def14a-113084_psb.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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| PSB Holdings, Inc. |
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Notice of Annual Meeting of Shareholders
of
PSB Holdings, Inc.
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The annual meeting of shareholders of PSB Holdings, Inc. will be held at 3:00 p.m., Tuesday, April 19, 2011, at Best Western Midway, 2901 Hummingbird Road, Wausau, Wisconsin for the following purposes:
1. To elect thirteen directors;
2. To ratify the audit committee’s selection of Wipfli LLP as our independent auditor for the 2011 fiscal year; and
3. To transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on March 2, 2011, are entitled to notice of, and to vote at, the annual meeting of shareholders and any adjournment thereof.
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/s/ Peter W. Knitt
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Peter W. Knitt
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President
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March 15, 2011
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.
Proxy Statement
for
Annual Meeting of Shareholders
to be held April 19, 2011
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PSB Holdings, Inc.
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March 15, 2011
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1905 W. Stewart Avenue
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Wausau, Wisconsin 54401
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Proxy Statement for
Annual Meeting of Shareholders
to be held April 19, 2011
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 2011 annual meeting of shareholders, including any adjournment thereof. The annual meeting will be held at 3:00 p.m., April 19, 2011, at Best Western Midway, 2901 Hummingbird Road, Wausau, Wisconsin.
Proxies and Voting Procedures
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 at the annual meeting.
All shares represented by your properly completed proxy will be voted in accordance with your instructions if the proxy has been submitted to us prior to the meeting and has not been revoked. 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 recommends.
If any matters not specified in the accompanying notice of annual meeting are properly presented to shareholders 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.
Shareholders Entitled to Vote
Shareholders at the close of business on the record date, March 2, 2011, 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 1,572,992 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.
“Street Name” Accounts. If you hold shares in “street name” with a broker, bank, or other custodian, you will receive voting instructions from the holder of record of your shares. In some cases, a broker may be able to vote your shares even if you provide no instructions, but on other matters (such as the election of directors) your broker may vote the shares held for you only if you provide voting instructions. Shares for which a broker does not have the authority to vote are recorded as a “broker non-vote” and are not counted in the vote by shareholders. If you hold your shares in “street name,” it is critical that you cast your vote if you want it to count in the election of our directors. In the past, if you held your shares in “street name” and you did not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors as they felt appropriate. Recent changes in regulation were made to take away the ability of your bank or broker to vote your uninstructed shares in the election of directors on a discretionary basis. Accordingly, if you hold your shares in “street name” and you do not instruct your bank or broker how to vote in the election of directors, no votes will be cast on your behalf. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of our independent auditors.
Proposal No. 1—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 thirteen directors to be chosen at the annual meeting. You may vote in favor of the nominees specified on the accompanying form of proxy, or you 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.
Proposal No. 2—Ratification of Selection of Auditors. Proposal No. 2, relating to the ratification of our selection of Wipfli LLP as our independent auditors, will be approved if a majority of the shares of stock represented and voted at the annual meeting vote for approval, provided that a majority of the outstanding shares of stock are voted on the proposal. Shareholders may vote in favor of the proposal, against the proposal, or abstain from voting; however, shares that are not voted on Proposal No. 2 because of abstention will not have any effect on whether or not the proposal is adopted.
All Other Proposals. As of the date of this proxy statement, we do not know of any other proposals to be brought before the annual meeting. Generally, a proposal other than the election of directors that is brought before the meeting will be approved if the votes cast for the proposal exceed the votes cast against the proposal.
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 and Other Shareholder Proposals
Any shareholder who intends to present a proposal at the annual meeting to be held in 2012 must deliver the written proposal to the Secretary of the Company at our office in Wausau, Wisconsin:
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not later than November 15, 2011, 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, as amended (the “Exchange Act”); or
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on or after January 20, 2012, but not later than February 20, 2012, if the proposal is submitted pursuant to our bylaws, in which case we are not required to include the proposal in our proxy materials.
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Shareholders may present a proposal at the 2012 annual meeting for consideration only if proper notice of the proposal has been given in accordance with one of these requirements. Nominations for director made from the floor at the annual meeting of shareholders to be held in 2011 require advance notice in accordance with the bylaws.
Number 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. Our directors also serve as members of the board of directors of our subsidiary, Peoples State Bank (the “Bank”). The Board has set the number of directors at thirteen as of the date of our annual meeting of shareholders.
Attendance at Board Meetings. During 2010, the Board met 13 times and the Bank’s Board met 13 times. All 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.
Communicating with the Board. Shareholders and others may communicate with the Board by writing to the Chairman at our corporate office, P.O. Box 1686, Wausau, Wisconsin 54402-1686. Individual directors may also be contacted in writing at the same address. Mail that prominently contains the words “Shareholder Communication” on the envelope will be forwarded unopened to the director to whom it is addressed. Mail that is not so marked may be opened for sorting before it is forwarded to the director to whom it is addressed. If a complaint or concern involves accounting, internal accounting controls, or auditing matters, the correspondence may be addressed, and will be forwarded to the Chairman of the Audit Committee. Our website, www.psbholdingsinc.com, also describes the Audit Committee’s concern or complaint procedures in its “Employee Misconduct and Dishonesty Policy.”
Attendance at Annual Meetings. The Board has an informal policy under which all directors are expected to attend the annual meeting of shareholders unless other business matters require immediate attention. All directors attended the annual meeting held in 2010.
Certain Relationships and Related Transactions. We have not adopted any formal policies or procedures for the review, approval, or ratification of transactions that may be required to be reported under the Securities and Exchange Commission (“SEC”) disclosure rules. These transactions, if and when they are proposed or have occurred, have been or will in the future be reviewed by the entire Board (other than the director involved) on a case-by-case basis. The Board’s review considers the importance of the transaction to the Company; the availability of alternative sources or service providers to meet the Company’s requirements; the amount involved in the proposed transaction; the specific interest of the director or executive officer (or immediate family member) in the transaction; whether information concerning the fees, costs, or other terms of substantially similar arms-length transactions between unrelated parties is available; whether the terms of the proposed transaction present any unusual or unfavorable features to the Company; and such other factors as the Board may consider important and appropriate to its determination.
