EXHIBIT 10.5
PSB HOLDINGS, INC.
2001 STOCK OPTION PLAN
PSB HOLDINGS, INC.
2001 STOCK OPTION PLAN
SECTION 1. PURPOSE. The Plan has been adopted to (a) enable the
Company to attract and retain superior employees by providing incentive
opportunities with respect to future services that are competitive with
those of other similar companies, (b) further identify the interests of
participating employees with those of the Company's other shareholders
through compensation based on the performance of the Company's common
stock and (c) promote the long-term financial interests of the Company and
its shareholders.
SECTION 2. CERTAIN DEFINITIONS. As used in this Plan, and in
addition to any terms elsewhere defined in this Plan, the following terms,
when capitalized, shall have the meanings set forth in this Section 2.
Section 2.1. "BOARD" means the Board of Directors of the Company.
Section 2.2. "CAUSE" means any one or more of the following on the
part of the participant: (a) the commission of an act which results in a
payment of a claim filed by the Company or a Subsidiary under a blanket
banker fidelity bond or similar policy as from time to time and at any
time maintained; (b) an intentional failure to perform assigned duties;
(c) willful misconduct in the course of the participant's employment; (d)
breach of a fiduciary duty involving personal profit or acts or omissions
of personal dishonesty, including, but not limited to, commission of any
crime of theft, embezzlement, misapplication of funds, unauthorized
issuance of obligations, or false entries; (e) any intentional, reckless,
or negligent act or omission to act which results in the violation by the
participant of any policy established by the Company or a Subsidiary which
is designed to insure compliance with applicable banking, securities,
employment discrimination or other laws or which causes or results in the
Company's or a Subsidiary's violation of such laws, except any act done by
the participant in good faith, as determined in the reasonable discretion
of the Board, or which results in a violation of such policies or law
which is, in the reasonable sole discretion of such Board, immaterial; or
(f) any of the foregoing which results in material loss to the Company or
any of its Subsidiaries. Except to the extent of the discretion granted
to the Board in clause (e), the Committee shall have the sole discretion
to determine whether "Cause" exists, and the Committee's determination
shall be final.
Section 2.3. "CHANGE IN CONTROL" has the meaning set forth in Section
8.2.
Section 2.4. "CODE" means the Internal Revenue Code of 1986, as
amended. The reference to any specific section of the Code shall include
any successor section or sections.
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Section 2.5. "COMMITTEE" means, subject to the provisions of Section
4, the Option Committee of the Board.
Section 2.6. "COMMON STOCK" means the common stock of the Company.
Section 2.7. "COMPANY" means PSB Holdings, Inc., a Wisconsin
corporation.
Section 2.8. "DISABILITY" means (a) a physical or mental condition
which qualifies as a total and permanent disability under the terms of any
plan or policy maintained by the Company or a Subsidiary and for which the
Optionee is eligible to receive benefits under such plan or policy, or (b)
if the Optionee does not participate in a disability plan, or is not
covered by a disability policy, of the Company or a Subsidiary,
"Disability" means the permanent and total inability of a participant by
reason of mental or physical infirmity, or both, to perform the work
customarily assigned to him or her, if a medical doctor selected or
approved by the Board, and knowledgeable in the field of such infirmity,
advises the Committee either that it is not possible to determine when
such Disability will terminate or that it appears probable that such
Disability will be permanent during the remainder of said participant's
lifetime.
Section 2.9. "EFFECTIVE DATE" means February 20, 2001.
Section 2.10. "EMPLOYED," and any variation thereof such as
"employment," means, as appropriate, employed by or employment with any of
the Company or any present or future Subsidiary.
