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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
 
 
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
 
Date of Report (Date of earliest event reported): March 5, 2021
 
 
Guaranty Federal Bancshares, Inc.
(Exact name of registrant as specified in its charter)
 
 
Delaware 0-23325 43-1792717
(State or other jurisdiction of incorporation) (Commission file number) (IRS Employer Identification No.)
                                                                       
2144 E Republic Road, Suite F200
Springfield, Missouri 65804
(Address of principal executive offices and zip code)
 
 
Registrant's telephone number, including area code: (833) 875-2492
 
 
Not applicable
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. to Form 8-K):
 
 
☐
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, Par Value $0.10 per share
GFED
NASDAQ Global Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined by Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Act of 1934.
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period of complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
 
 
 
 
INCLUDED INFORMATION
 
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
 
(e)
 
 
1.
Written Description of 2021 Executive Incentive Compensation Annual Plan for Certain Executive Officers.
 
On March 5, 2021, the Company entered into short-term incentive compensation arrangements with respect to bonuses payable in 2021 for Executive Officers Shaun A. Burke, President and Chief Executive Officer, Carter Peters, Chief Financial Officer, Robin Robeson, Chief Operating Officer, Sheri Biser, Chief Credit Officer, and Craig Dunn, Chief Commercial Banking Officer. The written description of each agreement is attached hereto as Exhibits 10.1 through 10.5 and is incorporated by reference in this Item 502(e).
 
Item 9.01 Financial Statements and Exhibits.
 
(d) Exhibits
 
Exhibit Number    Description
 
10.1
10.2
10.3
10.4
10.5
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
   
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Guaranty Federal Bancshares, Inc.
By: /s/ Shaun A. Burke
  Shaun A. Burke  
  President and Chief Executive Officer  
                                              
Date: March 5, 2021
 
 

Exhibit 10.1

 

Written Description of

2021 Executive Incentive Compensation Annual Plan -

President and Chief Executive Officer

 

The following is a description of the material terms of the 2021 Executive Incentive Compensation Annual Plan (the “Plan”) that was adopted by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Guaranty Federal Bancshares, Inc. (the “Company”) with respect to the bonus payable to Shaun A. Burke, the Company’s President and Chief Executive Officer (the "Executive"), for 2021:

 

The Plan will pay a maximum of $163,863 of which one hundred-percent (100%) of the bonus amount will be paid in cash. There are three possible levels of incentive awards: threshold (25%); target (50%); and maximum (100%). For any bonus amount to be paid, the threshold level of performance must be achieved. The bonus amount will be prorated for performance achievements between the threshold and target levels and between the target and maximum levels. The three performance measurements of the Company (and the weight given to each measurement) applicable to each award level are as follows: (i) Return on Average Assets (50%), (ii) Net Interest Margin (25%) and (iii) Efficiency Ratio (25%). The following minimum criteria must all be satisfied before an award is paid under the Plan: (i) Net income of the Company for calendar year 2021 of at least 75% of approved budget to receive full performance incentive and incentive will be reduced by 50% if Company achieves between 50% and 74.99% of budget net income; No incentive will be paid if net income is below 50% of budget; (ii) Non-Performing Assets to Average Total Assets ratio of 1.50% or less at 12/31/21. If the Bank fails this measure, the Board may reduce the earned incentive at the recommendation of the Committee; (iii) Satisfactory audits as determined by the Board after review of findings from regulatory examination reports and applicable audits and reviews; (iv) The Company and Guaranty Bank must maintain capital ratios to meet regulatory “well capitalized” status; and (v) Satisfactory performance appraisal, actively employed by Guaranty Bank, and in good standing at the time the bonus is paid, which will not be prior to the public release of earnings in 2022 for the calendar year 2021.

 

If the Company terminates the Executive’s employment other than for cause (as defined in Executive’s employment agreement) before the end of the performance year, then the Executive will be eligible for a prorated incentive payment (at target level) except for a change in control of the Company. If the Executive’s employment ends within twelve months following a change in control of the Company, then the Executive will be eligible for an incentive amount computed in accordance with the Executive’s employment agreement.

