SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No.___)
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-12
PSB HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
(1) Amount Previously Paid: ___________________________
(2) Form, Schedule or Registration Statement No:
___________________________
(3) Filing Party: ___________________________
(4) Date Filed: ___________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
PSB HOLDINGS, INC.
____________________
The annual meeting of shareholders of PSB Holdings, Inc. will be held
at 3:00 p.m., Tuesday, April 17, 2001 at the Peoples State Bank Training
Center, 2001 West Stewart Avenue, Wausau, Wisconsin for the following
purposes:
1. To elect 11 directors;
2. To consider and approve an amendment to the restated articles of
incorporation to provide for the creation of three classes of directors;
3. To consider and approve the 2001 Stock Option Plan; and
4. To transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on March 30, 2001 are
entitled to notice of and to vote at the annual meeting of shareholders
and any adjournment thereof.
By order of the Board of Directors
DAVID K. KOPPERUD
David K. Kopperud
President
March 30, 2001
SHAREHOLDERS ARE REQUESTED TO PROMPTLY DATE, SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT THEY EXPECT TO
ATTEND THE ANNUAL MEETING.
PSB HOLDINGS, INC. MARCH 30, 2001
1905 W. STEWART AVENUE
WAUSAU, WISCONSIN 54401
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 17, 2001
SOLICITATION OF PROXIES
We are providing these proxy materials in connection with the
solicitation of proxies by the Board of Directors of PSB Holdings, Inc.,
for use at the 2001 annual meeting of shareholders, including any
adjournment thereof. The annual meeting will be held at 3:00 p.m., at the
Peoples State Bank Training Center, 2001 West Stewart Avenue, Wausau,
Wisconsin.
PROXIES AND VOTING PROCEDURES
YOUR VOTE
Whether or not you plan to attend the annual meeting, please sign,
date and return the enclosed proxy promptly in order to be sure that your
shares are voted. You may revoke your proxy at any time before it is
voted by giving written notice to the Secretary of the company at our
principal office in Wausau, Wisconsin, by filing another duly executed
proxy bearing a later date with the Secretary, or by giving oral notice to
the presiding officer at the annual meeting.
All shares represented by your properly completed proxies which have
been submitted to us prior to the meeting (and which have not been
revoked) will be voted in accordance with your instructions. IF YOU DO
NOT INDICATE HOW YOUR SHARES SHOULD BE VOTED ON A PROPOSAL, THE SHARES
REPRESENTED BY YOUR PROPERLY COMPLETED PROXY WILL BE VOTED AS THE BOARD OF
DIRECTORS RECOMMENDS.
If any other matters are properly presented at the annual meeting for
consideration, including, among other things, consideration of a motion to
adjourn the meeting to another time or place, the persons named as proxies
in the proxy form furnished to you by the Board will have discretion to
vote on those matters according to their best judgment to the same extent
as you would be entitled to vote. We do not anticipate that any other
matters will be raised at the annual meeting.
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SHAREHOLDERS ENTITLED TO VOTE
Shareholders at the close of business on the record date, March 30,
2001, are entitled to notice of and to vote at the annual meeting Each
share is entitled to one vote on each proposal properly brought before the
annual meeting. Votes cast by proxy or in person at the annual meeting
will be tabulated by an inspector of elections appointed by the Board. On
the record date, there were 839,705 shares of common stock outstanding.
QUORUM, REQUIRED VOTE AND RELATED MATTERS
Quorum. A quorum is present if a majority of the votes entitled to
be cast on a proposal are represented at the annual meeting in person or
by proxy. For purposes of determining a quorum, shareholders who are
present in person or are represented by proxy, but who abstain from
voting, are considered present and count toward the determination of the
quorum. Shares reported as broker non-votes are also considered to be
shares present for purposes of determining whether a quorum is present.
BROKER NON-VOTES. If you hold shares in "street name" through a
broker or other nominee, your broker or nominee may not be permitted to
exercise voting discretion with respect to each proposal to be voted upon.
Brokers or nominees who are the holders of record of company common stock
for customers generally have discretionary authority to vote on certain
routine matters. However, such brokers generally will not have authority
to vote on other matters if they have not received instructions from their
customers. If you do not give your broker or nominee specific
instructions, your shares may not be voted on each proposal and will not
be counted in determining the number of shares necessary for approval. In
determining the vote of a shareholder on matters for which a broker or
nominee does not have the authority to vote, shares held of record by the
broker or nominee will be recorded as a "broker non-vote."
Election of Directors. Directors are elected by a plurality of the
votes cast by the shares entitled to vote. For this purpose, a
"plurality" means that the individuals receiving the largest number of
votes are elected as directors, up to the maximum of 11 directors to be
chosen at the annual meeting. You may vote in favor of the nominees
specified on the accompanying form of proxy or may withhold your vote as
to one or more of such nominees. Shares withheld or not otherwise voted
in the election of directors (because of abstention, broker non-vote, or
otherwise) will have no effect on the election of directors.
All Other Proposals. The amendment of our restated articles of
incorporation to provide for a classified board of directors (Proposal No.
2) requires the approval of two-thirds of our issued and outstanding
common stock. Broker non-votes and abstentions will therefore count as a
"no" vote on the amendment of the restated articles of incorporation.
Approval of the 2001 Stock Option Plan (Proposal No. 3) requires that a
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majority of the shares of stock represented and voted at the annual
meeting vote for approval. Therefore, broker non-votes and abstentions
will not have an effect on approval of the plan.
COSTS OF SOLICITATION
In addition to solicitation by mail, our officers, directors and
regular employees may solicit proxies in person or by telephone,
facsimile, electronic mail or other forms of communication. Expenses in
connection with the solicitation of proxies, including the reasonable
expenses of brokers, fiduciaries and other nominees in forwarding proxy
material to beneficial owners of our common stock, will be borne by us.
PROXY STATEMENT PROPOSALS
Any shareholder who intends to present a proposal at the annual
meeting to be held in 2002 must deliver the written proposal to the
Secretary of the company at our office in Wausau, Wisconsin not later than
November 30, 2001, if the proposal is submitted for inclusion in our proxy
materials for that meeting pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Our restated articles of incorporation provide that the number of
directors shall be determined by resolution of the Board, but that there
shall be not less than five nor more than seventeen directors. The number
of directors within these limits is set by Board resolution. Our
directors also serve as members of the board of directors of our
subsidiary, Peoples State Bank (the "Bank").
Leonard C. Britten and George L. Geisler retired from the Board on
December 31, 2000. Mr. Britten had served as a director of the company
since its formation in 1995 and as Chairman of the Board of the Bank from
1991 to 1999 and as a director of the Bank since 1962. Mr. Geisler had
also served as a director of the company since its formation in 1995 and
as a director of the Bank since 1980.
In connection with the retirement of Mr. Britten and Mr. Geisler the
Board set the number of directors at eleven. The Board has proposed that
the shareholders approve an amendment to our restated articles of
incorporation to provide that the directors be divided into three classes,
with one class to be elected each year. See "Proposal No. 2 - Amendment
of Restated Articles of Incorporation." The Board has nominated the
eleven persons named below to serve as directors. If Proposal No. 2 is
approved, five of the nominees will be elected as Class I directors to
serve an initial term which will end at the annual meeting to be held in
2002, three nominees will be elected as Class II directors to serve an
initial term which will expire at the annual meeting to be held in 2003,
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and three nominees will be elected as Class III directors to serve an
initial term which will expire at the annual meeting to be held in 2004.
The names, proposed classes and terms of each of the nominees are set
forth in the table which follows. If Proposal No. 2 is not adopted, each
nominee elected will serve for a term which will expire at the annual
meeting to be held in 2002.
Each of the nominees has consented to serve if elected, but in case
one or more of the nominees is not a candidate at the annual meeting, it
is the intention of the persons designated as proxies on the accompanying
proxy form to vote for such substitute or substitutes as may be designated
by the Board.
The name, age, principal occupation or employment and other
affiliations, and proposed class with respect to each nominee are set
forth below.
PROPOSED CLASS YEAR BECAME
AND YEAR IN WHICH DIRECTOR OF THE
NAME AND AGE PRINCIPAL OCCUPATION TERM WILL EXPIRE COMPANY
Patrick L. Crooks, 66 Attorney, Crooks, Low, Class I, 2002 1995
Connell, & Rottier, S.C.
Lawrence Hanz, Jr., 76 Retired, formerly
Vice-President of Hanz Class I, 2002 1995
Contractors Ready Mix
Thomas R. Polzer, 58 Vice President, Secretary Class I, 2002 1995
and Treasurer of
M & J Sports, Inc.
William M. Reif, 58 President and CEO of Class I, 2002 1997
Wausau Coated Products,
Inc.
Eugene Witter, 77 Witter Farm Dairy, Inc. Class I, 2002 1995
Gordon P. Connor, 63 Investor; President of Class II, 2003 1995
Connor Management
Corporation
Charles A. Ghidorzi, 56 President of C.A. Class II, 2003 1997
Ghidorzi, Inc.