Section 2.11. "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
Section 2.12. "FAIR MARKET VALUE" of a share of the Common Stock as
of any date means an amount equal to:
(a) the average of the highest bid and lowest ask prices of the
Common Stock reported on the OTC Bulletin Board, or, if prices for the
Common Stock are not quoted on the OTC Bulletin Board, the average of the
highest bid and lowest ask prices reported on any other bona fide over-
the-counter stock market selected in good faith by the Committee;
provided, however, if the date on which "Fair Market Value" is to be
determined is not a business day, or, if there shall be no reported
transactions for such date, such determination shall be made on the next
preceding business day for which transactions were reported, or
(b) if the Committee determines that the amount determined
pursuant to (a) is not indicative of the market value of the Common Stock
because of limited or sporadic trading of the Common Stock and the lack of
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recent quotations for the Common Stock on the OTC Bulletin Board, then
such amount as may be determined by the Committee by whatever means or
method as the Committee, in the good faith exercise of its discretion,
shall at such time deem appropriate and representative of the fair market
value of the Common Stock.
Section 2.13. "OPTION" means an option to purchase Shares awarded
pursuant to the provisions of Section 6 and which is intended to meet the
requirements of an "incentive stock option" within the meaning of Section
422 of the Code.
Section 2.14. "OPTION AGREEMENT" means the written document which
evidences an award of Options, whether or not such document requires the
signature of the Optionee.
Section 2.15. "OPTIONEE" means an eligible employee, as determined in
accordance with Section 5, who has been granted an Option.
Section 2.16. "OPTION PRICE" means, with respect to each Option, the
price per Share at which such Option may be exercised and the Shares
subject to such Option purchased.
Section 2.17. "PLAN" means the PSB Holdings, Inc. 2001 Stock Option
Plan as set forth herein or as hereafter amended.
Section 2.18. "SHARE" means a share of Common Stock.
Section 2.19. "SUBSIDIARY" means any corporation, partnership, or
other entity in which the Company owns, directly or indirectly, at least a
50% interest in the voting rights or profits.
Section 2.20. "TERMINATION OF EMPLOYMENT" means the termination of an
Optionee's employment with, or performance of services for, the Company
and any of its Subsidiaries. An Optionee employed by, or performing
services for, a Subsidiary shall also be deemed to incur a Termination of
Employment if the Subsidiary ceases to be such a Subsidiary and the
Optionee does not immediately thereafter become an employee of the Company
or another Subsidiary. Temporary absences from employment because of
illness, vacation, or leave of absence and transfers among the Company and
its Subsidiaries shall not be considered Terminations of Employment. For
purposes of the Plan, an Optionee's employment shall be deemed to have
terminated at the close of business on the day preceding the first date on
which he or she is no longer for any reason whatsoever employed by the
Company or any of its Subsidiaries.
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SECTION 3. NUMBER OF SHARES AVAILABLE FOR OPTIONS.
Section 3.1 SHARES SUBJECT. The aggregate number of Shares which may
be delivered under Options awarded pursuant to the Plan shall be 15,000.
Section 3.2 UNDELIVERED SHARES. To the extent any Shares subject to
an Option are not delivered to an Optionee (or the estate or other
transferee of such Optionee) because the Option is forfeited, expires, or
otherwise becomes unexercisable such Shares shall be deemed not to have
been delivered for purposes of determining the maximum number of Shares
available for delivery under the Plan.
Section 3.3 EXERCISE USING SHARES. If the Option Price of any Option
awarded under the Plan is satisfied by tendering Shares to the Company
only the number of Shares issued to the Optionee (or the estate or other
transferee of such Optionee), net of the Shares tendered, shall be deemed
delivered for purposes of determining the maximum number of Shares
available for delivery under the Plan.
Section 3.4 STOCK DIVIDENDS, ETC. If the Company shall, after the
Effective Date, change the Common Stock into a greater or lesser number of
Shares through a stock dividend, stock split-up or combination of Shares,
then (a) the number of Shares then subject to the Plan as provided for in
Section 3.1, but which are not then subject to any outstanding Option, (b)
the number of Shares subject to each then outstanding Option (to the
extent not previously exercised), and (c) the price per Share payable upon
exercise of each then outstanding Option, shall all be proportionately
increased or decreased as of the record date for such stock dividend,
stock split-up or combination of Shares in order to give effect thereto.
Notwithstanding any such proportionate increase or decrease, no fraction
of a Share shall be issued upon the exercise of an Option and the Shares
subject to an Option shall be rounded to the nearest whole Share.
