SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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14a-6(e)(2))
[X] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant to Section 240.14a-12
Tri City Bankshares Corporation
________________________________________________
(Name of Registrant as Specified In Its Charter)
_____________________________________________________________________
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TRI CITY BANKSHARES CORPORATION
6400 South 27th Street
Oak Creek, Wisconsin 53154
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 14, 2006
TO THE SHAREHOLDERS OF TRI CITY BANKSHARES CORPORATION:
Notice is hereby given that the Annual Meeting of Shareholders of Tri City
Bankshares Corporation will be held at Tri City National Bank, 6400 South 27th
Street, Oak Creek, Wisconsin 53154, on Wednesday, June 14, 2006 at 9:30 a.m.,
for the following purposes:
(1) To elect fourteen members of the Board of Directors to serve until the 2007
Annual Meeting of Shareholders and until their successors are elected and
qualified; and
(2) To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
Holders of common stock of record at the close of business on May 3, 2006 will
be entitled to notice of, and to vote at, the Annual Meeting, or at any
adjournment thereof.
All shareholders are cordially invited to attend and participate in the Annual
Meeting in person. We urge you to sign, date and return the enclosed proxy
whether or not you expect to attend the Annual Meeting in person. Your proxy
will not be used if you subsequently decide to attend the Annual Meeting and
desire to vote your shares in person, or if you revoke your proxy by any other
lawful means.
By Order of the Board of Directors,
/s/Scott A. Wilson
- --------------------------
Scott A. Wilson, Secretary
Oak Creek, Wisconsin
May 10, 2006
TRI CITY BANKSHARES CORPORATION
6400 South 27th Street
Oak Creek, Wisconsin 53154
PROXY STATEMENT
-------------------
This proxy statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Tri City Bankshares Corporation (the "Corporation")
to be voted at the Annual Meeting of Shareholders to be held at Tri City
National Bank, 6400 South 27th Street, Oak Creek, Wisconsin 53154, on June 14,
2006 at 9:30 a.m., for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders. The solicitation is made by the mailing of this
proxy statement with its enclosures. No other solicitation is contemplated,
however, if it is necessary to assure adequate attendance at the Annual Meeting,
the Corporation's Board of Directors may, if it deems it advisable, make a
further solicitation by mail, telephone, facsimile, and/or personal interview
for proxies. Such solicitation will be made by the officers of the Corporation
and will be limited in extent. The total cost of the solicitation, including
reimbursement of banks, brokerage firms, custodians, nominees, and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of the Corporation's common stock, $1.00 par value (the
"Common Stock"), will be borne by the Corporation. The approximate date on which
this proxy statement and accompanying proxy card and annual report are first
being mailed to shareholders is May 10, 2006.
Shareholders are asked to complete, sign and return the enclosed proxy. The
proxy may be revoked by you at any time before it is voted at the Annual
Meeting. Prior to the Annual Meeting, this may be done by execution of a
later-dated proxy or by written revocation sent to the Secretary of the
Corporation, Mr. Scott A. Wilson, at the office of the Corporation, 6400 South
27th Street, Oak Creek, Wisconsin 53154. Alternatively, the proxy may be revoked
at the Annual Meeting by oral or written request to the Secretary of the
Corporation.
Only shareholders of record at the close of business on May 3, 2006 will be
entitled to vote at the meeting. There were 8,729,888 shares of the Common Stock
of the Corporation outstanding on that date, each share being entitled to one
vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following information is based upon information provided to the Corporation
by the persons named below and sets forth, as of March 29, 2006, except as
otherwise indicated, information regarding the beneficial ownership of shares of
Common Stock by (a) persons known by the Corporation to own beneficially,
directly or indirectly, more than 5% of the Corporation's Common Stock; (b)
directors, nominees for director and certain executive officers; and (c) all
directors and executive officers of the Corporation as a group. Except as
otherwise indicated, the address of each beneficial owner of more than 5% of the
Common Stock listed below is 6400 South 27th Street, Oak Creek, Wisconsin 53154.