Gordon P. Gullickson, 72 Chairman of the Class II, 2003 1995
Board of the Company
and the Bank; President
of the Company (1995-1999)
and the Bank (1986-1999)
William J. Fish, 50 President of BILCO, Inc. Class III, 2004 1995
(McDonald's franchisee)
David K. Kopperud, 55 President of the Company Class III, 2004 1999
and the Bank since July,
1999; previously Executive
Vice President of the Bank
(1994-1999)
Thomas A. Riiser, 65 Retired, formerly Class III, 2004 1995
President of Riiser Oil
Company, Inc.
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COMMITTEES AND COMPENSATION OF DIRECTORS
COMMITTEES AND MEETINGS
The Board appoints an Audit & Examining Committee. The Board of
Directors of the Bank appoints a Compensation & Pension Committee which
serves in lieu of a compensation committee of our Board.
Mr. Crooks, Mr. Fish, Mr. Connor, Mr. Reif, and Mr. Polzer serve as
members of the Audit & Examining Committee. The Audit & Examining
Committee reviews the financial reports of the company, our system of
internal financial controls and the appointment, independence and
performance of our independent auditors. The committee held two meetings
during 2000. See "Report of the Audit & Examining Committee."
The Board does not have a standing nominating committee. The
functions of a nominating committee are performed by the Board which will
consider nominations for directors submitted by shareholders.
Recommendations concerning nominations with pertinent background
information should be directed to the President of the company. The Board
has not adopted formal procedures with respect to nominee recommendations.
We pay no compensation to our officers. All officers are full-time
employees of the Bank. Mr. Fish, Mr. Ghidorzi, Mr. Polzer, Mr. Hanz and
Mr. Witter serve as members of the Bank's Compensation & Pension
Committee. The committee met two times during 2000 to review and
recommend to the Board base salaries and bonus compensation of Bank
officers. See "Executive Officer Compensation."
During 2000, the Board met five times and the Bank's board met twelve
times. All of the directors attended at least 75% of the aggregate number
of meetings of the boards and meetings of the committees of the boards on
which they served.
COMPENSATION OF DIRECTORS
Directors receive no compensation for service as directors of the
company, but receive $400 for each meeting of the Bank's board which they
attend. Directors of the Bank also receive $300 for each meeting of the
Bank's Loan Committee attended and $200 for each other committee meeting
attended. Directors of the Bank are also eligible to receive a bonus at
year end in a maximum amount of $4,800. The maximum bonus is reduced by
$400 for each meeting of the Bank's board not attended after the first
absence.
Mr. Gullickson was paid $1,000 per month for providing consulting
services to the Bank in connection with the transition of Bank management
and for providing continuity and contact with Bank customers. The
agreement terminated on December 31, 2000.
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Through the last fiscal year, the Bank maintained a non-qualified
retirement plan for its directors. The plan was terminated on December
31, 2000. A Bank director who had served a minimum of 15 years on the
Bank board at the termination date of the plan is entitled to receive a
retirement benefit of 50% of the aggregate director fees and bonus
received by the director during the five year period immediately preceding
his retirement from the board. Retirement benefits are payable in 20
quarterly installments except that in the event of death, accrued but
unpaid benefits may be paid either in installments or in a lump sum. Mr.
Britten and Mr. Geisler became eligible for their benefits upon their
retirement and Mr. Hanz, Mr. Riiser and Mr. Witter are eligible to receive
benefits under the plan when their service on the Bank board terminates.
REPORT OF THE AUDIT & EXAMINING COMMITTEE
The Audit & Examining Committee assists the Board in monitoring the
integrity of the company's financial statements and the independence and
the performance of the company's independent auditors. The Board has not
adopted an audit committee charter. Each member of the Audit & Examining
Committee is an "independent director" as determined in accordance with
Rule 4200(a)(14) of the listing requirements for The Nasdaq Stock Market.
This report summarizes the actions of the committee with respect to the
company's financial statements for the last fiscal year.
Management has primary responsibility for the company's financial
statements and the filing of financial reports with the Securities and
Exchange Commission. The committee periodically reviewed and discussed,
prior to their issuance, the company's financial statements with
management, other company financial personnel and representatives of
Wipfli Ullrich Bertelson LLP ("Wipfli"), the company's independent
auditors. Management advised the committee that all financial statements
were prepared in accordance with generally accepted accounting principles.
The committee's review of the financial statements included discussion
with the independent auditors of matters required to be discussed pursuant
to Statement on Auditing Standards No. 61 (Communication With Audit
Committees).
The committee received from Wipfli the written disclosure and the
letter relating to the independence of the firm required by the
Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees). The committee also discussed with Wipfli the
independence of the firm for the purposes of expressing an opinion on the
company's financial statements and considered whether the provision of
nonaudit services is compatible with maintaining the independence of the
firm. During the last fiscal year, Wipfli billed aggregate fees for
various services in the following categories:
AUDIT FEES
Audit fees for professional services rendered for the audit of the
company's financial statements for fiscal year 2000 and review of the
unaudited financial statements included in the company's quarterly reports
on Form 10-Q were $41,352.
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FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Wipfli did not perform any professional services in 2000 with respect
to the company's information systems, management of the company's local
area network, or the design or implementation of a hardware or software
system that aggregates source data for the company's financial statements
or generates information significant to the statements.
ALL OTHER FEES
The firm's aggregate fees billed in 2000 for services to the company
other than fees for services described under "Audit Fees" were $32,528.
These fees represented professional services relating primarily to
internal audit services and accounting and tax issues.
On the basis of its reviews and discussions concerning the financial
statements and the independence of the auditors described above, the
committee recommended to the Board that it approve the inclusion of the
company's audited financial statements in the company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000, for filing with the
Securities and Exchange Commission.
This report does not constitute soliciting material and should not be
deemed filed or incorporated by reference into any other company filing
under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent the company specifically incorporates this report by
reference therein.
MEMBERS OF THE AUDIT COMMITTEE
Patrick L. Crooks
William J. Fish
Gordon P. Connor
William M. Reif
Thomas R. Polzer
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, based on statements filed with the SEC
or information otherwise known to us, the name of each person believed by
us to own more than 5% of our
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common stock and the number of shares of common stock held by each person.
SHARES OF BANK STOCK PERCENT OF
NAME AND ADDRESS BENEFICIALLY OWNED CLASS
Caroline S. Mark 53,330 6.35%
2003 Ridgeview Dr.
Wausau, WI 54401
Lawrence Hanz, Jr. 44,070 5.25%
2102 Clarberth
Schofield, WI 54476
The following table sets forth, based on statements filed with the
Securities and Exchange Commission or otherwise made to us, the amount of
common stock which is deemed beneficially owned on the record date by each
of our directors and each of the executive officers named in the summary
compensation table on page 9. The amounts indicated include shares held
by spouses and minor children, shares held indirectly in trust for the
benefit of the directors and/or their spouses, children or parents and
shares held by businesses or trusts over which directors exercise voting
control.
SHARES OF STOCK PERCENT OF
NAME BENEFICIALLY OWNED CLASS
Gordon P. Connor 7,368 *
Patrick L. Crooks 7,268 *
William J. Fish 6,275 *
Charles A. Ghidorzi 0 *
Gordon P. Gullickson 6,400 *
Lawrence Hanz Jr. 44,070 5.25%
David K. Kopperud 335 *
Thomas R. Polzer 595 *
William M. Reif 1,140 *
Thomas A. Riiser 8,575 1.02%
Eugene Witter 9,900 1.18%
Kenneth M. Selner 4,660 *
Todd R. Toppen 500 *
All directors and
officers as a group
(13 persons) 97,086 11.56%
*Less than 1%
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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 officers and persons who own more than 10% of our common
stock ("reporting persons") to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Reporting
persons are also required by SEC regulations to furnish us with copies of
all section 16(a) forms filed by them with the SEC. Based solely on our
review of the copies of the section 16(a) forms received by us or upon
written representations from certain of these reporting persons as to
compliance with the section 16(a) regulations, we are of the opinion that
during the 2000 fiscal year, all filing requirements applicable under
section 16 to the reporting persons were satisfied.
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
No compensation is paid by us to any of our officers. The table below
sets forth compensation awarded, earned or paid by the Bank for services
in all capacities during the three years ended December 31, 2000, 1999,
and 1998 to our Chief Executive Officer. No other executive officers of
the company or the Bank as of December 31, 2000 had salary and bonus
compensation for the most recent fiscal year in excess of $100,000.
Neither we nor the Bank maintained a long-term compensation plan or stock
option or stock appreciation rights plan in 2000.
Summary Compensation Table
Name and Other Annual All Other
Principal Position Year Salary(1) Bonus Compensation Compensation
David K. Kopperud 2000 $120,000 $ 0 $ 0 $ 21,413 (2)
President and a 1999 $ 82,000 $ 37,500 $ 0 $ 12,963
director of 1998 $ 70,000 $ 30,000 $ 0 $ 6,735
the Company and
the Bank
(1) Includes compensation deferred by participants under the Bank's 401(k)
plan.
(2) Includes contributions under the Bank's defined contribution plans of
$11,813 and directors fees of $9,600.