Section 3.5 OTHER CHANGES. If, after the Effective Date, there shall
be any change in the Common Stock or other change in the capitalization of
the Company other than through a stock dividend, stock split-up or
combination of Shares, including, but not limited to, a change which
results from a merger, consolidation, spin-off, or other distribution of
stock or property of the Company, any reorganization (whether or not such
reorganization is within the meaning of Section 368 of the Code), or any
partial or complete liquidation of the Company, then if, and only if, the
Committee shall determine that such change equitably requires an
adjustment in (a) the number or kind of shares of stock then reserved for
issuance under Section 3.1, (b) the number or kind of shares of stock then
subject to an Option, (c) the Option Price with respect to an Option, or
(d) any other limitation on the Option which may be granted to any
participant, to the extent such adjustment does not cause any Option to
fail to satisfy the requirements for exemption from the limitations on
deductibility imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(c) of the Code if such Option would have satisfied such
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requirements immediately prior to such adjustment and if such Option, if
then exercised, would, when added to the Optionee's estimated compensation
from the Company and all Subsidiaries for such year, exceed the
deductibility limits of Section 162(m) of the Code, such adjustment as the
Committee shall determine is equitable and as shall be approved by the
Board shall be made and shall be effective and binding for all purposes of
such Option and the Plan. If any member of the Committee shall, at the
time of such approval, be an Optionee, he shall not participate in action
in connection with such adjustment.
SECTION 4. ADMINISTRATION OF THE PLAN.
Section 4.1 COMMITTEE. The Plan shall be administered by the
Committee. The Committee shall, subject to the terms of the Plan, have
the authority to, in its sole discretion, (a) select eligible employees to
receive an award of one or more Options and to participate in the Plan,
(b) determine the number of Shares subject to each award and the Option
Price associated therewith, (c) establish terms and conditions concerning
the time of, and conditions precedent to, the exercisability of each
Option (including, without limitation, conditions with respect to the
passage of time, performance of the Company, or a Subsidiary, or the
Optionee, restrictions on competitive employment or satisfaction of
Company policies, and any other conditions which the Committee deems
reasonably related to the satisfaction of the purposes of the Plan), (d)
determine the form of each Option Agreement and all terms and conditions
thereof with respect to each award, (e) interpret the Plan and the
application thereof and establish such rules and regulations as it deems
necessary or desirable for the administration of the Plan, (f) modify or
cancel any award or Option or take such action to cause the vesting or
exercisability of any or all outstanding Options to become exercisable in
part or in full for any reason at any time, subject to the limitation of
Section 8.1, and (g) exercise such other authority as is reasonably
related to the administration of and/or the fulfillment of the purpose of
the Plan. All actions, interpretations, rules, regulations and conditions
taken or established by the Committee shall be final, binding and
conclusive upon the Company, each Subsidiary, and all Optionees.
Section 4.2 MEMBERSHIP OF THE COMMITTEE.
(a) MEMBERSHIP QUALIFICATIONS. Except as provided in this
Section 4.2, at all times the Committee shall consist of not less than
three members designated by the Board from among those of its members who
are not officers or employees of the Company or a Subsidiary and each of
whom is (a) a "non-employee director" within the meaning of Rule 16b-3
under the Exchange Act (a "Non-Employee Director") and (b) an "outside
director" within the meaning of Section 162(m) of the Code (an "Outside
Director"); provided, however, that in addition to the Board's general
authority to amend the Plan as provided for in Section 9.1, the Board
shall have the specific authority to modify or eliminate the foregoing
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qualifications or adopt such other qualifications as are reasonably
intended to result in (x) the award of Options, and transactions with
respect to the award or exercise of such Options, satisfying an exemption
from Section 16(b) of the Exchange Act, or any successor thereto, and (y)
compensation recognized by Optionees qualifying as a deductible expense of
the Company under the "performance-based compensation" exception to
compensation deduction limits which would otherwise be imposed on the
Company under Section 162(m) of the Code.
(b) APPOINTMENT OF OTHER MEMBERS. In the event that one or more
members of the Committee shall fail to meet the qualifications set forth
in Section 4.2(a), the Board shall remove such member or members and
appoint a successor or successors who satisfy such qualifications. The
Board shall act in a reasonably prompt manner to fill any vacancy on the
Committee from among such of its members who are both Non-Employee
Directors and Outside Directors.