Amount and Nature
of Beneficial Percent of
Name of Beneficial Owner Ownership (1) Class
- ------------------------ ----------------- ----------
Frank J. Bauer 76,032 (2) *
William N. Beres 14,585 (3) *
Sanford Fedderly 206,916 (4) 2.4%
Scott D. Gerardin 9,117 (5) *
William Gravitter 620,687 (6) 7.2%
Henry Karbiner, Jr. 212,887 (7) 2.5%
Christ Krantz 256,800 3.0%
Brian T. McGarry 155,147 (8) 1.8%
Robert W. Orth 35,792 (9) *
Ronald K. Puetz 48,707 (10) *
Agatha T. Ulrich 2,191,931 (11) 25.3%
Agatha T. Ulrich Marital Trust 1,899,760 (12) 21.9%
David A. Ulrich, Jr. 217,739 (13) 2.5%
William J. Werry 105,000 (14) 1.2%
Scott A. Wilson 40,169 (15) *
All directors and officers
as a group (14 persons) (16) 4,191,509 48.3%
All directors, officers and
beneficial owners of more than
5% of the Common Stock as a
group (15 persons) 6,091,269 70.2%
- ------------------------------
* Less than 1%
(1) Nature of beneficial ownership is direct unless otherwise indicated by
footnote, and beneficial ownership, as shown in the foregoing table, arises
from sole voting and investment power, except as otherwise indicated by
footnote.
(2) Includes 7,500 shares registered in the name of Mr. Bauer and his wife, as
joint tenants, as to which Mr. Bauer has shared voting and investment
power, and 2,640 shares registered in the name of Mrs. Bauer.
(3) Shares registered in the name of Mr. Beres and his wife, as joint tenants,
as to which Mr. Beres has shared voting and investment power, 1,191 shares
held in accounts for Mr. Beres' children for which he is custodian, and
2,185 and 1,165 shares held in self-directed individual retirement accounts
("IRA's") for the benefit of Mr. Beres and Mrs. Beres, respectively.
(4) Includes 102,495 shares registered in the name of Mrs. Roberta C. Fedderly
1991 Revocable Trust, 98,226 shares registered to the Sanford Fedderly 1991
Revocable Trust, and 1,920 shares held in a self-directed IRA for the
benefit of Mr. Fedderly.
(5) Shares registered in the name of Mr. Gerardin and his wife, as joint
tenants, as to which Mr. Gerardin has shared voting and investment power.
Includes 8,997 shares held in a self-directed IRA for the benefit of Mr.
Gerardin.
(6) Includes 61,656 shares registered in the name of Mrs. Gravitter. Includes
21,037 shares held under agreements with members of Mr. Gravitter's family
under which he exercises no voting power, but has right of first refusal on
sale of stock.
(7) Includes 16,500 shares registered in the name of Mrs. Karbiner, and 46,644
shares and 1,243 shares held in self-directed IRAs for the benefit of Mr.
Karbiner and Mrs. Karbiner, respectively.
(8) Includes 117,029 shares registered in the name of Mrs. McGarry.
(9) Includes 5,649 shares in accounts for Mr. Orth's children for which he is
custodian.
(10) Includes 8,316 shares registered in the name of Mr. Puetz and his wife as
joint tenants, as to which Mr. Puetz has shared voting and investment
power, 3,105 shares registered in the name of Mrs. Puetz, and 7,896 shares
held in a self-directed IRA for the benefit of Mr. Puetz.
(11) Includes 31,918 shares registered in the name of NDC, LLC, of which Mrs.
Ulrich is a principal member, and 118,194 shares held in self-directed IRAs
for the benefit of Mrs. Ulrich. Includes 397,766 shares held under
agreements with members of Mrs. Ulrich's family under which she exercises
no voting power but has right of first refusal on sale of stock. Excludes
shares held by the Agatha T. Ulrich Marital Trust. Excludes 304,568 shares
held under an agreement with another shareholder of the Corporation and his
transferees under which Mrs. Ulrich exercises no voting power but has right
of first refusal on sale of stock.