There was no transaction with related parties in 2010 that is required to be disclosed under the rules of the SEC because it exceeded the lesser of (1) $120,000 or (2) 1% of the Company’s total assets, and none of our directors or executive officers (or their affiliates or members of their immediate family) had a direct or indirect material interest in such a transaction. During the year, 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 for which they serve as directors and officers, conducted banking transactions with the Bank or provided certain services to the Company. 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 collectability or present other unfavorable features. In our opinion, all banking and other transactions were made on terms at least as favorable to the Company as those which are available to unaffiliated parties.
Director Independence. With the exception of Mr. Knitt, each of our directors satisfies the criteria for director independence under the listing standards applicable to companies listed on The Nasdaq National Market. The Nasdaq criteria for independence are used because the Company is not listed on any exchange. In reaching its determination of independence, the Board considered that Mr. Gullickson receives a perquisite in the form of club memberships, but no consulting, advisory, or other compensatory fee; that the law firm in which Mr. Crooks is a shareholder receives certain legal fees from the Company; and that Ms. Kieffer is an officer of a closely-held Company that receives certain payments for printing and publishing services from the Company.
Our Board appoints both the Nominating Committee and Audit Committee. The Bank’s board appoints a Compensation Committee, which serves in lieu of a compensation committee of our Board. For more information regarding our Board’s Nominating Committee, see “Proposal No. 1 – Election of Directors” below.
Audit Committee. The Audit Committee is established in accordance with Section 3(a)(58)(A) of the Exchange Act and held four meetings in 2010. The Audit Committee operates under a charter adopted by the Board and assists the Board in monitoring (1) the integrity of our financial statements, (2) the independent auditor’s qualifications and independence, (3) the performance of our internal audit function and independent auditors, and (4) our compliance with legal and regulatory requirements. A copy of the Audit Committee’s charter is available on the Company’s website at www.psbholdingsinc.com. Mr. Polzer (Chairman), Mr. Crooks, Mr. Fish, and Mr. Gullickson serve as members of the Audit Committee. A majority of the Committee members (Mr. Polzer, Mr. Fish, and Mr. Gullickson) satisfy the additional Nasdaq and SEC criteria for audit committee member independence. See “Audit Committee Report and Related Matters – Audit Committee Report.”
Compensation Committee. We pay no compensation to our officers. All officers are full-time employees of the Bank. Mr. Ghidorzi (Chairman), Mr. Fish, Mr. Polzer, and Mr. Crooks serve as members of the Bank’s Compensation Committee. The committee met three times during 2010. See “Executive Officer Compensation.”
Although the Board is not involved in the day-to-day management of risks facing our Company or the Bank, the Board plays an important role in risk oversight. The Company’s risk management systems, including our internal and external auditing procedures and internal controls over financial reporting, among others, are designed in part to bring to the Board’s attention the Company’s most material risks so that the Board can understand and evaluate how those risks might affect the Company and how management is responding to those risks. The Board also works with and supports management in promoting a corporate culture that understands the importance of enterprise-wide risk management and incorporates it into day-to-day decisions that are made regarding our business. A high priority is placed on risk-aware and risk-adjusted decision making throughout the Company, and regular efforts are undertaken to assess and analyze the most likely areas of future risk for the Company.
A significant element of the Company’s risk involves loans made by the Bank. The Bank’s Loan Committee, which includes six members of our Board, recommends, and the Bank’s Board adopts, updates to the loan policy on an annual basis. The Bank’s loan committee also meets on a regular basis in order to review proposals for loans that exceed certain thresholds or involve other risks. All of the Bank’s loans are also given a risk rating, and problem or delinquent loans are reviewed with the Bank’s Loan Committee on a regular basis.
Our Audit Committee is also charged with, among other duties, regularly discussing with management and our independent auditors the Company’s major financial risk exposures and the steps management has taken to monitor and control those risk exposures, including the Company’s risk assessment and risk management policies. Finally, the Audit Committee has established procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
Another significant element of the Company’s risk involves the interest rate risk embedded in the assets and liabilities identified on our balance sheet and the liquidity and capital needs required by operations. The Bank’s Asset-Liability and Investment Committee (“ALCO Committee”) includes four members of our Board and monitors interest rate risk, available liquidity and capital resources, investment security transactions, and significant changes in loan and deposit product pricing. The ALCO Committee meets on a quarterly basis. The Committee engages an outside independent consultant concerning the management of and strategy surrounding these risks.
Board Leadership Structure
Mr. Crooks serves as Chairman of our Board and brings to this role his experience as a longtime director of the Company. Mr. Knitt, who serves as the Company’s President, is also a director; however, Mr. Crooks leads the Board meetings in his role as Chairman, thereby allowing Mr. Knitt to provide greater focus on the Company’s (and the Bank’s) day-to-day operations. Mr. Knitt and Mr. Crooks work together in developing agendas for board meetings and otherwise establishing Board priorities and procedures. We believe that this structure best allows the Board to fulfill its oversight role at this time; however, the Board does not have a specific policy regarding the separation of the roles of President and Chairman, as it believes that it is in the best interest of the Company to make that determination on a case-by-case basis based on the position and direction of the Company, as well as the membership of the Board, at the time.
Proposal No. 1 – Election of Directors
Nominating Committee and Identification of Candidates. The Board has appointed a Nominating Committee made up of Messrs. Riiser (who serves as Chairman of the Committee) Ghidorzi, Fish, and Crooks, each of whom is an independent director as determined in accordance with the listing standards applicable to companies listed on The Nasdaq National Market. Nominations for directors are recommended to the Board by the Nominating Committee. In making recommendations to the Board regarding nominees for director, the Nominating Committee considers the following factors, among other things, important:
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the Company is engaged almost exclusively in community-based commercial and retail banking within a three-county market area; consequently, there is a need to identify Board members who understand and are involved as users of banking services in the Company’s market area rather than candidates who have national or regional banking experience; and
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the nature of community-based banking requires directors who can be strong supporters of the Company’s business in its market area.
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The Nominating Committee will consider candidates for election from a wide variety of potential sources and may, from time to time, recommend adjustments to the size of the Board to reflect the number of qualified Board candidates. Persons considered for nomination by the Board and inclusion in the Board’s proxy statement may include incumbents whose term will expire at the next annual meeting or persons identified by members of the Nominating Committee or Board, executive officers, and shareholders.
Shareholder Recommendations. To recommend an individual for consideration, a shareholder should mail or otherwise deliver a written recommendation to the Board not later than the December 1 immediately preceding the annual meeting for which the individual is to be considered for inclusion as a nominee of the Board. At a minimum, a shareholder recommendation should include the individual’s current and past business or professional affiliations and experience, age, stock ownership, particular banking, or business qualifications, if any, and such other information as the shareholder deems relevant to assist the Board in considering the individual’s potential service as a director.