(c) VALIDITY OF GRANTS. Notwithstanding the qualifications for
members of the Committee established in Section 4.2(a), any award of
Options made by the Committee in good faith and without the knowledge that
one or more of its members did not satisfy such qualifications, shall be
valid and enforceable by the Optionee even though the members of the
Committee did not, at the time of such award, satisfy such qualifications.
Section 4.3 ACTIONS BY THE COMMITTEE. A majority of the members of
the Committee shall constitute a quorum. In the absence of specific rules
to the contrary, action by the Committee shall require the consent of a
majority of the members of the Committee, expressed either orally at a
meeting of the Committee or in writing in the absence of a meeting.
Section 4.4 ACTIONS BY THE BOARD. Any authority granted to the
Committee may also be exercised by the full Board, except to the extent
that the grant or exercise of such authority would cause any Option or
transaction to become subject to (or lose an exemption under) the short-
swing profit recovery provisions of Section 16 of the Exchange Act or
cause an Option not to qualify for, or to cease to qualify for, the
exemption as "performance-based compensation" under Section 162 of the
Code, and the regulations promulgated thereunder. To the extent that any
permitted action taken by the Board conflicts with action taken by the
Committee, the Board action shall control.
Section 4.5 LIMITATION ON LIABILITY AND INDEMNIFICATION OF BOARD. No
member of the Board, no executive officer or other employee of the
Company, and no other agent or representative of the Company shall be
liable for any act, omission, interpretation, construction, or
determination made in connection with the Plan in good faith, and all such
persons shall be entitled to indemnification and reimbursement by the
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Company in respect of any claim, loss, damage, or expense (including
attorneys fees) arising therefrom to the full extent permitted by law,
except as otherwise may be provided in the Company's articles of
incorporation and/or by-laws, and under any directors' and officers'
liability insurance that may be in effect from time to time.
SECTION 5. PERSONS ELIGIBLE TO BECOME OPTIONEES. Persons who are (a)
key salaried employees of the Company or any Subsidiary or (b) prospective
key salaried employees who have accepted offers of employment from the
Company or a Subsidiary shall be eligible to be selected, in the sole
discretion of the Committee, to participate in, and receive an award of
one or more Options pursuant to the Plan.
SECTION 6. AWARDING OF OPTIONS.
Section 6.1 OPTIONEES. Subject to the limitations of Section 5,
Options shall be awarded to such eligible employees of the Company and its
Subsidiaries as the Committee may, from time to time and at any time,
select. Membership of an employee or prospective employee in a class
shall not, without specific Committee action, entitle such employee or
prospective employee to receive an Option award.
Section 6.2 OPTION AGREEMENT. Each Option shall be evidenced by an
Option Agreement, the terms of which may differ from other Option
Agreements. Each Option Agreement shall be signed on behalf of the
Company and, if so provided by the Committee, the Optionee, and shall set
forth with respect to the Option or Options awarded therein, the name of
the Optionee, the date awarded, the Option Price, the number of Shares
subject to the Option, and such other terms and conditions consistent with
the Plan as determined by the Committee. The Committee may at the time of
award or at any time thereafter impose such additional terms and
conditions on the exercise of such Option as it deems necessary or
desirable for such Option, or the exercise thereof, to be exempt under
Section 16(b) of the Exchange Act, and the regulations promulgated
thereunder, and to qualify as "performance-based compensation" under
Section 162 of the Code, and the regulations promulgated thereunder. Each
Option Agreement shall incorporate by reference all terms, conditions and
limitations set forth in the Plan.
Section 6.3 TERMS AND CONDITIONS OF THE OPTIONS. In addition to any
other terms, conditions, and limitations specified in the Plan, each
Option awarded hereunder shall, as to each Optionee, satisfy the following
requirements:
(a) DATE OF AWARD. Options must be awarded on or before
February 19, 2011.
(b) EXPIRATION. No Option shall be exercisable after the
expiration of ten years from the date such Option is awarded.