(12) The trustees are Ronald K. Puetz, George A. Dionisopoulos and Kathleen L.
McGarry. Includes 397,766 shares held under agreements with members of Mrs.
Ulrich's family under which the Trust exercises no voting power but has
right of first refusal on sale of stock. The trust has sole voting and
dispositive power over 1,501,994 shares and shared dispositive power over
397,766 shares. Excludes 304,568 shares held under an agreement with
another shareholder of the Corporation and his transferees under which the
Trust exercises no voting power but has right of first refusal on sale of
stock. The address of the trust is c/o Foley & Lardner, 777 E. Wisconsin
Avenue, Milwaukee, WI 53202.
(13) Includes 6,532 shares registered in the name of Mr. Ulrich and his wife as
joint tenants, as to which Mr. Ulrich has shared voting and investment
power. Includes 18,231 shares registered in the name of Mr. Ulrich's wife.
Includes 48,498 shares held in accounts for Mr. Ulrich's minor children.
(14) Includes 81,156 shares registered in the name of Mr. Werry and his wife as
joint tenants, as to which Mr. Werry has shared voting and investment
power. Includes 7,284 shares registered in the name of Mrs. Werry.
(15) Shares registered in the name of Mr. Wilson and his wife, as to which Mr.
Wilson has shared voting and investment power, and 10,223 shares and 4,220
shares held in self-directed IRA's for the benefit for Mr. Wilson and Mrs.
Wilson, respectively.
(16) Excludes shares held by the Agatha T. Ulrich Marital Trust, of which no
director or officer has beneficial ownership.
The Corporation knows of no contractual arrangements, including the pledge of
its securities, which might result in a change of control of the Corporation.
ELECTION OF DIRECTORS
The Board of Directors proposes that the fourteen (14) nominees named below be
elected to serve as directors for the ensuing year and until their successors
are elected and qualified. All fourteen (14) directors will serve one year
terms. Proxies received by the Board of Directors will be voted FOR the election
of the following fourteen (14) persons, unless otherwise indicated, but, if any
such nominee is unable to serve, due to presently unforeseen circumstances,
proxies may be voted for another person nominated by the Board of Directors.
All of the persons nominated as directors are currently directors of the
Corporation. All of the nominees have consented to serve if elected, and the
Board of Directors is not aware of any nominee who may be unable to serve as a
director. The directors and officers of the Corporation beneficially own a
majority of the Corporation's outstanding Common Stock. Accordingly, assuming
that all directors and executive officers vote for the nominees listed below,
election of such nominees is assured.
DIRECTOR PRINCIPAL OCCUPATION DURING THE
NAME SINCE AGE PAST 5 YEARS AND OTHER DIRECTORSHIPS
- ------------------- ----- --- -------------------------------------
Frank J. Bauer 1990 79 President of Frank Bauer Construction
Company, Inc. Director of Tri City
National Bank.
William N. Beres 2002 48 Chief Financial Officer of Wisvest
Corporation, a wholly owned subsidiary
of Wisconsin Energy Corp. since
September, 1998. Vice President of
Minergy Corp. , a wholly owned
subsidiary of Wisconsin Energy Corp.
since May, 2003. Member of the board
of directors for Centerpoint Wispark
Land Company,LLC since December, 2004.
Member of the board of directors of
ReGENco, LLC since December, 2005.
Director of Tri City National Bank.
Sanford Fedderly 1980 71 Retired Registered Pharmacist. Retired
President of Tri City Pharmacy, Inc.,
Oak Creek, Wisconsin. Director of Tri
City National Bank.
Scott D. Gerardin 2002 47 Senior Vice President, General Counsel
and Assistant Secretary of the
Corporation since January 2005.
Senior Vice President and General
Counsel of Tri City National Bank.
Director of Tri City National Bank.
William Gravitter 1980 77 President of Hy-View Mobile Home Park.
Director of Tri City National Bank.
Henry Karbiner, Jr. 1980 65 President, Chief Executive Officer and
Chairman of the Board of the
Corporation since October 1998.