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COMMITTEE'S AND BOARD'S REPORT ON COMPENSATION POLICIES
GENERAL
Compensation policies are administered by the Compensation & Pension
Committee of the Bank (the "Compensation Committee"). The Bank's
executive compensation policies are intended to attract and retain
individuals who have experience in banking and to provide a level of
compensation which is competitive with other banks. Although compensation
data from the Wisconsin Bankers Association may be consulted for purposes
of comparison, given the disparity of size among banks and the difficulty
in drawing exact comparisons between the duties and responsibilities of
officers of other banks, the determination of appropriate compensation
levels by the Compensation Committee is subjective.
BASE SALARIES
Base salaries are recommended by the President and reviewed on an
annual basis by the Compensation Committee. Annual increases are
determined by the overall objective of maintaining competitive salary
levels, general factors such as the rate of inflation and individual job
performance. Individual job performance is the most important of these
criteria. The Compensation Committee, after reviewing the recommendations
of the President for salaries other than his own, recommends base salary
amounts to the full Bank board which makes the final decision with respect
to all base salary and incentive compensation matters.
INCENTIVE COMPENSATION
The Bank maintains a senior management incentive plan which is
intended to provide incentive compensation based upon the Bank's financial
performance. Compensation payable under the plan is based upon the Bank's
key operating ratios and other measures of the Bank's financial
performance. The weight given to the various performance factors varies
depending on each participating officer's position with the Bank. No
bonuses were paid under the plan in 2000 to the Bank's senior management
team.
COMPENSATION COMMITTEE AND BOARD INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the company or the Bank served on the board of
directors or compensation committees of any organization whose executive
officers served on the Compensation Committee. Mr. Kopperud is an
employee of the Bank and a member of its board, but does not participate
in the Bank's formal determination of compensation levels which are
recommended by him.
COMPENSATION & PENSION COMMITTEE
William J. Fish Charles A. Ghidorzi
Thomas R. Polzer Lawrence Hanz, Jr.
Eugene Witter
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 2000, in the ordinary course of business, our directors and
officers and the directors and officers of the Bank and many of their
associates and the firms of which they serve as directors and officers
conducted transactions with the Bank. In our opinion, these transactions
were made on terms comparable to those which are available to unaffiliated
parties. All loans to directors and officers and to persons or firms
affiliated with directors and officers were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with unrelated persons and did not
involve more than normal risk of collectibility or present other
unfavorable features. We expect that transactions such as those described
above will continue in the future.
STOCK PRICE PERFORMANCE
Transactions in our common stock have been infrequent and prices have
been historically determined by private negotiation between the parties.
There is no active market for our stock. No data regarding the prices at
which trades are made was published or otherwise publicly available until
price quotations for the stock began on January 10, 2000 on the OTC
Bulletin Board under the symbol "PSBQ.OB." During 2000, 27 transactions
with a total volume of 86,000 shares were reported on the OTC Bulletin
Board. Of those, 14 were transactions in which we purchased a total of
40,690 shares of our stock. At December 31, 2000 the quoted bid price for
our stock was $28.00. Because of the limited number of independent trades
reported for our stock, we believe that there are no meaningful
comparisons that can be made to bank or financial institution stocks which
are actively traded or to broader market indices.
PROPOSAL NO. 2 - AMENDMENT OF RESTATED
ARTICLES OF INCORPORATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
TO OUR RESTATED ARTICLES OF INCORPORATION.
GENERAL INFORMATION ON THE AMENDMENT
The Board has unanimously recommended that the shareholders
approve an amendment to our restated articles of incorporation to provide
that our directors be divided into three classes that are as nearly equal
in number as possible and that directors may be removed only for cause.
The initial terms of Class I directors will expire at our 2002 annual
meeting, the initial terms of Class II directors will expire at our 2003
annual meeting and the initial terms of Class III directors will expire at
our 2004 annual meeting. At each annual meeting following the 2001 annual
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meeting, the class of directors whose terms expire at that meeting would
be elected for a three-year term. Therefore, beginning with the annual
meeting of shareholders to be held in 2002, at each annual meeting,
approximately one-third of our directors would be elected for a three-year
term. A copy of the proposed amendment to our restated articles of
incorporation is attached to this proxy statement as Appendix A.
If the proposed amendment is adopted, the eleven directors to be
elected at the annual meeting will be elected to the classes and for the
terms described under "Proposal No. 1 - Election of Directors." If the
proposed amendment is not adopted, each of the candidates will be elected
to serve a one-year term which will expire at our annual meeting to be
held in 2002.
PURPOSE OF THE AMENDMENT
A classified board of directors is generally considered to be a
measure which will enable a corporation to better resist unwanted or
unsolicited efforts to acquire the corporation and serves to protect the
value of each shareholder's investment. The Board is of the opinion that
an unsolicited attempt to take over a company can be highly disruptive to
a company and can result in dissimilar treatment of the company's
shareholders. Certain takeover tactics such as two tiered tender offers,
for example, can result in shareholders receiving different amounts or
types of consideration for their shares. The amendment will, by making it
more time consuming and difficult for a substantial shareholder or
shareholders to gain control of the Board without its consent, ensure some
continuity in the management of our business and affairs during a takeover
attempt and provide the Board with sufficient time to review both takeover
proposals and appropriate alternatives. We also believe that the
amendment will serve to encourage any person intending to attempt a
takeover to negotiate in advance with the Board.
The proposed amendment was not proposed by the Board in response to a
specific threat, but rather is being recommended to assure fair treatment
of our shareholders in certain takeover situations. Although the Board
may review other possible anti-takeover measures, the Board has no present
intention of proposing additional amendments to the restated articles of
incorporation or taking other measures that would generally have the
purpose of discouraging a third party from acquiring a controlling
interest in the company.
The Board also recommended the adoption of the resolution as a measure
of corporate governance. The Board believes that a classified board will
promote continuity of management and thereby enhance our ability to carry
out long-range plans and goals.
The proposed amendment also provides that shareholders may remove a
director only for cause. "Cause" is defined as a director's willful and
continuous failure to substantially perform the director's duties to the
corporation (other than any failure resulting from incapacity due to
physical or mental illness) or the director's willful misconduct which is
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materially and demonstrably injurious to the corporation. Without a
limitation providing for a removal of directors only for cause, the
classified board could be circumvented by a substantial shareholder or
shareholders calling a special meeting to remove all classes of directors.
DISADVANTAGES OF THE AMENDMENT
The proposed classified board will have the effect of extending
the time required to effect a change in control of the Board and may
discourage hostile takeover bids for the company even if a majority of our
shareholders might consider such a bid to be in their best interests. The
amendment could make it more difficult to acquire the company by means of
a hostile tender offer, open market purchases, a proxy contest or
otherwise.
The amendment will also make it more difficult for our shareholders to
change the composition of the Board even if the shareholders believe such
a change would be desirable based on the performance of our directors and
the company. If shareholders approve the amendment, it will take at least
two annual meetings for a majority of shareholders to effectuate a change
in control of the Board. Currently, a majority of shareholders could
effectuate a change in control of the Board at one shareholder meeting.
Because of the additional time required to change the control of the
Board, the amendment will tend to perpetuate present management.
The amendment may also discourage accumulations of large blocks
of our stock by purchasers whose objective is to have such stock
repurchased by us at a premium. Therefore, adoption of the amendment
could tend to reduce any temporary fluctuations in the market price of our
stock that may be caused by such accumulations. Accordingly, our
shareholders could be deprived of certain opportunities to sell their
stock at a temporarily higher market price. Because the amendment will
increase the amount of time required for a takeover bidder to obtain
control of the company without the cooperation of the Board, even if the
takeover bidder were to acquire a majority of our outstanding stock, a
classified board may tend to discourage certain tender offers that would
otherwise allow shareholders the opportunity to realize a premium over the
market price of their stock.
VOTE REQUIRED TO APPROVE AMENDMENTS
Any amendment to our restated articles of incorporation must be
approved by the holders of two-thirds of the outstanding shares of our
common stock.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENT TO OUR RESTATED ARTICLES OF INCORPORATION TO CREATE A CLASSIFIED
BOARD OF DIRECTORS WITH STAGGERED THREE YEAR TERMS AND TO PROVIDE THAT
DIRECTORS MAY BE REMOVED ONLY FOR CAUSE.
-13-
PROPOSAL NO. 3 - APPROVAL OF 2001 STOCK OPTION PLAN
THE FOLLOWING SUMMARY OF THE MATERIAL FEATURES OF THE 2001 STOCK
OPTION PLAN (THE "2001 PLAN") DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED BY REFERENCE TO THE TEXT OF THE PLAN. A COPY OF THE PLAN IS
AVAILABLE UPON REQUEST FROM THE SECRETARY OF THE COMPANY. THE PLAN WILL
ALSO BE FILED AS AN EXHIBIT TO OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 2000, AND WILL BE AVAILABLE AT THE SEC'S WEB SITE,
HTTP://WWW.SEC.GOV, UPON FILING OF THAT REPORT.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 2001
PLAN.
ADOPTION AND PURPOSE
On February 20, 2001, the Board adopted the 2001 Plan, subject to the
approval of the shareholders at the annual meeting. The purpose of the
2001 Plan is to enable us to attract and retain management-level employees
and to link stock-based individual participant incentives directly to our
financial performance and increase in shareholder value.
