Exhibit 10.3
PSB HOLDINGS, INC.
2001 STOCK OPTION PLAN
As amended March 15, 2005
PSB HOLDINGS, INC.
2001 STOCK OPTION PLAN
SECTION 1. PURPOSE. The Plan has been adopted to (a) enable the Company
to attract and retain superior employees by providing incentive opportunities
with respect to future services that are competitive with those of other
similar companies, (b) further identify the interests of participating
employees with those of the Company's other shareholders through compensation
based on the performance of the Company's common stock and (c) promote the
long-term financial interests of the Company and its shareholders.
SECTION 2. CERTAIN DEFINITIONS. As used in this Plan, and in addition
to any terms elsewhere defined in this Plan, the following terms, when
capitalized, shall have the meanings set forth in this Section 2.
Section 2.1. "Board" means the Board of Directors of the Company.
Section 2.2. "Cause" means any one or more of the following on the part
of the participant: (a) the commission of an act which results in a payment of
a claim filed by the Company or a Subsidiary under a blanket banker fidelity
bond or similar policy as from time to time and at any time maintained; (b) an
intentional failure to perform assigned duties; (c) willful misconduct in the
course of the participant's employment; (d) breach of a fiduciary duty
involving personal profit or acts or omissions of personal dishonesty,
including, but not limited to, commission of any crime of theft, embezzlement,
misapplication of funds, unauthorized issuance of obligations, or false
entries; (e) any intentional, reckless, or negligent act or omission to act
which results in the violation by the participant of any policy established by
the Company or a Subsidiary which is designed to insure compliance with
applicable banking, securities, employment discrimination or other laws or
which causes or results in the Company's or a Subsidiary's violation of such
laws, except any act done by the participant in good faith, as determined in
the reasonable discretion of the Board, or which results in a violation of such
policies or law which is, in the reasonable sole discretion of such Board,
immaterial; or (f) any of the foregoing which results in material loss to the
Company or any of its Subsidiaries. Except to the extent of the discretion
granted to the Board in clause (e), the Committee shall have the sole
discretion to determine whether "Cause" exists, and the Committee's
determination shall be final.
Section 2.3. "Change in Control" has the meaning set forth in Section
8.2.
Section 2.4. "Code" means the Internal Revenue Code of 1986, as amended.
The reference to any specific section of the Code shall include any successor
section or sections.
Section 2.5. "Committee" means, subject to the provisions of Section 4,
the Option Committee of the Board.
Section 2.6. "Common Stock" means the common stock of the Company.
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Section 2.7. "Company" means PSB Holdings, Inc., a Wisconsin
corporation.
Section 2.8. "Disability" means (a) a physical or mental condition which
qualifies as a total and permanent disability under the terms of any plan or
policy maintained by the Company or a Subsidiary and for which the Optionee is
eligible to receive benefits under such plan or policy, or (b) if the Optionee
does not participate in a disability plan, or is not covered by a disability
policy, of the Company or a Subsidiary, "Disability" means the permanent and
total inability of a participant by reason of mental or physical infirmity, or
both, to perform the work customarily assigned to him or her, if a medical
doctor selected or approved by the Board, and knowledgeable in the field of
such infirmity, advises the Committee either that it is not possible to
determine when such Disability will terminate or that it appears probable that
such Disability will be permanent during the remainder of said participant's
lifetime.
Section 2.9. "Effective Date" means February 20, 2001.
Section 2.10. "Employed," and any variation thereof such as
"employment," means, as appropriate, employed by or employment with any of the
Company or any present or future Subsidiary.
Section 2.11. "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
Section 2.12. "Fair Market Value" of a share of the Common Stock as of
any date means an amount equal to:
(a) the average of the highest bid and lowest ask prices of the
Common Stock reported on the OTC Bulletin Board, or, if prices for the
Common Stock are not quoted on the OTC Bulletin Board, the average of the
highest bid and lowest ask prices reported on any other bona fide over-
the-counter stock market selected in good faith by the Committee;
provided, however, if the date on which "Fair Market Value" is to be
determined is not a business day, or, if there shall be no reported
transactions for such date, such determination shall be made on the next
preceding business day for which transactions were reported, or
(b) if the Committee determines that the amount determined
pursuant to (a) is not indicative of the market value of the Common Stock
because of limited or sporadic trading of the Common Stock and the lack
of recent quotations for the Common Stock on the OTC Bulletin Board, then
such amount as may be determined by the Committee by whatever means or
method as the Committee, in the good faith exercise of its discretion,
shall at such time deem appropriate and representative of the fair market
value of the Common Stock.