Treasurer of the Corporation since
April 1980. Vice President and
Secretary of the Corporation from
January 1989 to October 1998. Chairman
of the Board and Chief Executive
Officer of Tri City National Bank.
Christ Krantz 1980 81 President of Krantz Realty, Inc. Vice
President and Secretary of KRK, Inc.,
which owns Ramada Airport Motel,
Milwaukee, Wisconsin. Partner in
Veterans Linen Supply Company.
Director of Tri City National Bank.
Brian T. McGarry 2005 55 Retired Vice President of Tri City
National Bank. Director of Tri City
National Bank.
Robert W. Orth 1996 59 Senior Vice President of the
Corporation since 1996. Executive
Vice President and Director of Tri
City National Bank.
Ronald K. Puetz 1988 57 Executive Vice President of the
Corporation since June 2000. Senior
Vice President of the Corporation
from January 1990 to June 2000.
President of Tri City National Bank.
Vice President and Treasurer of NDC,
LLC. Director of Tri City National
Bank.
Agatha T. Ulrich 1999 77 Chairman and Director of NDC, LLC.
Director of Tri City National Bank.
David A. Ulrich, Jr. 1997 45 Retired Vice President and Director
of Mega Marts, Inc. Retired Vice
President and Director of NDC, Inc.
Director of Tri City National Bank.
William J. Werry 1980 79 Retired Unit President of Tri City
National Bank. Director of Tri City
National Bank.
Scott A. Wilson 1990 59 Senior Vice President and Secretary
of the Corporation since October 1998.
Executive Vice President and Director
of Tri City National Bank.
There is a family relationship between several of the nominees for directorship.
Mr. Ulrich is Mrs. Ulrich's son, Mr. Bauer is Mrs. Ulrich's brother and Mr.
McGarry is Mrs. Ulrich's son-in-law.
The Corporation's Board of Directors has standing Audit and Executive
Committees. The Executive Committee is composed of Messrs. Fedderly, Gravitter,
Karbiner, Krantz and Puetz. The Executive Committee's purpose is to exercise the
powers of the full Board between regular meetings of the Board. During 2005, the
Executive Committee held no meetings. The Corporation has an Audit Committee
composed of independent directors. Information regarding the functions performed
by the Audit Committee, its membership, and the number of meetings held during
the fiscal year, is set forth in the "Report of the Audit Committee," included
in this Proxy Statement.
The Board of Directors has not appointed a nominating committee, and the review
of recommendations for, and the selection of, nominees to Board membership is
handled by the Board serving as a committee of the whole. Due to the infrequent
turnover in the Board, the Board has determined that it is not necessary or
appropriate at this time to establish a separate nominating committee. No
nominating committee charter has been adopted by the Board of Directors serving
in their capacity as a committee of the whole. All of the directors except
Messrs. Gerardin, Karbiner, Jr., Orth, Puetz, Wilson and Werry are independent
in accordance with the definition of independence in Rule 4200(a)(15) of the
NASD listing standards.
The Board of Directors does not have a formal process for considering nominees
whose names are submitted to it by shareholders because it believes that the
informal consideration process has been adequate given the historical absence of
shareholder proposals. If shareholders were to recommend nominees for directors,
the full Board of Directors would consider such persons. Shareholders are
entitled to nominate persons from the floor at the Annual Meeting, but it is
intended that the proxies solicited with the proxy statement will be voted for
the slate of the fourteen persons listed in the table above as nominees to the
Board of Directors.
The Board of Directors has generally identified nominees based upon suggestions
by non-management directors, management members and/or shareholders. The Board
of Directors considers factors important for potential members of the Board,
including the individual's integrity, general business background and
experience, experience with the banking industry, and the ability to serve on
the Board of Directors. The Board of Directors does not evaluate proposed
nominees differently based upon who made the proposal.
The Board of Directors does not have a compensation committee.
The Board of Directors held four meetings during 2005. All incumbent directors
attended 75% or more of the meetings of the Board and the committees on which
they served during 2005. Directors are encouraged to attend the annual meeting
of shareholders, but the Corporation has not adopted a formal policy requiring
attendance at the annual meeting. All of the incumbent directors attended the
2005 annual meeting of shareholders.