 

The Board may adjust the incentive based on achievement of the above measurements and other pertinent factors including, but not limited to, executive’s contribution to the bank’s goals and objective, attitude, teamwork, initiative, interpersonal relationships and adherence to policies. The Board will also consider the executive’s overall compensation relevant to peer group.

 

The Board retains the right to make the final determination of the incentive payment and amount, if any, and may consider other pertinent facts prior to making an award. All incentive payments shall be subject to the Company’s Compensation Clawback Policy.

 

 

Exhibit 10.2

 

Written Description of

2021 Executive Incentive Compensation Annual Plan –

Chief Financial Officer

 

The following is a description of the material terms of the 2021 Executive Incentive Compensation Annual Plan (the “Plan”) that was adopted by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Guaranty Federal Bancshares, Inc. (the “Company”) with respect to the bonus payable to Carter Peters, the Company’s Chief Financial Officer (the "Executive"), for 2021:

 

The Plan will pay a maximum of $109,242 of which one hundred-percent (100%) of the bonus amount will be paid in cash. There are three possible levels of incentive awards: threshold (25%); target (50%); and maximum (100%). For any bonus amount to be paid, the threshold level of performance must be achieved. The bonus amount will be prorated for performance achievements between the threshold and target levels and between the target and maximum levels. The three performance measurements of the Company (and the weight given to each measurement) applicable to each award level are as follows: (i) Return on Average Assets (50%), (ii) Net Interest Margin (25%) and (iii) Efficiency Ratio (25%). The following minimum criteria must all be satisfied before an award is paid under the Plan: (i) Net income of the Company for calendar year 2021 of at least 75% of approved budget to receive full performance incentive and incentive will be reduced by 50% if Company achieves between 50% and 74.99% of budget net income; No incentive will be paid if net income is below 50% of budget; (ii) Non-Performing Assets to Average Total Assets ratio of 1.50% or less at 12/31/21. If the Bank fails this measure, the Board may reduce the earned incentive at the recommendation of the Committee; (iii) Satisfactory audits as determined by the Board after review of findings from regulatory examination reports and applicable audits and reviews; (iv) The Company and Guaranty Bank must maintain capital ratios to meet regulatory “well capitalized” status; and (v) Satisfactory performance appraisal, actively employed by Guaranty Bank, and in good standing at the time the bonus is paid, which will not be prior to the public release of earnings in 2022 for the calendar year 2021.

 

If the Company terminates the Executive’s employment other than for cause (as defined in Executive’s employment agreement) before the end of the performance year, then the Executive will be eligible for a prorated incentive payment (at target level) except for a change in control of the Company. If the Executive’s employment ends within twelve months following a change in control of the Company, then the Executive will be eligible for an incentive amount computed in accordance with the Executive’s employment agreement.

 

The Board may adjust the incentive based on achievement of the above measurements and other pertinent factors including, but not limited to, executive’s contribution to the bank’s goals and objective, attitude, teamwork, initiative, interpersonal relationships and adherence to policies. The Board will also consider the executive’s overall compensation relevant to peer group.

 

The Board retains the right to make the final determination of the incentive payment and amount, if any, and may consider other pertinent facts prior to making an award. All incentive payments shall be subject to the Company’s Compensation Clawback Policy.