Section 2.13. "Option" means an option to purchase Shares awarded
pursuant to the provisions of Section 6 and which is intended to meet the
requirements of an "incentive stock option" within the meaning of Section 422
of the Code.
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Section 2.14. "Option Agreement" means the written document which
evidences an award of Options, whether or not such document requires the
signature of the Optionee.
Section 2.15. "Optionee" means an eligible employee, as determined in
accordance with Section 5, who has been granted an Option.
Section 2.16. "Option Price" means, with respect to each Option, the
price per Share at which such Option may be exercised and the Shares subject to
such Option purchased.
Section 2.17. "Plan" means the PSB Holdings, Inc. 2001 Stock Option Plan
as set forth herein or as hereafter amended.
Section 2.18. "Share" means a share of Common Stock.
Section 2.19. "Subsidiary" means any corporation, partnership, or other
entity in which the Company owns, directly or indirectly, at least a 50%
interest in the voting rights or profits.
Section 2.20. "Termination of Employment" means the termination of an
Optionee's employment with, or performance of services for, the Company and any
of its Subsidiaries. An Optionee employed by, or performing services for, a
Subsidiary shall also be deemed to incur a Termination of Employment if the
Subsidiary ceases to be such a Subsidiary and the Optionee does not immediately
thereafter become an employee of the Company or another Subsidiary. Temporary
absences from employment because of illness, vacation, or leave of absence and
transfers among the Company and its Subsidiaries shall not be considered
Terminations of Employment. For purposes of the Plan, an Optionee's employment
shall be deemed to have terminated at the close of business on the day
preceding the first date on which he or she is no longer for any reason
whatsoever employed by the Company or any of its Subsidiaries.
SECTION 3. NUMBER OF SHARES AVAILABLE FOR OPTIONS.
Section 3.1 Shares Subject. The aggregate number of Shares which may be
delivered under Options awarded pursuant to the Plan shall be 15,000.
Section 3.2 Undelivered Shares. To the extent any Shares subject to an
Option are not delivered to an Optionee (or the estate or other transferee of
such Optionee) because the Option is forfeited, expires, or otherwise becomes
unexercisable such Shares shall be deemed not to have been delivered for
purposes of determining the maximum number of Shares available for delivery
under the Plan.
Section 3.3 Exercise Using Shares. If the Option Price of any Option
awarded under the Plan is satisfied by tendering Shares to the Company only the
number of Shares issued to the Optionee (or the estate or other transferee of
such Optionee), net of the Shares tendered, shall be deemed delivered for
purposes of determining the maximum number of Shares available for delivery
under the Plan.
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Section 3.4 Stock Dividends, etc. If the Company shall, after the
Effective Date, change the Common Stock into a greater or lesser number of
Shares through a stock dividend, stock split-up or combination of Shares, then
(a) the number of Shares then subject to the Plan as provided for in Section
3.1, but which are not then subject to any outstanding Option, (b) the number
of Shares subject to each then outstanding Option (to the extent not previously
exercised), and (c) the price per Share payable upon exercise of each then
outstanding Option, shall all be proportionately increased or decreased as of
the record date for such stock dividend, stock split-up or combination of
Shares in order to give effect thereto. Notwithstanding any such proportionate
increase or decrease, no fraction of a Share shall be issued upon the exercise
of an Option and the Shares subject to an Option shall be rounded to the
nearest whole Share.