ADMINISTRATION
The 2001 Plan is administered by the Board's Option Committee. The
committee consists of not less than three members of the Board who may not
be employees of the company and who must satisfy other conditions
prescribed for "non-employee directors" under SEC Rule 16b-3 and "outside
directors" under Section 162(m) of the Internal Revenue Code (the "Code").
Mr. Fish, Mr. Ghidorzi, Mr. Hanz, Mr. Riiser and Mr. Witter serve on the
committee.
The committee is authorized, in its sole discretion, to select those
eligible employees who will receive stock option awards, determine the
number of shares covered by such awards, impose conditions on the vesting
or exercise of options, and administer and interpret the plan. No options
have been granted under the plan as of the date of this proxy statement.
PERSONS ELIGIBLE TO RECEIVE OPTIONS
Key salaried employees of the company and its subsidiaries and
prospective key salaried employees who will function in one of those
capacities and who have accepted offers of employment are eligible to
participate in the plan. Membership in the eligible class of persons does
not provide a right to participate in the plan. Options will be granted
only to those eligible persons who are selected by the committee. As of
the date of this proxy statement, we estimate that the number of eligible
persons is approximately 15.
-14-
OPTIONS
GENERAL. Options awarded to employees under the 2001 Plan are
intended to be incentive stock options under Internal Revenue Code
Section 422.
SHARES TO BE AWARDED. The number of shares which may be awarded under
an option in any year is limited to that number which, when the option
first becomes exercisable, will have a value which is not in excess of
$100,000. In addition, no employee may be awarded options with respect to
more than 2,500 shares (subject to adjustment for future stock splits,
stock dividends or other similar increases in the number of shares
outstanding) in any calendar year.
EXERCISE PRICE. All options must be awarded at an option price which
is not less than the fair market value of the common stock on the date the
option is awarded. For purposes of the plan, the "fair market value" of a
share of our common stock generally means the average of the highest bid
and lowest ask prices as reported on the OTC Bulletin Board (or the market
on which our stock may be listed), although the committee may determine
"fair market value" under another method if it believes that the OTC
Bulletin Board quotations do not represent such value because of the
limited and sporadic trading of our stock.
PAYMENT FOR OPTIONS. No consideration is received by us when an
option is awarded. Upon exercise of an option, we will receive payment
for the shares in cash or, with the consent of the committee, an optionee
may elect to deliver common stock owned by the optionee which has a fair
market value equal to the exercise price.
CONDITIONS TO EXERCISE. The committee may establish various
conditions or requirements which must be satisfied before an option
becomes exercisable. These conditions may require the attainment of
certain financial goals by the company, the passage of stated periods of
time before the options vest, or any other conditions the committee
believes are reasonably related to the achievement of the purpose of the
2001 Plan. The committee may also waive or modify any such conditions in
its sole discretion.
TERM AND EXERCISE PERIODS OF OPTIONS. The committee may establish the
term of any option, although all options must be exercised within ten
years of their date of award. Options must generally be exercised within
three months of the optionee's termination of employment, although
extended exercise periods of up to one year are provided for in the case
of death or disability. Options are forfeited upon termination for cause
as defined in the plan. Options are not transferrable, except upon the
death of an optionee.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the principal federal income tax
consequences associated with the award and exercise of options under the
2001 Plan. This discussion is based on federal tax law as in effect on
-15-
the date of this proxy statement as it relates to incentive stock options.
An optionee will not generally recognize income upon the grant of an
option and will not generally recognize income upon exercise of the
option, provided the optionee is an employee of the company or a
subsidiary at all times from the date of grant until three months prior to
exercise. However, the amount by which the fair market value of the
shares on the date of exercise exceeds the exercise price will be
includable for purposes of determining any alternative minimum taxable
income of an optionee. If an optionee who has exercised an incentive
stock option sells the shares acquired upon exercise more than two years
after the grant date and more than one year after exercise, capital gain
or loss will be recognized equal to the difference between the sales price
and the exercise price. An optionee who sells the shares within two years
after the grant date or within one year after exercise will recognize
ordinary compensation income in an amount equal to the lesser of the
difference between (a) the exercise price and the fair market value of the
shares on the date of exercise or (b) the exercise price and the sales
proceeds. Any remaining gain or loss will be treated as a capital gain or
loss. We will be entitled to a federal income tax deduction equal to the
amount of ordinary compensation income recognized by the optionee in this
case. The deduction will be allowable at the same time the optionee
recognizes the income.
SHARES AVAILABLE FOR OPTIONS
The 2001 Plan authorizes the issuance of options to purchase 15,000
shares of common stock, or approximately 1.79% of the shares outstanding
on the record date. As of March 15, 2001, the average closing bid price
per share of the common stock as reported on the OTC Bulletin Board was
$28.58.
If any option awarded under the plan terminates without having been
exercised in full, the number of shares as to which such option was not
exercised will remain available for future option awards under the plan.
Similarly, shares which are not delivered to an optionee because the
optionee has delivered shares owned by the optionee in payment of the
exercise price, will remain available for future option awards.
The number of shares as to which options may be awarded under the 2001
Plan will be adjusted to reflect future stock splits, stock dividends or
other similar increases in the number of shares of common stock
outstanding. In addition, the committee has the authority to make such
adjustment as it deems appropriate if there is any other change in the
capital structure of the company.
CHANGE IN CONTROL
Upon the occurrence of a change in control of the company, each option
outstanding on the date on which the change in control occurs will
-16-
immediately become exercisable in full. Each optionee will also have the
right, at his or her election made during a period of 60 days following
the date on which the change of control occurs, to surrender all or part
of any option for an immediate lump-sum cash payment for each covered
share which is surrendered. This payment will be equal to the excess, if
any, of (1) the higher of (a) the highest fair market value on any date in
the 60-day period ending on the date on which the change in control
occurred, or (b) the highest per share price for common stock actually
paid in connection with the change in control, over (2) the per share
exercise price of the option surrendered.
For purposes of the 2001 Plan, the term "change in control" is defined
to include (1) the acquisition, directly or indirectly, of at least 20% of
our outstanding voting securities, (2) certain mergers and consolidations
which result in our shareholders owning less than 60% of the new
corporation, (3) the sale or other disposition of all or substantially all
of our assets, (4) a liquidation or dissolution approved by our
shareholders, and (5) a change in the majority of the members of the
Board, other than a change consisting of directors nominated with the
approval of the Board.
AMENDMENT AND TERMINATION OF THE 2001 PLAN
The 2001 Plan may be amended by the Board at any time, subject to
certain limitations. Certain amendments, such as an increase in the
number of shares available for options, may also require the approval of
shareholders under the rules of a securities exchange or over-the-counter
market and, to the extent so required, we intend to seek such approval.
The Board may not amend the 2001 Plan in a manner which would adversely
affect the rights of the holder of an option without the holder's consent.
The 2001 Plan may be terminated at any time by the Board, but
termination of the plan cannot, without the optionee's consent, reduce or
restrict the optionee's rights under any options previously awarded under
the plan. Unless the Board elects to terminate the plan at an earlier
date, the 2001 Plan will terminate on February 19, 2011.
APPLICATION OF SECTION 162(M) OF THE CODE
Compensation of persons who are named in the summary compensation
table in our proxy statement is generally subject to the tax deduction
limits of section 162(m) of the Code. Stock options that qualify as
"performance-based compensation" are exempt from section 162(m), thus
allowing us the full tax deduction (to the extent optionees recognize
taxable income) permitted for such compensation. If approved by our
shareholders, the 2001 Plan will enable the committee to grant options
that will be exempt from the deduction limits of section 162(m).
-17-
VOTE REQUIRED FOR APPROVAL OF THE 2001 PLAN
Approval of the 2001 Plan requires the vote of a majority of the
common stock cast at the annual meeting. All shareholders are requested
to specify their vote on the enclosed form of proxy. If no specification
is made, the proxy will be voted for approval of the 2001 Plan.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF
THE 2001 PLAN.
CORPORATE SUMMARY ANNUAL REPORT
The 2000 Summary Annual Report, which includes condensed consolidated
financial statements for the years ended December 31, 2000, 1999 and 1998,
has been mailed concurrently with this proxy statement to shareholders as
of the record date. The 2000 Summary Annual Report and the 2000 Form 10-K
Annual Report do not constitute a part of this proxy statement.
By Order of the Board of Directors
DAVID K. KOPPERUD
David K. Kopperud
President
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
-18-
APPENDIX A
Proposed amendment to Article 5 of the restated Articles of Incorporation
of PSB Holdings, Inc.
Article 5. DIRECTORS.
(a) The number of the directors of the Corporation that shall constitute
the Board of Directors shall be not less than five nor more than
seventeen. The number of directors shall be fixed, from time to time and
within the limits prescribed herein, by resolution adopted by the
affirmative vote of the Corporation's Board of Directors.
(b) Subject to applicable law, the directors shall be divided into three
classes, which shall be denominated as Class I, II, and III, respectively.
The initial term of office of Class I directors shall expire at the annual
meeting of shareholders to be held in 2002 and until their respective
successors are duly elected and qualified, or until their resignation or
removal, and the initial Class I shall consist of five directors. The
initial term of office of Class II directors shall expire at the annual
meeting of shareholders to be held in 2003 and until their respective
successors are duly elected and qualified, or until their resignation or
removal, and the initial Class II shall consist of three directors. The
initial term of office of Class III directors shall expire at the annual
meeting of shareholders to be held in 2004 and until their respective
successors are duly elected and qualified, or until their resignation or
removal, and the initial Class III shall consist of three directors.