 

 

 

 

Exhibit 10.3

 

Written Description of

2021 Executive Incentive Compensation Annual Plan -

Chief Operating Officer

 

The following is a description of the material terms of the 2021 Executive Incentive Compensation Annual Plan (the “Plan”) that was adopted by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Guaranty Federal Bancshares, Inc. (the “Company”) with respect to the bonus payable to Robin Robeson, the Company’s Chief Operating Officer (the "Executive"), for 2021:

 

The Plan will pay a maximum of $119,126 of which one hundred-percent (100%) of the bonus amount will be paid in cash. There are three possible levels of incentive awards: threshold (25%); target (50%); and maximum (100%). For any bonus amount to be paid, the threshold level of performance must be achieved. The bonus amount will be prorated for performance achievements between the threshold and target levels and between the target and maximum levels. The three performance measurements of the Company (and the weight given to each measurement) applicable to each award level are as follows: (i) Return on Average Assets (50%), (ii) Net Interest Margin (25%) and (iii) Efficiency Ratio (25%). The following minimum criteria must all be satisfied before an award is paid under the Plan: (i) Net income of the Company for calendar year 2021 of at least 75% of approved budget to receive full performance incentive and incentive will be reduced by 50% if Company achieves between 50% and 74.99% of budget net income; No incentive will be paid if net income is below 50% of budget; (ii) Non-Performing Assets to Average Total Assets ratio of 1.50% or less at 12/31/21. If the Bank fails this measure, the Board may reduce the earned incentive at the recommendation of the Committee; (iii) Satisfactory audits as determined by the Board after review of findings from regulatory examination reports and applicable audits and reviews; (iv) The Company and Guaranty Bank must maintain capital ratios to meet regulatory “well capitalized” status; and (v) Satisfactory performance appraisal, actively employed by Guaranty Bank, and in good standing at the time the bonus is paid, which will not be prior to the public release of earnings in 2022 for the calendar year 2021.

 

If the Company terminates the Executive’s employment other than for cause (as defined in Executive’s employment agreement) before the end of the performance year, then the Executive will be eligible for a prorated incentive payment (at target level) except for a change in control of the Company. If the Executive’s employment ends within twelve months following a change in control of the Company, then the Executive will be eligible for an incentive amount computed in accordance with the Executive’s employment agreement.

 

The Board may adjust the incentive based on achievement of the above measurements and other pertinent factors including, but not limited to, executive’s contribution to the bank’s goals and objective, attitude, teamwork, initiative, interpersonal relationships and adherence to policies. The Board will also consider the executive’s overall compensation relevant to peer group.

 

The Board retains the right to make the final determination of the incentive payment and amount, if any, and may consider other pertinent facts prior to making an award. All incentive payments shall be subject to the Company’s Compensation Clawback Policy.

 

 

 

Exhibit 10.4

 

Written Description of

2021 Executive Incentive Compensation Annual Plan –

Chief Credit Officer

 

The following is a description of the material terms of the 2021 Executive Incentive Compensation Annual Plan (the “Plan”) that was adopted by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Guaranty Federal Bancshares, Inc. (the “Company”) with respect to the bonus payable to Sheri Biser, the Company’s Chief Credit Officer (the "Executive"), for 2021:

 

The Plan will pay a maximum of $99,395 of which one hundred-percent (100%) of the bonus amount will be paid in cash. There are three possible levels of incentive awards: threshold (25%); target (50%); and maximum (100%). For any bonus amount to be paid, the threshold level of performance must be achieved. The bonus amount will be prorated for performance achievements between the threshold and target levels and between the target and maximum levels. The three performance measurements of the Company (and the weight given to each measurement) applicable to each award level are as follows: (i) Return on Average Assets (50%), (ii) Net Interest Margin (25%) and (iii) Efficiency Ratio (25%). The following minimum criteria must all be satisfied before an award is paid under the Plan: (i) Net income of the Company for calendar year 2021 of at least 75% of approved budget to receive full performance incentive and incentive will be reduced by 50% if Company achieves between 50% and 74.99% of budget net income; No incentive will be paid if net income is below 50% of budget; (ii) Non-Performing Assets to Average Total Assets ratio of 1.50% or less at 12/31/21. If the Bank fails this measure, the Board may reduce the earned incentive at the recommendation of the Committee; (iii) Satisfactory audits as determined by the Board after review of findings from regulatory examination reports and applicable audits and reviews; (iv) The Company and Guaranty Bank must maintain capital ratios to meet regulatory “well capitalized” status; and (v) Satisfactory performance appraisal, actively employed by Guaranty Bank, and in good standing at the time the bonus is paid, which will not be prior to the public release of earnings in 2022 for the calendar year 2021.