Qualifications. In reviewing potential nominees, the Nominating Committee considers the qualifications of the nominee and the mix of age, skills, and experience of current Board members. All potential nominees submitted to, or identified by, the Nominating Committee are evaluated on a similar basis for their level of qualifications and experience. While the Nominating Committee has not adopted specific minimum qualification requirements, the Nominating Committee believes that persons nominated for director should possess a combination of age, experience, and skills and, to as great an extent as possible, the following attributes:
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a reputation for personal and professional integrity and high regard in the community;
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comprehensive knowledge of our banking market area and customer base;
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a successful business career and an ability to enhance our banking business;
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proven sound business judgment and skills;
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the ability to understand the economic, financial, operational, and regulatory issues affecting our banking business; and
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a motivation to benefit the organization, rather than obtaining personal gain or prestige.
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The Nominating Committee will also evaluate candidates in light of its objective to attain greater gender diversity among its members; however, the Committee does not have any specific policy regarding Board diversity.
Members of the Nominating Committee do not take part in the consideration of their own candidacy as directors. Incumbent Board members are considered by the Nominating Committee on the basis of the qualities outlined above, as well as on the basis of their service during their term in office.
Directors are required to own a minimum of 500 shares of our stock by the first anniversary of their election to the Board. The mandatory retirement age for directors first elected to our Board prior to August 2002, other than Mr. Gullickson, is age 77, and the mandatory retirement age is 72 for all directors first elected after July 2002.
At the annual meeting, shareholders will be asked to elect each of the following nominees to terms of office that will expire at the annual meeting of shareholders to be held in 2012. 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 of each nominee are set forth in the following table. Unless otherwise specified, each current position has been held for a minimum of five years. Also included in the table is information regarding each nominee’s specific experience, qualifications, attributes, and skills that led our Nominating Committee to recommend their nomination to the Board.
The Board recommends a vote FOR the election of each of the following nominees.
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Year Became
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Director
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Name and Age
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Principal Occupation
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of the Company
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Gordon P. Connor, 73
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Investor; President of Connor Management Corporation. We believe Mr. Connor’s qualifications to sit on our Board include his and his family’s significant holdings of Company stock, his experience as an equity and debt security investment manager, as well as his financial expertise and experience as a director of the Bank since 1989.
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1995
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Patrick L. Crooks, 76
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Chairman of the Board of the Bank; Attorney and President, Crooks, Low & Connell, S.C. We believe that Mr. Crooks’ qualifications to serve as a director include his long career as an attorney in private practice, his experience in helping organize and advise the Bank since its inception in 1962, his significant holdings of Company stock, and his experience as a director of the Bank since 1988.
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1995
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William J. Fish, 60
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President of BILCO, Inc. (McDonald’s franchisee). We believe that Mr. Fish’s qualifications to serve as a director include his significant holdings of Company stock and his experience in running small business franchises for many years.
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1995
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Charles A. Ghidorzi, 66
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Managing member of Ghidorzi Construction Company, LLC. We believe that Mr. Ghidorzi’s qualifications to serve as a director include his real estate development and construction experience, which allows him to provide perspective as the Bank considers making loans secured by real estate collateral or expansion through brick and mortar branch bank facilities.
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1997
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Gordon P. Gullickson, 82
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Chairman of the Board of the Company; retired, former
President of the Company (1995-1999) and the Bank (1986-1999). We believe that Mr. Gullickson’s decades of experience in the banking industry, including his service as president of the Company and the Bank, as well as his experience as a director of the Bank since 1986, make him qualified to serve as a director.
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1995
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Karla M. Kieffer, 49
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Vice President of Sales and co-owner of Sun Press, Inc., d/b/a SUN Printing. We believe that Ms. Kieffer’s qualifications to serve as a director include her experience in managing sales and product development, as well as her experience in operating a local business similar to our customer base, which will help us gauge local business financing and cash management needs.
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2011
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Peter W. Knitt, 52
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President and CEO of the Company and the Bank (since 2006);
formerly Senior Vice President of the Bank (2003-2006). We believe that Mr. Knitt’s qualifications to serve on our Board include his vast experience in the banking industry as both a commercial lender and as our Bank’s president and chief executive officer.
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2006
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David K. Kopperud, 65
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Former President of the Company and the Bank (1999-2006). We believe that Mr. Kopperud’s knowledge of the Company and the Bank, which arises in part from his service as president and chief executive officer and decades of experience in finance and banking, as well as Mr. Kopperud’s knowledge of commercial lending and the market areas served by the Bank in addition to his significant holdings of Company stock qualify him to serve as a director.
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1999
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Year Became
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Director
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Name and Age
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Principal Occupation
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of the Company
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Kevin J. Kraft, 33
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Chief Operating Officer and Chief Financial Officer of JARP Industries, Inc. We believe that Mr. Kraft's background in public accounting with Ernst & Young, LLP and later experience with public company Bucyrus International, Inc. performing internal financial analysis and benchmarking performance will help bring financial expertise to our directorship. Mr. Kraft’s experience in owning and operating a local manufacturer similar to our customer base will also assist us in gauging local business financing and cash management needs.
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2011
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Thomas R. Polzer, 68
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President, Polzer of Wausau, LLC and M & J Sports, Inc. We believe that Mr. Polzer’s decades of experience running small retail business enterprises and his directorship at a local bank prior to Peoples State Bank, as well as his significant holdings of Company stock, qualify him to serve as a director.
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1995
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William M. Reif, 68
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President and CEO of Wausau Coated Products, Inc. We believe that Mr. Reif’s decades of experience running closely-held manufacturing business enterprises as well as directorship experience with a significantly larger banking organization qualify him to serve as a director.
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1997
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Thomas A. Riiser, 75
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Retired; former President of Riiser Oil Company, Inc. We believe that Mr. Riiser’s experience running a closely-held business service enterprise, as well as his knowledge of our market areas and experience as a director to the Bank since 1981 qualify him to serve as a director.
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1995
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Timothy J. Sonnentag, 44
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President, County Materials Corporation. We believe that Mr. Sonnentag’s experience leading a large company with more than 40 facilities located throughout the United States, as well as his business management skills, qualify him to serve as a director.