Subject to the foregoing, at each annual meeting of shareholders,
commencing at the annual meeting to be held in 2002, the successors to the
class of directors whose term shall then expire shall be elected to hold
office for a term expiring at the third succeeding annual meeting and
until their successors shall be duly elected and qualified, or until their
resignation or removal. In the event that the number of directors is
increased or decreased by resolution of the Board of Directors as provided
for in subparagraph (a), the Board shall specify in such resolution which
class of directors shall be correspondingly increased or decreased, as the
case may be, so that the classes shall be as nearly equal in number as
possible.
(c) Notwithstanding any other provisions of these articles of
incorporation or the bylaws of the Corporation, any one or more directors
of the Corporation may be removed from office, but only for cause as
provided in this subparagraph (c). Two-thirds of the shares of each
voting group entitled to vote in the election of directors of the
Corporation shall be required to remove a director for cause at a meeting
of the shareholders called for that purpose. For purposes of this Article
5, "cause" shall mean the willful and continuous failure of a director to
substantially perform such director's duties to the Corporation (other
than any such failure resulting from incapacity due to physical or mental
illness) or the willful engaging by the director in gross misconduct
materially and demonstrably injurious to the Corporation.
-19-
Appendix I
This document is filed pursuant to Instruction 3 to Item 10 of Schedule
14A and is not part of the proxy solicitation material filed herewith.
PSB HOLDINGS, INC.
2001 STOCK OPTION PLAN
PSB HOLDINGS, INC.
2001 STOCK OPTION PLAN
SECTION 1. PURPOSE. The Plan has been adopted to (a) enable the
Company to attract and retain superior employees by providing incentive
opportunities with respect to future services that are competitive with
those of other similar companies, (b) further identify the interests of
participating employees with those of the Company's other shareholders
through compensation based on the performance of the Company's common
stock and (c) promote the long-term financial interests of the Company and
its shareholders.
SECTION 2. CERTAIN DEFINITIONS. As used in this Plan, and in
addition to any terms elsewhere defined in this Plan, the following terms,
when capitalized, shall have the meanings set forth in this Section 2.
Section 2.1. "BOARD" means the Board of Directors of the Company.
Section 2.2. "CAUSE" means any one or more of the following on the
part of the participant: (a) the commission of an act which results in a
payment of a claim filed by the Company or a Subsidiary under a blanket
banker fidelity bond or similar policy as from time to time and at any
time maintained; (b) an intentional failure to perform assigned duties;
(c) willful misconduct in the course of the participant's employment; (d)
breach of a fiduciary duty involving personal profit or acts or omissions
of personal dishonesty, including, but not limited to, commission of any
crime of theft, embezzlement, misapplication of funds, unauthorized
issuance of obligations, or false entries; (e) any intentional, reckless,
or negligent act or omission to act which results in the violation by the
participant of any policy established by the Company or a Subsidiary which
is designed to insure compliance with applicable banking, securities,
employment discrimination or other laws or which causes or results in the
Company's or a Subsidiary's violation of such laws, except any act done by
the participant in good faith, as determined in the reasonable discretion
of the Board, or which results in a violation of such policies or law
which is, in the reasonable sole discretion of such Board, immaterial; or
(f) any of the foregoing which results in material loss to the Company or
any of its Subsidiaries. Except to the extent of the discretion granted
to the Board in clause (e), the Committee shall have the sole discretion
to determine whether "Cause" exists, and the Committee's determination
shall be final.
Section 2.3. "CHANGE IN CONTROL" has the meaning set forth in Section
8.2.
Section 2.4. "CODE" means the Internal Revenue Code of 1986, as
amended. The reference to any specific section of the Code shall include
any successor section or sections.
Section 2.5. "COMMITTEE" means, subject to the provisions of Section
4, the Option Committee of the Board.
Section 2.6. "COMMON STOCK" means the common stock of the Company.
Section 2.7. "COMPANY" means PSB Holdings, Inc., a Wisconsin
corporation.
Section 2.8. "DISABILITY" means (a) a physical or mental condition
which qualifies as a total and permanent disability under the terms of any
plan or policy maintained by the Company or a Subsidiary and for which the
Optionee is eligible to receive benefits under such plan or policy, or (b)
if the Optionee does not participate in a disability plan, or is not
covered by a disability policy, of the Company or a Subsidiary,
"Disability" means the permanent and total inability of a participant by
reason of mental or physical infirmity, or both, to perform the work
customarily assigned to him or her, if a medical doctor selected or
approved by the Board, and knowledgeable in the field of such infirmity,
advises the Committee either that it is not possible to determine when
such Disability will terminate or that it appears probable that such
Disability will be permanent during the remainder of said participant's
lifetime.
Section 2.9. "EFFECTIVE DATE" means February 20, 2001.
Section 2.10. "EMPLOYED," and any variation thereof such as
"employment," means, as appropriate, employed by or employment with any of
the Company or any present or future Subsidiary.
Section 2.11. "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
Section 2.12. "FAIR MARKET VALUE" of a share of the Common Stock as
of any date means an amount equal to:
(a) the average of the highest bid and lowest ask prices of the
Common Stock reported on the OTC Bulletin Board, or, if prices for the
Common Stock are not quoted on the OTC Bulletin Board, the average of the
highest bid and lowest ask prices reported on any other bona fide over-
the-counter stock market selected in good faith by the Committee;
provided, however, if the date on which "Fair Market Value" is to be
determined is not a business day, or, if there shall be no reported
transactions for such date, such determination shall be made on the next
preceding business day for which transactions were reported, or
(b) if the Committee determines that the amount determined
pursuant to (a) is not indicative of the market value of the Common Stock
because of limited or sporadic trading of the Common Stock and the lack of
recent quotations for the Common Stock on the OTC Bulletin Board, then
such amount as may be determined by the Committee by whatever means or
method as the Committee, in the good faith exercise of its discretion,
shall at such time deem appropriate and representative of the fair market
value of the Common Stock.
Section 2.13. "OPTION" means an option to purchase Shares awarded
pursuant to the provisions of Section 6 and which is intended to meet the
requirements of an "incentive stock option" within the meaning of Section
422 of the Code.
Section 2.14. "OPTION AGREEMENT" means the written document which
evidences an award of Options, whether or not such document requires the
signature of the Optionee.
Section 2.15. "OPTIONEE" means an eligible employee, as determined in
accordance with Section 5, who has been granted an Option.
Section 2.16. "OPTION PRICE" means, with respect to each Option, the
price per Share at which such Option may be exercised and the Shares
subject to such Option purchased.
Section 2.17. "PLAN" means the PSB Holdings, Inc. 2001 Stock Option
Plan as set forth herein or as hereafter amended.
Section 2.18. "SHARE" means a share of Common Stock.
Section 2.19. "SUBSIDIARY" means any corporation, partnership, or
other entity in which the Company owns, directly or indirectly, at least a
50% interest in the voting rights or profits.
Section 2.20. "TERMINATION OF EMPLOYMENT" means the termination of an
Optionee's employment with, or performance of services for, the Company
and any of its Subsidiaries. An Optionee employed by, or performing
services for, a Subsidiary shall also be deemed to incur a Termination of
Employment if the Subsidiary ceases to be such a Subsidiary and the
Optionee does not immediately thereafter become an employee of the Company
or another Subsidiary. Temporary absences from employment because of
illness, vacation, or leave of absence and transfers among the Company and
its Subsidiaries shall not be considered Terminations of Employment. For
purposes of the Plan, an Optionee's employment shall be deemed to have
terminated at the close of business on the day preceding the first date on
which he or she is no longer for any reason whatsoever employed by the
Company or any of its Subsidiaries.
SECTION 3. NUMBER OF SHARES AVAILABLE FOR OPTIONS.
Section 3.1 SHARES SUBJECT. The aggregate number of Shares which may
be delivered under Options awarded pursuant to the Plan shall be 15,000.
Section 3.2 UNDELIVERED SHARES. To the extent any Shares subject to
an Option are not delivered to an Optionee (or the estate or other
transferee of such Optionee) because the Option is forfeited, expires, or
otherwise becomes unexercisable such Shares shall be deemed not to have
been delivered for purposes of determining the maximum number of Shares
available for delivery under the Plan.
Section 3.3 EXERCISE USING SHARES. If the Option Price of any Option
awarded under the Plan is satisfied by tendering Shares to the Company
only the number of Shares issued to the Optionee (or the estate or other
transferee of such Optionee), net of the Shares tendered, shall be deemed
delivered for purposes of determining the maximum number of Shares
available for delivery under the Plan.
Section 3.4 STOCK DIVIDENDS, ETC. If the Company shall, after the
Effective Date, change the Common Stock into a greater or lesser number of
Shares through a stock dividend, stock split-up or combination of Shares,
then (a) the number of Shares then subject to the Plan as provided for in
Section 3.1, but which are not then subject to any outstanding Option, (b)
the number of Shares subject to each then outstanding Option (to the
extent not previously exercised), and (c) the price per Share payable upon
exercise of each then outstanding Option, shall all be proportionately
increased or decreased as of the record date for such stock dividend,
stock split-up or combination of Shares in order to give effect thereto.