Section 3.5 Other Changes. If, after the Effective Date, there shall be
any change in the Common Stock or other change in the capitalization of the
Company other than through a stock dividend, stock split-up or combination of
Shares, including, but not limited to, a change which results from a merger,
consolidation, spin-off, or other distribution of stock or property of the
Company, any reorganization (whether or not such reorganization is within the
meaning of Section 368 of the Code), or any partial or complete liquidation of
the Company, then if, and only if, the Committee shall determine that such
change equitably requires an adjustment in (a) the number or kind of shares of
stock then reserved for issuance under Section 3.1, (b) the number or kind of
shares of stock then subject to an Option, (c) the Option Price with respect to
an Option, or (d) any other limitation on the Option which may be granted to
any participant, to the extent such adjustment does not cause any Option to
fail to satisfy the requirements for exemption from the limitations on
deductibility imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(c) of the Code if such Option would have satisfied such
requirements immediately prior to such adjustment and if such Option, if then
exercised, would, when added to the Optionee's estimated compensation from the
Company and all Subsidiaries for such year, exceed the deductibility limits of
Section 162(m) of the Code, such adjustment as the Committee shall determine is
equitable and as shall be approved by the Board shall be made and shall be
effective and binding for all purposes of such Option and the Plan. If any
member of the Committee shall, at the time of such approval, be an Optionee, he
shall not participate in action in connection with such adjustment.
SECTION 4. ADMINISTRATION OF THE PLAN.
Section 4.1 Committee. The Plan shall be administered by the Committee.
The Committee shall, subject to the terms of the Plan, have the authority to,
in its sole discretion, (a) select eligible employees to receive an award of
one or more Options and to participate in the Plan, (b) determine the number of
Shares subject to each award and the Option Price associated therewith, (c)
establish terms and conditions concerning the time of, and conditions precedent
to, the exercisability of each Option (including, without limitation,
conditions with respect to the passage of time, performance of the Company, or
a Subsidiary, or the Optionee, restrictions on competitive employment or
satisfaction of Company policies, and any other conditions which the Committee
deems reasonably related to the satisfaction of the purposes of the Plan), (d)
determine the form of each Option Agreement and all terms and conditions
thereof with respect
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to each award, (e) interpret the Plan and the application thereof and establish
such rules and regulations as it deems necessary or desirable for the
administration of the Plan, (f) modify or cancel any award or Option or take
such action to cause the vesting or exercisability of any or all outstanding
Options to become exercisable in part or in full for any reason at any time,
subject to the limitation of Section 8.1, and (g) exercise such other authority
as is reasonably related to the administration of and/or the fulfillment of the
purpose of the Plan. All actions, interpretations, rules, regulations and
conditions taken or established by the Committee shall be final, binding and
conclusive upon the Company, each Subsidiary, and all Optionees.
Section 4.2 Membership of the Committee.
(a) Membership Qualifications. Except as provided in this Section
4.2, at all times the Committee shall consist of not less than three
members designated by the Board from among those of its members who are
not officers or employees of the Company or a Subsidiary and each of whom
is (a) a "non-employee director" within the meaning of Rule 16b-3 under
the Exchange Act (a "Non-Employee Director") and (b) an "outside
director" within the meaning of Section 162(m) of the Code (an "Outside
Director"); provided, however, that in addition to the Board's general
authority to amend the Plan as provided for in Section 9.1, the Board
shall have the specific authority to modify or eliminate the foregoing
qualifications or adopt such other qualifications as are reasonably
intended to result in (x) the award of Options, and transactions with
respect to the award or exercise of such Options, satisfying an exemption
from Section 16(b) of the Exchange Act, or any successor thereto, and (y)
compensation recognized by Optionees qualifying as a deductible expense
of the Company under the "performance-based compensation" exception to
compensation deduction limits which would otherwise be imposed on the
Company under Section 162(m) of the Code.
(b) Appointment of Other Members. In the event that one or more
members of the Committee shall fail to meet the qualifications set forth
in Section 4.2(a), the Board shall remove such member or members and
appoint a successor or successors who satisfy such qualifications. The
Board shall act in a reasonably prompt manner to fill any vacancy on the
Committee from among such of its members who are both Non-Employee
Directors and Outside Directors.
(c) Validity of Grants. Notwithstanding the qualifications for
members of the Committee established in Section 4.2(a), any award of
Options made by the Committee in good faith and without the knowledge
that one or more of its members did not satisfy such qualifications,
shall be valid and enforceable by the Optionee even though the members of
the Committee did not, at the time of such award, satisfy such
qualifications.
Section 4.3 Actions by the Committee. A majority of the members of the
Committee shall constitute a quorum. In the absence of specific rules to the
contrary, action by the Committee shall require the consent of a majority of
the members of the Committee, expressed either orally at a meeting of the
Committee or in writing in the absence of a meeting.
