of the Company’s common stock in excess of the specified limitations. Furthermore, a stockholder’s ability to dispose of shares of common stock may be limited by reducing the class of potential acquirers for such shares.

 

Possible IRS Challenge of Amount of Tax Benefits.   The Internal Revenue Service (the “IRS”) has not audited or otherwise validated the amount of our tax benefits. The IRS could challenge the amount of our tax benefits, which could limit our ability to use our tax benefits to reduce our future income tax liability. In addition, the complexity of Section 382’s provisions and the limited knowledge any public company has about the ownership of its publicly traded stock make it difficult to determine whether an ownership change has occurred. Therefore, we cannot assure you that the IRS will not claim that we experienced an ownership change and attempt to reduce or eliminate our tax benefits even if the Tax Benefits Preservation Plan remains in place.

 

Anti-Takeover Impact. Unlike traditional stockholder rights plans (commonly referred to as “poison pills”), which are designed and put in place to deter unsolicited takeovers bids, the Tax Benefits Preservation Plan is designed solely to protect our tax benefits by discouraging actions that could increase the likelihood of a loss of those benefits.   The Tax Benefits Preservation Plan could have an anti-takeover effect, however, because it will restrict the ability of a person, entity or group to accumulate 4.99% or more of our common stock, and the ability of persons, entities or groups owning 4.99% or more of our common stock prior to the adoption of the Tax Benefits Preservation Plan, from acquiring additional shares of our common stock without the approval of our Board of Directors.  The Tax Benefits Preservation Plan also could have an anti-takeover effect because an Acquiring Person’s ownership may be diluted substantially upon the occurrence of a triggering event. Accordingly, the overall effects of the Tax Benefits Preservation Plan may be to render more difficult, or discourage, a merger, tender offer, proxy contest or assumption of control by a substantial holder of our stock. We are not presently aware of any potential takeover transaction.

 

The Company’s Board of Directors believes any potential negative aspects of the Tax Benefits Preservation Plan are substantially outweighed by the benefits of the Tax Benefits Preservation Plan.  While the existence of the Tax Benefits Preservation Plan does not guarantee that we will not experience an ownership change under Section 382 of the Internal Revenue Code, the Board believes that the Tax Benefits Preservation Plan will reduce the likelihood of an ownership change.

 

 

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Board Recommendation

 

The Company’s Board of Directors unanimously recommends that stockholders vote FOR approval of the Tax Benefits Preservation Plan.

 

PROPOSAL IV

 

RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS

 

The ACER Committee of the Company’s Board of Directors has renewed the Company’s arrangement for Dixon Hughes Goodman LLP to be the Company’s independent auditors for the fiscal year ending June 30, 2013, subject to the ratification of that appointment by the Company’s stockholders at the annual meeting.  A representative of Dixon Hughes Goodman LLP is expected to attend the annual meeting to respond to appropriate questions and will have an opportunity to make a statement if he or she so desires.

 

During the fiscal years ended June 30, 2012 and 2011, Dixon Hughes Goodman LLP provided various audit, audit related and non-audit services to the Company. Set forth below are the aggregate fees billed for these services:

 

	(a)	Audit Fees: Aggregate fees billed for professional services rendered during both fiscal years for the audit of HomeTrust Bank’s annual financial statements and statutory internal control attestation and, in fiscal 2012 only, reviews of interim financial statements included in HomeTrust Bancshares’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 and in the Form S-1 Registration Statement for HomeTrust Bancshares’ initial public offering: $162,111 – fiscal 2012; $129,329 – fiscal 2011.
	(b)	Audit Related Fees: Aggregate fees billed for professional services rendered during both fiscal years for the audit of HomeTrust Bank’s 401(k) plan and, in fiscal 2012 only, review and assistance in connection with the filing of HomeTrust Bancshares’ Form S-1 Registration Statement for its initial public offering, consents for such registration statement, comfort letter in connection with the initial public offering, and opinion issued in connection with regulatory application for HomeTrust Bank’s mutual-to-stock conversion:  $194,656 – fiscal 2012; $14,250 – fiscal 2011.
	(c)	Tax Fees: Aggregate fees billed for professional services rendered during both fiscal years related to tax compliance and tax return preparation and, in fiscal 2012 only, issuance of opinion on state tax consequences of HomeTrust Bank’s mutual-to-stock conversion: $24,475 – fiscal 2012; $21,775 – fiscal 2011.
	(d)	All other fees: None.

The ACER Committee pre-approves all audit and permissible non-audit services to be provided by Dixon Hughes Goodman LLP and the estimated fees for these services.  None of the services provided by Dixon Hughes Goodman LLP described in items (a)-(c) above was approved by the ACER Committee pursuant to a waiver of the pre-approval requirements of the SEC's rules and regulations.

 

The Company’s Board of Directors unanimously recommends that stockholders vote FOR the ratification of the appointment of Dixon Hughes Goodman LLP as the Company’s independent auditors for the fiscal year ending June 30, 2013.

STOCKHOLDER PROPOSALS

 

In order to be eligible for inclusion in the Company’s proxy materials for the Company’s next annual meeting of stockholders, any stockholder proposal to take action at the meeting must be received at the Company’s executive office at 10 Woodfin Street, Asheville, North Carolina no later than June 17, 2013.  All stockholder proposals submitted for inclusion in the Company’s proxy materials will be subject to the requirements of the proxy rules adopted under the Securities Exchange Act of 1934, as amended, and, as with any stockholder proposal (regardless of whether included in the Company’s proxy materials), the Company’s charter and bylaws.

 

In addition to the deadline and other requirements referred to above for submitting a stockholder proposal to be included in the Company’s proxy materials for its next annual meeting of stockholders, the Company’s bylaws

 

 

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require a separate notification to be made in order for a stockholder proposal to be eligible for presentation at the meeting, regardless of whether the proposal is included in the Company’s proxy materials for the meeting.  In order to be eligible for presentation at the Company’s next annual meeting of stockholders, written notice of a stockholder proposal containing the information specified in Article I, Section 6 of the Company’s bylaws must be received by the Secretary of the Company not earlier than the close of business on the later of the 90th day before the date of the next annual meeting or the tenth day following the first to occur of the day on which notice of the date of the next annual meeting is mailed or otherwise transmitted or the day on which public announcement of the date of the next annual meeting is first made by the Company.

OTHER MATTERS

 

The Board of Directors is not aware of any business to come before the annual meeting other than the matters described above in this proxy statement.  However, if any other matters should properly come before the meeting, it is intended that holders of the proxies will act in accordance with their best judgment.

 

ADDITIONAL INFORMATION

 

     The Company will pay the costs of soliciting proxies.  The Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of common stock.  In addition to solicitation by mail, directors, officers and employees of the Company may solicit proxies personally or by facsimile, telegraph or telephone, without additional compensation. The Company also has retained Regan & Associates, Inc. to assist in soliciting proxies and has agreed to pay Regan & Associates, Inc. a fee for those services not to exceed $12,000, including out-of-pocket expenses.

 

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