Notwithstanding any such proportionate increase or decrease, no fraction
of a Share shall be issued upon the exercise of an Option and the Shares
subject to an Option shall be rounded to the nearest whole Share.
Section 3.5 OTHER CHANGES. If, after the Effective Date, there shall
be any change in the Common Stock or other change in the capitalization of
the Company other than through a stock dividend, stock split-up or
combination of Shares, including, but not limited to, a change which
results from a merger, consolidation, spin-off, or other distribution of
stock or property of the Company, any reorganization (whether or not such
reorganization is within the meaning of Section 368 of the Code), or any
partial or complete liquidation of the Company, then if, and only if, the
Committee shall determine that such change equitably requires an
adjustment in (a) the number or kind of shares of stock then reserved for
issuance under Section 3.1, (b) the number or kind of shares of stock then
subject to an Option, (c) the Option Price with respect to an Option, or
(d) any other limitation on the Option which may be granted to any
participant, to the extent such adjustment does not cause any Option to
fail to satisfy the requirements for exemption from the limitations on
deductibility imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(c) of the Code if such Option would have satisfied such
requirements immediately prior to such adjustment and if such Option, if
then exercised, would, when added to the Optionee's estimated compensation
from the Company and all Subsidiaries for such year, exceed the
deductibility limits of Section 162(m) of the Code, such adjustment as the
Committee shall determine is equitable and as shall be approved by the
Board shall be made and shall be effective and binding for all purposes of
such Option and the Plan. If any member of the Committee shall, at the
time of such approval, be an Optionee, he shall not participate in action
in connection with such adjustment.
SECTION 4. ADMINISTRATION OF THE PLAN.
Section 4.1 COMMITTEE. The Plan shall be administered by the
Committee. The Committee shall, subject to the terms of the Plan, have
the authority to, in its sole discretion, (a) select eligible employees to
receive an award of one or more Options and to participate in the Plan,
(b) determine the number of Shares subject to each award and the Option
Price associated therewith, (c) establish terms and conditions concerning
the time of, and conditions precedent to, the exercisability of each
Option (including, without limitation, conditions with respect to the
passage of time, performance of the Company, or a Subsidiary, or the
Optionee, restrictions on competitive employment or satisfaction of
Company policies, and any other conditions which the Committee deems
reasonably related to the satisfaction of the purposes of the Plan), (d)
determine the form of each Option Agreement and all terms and conditions
thereof with respect to each award, (e) interpret the Plan and the
application thereof and establish such rules and regulations as it deems
necessary or desirable for the administration of the Plan, (f) modify or
cancel any award or Option or take such action to cause the vesting or
exercisability of any or all outstanding Options to become exercisable in
part or in full for any reason at any time, subject to the limitation of
Section 8.1, and (g) exercise such other authority as is reasonably
related to the administration of and/or the fulfillment of the purpose of
the Plan. All actions, interpretations, rules, regulations and conditions
taken or established by the Committee shall be final, binding and
conclusive upon the Company, each Subsidiary, and all Optionees.
Section 4.2 MEMBERSHIP OF THE COMMITTEE.
(a) MEMBERSHIP QUALIFICATIONS. Except as provided in this
Section 4.2, at all times the Committee shall consist of not less than
three members designated by the Board from among those of its members who
are not officers or employees of the Company or a Subsidiary and each of
whom is (a) a "non-employee director" within the meaning of Rule 16b-3
under the Exchange Act (a "Non-Employee Director") and (b) an "outside
director" within the meaning of Section 162(m) of the Code (an "Outside
Director"); provided, however, that in addition to the Board's general
authority to amend the Plan as provided for in Section 9.1, the Board
shall have the specific authority to modify or eliminate the foregoing
qualifications or adopt such other qualifications as are reasonably
intended to result in (x) the award of Options, and transactions with
respect to the award or exercise of such Options, satisfying an exemption
from Section 16(b) of the Exchange Act, or any successor thereto, and (y)
compensation recognized by Optionees qualifying as a deductible expense of
the Company under the "performance-based compensation" exception to
compensation deduction limits which would otherwise be imposed on the
Company under Section 162(m) of the Code.
(b) APPOINTMENT OF OTHER MEMBERS. In the event that one or more
members of the Committee shall fail to meet the qualifications set forth
in Section 4.2(a), the Board shall remove such member or members and
appoint a successor or successors who satisfy such qualifications. The
Board shall act in a reasonably prompt manner to fill any vacancy on the
Committee from among such of its members who are both Non-Employee
Directors and Outside Directors.
(c) VALIDITY OF GRANTS. Notwithstanding the qualifications for
members of the Committee established in Section 4.2(a), any award of
Options made by the Committee in good faith and without the knowledge that
one or more of its members did not satisfy such qualifications, shall be
valid and enforceable by the Optionee even though the members of the
Committee did not, at the time of such award, satisfy such qualifications.
Section 4.3 ACTIONS BY THE COMMITTEE. A majority of the members of
the Committee shall constitute a quorum. In the absence of specific rules
to the contrary, action by the Committee shall require the consent of a
majority of the members of the Committee, expressed either orally at a
meeting of the Committee or in writing in the absence of a meeting.
Section 4.4 ACTIONS BY THE BOARD. Any authority granted to the
Committee may also be exercised by the full Board, except to the extent
that the grant or exercise of such authority would cause any Option or
transaction to become subject to (or lose an exemption under) the short-
swing profit recovery provisions of Section 16 of the Exchange Act or
cause an Option not to qualify for, or to cease to qualify for, the
exemption as "performance-based compensation" under Section 162 of the
Code, and the regulations promulgated thereunder. To the extent that any
permitted action taken by the Board conflicts with action taken by the
Committee, the Board action shall control.
Section 4.5 LIMITATION ON LIABILITY AND INDEMNIFICATION OF BOARD. No
member of the Board, no executive officer or other employee of the
Company, and no other agent or representative of the Company shall be
liable for any act, omission, interpretation, construction, or
determination made in connection with the Plan in good faith, and all such
persons shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage, or expense (including
attorneys fees) arising therefrom to the full extent permitted by law,
except as otherwise may be provided in the Company's articles of
incorporation and/or by-laws, and under any directors' and officers'
liability insurance that may be in effect from time to time.
SECTION 5. PERSONS ELIGIBLE TO BECOME OPTIONEES. Persons who are (a)
key salaried employees of the Company or any Subsidiary or (b) prospective
key salaried employees who have accepted offers of employment from the
Company or a Subsidiary shall be eligible to be selected, in the sole
discretion of the Committee, to participate in, and receive an award of
one or more Options pursuant to the Plan.
SECTION 6. AWARDING OF OPTIONS.
Section 6.1 OPTIONEES. Subject to the limitations of Section 5,
Options shall be awarded to such eligible employees of the Company and its
Subsidiaries as the Committee may, from time to time and at any time,
select. Membership of an employee or prospective employee in a class
shall not, without specific Committee action, entitle such employee or
prospective employee to receive an Option award.
Section 6.2 OPTION AGREEMENT. Each Option shall be evidenced by an
Option Agreement, the terms of which may differ from other Option
Agreements. Each Option Agreement shall be signed on behalf of the
Company and, if so provided by the Committee, the Optionee, and shall set
forth with respect to the Option or Options awarded therein, the name of
the Optionee, the date awarded, the Option Price, the number of Shares
subject to the Option, and such other terms and conditions consistent with
the Plan as determined by the Committee. The Committee may at the time of
award or at any time thereafter impose such additional terms and
conditions on the exercise of such Option as it deems necessary or
desirable for such Option, or the exercise thereof, to be exempt under
Section 16(b) of the Exchange Act, and the regulations promulgated
thereunder, and to qualify as "performance-based compensation" under
Section 162 of the Code, and the regulations promulgated thereunder. Each
Option Agreement shall incorporate by reference all terms, conditions and
limitations set forth in the Plan.
Section 6.3 TERMS AND CONDITIONS OF THE OPTIONS. In addition to any
other terms, conditions, and limitations specified in the Plan, each
Option awarded hereunder shall, as to each Optionee, satisfy the following
requirements:
(a) DATE OF AWARD. Options must be awarded on or before
February 19, 2011.
(b) EXPIRATION. No Option shall be exercisable after the
expiration of ten years from the date such Option is awarded.
(c) PRICE. The Option Price as to any Share subject to an
Option may not be less than the Fair Market Value of the Share on the date
the Option is awarded.
(d) LIMITATIONS ON TRANSFERABILITY. No Option shall be
transferable by the Optionee other than by will or the laws of descent and
distribution, nor can it be exercised by anyone other than the Optionee
during the Optionee's lifetime. No Option may be sold, transferred,
assigned, pledged, hypothecated, encumbered, or otherwise disposed of
(whether by operation of law or otherwise), or be subject to execution,
attachment, or similar process. Upon any attempt to so sell, transfer,
assign, pledge, hypothecate, encumber, or otherwise dispose of any such
award, such award and all rights thereunder shall immediately become null
and void.