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Section 4.4 Actions by the Board. Any authority granted to the
Committee may also be exercised by the full Board, except to the extent that
the grant or exercise of such authority would cause any Option or transaction
to become subject to (or lose an exemption under) the short-swing profit
recovery provisions of Section 16 of the Exchange Act or cause an Option not to
qualify for, or to cease to qualify for, the exemption as "performance-based
compensation" under Section 162 of the Code, and the regulations promulgated
thereunder. To the extent that any permitted action taken by the Board
conflicts with action taken by the Committee, the Board action shall control.
Section 4.5 Limitation on Liability and Indemnification of Board. No
member of the Board, no executive officer or other employee of the Company, and
no other agent or representative of the Company shall be liable for any act,
omission, interpretation, construction, or determination made in connection
with the Plan in good faith, and all such persons shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage, or expense (including attorneys fees) arising therefrom to the full
extent permitted by law, except as otherwise may be provided in the Company's
articles of incorporation and/or by-laws, and under any directors' and
officers' liability insurance that may be in effect from time to time.
SECTION 5. PERSONS ELIGIBLE TO BECOME OPTIONEES. Persons who are (a)
key salaried employees of the Company or any Subsidiary or (b) prospective key
salaried employees who have accepted offers of employment from the Company or a
Subsidiary shall be eligible to be selected, in the sole discretion of the
Committee, to participate in, and receive an award of one or more Options
pursuant to the Plan; provided, however, that only employees of the Company or
a Subsidiary shall be eligible to receive an award intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
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
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Section 162 of the Code, and the regulations promulgated thereunder. Each
Option Agreement shall incorporate by reference all terms, conditions and
Limitations set forth in the Plan.
Section 6.3 Terms and Conditions of the Options. In addition to any
other terms, conditions, and limitations specified in the Plan, each Option
awarded hereunder shall, as to each Optionee, satisfy the following
requirements:
(a) Date of Award. Options must be awarded on or before February
19, 2011.
(b) Expiration. No Option shall be exercisable after the
expiration of ten years from the date such Option is awarded.
(c) Price. The Option Price as to any Share subject to an Option
may not be less than the Fair Market Value of the Share on the date the
Option is awarded.
(d) Limitations on Transferability. No Option shall be
transferable by the Optionee other than by will or the laws of descent
and distribution, nor can it be exercised by anyone other than the
Optionee during the Optionee's lifetime. No Option may be sold,
transferred, assigned, pledged, hypothecated, encumbered, or otherwise
disposed of (whether by operation of law or otherwise), or be subject to
execution, attachment, or similar process. Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber, or otherwise dispose of
any such award, such award and all rights thereunder shall immediately
become null and void.
(e) Exercise. Except as otherwise permitted by the Committee,
options must be exercised in accordance with the following time
limitations:
(i) Termination by Death. If an Optionee incurs a
Termination of Employment by reason of death, any Option held by
such Optionee may thereafter be exercised, to the extent then
exercisable, for a period of one year from the date of such death
or until the expiration of the stated term of such Option,
whichever period is shorter.
(ii) Termination by Reason of Disability. If an Optionee
incurs a Termination of Employment by reason of Disability, any
Option held by such Optionee may thereafter be exercised by the
Optionee (or the estate of the Optionee in the event of death), to
the extent it was exercisable at the time of such Termination of
Employment, for a period of one year.
(iii) Other Termination. Unless otherwise determined by the
Committee, if the Optionee incurs a Termination of Service for
Cause, all Options then held by such Optionee shall terminate and
may not be exercised from and after the effective date of such
Termination of Service. If an Optionee incurs a Termination of
Service for any reason other than death, Disability, or Cause, any
Option then held by the Optionee, to the extent it was exercisable
on the date of
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such Termination of Service, may be exercised for a period of
three months from the date of such Termination of Service or until
the expiration of the stated term of such Option, whichever period
is shorter.
(iv) Death After Termination. If the Optionee dies
subsequent to a Termination of Service for any reason other than
Cause (unless otherwise determined by the Committee in the event of
Termination of Service for Cause), then, notwithstanding any other
limitation on the exercise of the Optionee's Option set forth in
subparagraphs (i), (ii) or (iii), any Option held by such Optionee
on the Optionee's date of death may thereafter be exercised, to the
extent it was exercisable on such date, for a period of one year
from the date of death or until the expiration of the stated term
of such Option, whichever period is shorter.