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2009
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Director Compensation for 2010
The following table presents the compensation of our directors for 2010. A description of our director compensation policy and plans follows the table.
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Nonqualified |
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or Paid in |
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Compensation |
All Other |
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Name(1)
|
Cash |
Compensation |
Earnings |
Compensation |
Total |
| |
($) |
($)(3) |
($) |
($) |
($) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gordon P. Connor
|
|
$ |
18,800 |
|
|
$ |
1,000 |
|
|
$ |
3,246 |
|
|
$ |
0 |
|
|
$ |
23,046 |
|
|
Patrick L. Crooks
|
|
$ |
27,950 |
|
|
$ |
1,000 |
|
|
$ |
7,676 |
|
|
$ |
0 |
|
|
$ |
36,626 |
|
|
William J. Fish
|
|
$ |
27,000 |
|
|
$ |
1,000 |
|
|
$ |
11,269 |
|
|
$ |
0 |
|
|
$ |
39,269 |
|
|
Charles A. Ghidorzi
|
|
$ |
19,050 |
|
|
$ |
1,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
20,050 |
|
|
Gordon P. Gullickson
|
|
$ |
24,525 |
|
|
$ |
1,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
25,525 |
|
|
Karla M. Kieffer(2)
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
David K. Kopperud
|
|
$ |
21,900 |
|
|
$ |
1,000 |
|
|
$ |
1,755 |
|
|
$ |
0 |
|
|
$ |
24,655 |
|
|
Kevin J. Kraft(2)
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
Thomas R. Polzer
|
|
$ |
25,475 |
|
|
$ |
1,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
26,475 |
|
|
William M. Reif
|
|
$ |
17,850 |
|
|
$ |
1,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
18,850 |
|
|
Thomas A. Riiser
|
|
$ |
24,475 |
|
|
$ |
1,000 |
|
|
$ |
12,993 |
|
|
$ |
0 |
|
|
$ |
38,468 |
|
|
Timothy J. Sonnentag
|
|
$ |
16,500 |
|
|
$ |
1,000 |
|
|
$ |
547 |
|
|
$ |
0 |
|
|
$ |
18,047 |
|
|
|
(1) Mr. Knitt receives no director fees.
|
|
|
(2) Ms. Kieffer and Mr. Kraft joined the Board in January 2011.
|
|
|
(3) Amounts paid for achievement of targeted asset growth and return of equity during 2010.
|
Annual Retainer, Meeting, and Other Fees.
| |
|
Company
|
|
Bank
|
|
Board Retainer
|
|
|
|
|
|
|
|
Chairman
|
|
|
– |
|
|
$ |
12,000 |
(1) |
|
Other directors
|
|
|
– |
|
|
$ |
10,000 |
(1) |
| |
|
|
|
|
|
|
|
|
|
Meeting Fees
|
|
|
|
|
|
|
|
|
|
Board
|
|
$ |
500 |
(2) |
|
$ |
500 |
(3) |
|
Loan Committee
|
|
|
N/A |
|
|
$ |
225 |
|
|
Other Committee
|
|
$ |
300 |
|
|
$ |
300 |
|
|
Chairman’s fee
|
|
$ |
50 |
|
|
$ |
50 |
|
| |
|
|
|
|
|
|
|
|
|
Incentive Fees
|
|
|
|
|
|
|
|
|
|
Achievement of Targeted Return on Equity
|
|
|
– |
|
|
$ |
500 |
|
|
Achievement of Targeted Average Asset Growth
|
|
|
– |
|
|
$ |
500 |
|
(1) Reduced on a pro rata basis if director fails to attend at least seven meetings of the Board during fiscal year.
|
|
(2) Board meeting fee of $500 paid for Company special meetings held separately from a normally scheduled Bank Board meeting.
|
|
|
(3) Payment will be made for one excused absence.
|
2005 Deferred Compensation Plan. We maintain a deferred compensation program, the 2005 Deferred Compensation Plan, under which directors may elect prior to each January 1 to defer some or all of the fees otherwise payable by the Company and the Bank during the subsequent year. Amounts deferred become payable in cash in a form as elected by the director with options being a lump sum or in 60 or 120 monthly installments. Amounts deferred are paid the later of (1) the first day of third month following the director’s termination of service or (2) the date specified by the director in the director’s time of payment election (but the specified date can be no later than the first day of the third month following the month in which the director would have attained the director’s mandatory retirement age). The director’s election as to the form and time of payment must be made no later than December 31, 2007 (for individuals who were directors on December 31, 2007) or within 30 days of initial participation in the plan (for directors who joined the Board in 2008 or thereafter). In the event a director’s service terminates because of a change of control of the Company, as defined in the plan, payment of all deferred amounts will be made in a lump sum on the first July 1 following the director’s termination of service. For the 2010 fiscal year, interest was credited on deferred fees at a rate equal to 100% of our return on equity as defined in the plan. The plan provides for a minimum interest crediting rate of 5% and a maximum interest crediting rate of 15%. During the period following a director’s termination of service, the unpaid balance in a director’s deferral account is credited with interest at a rate of 8% per annum.
Beneficial Ownership of Common Stock
The following table sets forth, based on statements filed with the SEC or information otherwise known to us, in each case, as of the record date, the name of each person believed by us to own more than 5% of our 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
|
| |
|
|
|
The Banc Funds Company, L.L.C./ Charles J. Moore(1)
|
127,634
|
8.1%
|
|
208 S. LaSalle Street
|
|
|
|
|
Chicago, IL 60604
|
|
|
|
| |
|
|
|
|
Lawrence Hanz, Jr.
|
88,472
|
5.6%
|
|
2102 Clarberth
|
|
|
|
Schofield, WI 54476
|
|
|
|
|
(1) Shares held in various funds controlled by The Banc Fund Company, LLC, over which Mr. Moore exercises sole voting and dispositive power.
|
The following table sets forth, based on statements filed with the SEC, the amount of common stock that is deemed beneficially owned on the record date by each of our directors, each of the current executive officers named in the Summary Compensation Table, and our directors and executive officers as a group. 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; shares held by businesses or trusts over which directors exercise voting control; and shares subject to exercisable options.