(e) EXERCISE. Except as otherwise permitted by the Committee,
options must be exercised in accordance with the following time
limitations:
(i) TERMINATION BY DEATH. If an Optionee incurs a
Termination of Employment by reason of death, any Option held by such
Optionee may thereafter be exercised, to the extent then exercisable, for
a period of one year from the date of such death or until the expiration
of the stated term of such Option, whichever period is shorter.
(ii) TERMINATION BY REASON OF DISABILITY. If an Optionee
incurs a Termination of Employment by reason of Disability, any Option
held by such Optionee may thereafter be exercised by the Optionee (or the
estate of the Optionee in the event of death), to the extent it was
exercisable at the time of such Termination of Employment, for a period of
one year.
(iii) OTHER TERMINATION. Unless otherwise determined by
the Committee, if the Optionee incurs a Termination of Service for Cause,
all Options then held by such Optionee shall terminate and may not be
exercised from and after the effective date of such Termination of
Service. If an Optionee incurs a Termination of Service for any reason
other than death, Disability, or Cause, any Option then held by the
Optionee, to the extent it was exercisable on the date of such Termination
of Service, may be exercised for a period of three months from the date of
such Termination of Service or until the expiration of the stated term of
such Option, whichever period is shorter.
(IV) DEATH AFTER TERMINATION. If the Optionee dies
subsequent to a Termination of Service for any reason other than Cause
(unless otherwise determined by the Committee in the event of Termination
of Service for Cause), then, notwithstanding any other limitation on the
exercise of the Optionee's Option set forth in subparagraphs (i), (ii) or
(iii), any Option held by such Optionee on the Optionee's date of death
may thereafter be exercised, to the extent it was exercisable on such
date, for a period of one year from the date of death or until the
expiration of the stated term of such Option, whichever period is shorter.
(f) MINIMUM HOLDING PERIOD. No Option may be exercised before
the date which is six months after the later of (i) the date on which the
Plan is approved by the shareholders of the Company, or (ii) the date on
which such Option was awarded.
(g) ADDITIONAL RESTRICTIONS RELATING TO OPTIONS. No Option may
be awarded (i) to the extent that the aggregate Fair Market Value
(determined as of the time the Option is awarded) of the Shares for which
Options are exercisable for the first time by an individual during any
calendar year (under the Plan or any other plan of the Company or a
Subsidiary) exceeds $100,000 (or such other individual limit as may be in
effect under the Code on the date of award) and (ii) to an employee who,
at the time such Option is awarded, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or
any Subsidiary within the meaning of Section 422(b)(6) of the Code unless
(A) at the time the Option is awarded, the Option Price is at least 110%
of the Fair Market Value of the Shares subject to the Option, and (B) such
Option by its terms is not exercisable after the expiration of five years
from the date such Option is awarded.
(h) LIMITATION ON OPTION AWARDS. No Optionee may be awarded
Options under the Plan in any calendar year with respect to more than
2,500 Shares.
Section 6.4 TERMINATION OR LAPSE OF OPTIONS. Each Option shall
terminate or lapse upon the first to occur of (a) the expiration date or
any date as of which the Option is deemed to be forfeited as set forth in
the applicable Option Agreement, (b) the applicable date determined by
Section 6.3(b), or (c) midnight of the last day such Option could be
exercised under Section 6.3(e).
SECTION 7. EXERCISE AND PAYMENT OF OPTION PRICE.
Section 7.1 EXERCISE OF OPTIONS. Options shall be exercised as to
all or a portion of the Shares subject to the Option by written notice to
the Company setting forth the exact number of Shares as to which the
Option is being exercised and including with such notice payment of the
Option Price (plus the minimum required tax withholding, if any). The
date of exercise shall be the date such written notice and payment have
been delivered (in cash or in such other manner as provided in Section
7.2) to the Secretary of the Company either in person or by depositing
said notice and payment in the United States mail, postage pre-paid and
addressed to such officer at the Company's home office.
Section 7.2 PAYMENT FOR SHARES. Payment of the Option Price (plus
required tax withholding, if any) may be made (a) by tendering cash (in
the form of a check or otherwise) in such amount or (b) with the consent
of the Committee, and if authorized in the Option Agreement, by tendering
Shares owned by the Optionee with a Fair Market Value on the date of
exercise equal to such amount or (c) any combination of (a) and (b);
provided, however, that any Shares delivered in payment of the Option
Price shall have been purchased on the open market and held by the
Optionee for at least six months at the time of exercise of the Option.
Section 7.3 TAX WITHHOLDING. Although the Options are intended to
qualify as incentive stock options under Sections 422 of the Code, the
delivery of Shares under the Plan is subject to withholding of all
applicable taxes, and the Committee may condition the delivery of any
Shares or other benefits on satisfaction of applicable withholding
obligations.
Section 7.4 ISSUANCE OF SHARES. No Shares shall be issued until full
payment therefor has been made. An Optionee shall have all of the rights
of a shareholder of the Company holding the Common Stock that is subject
to such Option (including, if applicable, the right to vote the Shares and
the right to receive dividends), when the Optionee has given written
notice of exercise, has paid in full for such Shares and, if requested,
has given the representation described in Section 11.
SECTION 8. CHANGE IN CONTROL.
Section 8.1 ADJUSTMENT OF OPTIONS.
(a) VESTING AND CASH PAYMENT. In the event of a Change in
Control,
(i) all Options outstanding on the date on which such
Change in Control has occurred (the "Change in Control Date") shall, to
the extent not then exercisable or vested, immediately become exercisable
in full, and
(ii) each Optionee may elect (the Optionee's "Election
Right") with respect to each Option held by such Optionee on the Change in
Control Date to surrender such Option for an immediate lump sum cash
payment in an amount equal to the product of (A) the number of Shares then
subject to the Option as to which the election is being exercised
multiplied by (B) the excess, if any, of (1) the greater of (a) the Change
in Control Price or (b) the highest Fair Market Value of a Share on any
day in the 60-day period ending on the Change in Control Date, over (2)
the Option Price of such Option. For purposes of this Section 8.1(a), the
"Change in Control Price" shall mean, if the Change in Control is the
result of a tender or exchange offer or a Corporate Transaction (as
defined in Section 8.2(c)), the highest price per Share paid in such
tender or exchange offer or Corporate Transaction, and, to the extent that
the consideration paid in any such transaction consists all or in part of
securities or other noncash consideration, the value of such securities or
other noncash consideration shall be determined in the sole discretion of
the Committee.
(b) ELECTION. The exercise of an Election Right must be in
writing, specify the Option or Options and the number of Shares as to
which the election is being exercised, and be delivered to the Secretary
of the Company or his successor either in person or by depositing said
notice and payment in the United States mail, postage pre-paid and
addressed to such officer at the home office of the Company or its
successor on or before the 60th day following the Change in Control Date.
(c) PAYMENT DATE. All payments due an Optionee pursuant to the
provisions of this Section 8.1 shall be made by the Company or its
successor on or before the 5th business day following the date on which
the Optionee's election has been delivered pursuant to Section 8.1(b).
(d) POOLING CONSIDERATIONS. Notwithstanding any other provision
of this Section 8.1, if the grant or the exercise of an Optionee's
Election Right or payment of cash provided for in this Section 8.1 would
make a Change in Control transaction ineligible for pooling-of-interests
accounting treatment under APB No. 16, that, but for the nature of such
grant or exercise of Election Rights or payment of cash, would otherwise
be eligible for such pooling-of-interests accounting treatment, the
Committee shall have the right and authority to substitute for the cash
payments to be made to the Optionee pursuant to Section 8.1(a), Common
Stock with a Fair Market Value, determined as of the date of delivery of
such Shares, equal to the cash that would otherwise be payable to such
Optionee in connection with the exercise of an Optionee's Election Right
hereunder or, to the extent necessary to preserve such pooling-of-
interests accounting treatment, to otherwise modify, eliminate, or
terminate such Election Right.
Section 8.2 DEFINITION OF "CHANGE IN CONTROL." For purposes of the
Plan, a "Change in Control" means the happening of any of the following
events:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this paragraph (a), the following
acquisitions shall not constitute a Change in Control: (A) any acquisition
directly from the Company other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted
was itself acquired directly from the Company, (B) any acquisition by the
Company, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any entity controlled by
the Company, and (D) any acquisition pursuant to a transaction which
complies with clauses (i), (ii), and (iii) of paragraph (c) of this
Section 8.2; or
(b) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board; provided,
however, for purposes of the Plan, that any individual who becomes a
member of the Board subsequent to the Effective Date whose election, or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be deemed to be and shall be
considered as though such individual were a member of the Incumbent Board,
but provided, further, that any such individual whose initial assumption
of office occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board shall not be so deemed or considered as a member of the
Incumbent Board; or
(c) Consummation of a reorganization, merger or consolidation,
or sale or other disposition of all or substantially all of the assets of
the Company or the acquisition of the assets or securities of any other
entity (a "Corporate Transaction"); excluding, however, such a Corporate
Transaction pursuant to which (i) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all
or substantially all of the Company's assets either directly or through
one or more subsidiaries) (the "Resulting Company") in substantially the
same proportions as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person (other than
the Company, any employee benefit plan (or related trust) of the Company)
will beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the Resulting
Company or the combined voting power of the then outstanding voting
securities of such Resulting Company entitled to vote generally in the
election of directors except to the extent that such ownership existed
with respect to the Company prior to the Corporate Transaction, and (iii)
individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the Resulting
Company; or
(d) The approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
SECTION 9. AMENDMENT AND TERMINATION OF PLAN.