(f) Minimum Holding Period. No Option may be exercised before
the date which is six months after the later of (i) the date on which the
Plan is approved by the shareholders of the Company, or (ii) the date on
which such Option was awarded.
(g) Additional Restrictions Relating to Options. No Option may
be awarded (i) to the extent that the aggregate Fair Market Value
(determined as of the time the Option is awarded) of the Shares for which
Options are exercisable for the first time by an individual during any
calendar year (under the Plan or any other plan of the Company or a
Subsidiary) exceeds $100,000 (or such other individual limit as may be in
effect under the Code on the date of award) and (ii) to an employee who,
at the time such Option is awarded, owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company
or any Subsidiary within the meaning of Section 422(b)(6) of the Code
unless (A) at the time the Option is awarded, the Option Price is at
least 110% of the Fair Market Value of the Shares subject to the Option,
and (B) such Option by its terms is not exercisable after the expiration
of five years from the date such Option is awarded.
(h) Limitation on Option Awards. No Optionee may be awarded
Options under the Plan in any calendar year with respect to more than
2,500 Shares.
Section 6.4 Termination or Lapse of Options. Each Option shall
terminate or lapse upon the first to occur of (a) the expiration date or any
date as of which the Option is deemed to be forfeited as set forth in the
applicable Option Agreement, (b) the applicable date determined by Section
6.3(b), or (c) midnight of the last day such Option could be exercised under
Section 6.3(e).
SECTION 7. EXERCISE AND PAYMENT OF OPTION PRICE.
Section 7.1 Exercise of Options. Options shall be exercised as to all
or a portion of the Shares subject to the Option by written notice to the
Company setting forth the exact number of Shares as to which the Option is
being exercised and including with such notice payment of the
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Option Price (plus the minimum required tax withholding, if any). The date of
exercise shall be the date such written notice and payment have been delivered
(in cash or in such other manner as provided in Section 7.2) to the Secretary
of the Company either in person or by depositing said notice and payment in the
United States mail, postage pre-paid and addressed to such officer at the
Company's home office.
Section 7.2 Payment for Shares. Payment of the Option Price (plus
required tax withholding, if any) may be made (a) by tendering cash (in the
form of a check or otherwise) in such amount or (b) with the consent of the
Committee, and if authorized in the Option Agreement, by tendering Shares owned
by the Optionee with a Fair Market Value on the date of exercise equal to such
amount or (c) any combination of (a) and (b); provided, however, that any
Shares delivered in payment of the Option Price shall have been purchased on
the open market and held by the Optionee for at least six months at the time of
exercise of the Option.
Section 7.3 Tax Withholding. Although the Options are intended to
qualify as incentive stock options under Sections 422 of the Code, the delivery
of Shares under the Plan is subject to withholding of all applicable taxes, and
the Committee may condition the delivery of any Shares or other benefits on
satisfaction of applicable withholding obligations.
Section 7.4 Issuance of Shares. No Shares shall be issued until full
payment therefor has been made. An Optionee shall have all of the rights of a
shareholder of the Company holding the Common Stock that is subject to such
Option (including, if applicable, the right to vote the Shares and the right to
receive dividends), when the Optionee has given written notice of exercise, has
paid in full for such Shares and, if requested, has given the representation
described in Section 11.
SECTION 8. CHANGE IN CONTROL.
Section 8.1 Adjustment of Options.
(a) Vesting and Cash Payment. In the event of a Change in
Control,
(i) all Options outstanding on the date on which such Change
in Control has occurred (the "Change in Control Date") shall, to
the extent not then exercisable or vested, immediately become
exercisable in full, and
(ii) each Optionee may elect (the Optionee's "Election
Right") with respect to each Option held by such Optionee on the
Change in Control Date to surrender such Option for an immediate
lump sum cash payment in an amount equal to the product of (A) the
number of Shares then subject to the Option as to which the
election is being exercised multiplied by (B) the excess, if any,
of (1) the greater of (a) the Change in Control Price or (b) the
highest Fair Market Value of a Share on any day in the 60-day
period ending on the Change in Control Date, over (2) the Option
Price of such Option. For purposes of this Section 8.1(a), the
"Change in Control Price" shall mean, if the Change in Control is
the result of a
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tender or exchange offer or a Corporate Transaction (as defined in
Section 8.2(c)), the highest price per Share paid in such tender or
exchange offer or Corporate Transaction, and, to the extent that
the consideration paid in any such transaction consists all or in
part of securities or other noncash consideration, the value of
such securities or other noncash consideration shall be determined
in the sole discretion of the Committee.