| |
|
Shares of Stock
|
|
Percent of
|
|
Name
|
|
Beneficially Owned
|
|
Class
|
| |
|
|
|
|
|
|
|
Gordon P. Connor
|
|
|
22,596 |
(1) |
|
|
1.4 |
% |
|
Patrick L. Crooks
|
|
|
17,788 |
|
|
|
1.1 |
% |
|
William J. Fish
|
|
|
19,515 |
|
|
|
1.2 |
% |
|
Charles A. Ghidorzi
|
|
|
613 |
|
|
|
* |
|
|
Gordon P. Gullickson
|
|
|
5,044 |
|
|
|
* |
|
|
Karla M. Kieffer
|
|
|
0 |
|
|
|
* |
|
|
Peter W. Knitt
|
|
|
11,026 |
(2) |
|
|
* |
|
|
David K. Kopperud
|
|
|
22,115 |
|
|
|
1.4 |
% |
|
Kevin J. Kraft
|
|
|
0 |
|
|
|
* |
|
|
Thomas R. Polzer
|
|
|
20,012 |
|
|
|
1.3 |
% |
|
William M. Reif
|
|
|
6,698 |
|
|
|
* |
|
|
Thomas A. Riiser
|
|
|
17,556 |
|
|
|
1.1 |
% |
|
Timothy J. Sonnentag
|
|
|
2,025 |
|
|
|
* |
|
|
Scott M. Cattanach
|
|
|
5,814 |
(3) |
|
|
* |
|
|
All directors and officers as a group (12 persons)
|
|
|
150,802 |
(1)(2)(3) |
|
|
9.6 |
% |
|
|
(1)
|
Includes 4,967 shares held by two trusts for which beneficial ownership is disclaimed.
|
|
|
(2)
|
Includes 4,167 shares of unvested restricted stock granted to Mr. Knitt for which he holds voting rights.
|
|
|
(3)
|
Includes 560 shares that may be acquired by Mr. Cattanach through the exercise of options on or before 60 days from the record date (March 2, 2011) and 3,810 shares of unvested restricted stock granted to Mr. Cattanach for which he holds voting rights.
|
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act 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 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 and/or upon written representations from these reporting persons as to compliance with the Section 16(a) regulations, we are of the opinion that during the 2010 fiscal year, all reports required by Section 16(a) were filed on a timely basis except those listed below.
|
Name
|
Transaction Date
|
Filing Date
|
Shares
|
Price/Share
|
| |
|
|
|
|
|
Patrick L. Crooks
|
3-2-2010
|
3-19-2010
|
500
|
$19.75
|
Audit Committee Report and Related Matters
During the 2010 fiscal year, the Audit Committee met at various times with management, senior members of the Company’s financial management personnel, and the Company’s independent auditor to review and discuss, prior to their issuance, the Company’s financial statements, the Company’s reports to the SEC, and the Company’s system of internal controls. 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 auditor of matters required to be discussed pursuant to Statement on Auditing Standards No. 61 (Communication with Audit Committees), as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The Committee received from the Company’s independent auditor the written disclosure and the letter relating to the independence of the firm under the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence. The Committee also discussed with the Company’s independent auditor 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.
Management has primary responsibility for the Company’s financial statements and the filing of financial reports with the SEC. It is not the duty of the Audit Committee to conduct auditing or accounting reviews or procedures. The Committee acts only in an oversight capacity and it necessarily relies on the work and assurances provided by management and the independent auditor and it therefore does not have an independent basis to determine whether management has maintained appropriate accounting and financial reporting principles or policies or appropriate internal controls and procedures. Accordingly, the Committee’s reviews of the Company’s financial statements and its discussions with the Company’s financial management personnel and the independent auditor do not guarantee that the Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States or that the audit has been carried out in accordance with standards of the Public Company Accounting Oversight Board (United States).
On the basis of its reviews and discussions concerning the financial statements and the independence of the auditor described above, the Audit 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, 2010, for filing with the SEC.
| |
Audit Committee
|
| |
Thomas R. Polzer, Chairman
|
| |
Patrick L. Crooks
|
| |
William J. Fish
|
| |
Gordon P. Gullickson
|
Audit Committee Pre-Approval Policies
The Audit Committee is required to pre-approve audit and non-audit services performed by the Company’s independent auditor. The Committee has adopted a pre-approval policy under which certain specific services and related fees listed on a schedule of audit, audit-related, and tax services received pre-approval in 2010. In connection with the pre-approval, the Committee reviewed appropriate detailed back-up documentation and received confirmation from management and the independent auditor that each non-audit service included in the schedule may be performed by the independent auditor under applicable SEC and professional standards. Before any services are performed by the independent auditor, they are reviewed by the Company’s Chief Financial Officer to determine whether they have been included on the schedule of pre-approved services or require specific Committee action. Under the Committee’s policy, the Committee has delegated to the Chairman of the Audit Committee the authority to pre-approve specific services, other than internal control services, provided that any such pre-approvals must be presented to the full Committee at its next meeting.
In granting approval for a service, the Audit Committee (or the appropriate designated Committee member) considers the type and scope of service, the fees, whether the service is permitted to be performed by an independent auditor, and whether such service is compatible with maintaining the auditor’s independence.
Independent Auditor and Fees
The Audit Committee appointed Wipfli LLP (“Wipfli”) as independent auditor to audit the financial statements of the Company for the fiscal year ended December 31, 2010. Representatives of Wipfli will be present at the annual meeting and will have an opportunity to make a statement or respond to appropriate questions.
The following table presents aggregate professional fees paid or accrued during the 2010 and 2009 fiscal years in the categories specified. All services performed received pre-approval by the Audit Committee.
| |
|
2010
|
|
|
2009
|
|
| |
|
|
|
|
|
|
|
Audit Fees(1)
|
|
$ |
76,400 |
|
|
$ |
73,041 |
|
|
Audit-Related Fees(2)
|
|
|
15,086 |
|
|
|
26,068 |
|
|
Tax Fees(3)
|
|
|
10,277 |
|
|
|
10,138 |
|
|
All Other Fees(4)
|
|
|
6,368 |
|
|
|
4,800 |
|
| |
|
$ |
108,131 |
|
|
$ |
114,047 |
|
|
|
(1)
|
Audit fees consisted of audit work performed in the preparation of financial statements, as well as work generally only the independent auditor can reasonably be expected to provide, such as statutory audits and review of SEC filings.
|
|
|
(2)
|
Audit-related fees consisted principally of services relating to audit of an employee benefit plan and accounting and internal control consultation.
|
|
|
(3)
|
Tax fees represent professional services related to tax compliance and consultation.