Section 9.1 AMENDMENT OF PLAN. The Board may amend the Plan from
time to time and at any time; provided, however, that (a) except as
specifically provide herein, no amendment shall, in the absence of written
consent to the change by an affected Optionee, adversely affect such
Optionee's rights under any Option which has been awarded prior to the
amendment except to the extent such amendment is, in the sole opinion of
the Committee, required to comply with any stock exchange or over-the-
counter market listing rules, accounting rules, or laws applicable to the
Company or the Plan, (b) no amendment with respect to the maximum number
of Shares which may be issued pursuant to Options under the Plan or to any
individual in any calendar year made be made unless approved by a majority
of the Shares entitled to vote at a meeting of the shareholders if such
amendment would, in the absence of such approval and in the sole opinion
of the Committee, have an adverse effect on the Company under applicable
tax or securities laws or accounting rules, and (c) no amendment shall be
made without the approval of the Company's shareholders to the extent such
approval is required by applicable law or stock exchange or over-the-
counter market listing rules.
Section 9.2 TERMINATION OF PLAN. The Plan shall terminate on the
first to occur of (a) February 19, 2011 or (b) the date specified by the
Board as the effective date of Plan termination; provided, however, that
the termination of the Plan shall not limit or otherwise affect any
Options outstanding on the date of termination.
SECTION 10. EFFECTIVE DATE. Notwithstanding any provision of this
Plan to the contrary, the Plan shall not be effective, and any Options
awarded under the Plan shall be null and void, unless the adoption of the
Plan is approved at the annual meeting of the Company's shareholders next
following the Effective Date by the majority of the shares entitled to
vote at such meeting.
SECTION 11. INVESTMENT INTENT. The Committee may require each person
purchasing or receiving Shares pursuant to an Option to represent to and
agree with the Company in writing that such person is acquiring the Shares
without a view to the distribution thereof. The certificates for such
Shares may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer imposed in connection with the
Company's compliance with any securities law.
SECTION 12. AVAILABILITY OF INFORMATION. If the Shares subject to an
Option are not registered or to be registered under the Securities Act of
1933 as amended, the Company shall furnish each Optionee with (a) a copy
of the Plan and the Company's most recent annual report to its
shareholders at the time the Option Agreement is delivered to the Optionee
and (b) a copy of each subsequent annual report and proxy statement, on or
about the same date as such report shall be made available to shareholders
of the Company. The Company will furnish, upon written request addressed
to the Secretary of the Company, but at no charge to the Optionee or any
duly authorized representative of the Optionee, copies of all reports
filed by the Company with the Securities and Exchange Commission,
including, but not limited to, the Company's annual reports on Form 10-K,
its quarterly reports on Form 10-Q, and its proxy statements.
Notwithstanding the foregoing provisions of this Section 12, the Company
shall not be required to furnish any such report or statement if a copy of
such report is otherwise provided to the Optionee in connection with
another plan maintained by the Company or such Optionee's status as a
shareholder of the Company or if, by virtue of such Optionee's employment
or office with the Company or a Subsidiary, the Optionee has received such
report or statement.
SECTION 13. LIMITATION OF RIGHTS.
(a) CONDITIONS OF EMPLOYMENT. The Plan shall not constitute a
contract of employment, and participation in or eligibility for
participation in the Plan shall not confer upon any employee the right to
be continued as an employee of the Company or any present or future
Subsidiary and the Company and each Subsidiary hereby expressly reserves
the right to terminate the employment of any employee, with or without
cause, as if the Plan and any Options awarded pursuant to it were not in
effect.
(b) COMPANY ASSETS. Neither an Optionee nor any other person
shall, by reason of receiving an award of an Option under the Plan acquire
any right, title, or interest in any assets of the Company or any
Subsidiary by reason of such Option or the Plan. To the extent an
Optionee or any other person shall acquire a right to receive payments
from the Company pursuant to an Option Agreement or the Plan, such right
shall be no greater than the right of any unsecured general creditor of
the Company.
(c) ISSUANCE OF SHARES. Notwithstanding any other provision of
the Plan or agreements made pursuant thereto, the Company shall not be
required to issue or deliver any certificate or certificates for Shares
under the Plan prior to fulfillment of all of the following conditions:
(i) Listing or approval for listing upon notice of
issuance, of such Shares on the exchange or over-the-counter market as may
at the time be the principal market for the Common Stock;
(ii) Any registration or other qualification of the Shares
under any state or federal law or regulation, or the maintaining in effect
of any such registration or other qualification which the Committee shall,
in its absolute discretion upon the advice of counsel, deem necessary or
advisable; and
(iii) Obtaining any other consent, approval, or permit from
any state or federal governmental agency which the Committee shall, in its
absolute discretion after receiving the advice of counsel, determine to be
necessary or advisable.
SECTION 14. COMPLIANCE WITH APPLICABLE LAWS. If at any time the
Company shall be advised by its counsel that the exercise of any Option or
the delivery of Shares upon the exercise of an Option is required to be
approved, listed, registered or qualified under any securities law, that
certain actions must be taken under the rules of any stock exchange or
over-the-counter market, that such exercise or delivery must be
accompanied or preceded by a prospectus or similar circular meeting the
requirements of any applicable law, or that some other action is required
to be taken by the Company in compliance with applicable law, the Company
will use reasonable efforts to take all actions required within a
reasonable time, but exercise of the Options or delivery by the Company of
certificates for Shares may be deferred until the Company shall be in
compliance with all such requirements.
SECTION 15. GOVERNING LAW. The Plan, each Option and related Option
Agreement and all determinations made and actions taken pursuant thereto,
to the extent not otherwise governed by the Code or the laws of the United
States, shall be governed by the internal laws of the State of Wisconsin
and construed in accordance therewith without giving effect to the
principles of conflicts of laws applied by any state.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed by
its duly authorized officers as of March 19, 2001.
PSB HOLDINGS, INC.
By: DAVID K. KOPPERUD
David K. Kopperud
President
PSB Holdings, Inc.
____________________________
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
2000 FORM 10-K ANNUAL REPORT
PSB HOLDINGS, INC.
PROXY SOLICITED BY DIRECTORS FOR ANNUAL MEETING
APRIL 17, 2001
The undersigned hereby appoint(s) James E. Low and Harold H. Telschow, and
each of them, proxies of the undersigned, with full power of substitution, to
vote all shares of common stock of PSB Holdings, Inc. that the undersigned is
entitled to vote at the annual meeting of shareholders to be held on April 17,
2001 and at any adjournment thereof (the "Annual Meeting"). The proxies have
the authority to vote such stock with respect to the proposals set forth in
the Proxy Statement dated March 30, 2001 with the same effect as though the
undersigned were present in person and voting such shares. The undersigned
hereby revokes all proxies heretofore given to vote at the Annual Meeting and
any adjournment thereof.
PLEASE INDICATE HOW YOUR STOCK IS TO BE VOTED. IF NO SPECIFIC VOTING
INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS
RECOMMENDED BY THE BOARD OF DIRECTORS.
THE DIRECTORS RECOMMEND A VOTE FOR THE ELECTION OF EACH NOMINEE, APPROVAL
OF THE AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION AND APPROVAL OF THE
2001 STOCK OPTION PLAN.
1. Election of Directors:
CLASS I (2002)* CLASS II (2003)* CLASS III (2004)*
PATRICK L. CROOKS GORDON P. CONNOR WILLIAM J. FISH
LAWRENCE HANZ, JR. CHARLES A. GHIDORZI DAVID K. KOPPERUD
THOMAS R. POLZER GORDON P. GULLICKSON THOMAS A. RIISER
WILLIAM M. REIF
EUGENE WITTER
*If Proposal No.2 is not approved by the shareholders, each director to be
elected for a term of office that will expire at annual meeting to be held in
2002
FOR each nominee listed above WITHHOLD AUTHORITY
(except as marked to to vote for all nominees listed
the contrary below) above
(Instruction: To withhold authority to vote for any individual nominee(s),
print the name of the nominee on the space provided:
__________________________________________________________________
FOR AGAINST ABSTAIN
2. To approve the amendment to Article 5
of the restated articles of incorporation to
provide for a classified board of directors
FOR AGAINST ABSTAIN
3. To approve the 2001 Stock Option Plan
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
(YOU MUST SIGN, DATE AND COMPLETE THE REVERSE SIDE.)
PSB HOLDINGS, INC.
PROXY SOLICITED BY DIRECTORS FOR ANNUAL MEETING
APRIL 17, 2001
IF NO SPECIFIC VOTING INSTRUCTIONS ARE GIVEN ON THE OTHER SIDE, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF
DIRECTORS.
Please print name of shareholder below: Dated _________________, 2001
Name:__________________________ __________________________________
(Please Print) Signature
Name:__________________________ ___________________________________
(Please Print) Signature if held jointly
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name
by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.