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(c) PRICE. The Option Price as to any Share subject to an
Option may not be less than the Fair Market Value of the Share on the date
the Option is awarded.
(d) LIMITATIONS ON TRANSFERABILITY. No Option shall be
transferable by the Optionee other than by will or the laws of descent and
distribution, nor can it be exercised by anyone other than the Optionee
during the Optionee's lifetime. No Option may be sold, transferred,
assigned, pledged, hypothecated, encumbered, or otherwise disposed of
(whether by operation of law or otherwise), or be subject to execution,
attachment, or similar process. Upon any attempt to so sell, transfer,
assign, pledge, hypothecate, encumber, or otherwise dispose of any such
award, such award and all rights thereunder shall immediately become null
and void.
(e) EXERCISE. Except as otherwise permitted by the Committee,
options must be exercised in accordance with the following time
limitations:
(i) TERMINATION BY DEATH. If an Optionee incurs a
Termination of Employment by reason of death, any Option held by such
Optionee may thereafter be exercised, to the extent then exercisable, for
a period of one year from the date of such death or until the expiration
of the stated term of such Option, whichever period is shorter.
(ii) TERMINATION BY REASON OF DISABILITY. If an Optionee
incurs a Termination of Employment by reason of Disability, any Option
held by such Optionee may thereafter be exercised by the Optionee (or the
estate of the Optionee in the event of death), to the extent it was
exercisable at the time of such Termination of Employment, for a period of
one year.
(iii) OTHER TERMINATION. Unless otherwise determined by
the Committee, if the Optionee incurs a Termination of Service for Cause,
all Options then held by such Optionee shall terminate and may not be
exercised from and after the effective date of such Termination of
Service. If an Optionee incurs a Termination of Service for any reason
other than death, Disability, or Cause, any Option then held by the
Optionee, to the extent it was exercisable on the date of such Termination
of Service, may be exercised for a period of three months from the date of
such Termination of Service or until the expiration of the stated term of
such Option, whichever period is shorter.
(IV) DEATH AFTER TERMINATION. If the Optionee dies
subsequent to a Termination of Service for any reason other than Cause
(unless otherwise determined by the Committee in the event of Termination
of Service for Cause), then, notwithstanding any other limitation on the
exercise of the Optionee's Option set forth in subparagraphs (i), (ii) or
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(iii), any Option held by such Optionee on the Optionee's date of death
may thereafter be exercised, to the extent it was exercisable on such
date, for a period of one year from the date of death or until the
expiration of the stated term of such Option, whichever period is shorter.
(f) MINIMUM HOLDING PERIOD. No Option may be exercised before
the date which is six months after the later of (i) the date on which the
Plan is approved by the shareholders of the Company, or (ii) the date on
which such Option was awarded.
(g) ADDITIONAL RESTRICTIONS RELATING TO OPTIONS. No Option may
be awarded (i) to the extent that the aggregate Fair Market Value
(determined as of the time the Option is awarded) of the Shares for which
Options are exercisable for the first time by an individual during any
calendar year (under the Plan or any other plan of the Company or a
Subsidiary) exceeds $100,000 (or such other individual limit as may be in
effect under the Code on the date of award) and (ii) to an employee who,
at the time such Option is awarded, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or
any Subsidiary within the meaning of Section 422(b)(6) of the Code unless
(A) at the time the Option is awarded, the Option Price is at least 110%
of the Fair Market Value of the Shares subject to the Option, and (B) such
Option by its terms is not exercisable after the expiration of five years
from the date such Option is awarded.
(h) LIMITATION ON OPTION AWARDS. No Optionee may be awarded
Options under the Plan in any calendar year with respect to more than
2,500 Shares.
Section 6.4 TERMINATION OR LAPSE OF OPTIONS. Each Option shall
terminate or lapse upon the first to occur of (a) the expiration date or
any date as of which the Option is deemed to be forfeited as set forth in
the applicable Option Agreement, (b) the applicable date determined by
Section 6.3(b), or (c) midnight of the last day such Option could be
exercised under Section 6.3(e).
SECTION 7. EXERCISE AND PAYMENT OF OPTION PRICE.