|
|
|
(4)
|
Annual software licensing fee and clerical services related to human resource advertising.
|
Executive Officer Compensation
Summary Compensation Table for 2010
The following table sets forth the compensation awarded to, earned by, or paid by us and our subsidiaries during the year ended December 31, 2010, to our principal executive officer and each other executive officer as of December 31, 2010, whose total compensation exceeded $100,000:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
|
Name and
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Award(s)
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
|
Principal Position
|
|
|
($)(1)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)
|
|
|
($)(1)(3)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter W. Knitt
|
2010
|
|
$ |
228,664 |
|
|
$ |
0 |
|
|
$ |
33,994 |
|
|
$ |
0 |
|
|
$ |
33,934 |
|
|
$ |
23,794 |
|
|
$ |
24,345 |
(4) |
|
$ |
344,731 |
|
|
President, CEO, and a
|
2009
|
|
$ |
224,952 |
|
|
$ |
0 |
|
|
$ |
12,507 |
|
|
$ |
0 |
|
|
$ |
20,841 |
|
|
$ |
10,574 |
|
|
$ |
17,457 |
|
|
$ |
286,331 |
|
|
director of the Company
|
2008
|
|
$ |
218,400 |
|
|
$ |
0 |
|
|
$ |
24,998 |
|
|
$ |
0 |
|
|
$ |
5,242 |
|
|
$ |
13,471 |
|
|
$ |
18,880 |
|
|
$ |
280,991 |
|
|
and the Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott M. Cattanach
|
2010
|
|
$ |
147,626 |
|
|
$ |
1,000 |
|
|
$ |
31,993 |
|
|
$ |
0 |
|
|
$ |
21,908 |
|
|
$ |
1,529 |
|
|
$ |
14,798 |
(5) |
|
$ |
218,854 |
|
|
Secretary and Treasurer
|
2009
|
|
$ |
145,230 |
|
|
$ |
0 |
|
|
$ |
11,995 |
|
|
$ |
0 |
|
|
$ |
13,455 |
|
|
$ |
707 |
|
|
$ |
9,819 |
|
|
$ |
181,206 |
|
|
of the Company and
|
2008
|
|
$ |
141,000 |
|
|
$ |
0 |
|
|
$ |
22,003 |
|
|
$ |
0 |
|
|
$ |
3,384 |
|
|
$ |
942 |
|
|
$ |
12,395 |
|
|
$ |
179,724 |
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of the Bank
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes compensation deferred by officers under 401(k) plan and other deferred compensation plans.
|
|
(2)
|
The amounts indicated represent the grant date fair value for awards of restricted stock computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Subtopic 718-10. For Mr. Knitt, the number of shares granted was 1,478 for 2010, 831 for 2009, and 1,736 for 2008. For Mr. Cattanach, the number of shares granted was 1,391 for 2010, 797 for 2009, and 1,528 for 2008. These shares vest at the rate of 20% each year beginning on the second anniversary of the grant date, with 20% vesting on each anniversary date thereafter until the shares become fully vested. While the shares are unvested, the grantee maintains voting rights on the shares and receives dividends on the shares at the same amount and timing as all other common stock shares. All unvested restricted stock will immediately vest upon a change in control as defined in the grant agreement. All unvested shares are forfeited if the grantee’s employment with the bank is terminated for any reason.
|
|
(3)
|
Cash incentive compensation awards were made under the Focus Rewards Plan based on achievement of net income and other Bank-wide financial and non-financial goals.
|
|
(4)
|
Represents Company 401(k) contribution of $18,078, Company matching contribution of $4,000 under the Executive Deferred Compensation Plan, and $2,267 of dividends paid on unvested restricted stock.
|
|
(5)
|
Represents Company 401(k) contribution of $12,769 and $2,029 of dividends paid on unvested restricted stock.
|
Incentive Compensation, Deferred Compensation, and Other Compensation Arrangements
Focus Rewards Plan. The Bank’s Focus Rewards Plan provides an annual cash incentive opportunity for executive officers of the Company in their capacities as Bank officers. Incentive compensation is determined under a formula that derives 60% of the incentive compensation amount from the achievement of the Bank’s net income target, 20% from the achievement of specific Bank-wide financial and non-financial goals, and 20% from the Bank’s return on equity when measured against a peer group of publicly reporting banks. The following tables illustrate the potential incentive compensation, which is a percentage of a the Bank officer’s base salary, under two scenarios. Achievement of only some of the goals, but not others, would result in incentive compensation amounts falling between these two examples. Incentive compensation is paid in cash following the determination of results under the plan for the preceding fiscal year.
| |
All Specific Bank-wide Goals and
|
| |
Peer Return on Equity Goal Achieved
|
| |
% of Bank Budgeted Net Income Actually Achieved
|
|
% of Bank Budgeted
|
< 95%
|
95%
|
96%
|
97%
|
98%
|
99%
|
100%
|
|
Net Income Actually Achieved
|
Incentive Compensation as a Percentage of Base Salary
|
| |
4.00%
|
7.00%
|
7.60%
|
8.20%
|
8.80%
|
9.40%
|
10.00%
|
|
102.5%
|
|
|
|
|
|
|
12.50%
|
|
105.0%
|
|
|
|
|
|
|
16.00%
|
|
107.5%
|
|
|
|
|
|
|
20.00%
|
|
110.0%
|
|
|
|
|
|
|
25.00%
|
|
112.5%
|
|
|
|
|
|
|
30.00%
|
| |
|
|
|
|
|
|
|
| |
No Specific Bank-wide Goals Achieved
|
| |
and Peer Return on Equity Goal Not Achieved
|
| |
% of Bank Budgeted Net Income Actually Achieved
|
|
% of Bank Budgeted
|
< 95%
|
95%
|
96%
|
97%
|
98%
|
99%
|
100%
|
|
Net Income Actually Achieved
|
Incentive Compensation as a Percentage of Base Salary
|
| |
0.00%
|
3.00%
|
3.60%
|
4.20%
|
4.80%
|
5.40%
|
6.00%
|
|
102.5%
|
|
|
|
|
|
|
7.50%
|
|
105.0%
|
|
|
|
|
|
|
9.60%
|
|
107.5%
|
|
|
|
|
|
|
12.00%
|
|
110.0%
|
|
|
|
|
|
|
15.00%
|
|
112.5%
|
|
|
|
|
|
|
18.00%
|
Peter W. Knitt Executive Deferred Compensation Agreement. Mr. Knitt participates in the Bank’s Executive Deferred Compensation Plan (the “Plan”). The Plan terms in effect for Mr. Knitt permit him to elect to defer up to 20% of his base salary and up to 70% of his bonus incentive compensation. The Plan provides a matching grant contribution equal to 20% of the amount deferred up to a maximum annual matching contribution of 3% of Mr. Knitt’s base pay. Deferrals made by Mr. Knitt and the Plan’s matching contribution, if any, are credited to Mr. Knitt’s unfunded account. Plan interest is credited on the accumulated account balance at a rate equal to 100% of the Bank’s return on equity for the year subject to a maximum rate of 15% and a minimum rate of 5% while Mr. Knitt is employed and at a rate equal to 7% per year after his termination while the accumulated account balance is paid to Mr. Knitt. The accumulated balance in Mr. Knitt’s account will be paid in 130 biweekly installments as elected by Mr. Knitt upon termination of his employment for any reason. Mr. Knitt is fully vested in the accumulated account balance as well as any future matching grants or interest credited under the Plan. However, no Plan matching contribution or any interest credited would be paid if Mr. Knitt’s employment is terminated for cause as defined by the Plan. The Bank may, in its sole discretion and prior to commencement of benefits following Mr. Knitt’s termination, suspend the Plan. Upon suspension of the Plan, Mr. Knitt would not be permitted to make any further voluntary deferrals of base pay or incentive into the Plan and would receive no other credit to the Plan account except the annual interest credit on the accumulated balance.