(b) Election. The exercise of an Election Right must be in
writing, specify the Option or Options and the number of Shares as to
which the election is being exercised, and be delivered to the Secretary
of the Company or his successor either in person or by depositing said
notice and payment in the United States mail, postage pre-paid and
addressed to such officer at the home office of the Company or its
successor on or before the 60th day following the Change in Control Date.
(c) Payment Date. All payments due an Optionee pursuant to the
provisions of this Section 8.1 shall be made by the Company or its
successor on or before the 5th business day following the date on which
the Optionee's election has been delivered pursuant to Section 8.1(b).
(d) Pooling Considerations. Notwithstanding any other provision
of this Section 8.1, if the grant or the exercise of an Optionee's
Election Right or payment of cash provided for in this Section 8.1 would
make a Change in Control transaction ineligible for pooling-of-interests
accounting treatment under APB No. 16, that, but for the nature of such
grant or exercise of Election Rights or payment of cash, would otherwise
be eligible for such pooling-of-interests accounting treatment, the
Committee shall have the right and authority to substitute for the cash
payments to be made to the Optionee pursuant to Section 8.1(a), Common
Stock with a Fair Market Value, determined as of the date of delivery of
such Shares, equal to the cash that would otherwise be payable to such
Optionee in connection with the exercise of an Optionee's Election Right
hereunder or, to the extent necessary to preserve such pooling-of-
interests accounting treatment, to otherwise modify, eliminate, or
terminate such Election Right.
Section 8.2 Definition of "Change in Control." For purposes of the
Plan, a "Change in Control" means the happening of any of the following events:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (i) the then outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this paragraph (a), the following
acquisitions shall not constitute a Change in Control: (A) any
acquisition directly from the Company other than an acquisition by virtue
of the exercise of a conversion privilege unless the security being so
converted was
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itself acquired directly from the Company, (B) any acquisition by the
Company, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any entity controlled by
the Company, and (D) any acquisition pursuant to a transaction which
complies with clauses (i), (ii), and (iii) of paragraph(c) of this
Section 8.2; or
(b) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board; provided,
however, for purposes of the Plan, that any individual who becomes a
member of the Board subsequent to the Effective Date whose election, or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be deemed to be and shall be
considered as though such individual were a member of the Incumbent
Board, but provided, further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board shall not be so deemed or considered as a member of the
Incumbent Board; or
(c) Consummation of a reorganization, merger or consolidation, or
sale or other disposition of all or substantially all of the assets of
the Company or the acquisition of the assets or securities of any other
entity (a "Corporate Transaction"); excluding, however, such a Corporate
Transaction pursuant to which (i) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all
or substantially all of the Company's assets either directly or through
one or more subsidiaries) (the "Resulting Company") in substantially the
same proportions as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person (other than
the Company, any employee benefit plan (or related trust) of the Company)
will beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the Resulting
Company or the combined voting power of the then outstanding voting
securities of such Resulting Company entitled to vote generally in the
election of directors except to the extent that such ownership existed
with respect to the Company prior to the Corporate Transaction, and (iii)
individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the
Resulting Company; or
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(d) The approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
SECTION 9. AMENDMENT AND TERMINATION OF PLAN.
Section 9.1 Amendment of Plan. The Board may amend the Plan from time
to time and at any time; provided, however, that (a) except as specifically
provide herein, no amendment shall, in the absence of written consent to the
change by an affected Optionee, adversely affect such Optionee's rights under
any Option which has been awarded prior to the amendment except to the extent
such amendment is, in the sole opinion of the Committee, required to comply
with any stock exchange or over-the-counter market listing rules, accounting
rules, or laws applicable to the Company or the Plan, (b) no amendment with
respect to the maximum number of Shares which may be issued pursuant to Options
under the Plan or to any individual in any calendar year made be made unless
approved by a majority of the Shares entitled to vote at a meeting of the
shareholders if such amendment would, in the absence of such approval and in
the sole opinion of the Committee, have an adverse effect on the Company under
applicable tax or securities laws or accounting rules, and (c) no amendment
shall be made without the approval of the Company's shareholders to the extent
such approval is required by applicable law or stock exchange or over-the-
counter market listing rules.