The Board of Directors currently does not have a formal process for shareholders
to send communications to the Board because it believes that informal
communications are sufficient to communicate questions, comments and
observations that could be useful to the Board. However, shareholders wishing to
communicate with the Board of Directors may send communications directly to
Henry Karbiner, Jr., Chairman of the Board, c/o Tri City Bankshares Corporation,
6400 South 27th Street, Oak Creek, Wisconsin 53154.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Corporation's financial reporting process on
behalf of the Board of Directors. The Audit Committee is governed by a written
charter approved by the Board of Directors. A copy of this charter is included
in Appendix A of the 2003 Proxy. The current members of the Audit Committee, all
of whom are non-employee directors, are Messrs. Beres (Chair), Fedderly and
Krantz. The members of the Audit Committee are independent in accordance with
the definition of independence in Rule 4200(a)(15) of the NASD listing
standards. The Board of Directors has determined that it currently has one Audit
Committee financial expert, Mr. Beres, serving on its Audit Committee.
Management has the primary responsibility for the financial statements and the
reporting process including the systems of internal controls. In fulfilling its
oversight responsibilities, the Audit Committee reviewed the audited financial
statements in the Annual Report with management including the discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
financial statements.
The Audit Committee reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, their judgments as to
the quality, not just the acceptability, of the Corporation's accounting
principles and such other matters as are required to be discussed with the Audit
Committee under generally accepted auditing standards. In addition, the Audit
Committee has discussed with the independent auditors the matters required to be
discussed by Statement on Accounting Standards No. 61 and the auditors'
independence from management and the Corporation. The Audit Committee has
received the written disclosures from Virchow, Krause & Company, LLP required by
the Independence Standards Board Standard No. 1.
The Audit Committee discussed with the Corporation's internal and independent
auditors the overall scopes and plans for their respective audits. The Audit
Committee meets with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, their
evaluations of the Corporation's internal controls, and the overall quality of
the Corporation's financial reporting. The Audit Committee held six meetings
during fiscal 2005.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-K for the year ended 2005 for filing with the Securities and Exchange
Commission. The Audit Committee and the Board have also recommended the
selection of the Corporation's independent auditors.
William N. Beres, Audit Committee Chair
Sanford Fedderly, Audit Committee Member
Christ Krantz, Audit Committee Member
March 20, 2006
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid by the Corporation and
its subsidiaries during the fiscal years ended December 31, 2005, 2004 and 2003
to each of the most highly compensated executive officers of the Corporation
whose total annual cash compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
NAME AND Annual Compensation All Other
PRINCIPAL POSITION Year Salary ($) Bonus ($) Compensation($)(1)
- ------------------------------- ----
Henry Karbiner, Jr. 2005 $ 465,090 $ 23,255 $ 10,500
President and Chief 2004 456,110 22,845 8,500
Executive Officer and Treasurer 2003 448,251 44,825 8,500
Ronald K. Puetz, 2005 280,000 14,000 10,500
Executive Vice President 2004 276,187 13,750 8,500
2003 268,947 27,245 8,500
Robert W. Orth, 2005 233,100 11,655 10,500
Senior Vice President 2004 229,485 11,450 8,500
2003 223,850 22,735 8,500
Scott A. Wilson, 2005 225,300 11,265 10,500
Senior Vice President and 2004 222,173 11,065 8,500
Secretary 2003 216,150 21,965 8,500
Scott D. Gerardin 2005 133,400 6,670 7,003
Senior Vice President and 2004 126,750 6,305 6,638
General Counsel 2003 124,350 12,300 6,833
(1) All other compensation represents the Corporation's matching contribution
to the employee's 401(k) plan.
EQUITY COMPENSATION PLAN INFORMATION
The Corporation does not maintain any compensation plans under which equity
securities of the Corporation are authorized for issuance.