Section 7.1 EXERCISE OF OPTIONS. Options shall be exercised as to
all or a portion of the Shares subject to the Option by written notice to
the Company setting forth the exact number of Shares as to which the
Option is being exercised and including with such notice payment of the
Option Price (plus the minimum required tax withholding, if any). The
date of exercise shall be the date such written notice and payment have
been delivered (in cash or in such other manner as provided in Section
7.2) to the Secretary of the Company either in person or by depositing
said notice and payment in the United States mail, postage pre-paid and
addressed to such officer at the Company's home office.
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Section 7.2 PAYMENT FOR SHARES. Payment of the Option Price (plus
required tax withholding, if any) may be made (a) by tendering cash (in
the form of a check or otherwise) in such amount or (b) with the consent
of the Committee, and if authorized in the Option Agreement, by tendering
Shares owned by the Optionee with a Fair Market Value on the date of
exercise equal to such amount or (c) any combination of (a) and (b);
provided, however, that any Shares delivered in payment of the Option
Price shall have been purchased on the open market and held by the
Optionee for at least six months at the time of exercise of the Option.
Section 7.3 TAX WITHHOLDING. Although the Options are intended to
qualify as incentive stock options under Sections 422 of the Code, the
delivery of Shares under the Plan is subject to withholding of all
applicable taxes, and the Committee may condition the delivery of any
Shares or other benefits on satisfaction of applicable withholding
obligations.
Section 7.4 ISSUANCE OF SHARES. No Shares shall be issued until full
payment therefor has been made. An Optionee shall have all of the rights
of a shareholder of the Company holding the Common Stock that is subject
to such Option (including, if applicable, the right to vote the Shares and
the right to receive dividends), when the Optionee has given written
notice of exercise, has paid in full for such Shares and, if requested,
has given the representation described in Section 11.
SECTION 8. CHANGE IN CONTROL.
Section 8.1 ADJUSTMENT OF OPTIONS.
(a) VESTING AND CASH PAYMENT. In the event of a Change in
Control,
(i) all Options outstanding on the date on which such
Change in Control has occurred (the "Change in Control Date") shall, to
the extent not then exercisable or vested, immediately become exercisable
in full, and
(ii) each Optionee may elect (the Optionee's "Election
Right") with respect to each Option held by such Optionee on the Change in
Control Date to surrender such Option for an immediate lump sum cash
payment in an amount equal to the product of (A) the number of Shares then
subject to the Option as to which the election is being exercised
multiplied by (B) the excess, if any, of (1) the greater of (a) the Change
in Control Price or (b) the highest Fair Market Value of a Share on any
day in the 60-day period ending on the Change in Control Date, over (2)
the Option Price of such Option. For purposes of this Section 8.1(a), the
"Change in Control Price" shall mean, if the Change in Control is the
result of a tender or exchange offer or a Corporate Transaction (as
defined in Section 8.2(c)), the highest price per Share paid in such
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tender or exchange offer or Corporate Transaction, and, to the extent that
the consideration paid in any such transaction consists all or in part of
securities or other noncash consideration, the value of such securities or
other noncash consideration shall be determined in the sole discretion of
the Committee.
(b) ELECTION. The exercise of an Election Right must be in
writing, specify the Option or Options and the number of Shares as to
which the election is being exercised, and be delivered to the Secretary
of the Company or his successor either in person or by depositing said
notice and payment in the United States mail, postage pre-paid and
addressed to such officer at the home office of the Company or its
successor on or before the 60th day following the Change in Control Date.
(c) PAYMENT DATE. All payments due an Optionee pursuant to the
provisions of this Section 8.1 shall be made by the Company or its
successor on or before the 5th business day following the date on which
the Optionee's election has been delivered pursuant to Section 8.1(b).
(d) POOLING CONSIDERATIONS. Notwithstanding any other provision
of this Section 8.1, if the grant or the exercise of an Optionee's
Election Right or payment of cash provided for in this Section 8.1 would
make a Change in Control transaction ineligible for pooling-of-interests
accounting treatment under APB No. 16, that, but for the nature of such
grant or exercise of Election Rights or payment of cash, would otherwise
be eligible for such pooling-of-interests accounting treatment, the
Committee shall have the right and authority to substitute for the cash
payments to be made to the Optionee pursuant to Section 8.1(a), Common
Stock with a Fair Market Value, determined as of the date of delivery of
such Shares, equal to the cash that would otherwise be payable to such
Optionee in connection with the exercise of an Optionee's Election Right
hereunder or, to the extent necessary to preserve such pooling-of-
interests accounting treatment, to otherwise modify, eliminate, or
terminate such Election Right.