Section 9.2 Termination of Plan. The Plan shall terminate on the first
to occur of (a) February 19, 2011 or (b) the date specified by the Board as the
effective date of Plan termination; provided, however, that the termination of
the Plan shall not limit or otherwise affect any Options outstanding on the
date of termination.
SECTION 10. EFFECTIVE DATE. Notwithstanding any provision of this Plan
to the contrary, the Plan shall not be effective, and any Options awarded under
the Plan shall be null and void, unless the adoption of the Plan is approved at
the annual meeting of the Company's shareholders next following the Effective
Date by the majority of the shares entitled to vote at such meeting.
SECTION 11. INVESTMENT INTENT. The Committee may require each person
purchasing or receiving Shares pursuant to an Option to represent to and agree
with the Company in writing that such person is acquiring the Shares without a
view to the distribution thereof. The certificates for such Shares may include
any legend which the Committee deems appropriate to reflect any restrictions on
transfer imposed in connection with the Company's compliance with any
securities law.
SECTION 12. AVAILABILITY OF INFORMATION. If the Shares subject to an
Option are not registered or to be registered under the Securities Act of 1933
as amended, the Company shall furnish each Optionee with (a) a copy of the Plan
and the Company's most recent annual report to its shareholders at the time the
Option Agreement is delivered to the Optionee and (b) a copy of each subsequent
annual report and proxy statement, on or about the same date as such report
shall be made available to shareholders of the Company. The Company will
furnish, upon written request addressed to the Secretary of the Company, but at
no charge to the Optionee or
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any duly authorized representative of the Optionee, copies of all reports filed
by the Company with the Securities and Exchange Commission, including, but not
limited to, the Company's annual reports on Form 10-K, its quarterly reports on
Form 10-Q, and its proxy statements. Notwithstanding the foregoing provisions
of this Section 12, the Company shall not be required to furnish any such
report or statement if a copy of such report is otherwise provided to the
Optionee in connection with another plan maintained by the Company or such
Optionee's status as a shareholder of the Company or if, by virtue of such
Optionee's employment or office with the Company or a Subsidiary, the Optionee
has received such report or statement.
SECTION 13. LIMITATION OF RIGHTS.
(a) Conditions of Employment. The Plan shall not constitute a
contract of employment, and participation in or eligibility for
participation in the Plan shall not confer upon any employee the right to
be continued as an employee of the Company or any present or future
Subsidiary and the Company and each Subsidiary hereby expressly reserves
the right to terminate the employment of any employee, with or without
cause, as if the Plan and any Options awarded pursuant to it were not in
effect.
(b) Company Assets. Neither an Optionee nor any other person
shall, by reason of receiving an award of an Option under the Plan
acquire any right, title, or interest in any assets of the Company or any
Subsidiary by reason of such Option or the Plan. To the extent an
Optionee or any other person shall acquire a right to receive payments
from the Company pursuant to an Option Agreement or the Plan, such right
shall be no greater than the right of any unsecured general creditor of
the Company.
(c) Issuance of Shares. Notwithstanding any other provision of
the Plan or agreements made pursuant thereto, the Company shall not be
required to issue or deliver any certificate or certificates for Shares
under the Plan prior to fulfillment of all of the following conditions:
(i) Listing or approval for listing upon notice of issuance,
of such Shares on the exchange or over-the-counter market as may at
the time be the principal market for the Common Stock;
(ii) Any registration or other qualification of the Shares
under any state or federal law or regulation, or the maintaining in
effect of any such registration or other qualification which the
Committee shall, in its absolute discretion upon the advice of
counsel, deem necessary or advisable; and
(iii) Obtaining any other consent, approval, or permit from
any state or federal governmental agency which the Committee shall,
in its absolute discretion after receiving the advice of counsel,
determine to be necessary or advisable.
SECTION 14. COMPLIANCE WITH APPLICABLE LAWS. If at any time the Company
shall be advised by its counsel that the exercise of any Option or the delivery
of Shares upon the exercise
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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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