STOCK PURCHASE PLAN INFORMATION
Under the 2003 Stock Purchase Plan, eligible directors and officers may purchase
shares annually, in an amount not to exceed the director's fees during the year
or 10% of the officer's cash compensation for the year, at a purchase price
equal to the fair market value of the shares under the Corporation's Automatic
Dividend Reinvestment Plan. The number of shares originally authorized for sale
under this plan was 125,000. A total of 28,800 shares, representing 0.33% of the
total outstanding common stock of the Corporation, have been sold under the plan
to date. Shareholder approval was not required for this plan.
REPORT OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
Executive compensation, including that of the Chief Executive Officer, consists
primarily of salary and cash bonus. The Chief Executive Officer's compensation
is determined in the same manner as the other executives.
The bonus portion of the executive compensation is based on the Corporation's
return on average assets. If the return on average assets for the twelve-month
period ending in November is less than the minimum amount of one and one quarter
percent (1.25%), no cash bonuses are paid. If the return on average assets
exceeds the minimum, the bonus is computed as a percentage of salary based on a
formula such that as the return on average assets increases, the bonus
percentage increases. The board approves bonuses paid annually in the year they
are paid. The board may exercise discretion on the impact of certain
non-recurring, extraordinary income and expenses when considering the bonus
percentage. The same bonus percentage is applied to all officers of the
Corporation.
Except for the bonus, there is no specific relationship between corporate
performance and executive salaries and benefits. In 2005, executive compensation
was determined by the President of the Corporation considering the following
factors without assigning any relative weight or importance to any factor:
1. Current compensation;
2. Cost of living;
3. Salaries paid to executives at other banks;
4. Performance of the bank during the prior year;
5. Prospects of future growth and performance; and
6. The individual performance of the executive.
Stock price is not a factor in determining executive salaries or bonuses.
The salaries determined by the President were submitted to the full Board of
Directors for approval. After reviewing the recommendations, the Board members
had an opportunity to discuss any factors they deemed relevant - there was no
agenda or specific list of factors to be discussed. The recommendations of the
President were approved by the Board without adjustment.
The Corporation continues to follow its long-standing policy of not providing
its executives with many of the non-cash perquisites given to executives of
similar companies. Executives receive no stock rights, options, warrants or
stock appreciation rights except the opportunity to purchase stock at the
dividend reinvestment price under the plan described in this proxy statement
under the caption "Stock Purchase Plan Information." The Corporation does not
provide memberships for its executives in country clubs or other social clubs.
Also, executives receive no special retirement benefits or deferred compensation
- - they participate in the same retirement plan provided to non-executive
employees of the Corporation.
By the Board of Directors
Frank J. Bauer William N. Beres Sanford Fedderly
Scott D. Gerardin William Gravitter Henry Karbiner, Jr.
Christ Krantz Brian T. McGarry Robert W. Orth
Ronald K. Puetz Agatha T. Ulrich David A. Ulrich, Jr.
William J. Werry Scott A. Wilson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following members of the Board of Directors are officers of the Corporation
and its banking subsidiary:
Henry Karbiner, Jr. Robert W. Orth Ronald K. Puetz
Scott A. Wilson Scott D. Gerardin
STOCK PERFORMANCE GRAPH
The following graph shows the cumulative stockholder return on the Corporation's
Common Stock over the last five fiscal years compared to the returns of the
Standard & Poor's 500 Stock Index and Major Regional Bank Index compiled by
Standard & Poor's and consisting of 20 regional banks, assuming that $100 is
invested on December 31, 2000 with dividends reinvested.
TRI CITY FIVE YEAR STOCK PERFORMANCE
PERIOD MAJOR REGIONAL TRI CITY
(FISCAL YEAR COVERED) S&P 500 BANKS BANKSHARES
2000 100.00 100.00 100.00
2001 88.11 100.02 113.61
2002 68.64 99.00 131.78
2003 88.32 125.39 160.77
2004 97.93 143.47 168.39
2005 102.74 141.38 161.47
The Corporation's stock is traded on the over-the-counter market under the
trading symbol "TRCY." Trading in the Corporation's stock is limited and
sporadic and the Corporation believes that no established trading market for the
Corporation's stock exists. For purposes of the Corporation's Automatic Dividend
Reinvestment Plan, the Board of Directors is required to establish the "Fair
Market Value" of the Corporation's stock on a quarterly basis based on factors
set forth in the Dividend Reinvestment Plan. The Corporation's values above are
based on the Fair Market Value established under the Dividend Reinvestment Plan
over the past 5 years.