Section 8.2 DEFINITION OF "CHANGE IN CONTROL." For purposes of the
Plan, a "Change in Control" means the happening of any of the following
events:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this paragraph (a), the following
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acquisitions shall not constitute a Change in Control: (A) any acquisition
directly from the Company other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted
was itself acquired directly from the Company, (B) any acquisition by the
Company, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any entity controlled by
the Company, and (D) any acquisition pursuant to a transaction which
complies with clauses (i), (ii), and (iii) of paragraph (c) of this
Section 8.2; or
(b) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board; provided,
however, for purposes of the Plan, that any individual who becomes a
member of the Board subsequent to the Effective Date whose election, or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be deemed to be and shall be
considered as though such individual were a member of the Incumbent Board,
but provided, further, that any such individual whose initial assumption
of office occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board shall not be so deemed or considered as a member of the
Incumbent Board; or
(c) Consummation of a reorganization, merger or consolidation,
or sale or other disposition of all or substantially all of the assets of
the Company or the acquisition of the assets or securities of any other
entity (a "Corporate Transaction"); excluding, however, such a Corporate
Transaction pursuant to which (i) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all
or substantially all of the Company's assets either directly or through
one or more subsidiaries) (the "Resulting Company") in substantially the
same proportions as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person (other than
the Company, any employee benefit plan (or related trust) of the Company)
will beneficially own, directly or indirectly, 20% or more of,
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respectively, the outstanding shares of common stock of the Resulting
Company or the combined voting power of the then outstanding voting
securities of such Resulting Company entitled to vote generally in the
election of directors except to the extent that such ownership existed
with respect to the Company prior to the Corporate Transaction, and (iii)
individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the Resulting
Company; or
(d) The approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
SECTION 9. AMENDMENT AND TERMINATION OF PLAN.
Section 9.1 AMENDMENT OF PLAN. The Board may amend the Plan from
time to time and at any time; provided, however, that (a) except as
specifically provide herein, no amendment shall, in the absence of written
consent to the change by an affected Optionee, adversely affect such
Optionee's rights under any Option which has been awarded prior to the
amendment except to the extent such amendment is, in the sole opinion of
the Committee, required to comply with any stock exchange or over-the-
counter market listing rules, accounting rules, or laws applicable to the
Company or the Plan, (b) no amendment with respect to the maximum number
of Shares which may be issued pursuant to Options under the Plan or to any
individual in any calendar year made be made unless approved by a majority
of the Shares entitled to vote at a meeting of the shareholders if such
amendment would, in the absence of such approval and in the sole opinion
of the Committee, have an adverse effect on the Company under applicable
tax or securities laws or accounting rules, and (c) no amendment shall be
made without the approval of the Company's shareholders to the extent such
approval is required by applicable law or stock exchange or over-the-
counter market listing rules.
Section 9.2 TERMINATION OF PLAN. The Plan shall terminate on the
first to occur of (a) February 19, 2011 or (b) the date specified by the
Board as the effective date of Plan termination; provided, however, that
the termination of the Plan shall not limit or otherwise affect any
Options outstanding on the date of termination.
SECTION 10. EFFECTIVE DATE. Notwithstanding any provision of this
Plan to the contrary, the Plan shall not be effective, and any Options
awarded under the Plan shall be null and void, unless the adoption of the
Plan is approved at the annual meeting of the Company's shareholders next
following the Effective Date by the majority of the shares entitled to
vote at such meeting.
SECTION 11. INVESTMENT INTENT. The Committee may require each person
purchasing or receiving Shares pursuant to an Option to represent to and
agree with the Company in writing that such person is acquiring the Shares
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without a view to the distribution thereof. The certificates for such
Shares may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer imposed in connection with the
Company's compliance with any securities law.