Scott M. Cattanach Executive Deferred Compensation Agreement. Mr. Cattanach also participates in the Bank’s Executive Deferred Compensation Plan. The Plan terms in effect for Mr. Cattanach permit him to elect to defer up to 20% of his base salary and up to 70% of his bonus incentive compensation. The Plan provides a matching grant contribution equal to 20% of the amount deferred up to a maximum annual matching contribution of 3% of Mr. Cattanach’s base pay. Deferrals made by Mr. Cattanach and the Plan’s matching contribution, if any, are credited to Mr. Cattanach’s unfunded account. Plan interest while Mr. Cattanach is employed is credited on the accumulated account balance at a rate equal to 100% of the Bank’s return on equity for the year, subject to a maximum rate of 15% and a minimum rate of 5%. Following termination of employment after reaching normal retirement age, the Plan will provide an annual interest credit of 7% while benefits are paid over 130 biweekly installments. The Plan accumulated balance would be paid to Mr. Cattanach in a lump sum in the event of termination of employment from death, disability, or following a change in control. The Plan provides for participant vesting in Plan matching and interest contributions equal to 20% per year of participation and Mr. Cattanach will be fully vested in the Plan balance at December 31, 2011. However, no Plan matching contribution or any interest credited would be paid if Mr. Cattanach’s employment is terminated for cause as defined by the Plan. The Bank may, in its sole discretion and prior to commencement of benefits, suspend the Plan. Upon suspension of the Plan, Mr. Cattanach would not be permitted to make any further voluntary deferrals of base pay or incentive into the Plan and would receive no other credit to the Plan account except the annual interest credit on the accumulated balance.
Survivor Income Benefit Plan. The Bank maintains a Survivor Income Benefit Plan, which was originally adopted as an inducement to encourage the Bank’s executive officers to permit the Bank to purchase life insurance policies on their lives, with the Bank as beneficiary on the policies. Under this plan, the Bank has purchased life insurance on the lives of a number of its executive officers, including Messrs. Knitt and Cattanach, and all premiums on these policies have been paid. Under the plan, the Bank has agreed to pay to the executive’s named beneficiary a one-time taxable compensation payment, which is a multiple of the employee’s base salary up to a maximum amount. The payment is made out of insurance proceeds received, and no payment is made unless the Bank holds an insurance policy on the executive’s life and the executive dies while employed by the Bank. The maximum payment obligation under the plan is capped at $900,000 (for Mr. Knitt) and $450,000 (for Mr. Cattanach). Because of the capital required to purchase these insurance policy assets, the Bank does not currently anticipate purchasing additional policies for new executives.
Outstanding Equity Awards at Fiscal Year-End 2010
Stock options and unvested restricted stock awards held by our named executive officers at December 31, 2010, are indicated in the following table:
|
Option Awards
|
Stock Awards
|
|
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
|
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units,
or Other
Rights That
Have Not
Vested
|
Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units,
or Other Rights
That Have Not
Vested
|
| |
(#)
|
($)
|
|
(#)
|
($)
|
(#)
|
($)
|
| |
|
|
|
|
|
|
|
|
Mr. Knitt
|
–
|
–
|
–
|
4,167(1)
|
$95,841(2)
|
–
|
–
|
|
Mr. Cattanach
|
560
|
$16.81
|
4/16/12
|
3,810(1)
|
$87,630(2)
|
–
|
–
|
(1) Awards vest at the rate of 20% each year, beginning on the second anniversary of the date of grant.
(2) Market value is based on the closing market price of the Company’s common stock on December 31, 2010 ($23.00 per share).
Termination and Change in Control Arrangements
In order to promote stability and continuity of senior management, the Company has entered into employment and change of control agreements with Mr. Knitt and Mr. Cattanach.
Employment Terms and Severance Benefits. The agreements of Mr. Knitt and Mr. Cattanach are substantially similar in operation, but differ with respect to the amounts of salary and benefits. The agreements provided for an initial term of employment lasting through June 30, 2011, with automatic extensions thereafter on a year-to-year basis unless either party notifies the other that the contract will no longer be extended or the executive reaches a certain age (64 for Mr. Knitt and 66 for Mr. Cattanach). The agreements provide for the provision of base salaries and participation by the executives in the various plans offered to other employees. Mr. Knitt is also entitled to the use of a Bank-provided automobile and a social membership at a country club.