DIRECTOR COMPENSATION
Directors of the Corporation also serve as directors of Tri City National Bank,
the Corporation's banking subsidiary. Directors who are not officers of the
Corporation received an annual fee of $12,000 plus $1,000 for each Bank Board
meeting attended and $300 for each Corporation Board meeting attended. During
2005 the Corporation also paid the following fees to directors for chairing,
serving on and attending meetings of committees of the Board of Directors of the
Corporation or of Tri City National Bank: Sanford Fedderly, $13,650; William
Gravitter, $17,900; William Beres, $9,500; Christ Krantz, $6,850; William Werry,
$3,000; David A. Ulrich, Jr., $1,000.
In addition, in 2005, Mr. Werry received $16,800 for consulting services
performed for the Corporation. His current annual compensation is $16,800.
LOANS AND OTHER TRANSACTIONS WITH MANAGEMENT
The Corporation has never made any loans to any of its officers or directors.
However, in the ordinary course of business, the Corporation's banking
subsidiary made loans during 2005 to officers and directors of the Corporation,
and to business firms in which officers and directors of the Corporation are
officers, partners or in which they have a substantial interest. The loans made
by the Corporation's banking subsidiary were made to the Corporation's officers
and directors and certain of the companies with which they are associated in the
ordinary course of business on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable loans to
unaffiliated persons or firms, and do not involve more than a normal risk of
collectibility or present other unfavorable features.
Mrs. Agatha T. Ulrich, director of the Corporation, is a principal member in a
LLC that owns buildings occupied by the Corporation's central office in Oak
Creek, and a Tri City National Bank branch office located in Milwaukee. The
central office building lease has a term through 2011 and the branch office has
a lease with a term through 2010. The annual rent for 2005 paid in connection
with both of the aforementioned leases was $228,477. Rent is subject to
adjustment as a result of increases in the consumer price index. Pursuant to the
central office lease only, the Corporation is also obligated to pay its
proportionate share of property taxes, insurance and maintenance costs
associated with the building.
Pursuant to the Corporation's 2003 Stock Purchase Plan directors and officers
purchased an aggregate of 4,300 shares of common stock of the Corporation
(representing 0.05% of the total outstanding common stock of the
Corporation)from the January, 2006 offering at a purchase price of $19.35 per
share, which was equal to the fair market value of the shares under the
Corporation's Automatic Dividend Reinvestment Plan.
OTHER BUSINESS
The Board of Directors knows of no other business, which may come before the
Annual Meeting. In the event that any other business not known or determined at
this time does properly come before the Meeting, it is intended that the persons
named in the proxy shall vote in accordance with their best judgment.
VOTING OF PROXIES
The presence in person or by proxy, of the holders of a majority of the shares
of the Common Stock outstanding on the Record Date is required for a quorum with
respect to the matters on which action is to be taken at the Annual Meeting.
Abstentions and broker non-votes (i.e., proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner to vote shares as to a matter with respect to which the brokers or
nominees do not have discretionary power to vote) will be treated as present for
purposes of determining a quorum.
Proxies received by the Board of Directors will be voted in accordance with the
specifications indicated by the shareholder and unless authority to vote upon
the election of the directors, or as to individual nominees, is withheld, the
proxies will be voted FOR all of the nominees listed in the Proxy Statement.
Directors are elected by a plurality of the votes cast by holders of the
Corporation's Common Stock entitled to vote at a meeting at which a quorum is
present. In other words, the fourteen directors who receive the largest number
of votes will be elected as directors. Any shares not voted, whether by withheld
authority, broker non-vote or otherwise, will have no effect in the election of
directors except to the extent that the failure to vote for an individual
results in another individual receiving a larger number of votes. Any votes
attempted to be cast "against" a candidate are not given legal effect and are
not counted as votes cast in an election of directors.