SECTION 12. AVAILABILITY OF INFORMATION. If the Shares subject to an
Option are not registered or to be registered under the Securities Act of
1933 as amended, the Company shall furnish each Optionee with (a) a copy
of the Plan and the Company's most recent annual report to its
shareholders at the time the Option Agreement is delivered to the Optionee
and (b) a copy of each subsequent annual report and proxy statement, on or
about the same date as such report shall be made available to shareholders
of the Company. The Company will furnish, upon written request addressed
to the Secretary of the Company, but at no charge to the Optionee or any
duly authorized representative of the Optionee, copies of all reports
filed by the Company with the Securities and Exchange Commission,
including, but not limited to, the Company's annual reports on Form 10-K,
its quarterly reports on Form 10-Q, and its proxy statements.
Notwithstanding the foregoing provisions of this Section 12, the Company
shall not be required to furnish any such report or statement if a copy of
such report is otherwise provided to the Optionee in connection with
another plan maintained by the Company or such Optionee's status as a
shareholder of the Company or if, by virtue of such Optionee's employment
or office with the Company or a Subsidiary, the Optionee has received such
report or statement.
SECTION 13. LIMITATION OF RIGHTS.
(a) CONDITIONS OF EMPLOYMENT. The Plan shall not constitute a
contract of employment, and participation in or eligibility for
participation in the Plan shall not confer upon any employee the right to
be continued as an employee of the Company or any present or future
Subsidiary and the Company and each Subsidiary hereby expressly reserves
the right to terminate the employment of any employee, with or without
cause, as if the Plan and any Options awarded pursuant to it were not in
effect.
(b) COMPANY ASSETS. Neither an Optionee nor any other person
shall, by reason of receiving an award of an Option under the Plan acquire
any right, title, or interest in any assets of the Company or any
Subsidiary by reason of such Option or the Plan. To the extent an
Optionee or any other person shall acquire a right to receive payments
from the Company pursuant to an Option Agreement or the Plan, such right
shall be no greater than the right of any unsecured general creditor of
the Company.
(c) ISSUANCE OF SHARES. Notwithstanding any other provision of
the Plan or agreements made pursuant thereto, the Company shall not be
required to issue or deliver any certificate or certificates for Shares
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under the Plan prior to fulfillment of all of the following conditions:
(i) Listing or approval for listing upon notice of
issuance, of such Shares on the exchange or over-the-counter market as may
at the time be the principal market for the Common Stock;
(ii) Any registration or other qualification of the Shares
under any state or federal law or regulation, or the maintaining in effect
of any such registration or other qualification which the Committee shall,
in its absolute discretion upon the advice of counsel, deem necessary or
advisable; and
(iii) Obtaining any other consent, approval, or permit from
any state or federal governmental agency which the Committee shall, in its
absolute discretion after receiving the advice of counsel, determine to be
necessary or advisable.
SECTION 14. COMPLIANCE WITH APPLICABLE LAWS. If at any time the
Company shall be advised by its counsel that the exercise of any Option or
the delivery of Shares upon the exercise of an Option is required to be
approved, listed, registered or qualified under any securities law, that
certain actions must be taken under the rules of any stock exchange or
over-the-counter market, that such exercise or delivery must be
accompanied or preceded by a prospectus or similar circular meeting the
requirements of any applicable law, or that some other action is required
to be taken by the Company in compliance with applicable law, the Company
will use reasonable efforts to take all actions required within a
reasonable time, but exercise of the Options or delivery by the Company of
certificates for Shares may be deferred until the Company shall be in
compliance with all such requirements.
SECTION 15. GOVERNING LAW. The Plan, each Option and related Option
Agreement and all determinations made and actions taken pursuant thereto,
to the extent not otherwise governed by the Code or the laws of the United
States, shall be governed by the internal laws of the State of Wisconsin
and construed in accordance therewith without giving effect to the
principles of conflicts of laws applied by any state.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed by
its duly authorized officers as of March 19, 2001.
PSB HOLDINGS, INC.
By: DAVID K. KOPPERUD
David K. Kopperud
President
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