In the event of his termination without cause, Mr. Knitt is entitled to receive an amount equal to 110% of the amount he would have been paid as salary under the agreement which would be paid monthly for a term of 12 months following termination. In the event of his termination without cause, Mr. Cattanach is entitled to receive the amount he would have been entitled to receive as salary under his agreement, but in no event for a period of less than twelve months. Each officer is also entitled to coverage under the Bank’s health insurance plan for the period of the severance benefit or until the executive becomes eligible for coverage under the plan of another employer. In the event of termination for cause, the executive is entitled to no further benefits under the agreement. “Cause” is defined under the agreements as (1) acts that result in the payment of a claim under a blanket banker fidelity bond policy; (2) the willful and continuing failure to perform the executive’s duties; (3) the commission of certain crimes, including theft, embezzlement, misapplication of funds, unauthorized issuance of obligations, and false entries; (4) acts or omissions to act that result in the material violation by the executive of any policy established by the Bank which is designed to insure compliance with applicable banking, securities, employment discrimination, or other laws or which cause or result in the Bank’s violation of such laws; or (5) the executive’s physical or mental disability. The agreements provide that the executive will not work in competition with the Bank for a period of one year following termination and must observe a two-year period on the confidentiality of Bank information.
Termination After Change in Control. The agreements also guarantee the executives certain compensation and benefits in the event of their termination following a change in control of the Company. Upon a change in control, the term of employment is reset to two years starting on the date of the change in control. For each year the contract remains in effect following a change in control, the executive will be entitled to annual incentive compensation equal to the average incentive compensation earned in the three years immediately preceding the change in control. In the event Mr. Knitt voluntarily terminates employment as a result of a significant change in his job duties or responsibilities, a relocation of his office of more than 25 miles from the then current location of his principal office, or other “good reason,” as defined in the agreements, or he is involuntarily terminated other than for cause he would be entitled to (1) the base salary accrued through termination plus a pro rata portion of incentive compensation earned for the year of termination (based on amounts earned in the previous fiscal year), (2) a lump sum payment equal to three times the sum of his current base salary plus the average incentive compensation earned for the three most recently completed years, and (3) coverage under the Bank’s health insurance plan until he becomes eligible for coverage under the health insurance plan of another employer up to a maximum period of 36 months following termination. The benefit payable to Mr. Knitt may be greater than the amount considered to be an “excess parachute payment” under Section 280G of the Internal Revenue Code to the extent that prior year elective salary deferrals into the Executive Deferred Compensation Plan lower the amount of the taxable compensation used to determine the excess parachute payment compensation limit specific to Mr. Knitt.
In the event Mr. Cattanach terminates his employment for good reason or is otherwise involuntarily terminated other than for cause, he would be entitled to (1) the base salary accrued through termination plus a pro rata portion of incentive compensation earned for the year of termination (based on amounts earned in the previous fiscal year), (2) a lump sum payment equal to three times his current annual base salary, and (3) coverage under the Bank’s health insurance plan until he becomes eligible for coverage under the health insurance plan of another employer up to a maximum period of 36 months following termination. The benefits payable to Mr. Cattanach cannot, however, be greater than the amount which would cause them to be an “excess parachute payment” under Section 280G of the Internal Revenue Code.
For purposes of these agreements, a “change in control” of the Company means:
|
|
·
|
the acquisition of 30% or more of the Company’s common stock by a person or group (excluding stock acquired by an employee benefit plan sponsored by the Company); or
|
|
|
·
|
a change in the composition of the Board during any 24 consecutive months so that the incumbent directors (or directors approved by the incumbent directors) no longer constitute a majority of the directors; or
|
|
|
·
|
the occurrence of a transaction resulting in the acquisition of PSB or the Bank in which the Company’s shareholders will beneficially own less than 60% of the voting shares of the new combined entity; or
|
|
|
·
|
the liquidation or dissolution of the Company or the Bank.
|
Proposal No. 2 – Ratification of Selection of Auditors
The Audit Committee has selected Wipfli LLP as our auditor for the 2011 fiscal year, and the Board is asking our shareholders to ratify that selection. Although current law and applicable rules and regulations, as well as our Audit Committee’s charter, require that the Audit Committee engage, retain, and supervise our independent auditing firm, the Board considers the selection of the independent auditor to be an important matter of shareholder concern and is accordingly submitting the selection of Wipfli LLP for ratification by shareholders.
The affirmative vote of the holders of a majority of the shares of common stock cast in person or by proxy at the meeting is required to approve the ratification of the selection of Wipfli LLP as our independent auditor for the current fiscal year.
The Board recommends that the shareholders vote FOR the ratification of the selection of Wipfli LLP as the Company’s independent auditor for the 2011 fiscal year.
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders to be Held on April 19, 2011
This proxy statement and the 2010 Annual Report to Shareholders are available for viewing, printing, and downloading at www.psbholdingsinc.com.
We will furnish to any shareholder (without charge) a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission, except for exhibits, upon written or oral request to the Secretary, PSB Holdings, Inc., 1905 W. Stewart Avenue, Wausau, Wisconsin 54401.
P R O X Y
PSB HOLDINGS, INC.
PROXY SOLICITED BY DIRECTORS FOR ANNUAL MEETING
April 19, 2011
The undersigned hereby appoint(s) Peter W. Knitt and Scott M. Cattanach, 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 19, 2011, and at any adjournment thereof (the “Annual Meeting”). The proxies have the authority to vote such stock as directed on the face hereof with respect to the proposals set forth in the proxy statement dated March 15, 2011, 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.
1. Election of Directors:
The directors recommend a vote FOR the election of each nominee.
|
Gordon P. Connor
|
Karla M. Kieffer
|
William M. Reif
|
|
Patrick L. Crooks
|
Peter W. Knitt
|
Thomas A. Riiser
|
|
William J. Fish
|
David K. Kopperud
|
Timothy J. Sonnentag
|
|
Charles A. Ghidorzi
|
Kevin J. Kraft
|
|
|
Gordon P. Gullickson
|
Thomas R. Polzer
|
|
| |
FOR
|
|
WITHHOLD AUTHORITY
|
| |
each nominee listed above
|
|
to vote for all nominees listed above
|
| |
(except as marked to the contrary below)
|
|
|
Instruction: To withhold authority to vote for any individual nominee(s), print the name of the nominee on the space provided:
__________________________________________________________________
|
2.
|
Ratification of Selection of Wipfli LLP as Independent Auditors.
|
|
|
The directors recommend a vote FOR the ratification of the selection of Wipfli LLP.
|
|
3.
|
In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting.
|
Unless otherwise specified in the squares provided, the proxies
shall vote for the election of the nominees listed above.
Please print name of shareholder below: Dated _________________, 2011
|
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, partnership, LLC, or other entity, please sign in full name of entity by authorized individual and give title.
|
| |
|
|
|
Please mark, sign, date, and return this proxy promptly using the enclosed envelope.