 

If the Company terminates the Executive’s employment other than for cause (as defined in Executive’s employment agreement) before the end of the performance year, then the Executive will be eligible for a prorated incentive payment (at target level) except for a change in control of the Company. If the Executive’s employment ends within twelve months following a change in control of the Company, then the Executive will be eligible for an incentive amount computed in accordance with the Executive’s employment agreement.

 

The Board may adjust the incentive based on achievement of the above measurements and other pertinent factors including, but not limited to, executive’s contribution to the bank’s goals and objective, attitude, teamwork, initiative, interpersonal relationships and adherence to policies. The Board will also consider the executive’s overall compensation relevant to peer group.

 

The Board retains the right to make the final determination of the incentive payment and amount, if any, and may consider other pertinent facts prior to making an award. All incentive payments shall be subject to the Company’s Compensation Clawback Policy.

 

 

Exhibit 10.5

 

Written Description of

2021 Executive Incentive Compensation Annual Plan –

Chief Commercial Banking Officer

 

The following is a description of the material terms of the 2021 Executive Incentive Compensation Annual Plan (the “Plan”) that was adopted by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Guaranty Federal Bancshares, Inc. (the “Company”) with respect to the bonus payable to Craig Dunn, the Company’s Chief Commercial Banking Officer (the "Executive"), for 2021:

 

The Plan will pay a maximum of $112,500 of which one hundred-percent (100%) of the bonus amount will be paid in cash. There are three possible levels of incentive awards: threshold (25%); target (50%); and maximum (100%). For any bonus amount to be paid, the threshold level of performance must be achieved. The bonus amount will be prorated for performance achievements between the threshold and target levels and between the target and maximum levels. The three performance measurements of the Company (and the weight given to each measurement) applicable to each award level are as follows: (i) Return on Average Assets (50%), (ii) Net Interest Margin (25%) and (iii) Efficiency Ratio (25%). The following minimum criteria must all be satisfied before an award is paid under the Plan: (i) Net income of the Company for calendar year 2021 of at least 75% of approved budget to receive full performance incentive and incentive will be reduced by 50% if Company achieves between 50% and 74.99% of budget net income; No incentive will be paid if net income is below 50% of budget; (ii) Non-Performing Assets to Average Total Assets ratio of 1.50% or less at 12/31/21. If the Bank fails this measure, the Board may reduce the earned incentive at the recommendation of the Committee; (iii) Satisfactory audits as determined by the Board after review of findings from regulatory examination reports and applicable audits and reviews; (iv) The Company and Guaranty Bank must maintain capital ratios to meet regulatory “well capitalized” status; and (v) Satisfactory performance appraisal, actively employed by Guaranty Bank, and in good standing at the time the bonus is paid, which will not be prior to the public release of earnings in 2022 for the calendar year 2021.

 

If the Company terminates the Executive’s employment other than for cause (as defined in Executive’s employment agreement) before the end of the performance year, then the Executive will be eligible for a prorated incentive payment (at target level) except for a change in control of the Company. If the Executive’s employment ends within twelve months following a change in control of the Company, then the Executive will be eligible for an incentive amount computed in accordance with the Executive’s employment agreement.

 

The Board may adjust the incentive based on achievement of the above measurements and other pertinent factors including, but not limited to, executive’s contribution to the bank’s goals and objective, attitude, teamwork, initiative, interpersonal relationships and adherence to policies. The Board will also consider the executive’s overall compensation relevant to peer group.

 

The Board retains the right to make the final determination of the incentive payment and amount, if any, and may consider other pertinent facts prior to making an award. All incentive payments shall be subject to the Company’s Compensation Clawback Policy.