INDEPENDENT AUDITORS
The Corporation engaged Virchow Krause to audit the Corporation's financial
statements for the year ended December 31, 2005. During the year ended December
31, 2005, the Corporation did not consult with Virchow Krause regarding any of
the matters or events set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
As of the date of this proxy statement, the Audit Committee has selected Virchow
Krause as independent auditors for the 2006 year-end audit.
AUDIT FEES. The aggregate fees billed for audit services rendered by Virchow
Krause in 2005 and 2004 totaled $73,325 and $72,025 respectively. Services in
this category for 2005 and 2004 consisted of:
o Audits of the consolidated financial statements;
o Reviews of the financial statements included in the Corporation's
Quarterly Reports on Form 10-Q;
o Examination of management's assertion regarding internal control over
financial reporting; and
o Services associated with registration statements, periodic reports and
other documents filed with the Securities and Exchange Commission.
AUDIT-RELATED FEES. The aggregate fees billed in 2005 and 2004 for assurance and
related services provided by Virchow Krause that are reasonably related to the
performance of the audit or review of the Corporation's financial statements
totaled $12,325 and $9,250 respectively. Services in this category in 2005 and
2004 consisted primarily of:
o Financial statement audits of employee benefit plan; and
o Agreed-upon procedures reports related to an educational loan program
TAX FEES. The aggregate fees billed in 2005 and 2004 for professional services
rendered by Virchow Krause, for tax compliance, tax advice and tax planning,
totaled $13,320 and $9,175 respectively. Services in this category in 2005 and
2004 consisted primarily of:
o Tax planning and other non-compliance consultation, including tax audit
assistance; and
o Tax compliance, including federal and state tax return preparation.
ALL OTHER FEES. There were no fees billed in 2005 and 2004 for other
professional services provided by Virchow Krause.
The Audit Committee has considered whether the provision of other non-audit
services is compatible with the independent auditors' independence and satisfied
itself as to the auditors' independence.
Representatives of the firm of Virchow, Krause & Company, LLP are expected to be
present at the Annual Meeting and will have an opportunity to make a statement
if they so desire and will be available to respond to appropriate questions.
The Audit Committee pre-approves all audit and allowable non-audit services
provided by the independent auditors. These services may include audit services,
audit-related services, tax services and other services.
SHAREHOLDERS' PROPOSALS
Proposals by shareholders sought to be included in the Corporation's proxy
statement for its 2007 Annual Meeting of Shareholders must be received by the
Corporation no later than January 10, 2007. The Corporation's By-Laws currently
do not restrict shareholders from making proposals or director nominations at
the Annual Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Corporation's
executive officers, directors and 10% shareholders to file reports with the
Securities and Exchange Commission disclosing their ownership, and changes in
their ownership of stock in the Corporation. Copies of these reports must also
be furnished to the Corporation. Based solely on a review of these copies, the
Corporation believes that during 2005, its officers, directors and 10%
shareholders complied with all filing requirements under Section 16(a) of the
Securities Exchange Act of 1934.
FORM 10-K
A COPY OF THE CORPORATION'S FORM 10-K WHICH AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 2005 MAY BE OBTAINED WITHOUT
CHARGE BY ANY PERSON WHO WAS A BENEFICIAL OWNER OF THE CORPORATION'S SHARES AS
OF THE MAY 3, 2006 RECORD DATE BY WRITTEN REQUEST TO SCOTT A. WILSON, SECRETARY
OF THE CORPORATION, 6400 SOUTH 27TH STREET, OAK CREEK, WISCONSIN 53154, (414)
761-1610.
By Order of the Board of Directors
/s/Scott A Wilson
- --------------------------
Scott A. Wilson, Secretary
Oak Creek, Wisconsin
May 10, 2006
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. THEREFORE, PLEASE
COMPLETE, SIGN AND RETURN THE PROXY AS SOON AS POSSIBLE WHETHER OR NOT YOU
EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON.