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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement.
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2)).
[X] Definitive Proxy Statement.
[ ] Definitive Additional Materials.
[ ] Soliciting Material Pursuant to Section 240.14a-12
ALPENA BANCSHARES, INC.
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(Name of Registrant as Specified In Its Charter)
ALPENA BANCSHARES, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
[ALPENA BANCSHARES, INC. LOGO]
March 14, 2003
Dear Stockholder:
We cordially invite you to attend the 2003 Annual Meeting of Stockholders of
Alpena Bancshares, Inc. (the "Company"). The Annual Meeting will be held at the
Thunder Bay Recreational Center, 701 Woodward Avenue, Alpena, Michigan, at 1:00
p.m., Michigan time, on April 16, 2003.
The enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted. During the Annual Meeting we will also report on the
operations of the Company. Directors and officers of the Company will be present
to respond to any stockholders' questions. Also enclosed for your review is our
Annual Report to Stockholders, which contains detailed information concerning
the activities and operating performance of the Company.
The business to be conducted at the Annual Meeting consists of the election of
two directors to the Board of Directors of the Company and the ratification of
the appointment of Plante & Moran, LLP as auditors for the year ending December
31, 2003. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" the election of directors and
"FOR" the ratification of the appointment of the Company's auditors.
The Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interest of the Company and its
stockholders.
On behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy card as soon as possible, even if you currently plan to attend
the Annual Meeting. This will not prevent you from voting in person, but will
assure that your vote is counted if you are unable to attend the Annual Meeting.
Your vote is important, regardless of the number of shares that you own.
Sincerely,
/s/ Martin A. Thomson
Martin A. Thomson
President and Chief Executive Officer
ALPENA BANCSHARES, INC.
100 South Second Avenue
Alpena, Michigan 49707
(989) 356-9041
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On April 16, 2003
Notice is hereby given that the Annual Meeting of Alpena Bancshares,
Inc. (the "Company") will be held at the Thunder Bay Recreational Center, 701
Woodward Avenue, Alpena, Michigan, on April 16, 2003, at 1:00 p.m., Michigan
time.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company;
2. The ratification of the appointment of Plante & Moran, LLP as
auditors for the Company for the year ending
December 31, 2003; and
such other matters as may properly come before the Annual Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
to come before the Annual Meeting.
Any action may be taken on the foregoing proposals at the Annual
Meeting on the date specified above, or on any date or dates to which the Annual
Meeting may be adjourned. Stockholders of record at the close of business on
February 28, 2003, are the stockholders entitled to vote at the Annual Meeting,
and any adjournments thereof.
A list of stockholders entitled to vote at the Annual Meeting will be
available for inspection at the Company's main office, 100 South Second Avenue,
Alpena, Michigan, for the twenty (20) days immediately prior to the Annual
Meeting. It also will be available for inspection at the Annual Meeting.
EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING
WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY
BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR
HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE ANNUAL MEETING.
HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN
NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE
PERSONALLY AT THE ANNUAL MEETING.
By Order of the Board of Directors
/s/ James I. Malaski
James I. Malaski
Secretary
Alpena, Michigan
March 14, 2003
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
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PROXY STATEMENT
ALPENA BANCSHARES, INC.
100 S. Second Avenue
Alpena, Michigan 49707
(989) 356-9041
ANNUAL MEETING OF STOCKHOLDERS
April 16, 2003
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Alpena Bancshares, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company (the
"Annual Meeting"), which will be held at the Thunder Bay Recreational Center,
701 Woodward Avenue, Alpena, Michigan, on April 16, 2003, at 1:00 p.m., Michigan
time, and all adjournments of the Annual Meeting. The accompanying Notice of
Annual Meeting of Stockholders and this Proxy Statement are first being mailed
to stockholders on or about March 14, 2003.
At the Annual Meeting, stockholders will vote on the election of two
directors of the Company and on the ratification of the appointment of the
Company's auditors for the fiscal year ending December 31, 2003.
REVOCATION OF PROXIES
Stockholders who execute proxies in the form solicited hereby retain
the right to revoke them in the manner described below. Unless so revoked, the
shares represented by such proxies will be voted at the Annual Meeting and all
adjournments thereof. Proxies solicited on behalf of the Board of Directors of
the Company will be voted in accordance with the directions given therein. WHERE
NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED "FOR" THE PROPOSALS SET
FORTH IN THIS PROXY STATEMENT FOR CONSIDERATION AT THE ANNUAL MEETING.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting or any adjournments
thereof.
Proxies may be revoked by sending written notice of revocation to the
Secretary of the Company, at the address of the Company shown above. The
presence at the Annual Meeting of any stockholder who had given a proxy shall
not revoke such proxy unless the stockholder delivers his or her ballot in
person at the Annual Meeting or delivers a written revocation to the Secretary
of the Company prior to the voting of such proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Holders of record of the Company's common stock, par value $1.00 per
share (the "Common Stock") as of the close of business on February 28, 2003 (the
"Record Date") are entitled to one vote for each share then held. As of the
Record Date, the Company had 1,645,258 shares of Common Stock issued and
outstanding, 920,000 of which were held by Alpena Bancshares, M.H.C. (the
"Mutual Holding Company"), and 725,258 of which were held by stockholders other
than the Mutual Holding Company. The presence in person or by proxy of a
majority of the outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum at the Annual Meeting. Broker non-voted and abstentions
will be counted as shares present and entitled to vote for the purposes of
establishing a quorum. In the event there are not sufficient votes for a quorum,
or to approve or ratify any matter presented at the time of the Annual Meeting,
the Annual Meeting may be adjourned in order to permit the further solicitations
of proxies.
1
As to the election of directors, the proxy card provided by the Board
of Directors enables the stockholder to vote "FOR" the election of the two
nominees proposed by the Board, or to "WITHHOLD AUTHORITY" to vote for the
nominees proposed. Directors are elected by a plurality of votes cast, without
regard to either broker non-votes or proxies as to which authority to vote for
the nominee being proposed is withheld.
As to the ratification of Plante & Moran, LLP as independent auditors
of the Company, by checking the appropriate box, a stockholder may: (i) vote
"FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on
such item. The affirmative vote of holders of a majority of the total votes
present at the Annual Meeting in person or by proxy is required for approval of
the ratification of Plante & Moran, LLP as the Company's independent auditors.
Shares as to which the "ABSTAIN" box has been selected on the proxy card will
count as shares present and entitled to vote and will be treated as votes
"AGAINST" the proposal.
Management of the Company anticipates that shares of Common Stock owned
by the Mutual Holding Company will be voted in favor of the nominees for
director and in favor of the ratification of the Company's auditors for the
fiscal year ending December 31, 2003. The affirmative vote of such shares would
ensure the election of such nominees and the ratification of such auditors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Persons and groups who beneficially own in excess of five percent of
the Common Stock are required to file certain reports with the Securities and
Exchange Commission ("SEC") regarding such ownership pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The following table sets
forth, as of the Record Date, the shares of Common Stock beneficially owned by
directors and nominees individually, by executive officers individually, by
executive officers and directors as a group and by each person who was the
beneficial owner of more than five percent of the Company's outstanding shares
of Common Stock.
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Common Stock
Beneficial Owners Ownership (1) (4) Outstanding
----------------- ----------------- -----------
Directors and Executive Officers (2)
James C. Rapin 8,364 0.51
Gary W. Bensinger 966 0.06
Martin A. Thomson 12,617 0.77
Keith D. Wallace 7,715 0.47
Gary C. VanMassenhove 1,000 0.06
Jerome W. Tracey 491 0.03
Debra S. Weiss 180 0.01
Joseph W. Gentry II 40 0.002
James I. Malaski 14,290 0.87
All Directors and Executive Officers 45,663 2.78
As a Group (9 persons) (3)
2
(Footnotes on next page)
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PRINCIPAL STOCKHOLDERS:
Alpena Bancshares, M.H.C. 920,000 55.92
100 S. Second Avenue
Alpena, Michigan 49707
Financial & Investment Management Group, Ltd. 120,364 7.33
417 Saint Joseph Street
Suttons Bay, Michigan 49682 (5)
Jeffrey L. Gendell, Individually, and as 128,930 7.85
managing member of
Tontine Management, L.L.C., and
general partner of
Tontine Financial Partners, L.P.
237 Park Avenue, 9th Floor
New York, New York 10017 (6)
Jeffrey S. Halis, as the general 93,708 5.71
partner of each of
Tyndall Partners, L.P.,
Tyndall Institutional Partners, L.P., and
Madison Avenue Partners, L.P.,
153 East 53rd Street, 55th Floor
New York, New York 10022 (7)
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(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner for purposes of this table, of any shares of Common
Stock if he has shared voting or investment power with respect to such
security, or has a right to acquire beneficial ownership at any time within
60 days from the Record Date. As used herein, "voting power" is the power
to vote or direct the voting of shares and "investment power" is the power
to dispose or direct the disposition of shares. Includes all shares held
directly as well as by spouses and minor children, in trust and other
indirect ownership, over which shares the named individuals effectively
exercise sole or shared voting and investment power.
(2) The mailing address for each person listed is 100 S. Second Avenue, Alpena,
Michigan 49707.
(3) The Company's executive officers and directors are also executive officers
and directors of Alpena Bancshares, M.H.C.
(4) Includes shares of Common Stock allocated to the accounts of employees
pursuant to the Company's Employee Stock Ownership Plan ("ESOP"). Under the
terms of the ESOP, shares of Common Stock so allocated are voted in
accordance with the instructions of the respective employees. All shares
have been so allocated.
(5) Based on a schedule 13G filed with the SEC on February 15, 2002.
(6) Based on a schedule 13D filed with the SEC on January 18, 2002.
(7) Based on a schedule 13D filed with the SEC on January 29, 2002.
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of six members with
one vacancy. The Company's bylaws provide that approximately one-third of the
directors are to be elected annually. Directors of the Company are generally
elected to serve for a three-year period or until their respective successors
shall have been elected and shall qualify. The Board of Directors has nominated
to serve as director, Gary C. VanMassenhove and Thomas R. Townsend, each of whom
is currently a member of the Board of Directors. Messrs. VanMassenhove and
Townsend would be elected to serve for three-year periods, and until their
successors shall have been elected and shall qualify. At the Annual Meeting,
proxies cannot be voted for a greater number of persons than the two nominees in
this proxy statement.
The table below sets forth certain information regarding the composition of
the Company's Board of Directors, including the terms of office of Board
members. It is intended that the proxies solicited on behalf of the Board of
Directors (other than proxies in which the vote is withheld as to one or more
nominees) will be voted at the Annual Meeting for the election of the nominees
identified below. If a nominee is unable to serve, the shares represented by all
such proxies will be voted for the election of such substitute as the Board of
Directors may recommend. At this time, the Board of Directors knows of no reason
why the nominees might be unable to serve, if elected. There are
no arrangements or understandings between any nominee and any other person
pursuant to which such nominees were selected.
Shares of
Common Stock
Positions Beneficially
Held in the Director Current Term Owned on Percent
Name (1) Age Company Since (2) to Expire Record Date (3) of Class
-------- --- ------- --------- --------- --------------- --------
NOMINEES
Gary C. VanMassenhove 56 Director 2001 2003 1,000 *
Thomas R. Townsend (4) 51 Director 2002 2003 -- *
DIRECTORS CONTINUING IN OFFICE
James C. Rapin 62 Chairman 1986 2005 8,364 *
Gary W. Bensinger 60 Vice Chairman 1985 2004 966 *
Keith D. Wallace 61 Director 1988 2004 7,715 *
Martin A. Thomson 54 President, CEO 1986 2005 12,617 *
and Director
- ----------------------------
* Less than 1%.
(1) The mailing address for each person listed is 100 S. Second Avenue, Alpena,
Michigan 49707. Each of the persons listed is also a director of First
Federal of Northern Michigan, the Company's savings bank subsidiary (the
"Bank"), as well as Alpena Bancshares, M.H.C., which owns the majority of
the Company's issued and outstanding shares of Common Stock.
(2) Except for Messrs. VanMassenhove and Townsend, reflects initial appointment
to the Board of Directors of the Bank's mutual predecessor.
(3) See definition of "beneficial ownership" in the table under the heading
"Voting Securities and Principal Holders Thereof."
(4) Mr. Townsend was appointed by the Board of Directors in April 2002 to fill
a vacancy on the Board of Directors. Mr. Townsend was appointed to a term
expiring at this Annual Meeting.
The principal occupation during the past five years of each director and
executive officer of the Company and the Bank is set forth below. References to
the Company include, where applicable, the Bank, which reorganized to form the
Company as its holding company in November 2000. All directors and executive
officers have held their present positions for five years unless otherwise
stated.
DIRECTORS -
James C. Rapin was elected as the Chairman of the Board of Directors of
the Company and the Bank in March 2002. He has been a director of the Bank since
1985, and a director of the Company since its formation in November 2000, and
had been Vice Chairman of the Board since April 2001. Mr. Rapin is a pharmacist
with LeFave Pharmacy, Alpena, Michigan.
Gary W. Bensinger was elected as the Vice Chairman of the Board of
Directors of the Company and the Bank in March 2002. He has been a director of
the Bank since 1985, and a director of the Company since its formation in
November 2000. Mr. Bensinger is owner of Bensinger's Western Auto Store in
Alpena, Michigan.
Martin A. Thomson was named Acting President and Chief Executive
Officer of the Company and the Bank in May 2001 and later named President and
Chief Executive Officer in October 2001. Mr. Thomson previously held the
position of President and Chief Executive Officer of Presque Isle Electric and
Gas Cooperative, Inc., Onaway, Michigan. Mr. Thomson has been a director of the
Bank since 1986, and a director of the Company since its formation in November
2000.
Keith D. Wallace is the senior partner of the law firm of Isackson and
Wallace, P.C., located in Alpena, Michigan. Mr. Wallace has acted as general
counsel to the Bank since 1988. Mr. Wallace has been a director of the Bank
since 1988, and a director of the Company since its formation in November 2000.
Gary C. VanMassenhove is a partner in VanMassenhove, Kearly, Taphouse &
Faulman, CPAs. Mr. VanMassenhove has been a Certified Public Accountant for 31
years. He has been a director of the Company and the Bank since September 2001.
4
Thomas R. Townsend is the President of the R.A. Townsend Co., a
plumbing, heating and air conditioning distributor located in Alpena, Michigan,
where he has been employed for the past 26 years. Mr. Townsend has been a
director of the Company and the Bank since April 2002.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS-
Jerome W. Tracey was named Senior Vice President, Senior Lender of the
Company and the Bank in September 2001, after serving as Vice President of
Commercial Services since joining the Bank in November 1999. Prior to joining
the Bank, Mr. Tracey served as Vice President of Commercial Lending for National
City Bank, Alpena, Michigan, a position he held since 1996. Mr. Tracey has been
in the banking profession since 1981.
Debra S. Weiss was named Senior Vice President, Retail Banking of the
Bank in August 2002, after serving as Vice President, Retail Services of the
Bank since September 2001, and serving as the Gaylord Branch Manager since
joining the Bank in May 2001. Prior to joining the Bank, Ms. Weiss served as
Secondary Market Officer and Compliance Officer for Alden State Bank, Alden,
Michigan. Ms. Weiss was employed as a Compliance Specialist Examiner for the
Office of Comptroller of the Currency from 1998 - 1999, and she held various
officer positions with First National Bank, Gaylord, Michigan from 1992 - 1998.
Michael W. Mahler was named Chief Financial Officer and Treasurer of
the Company and the Bank in November 2002. Prior to this, Mr. Mahler was
employed for two years by the Besser Company, in Alpena, Michigan, which company
is an international producer of concrete products equipment, where he served as
their Corporate Controller. He was previously employed for ten years by LTV
Steel Company, where he was a financial analyst in East Chicago, Indiana for
seven years and for three years he was the controller of a division in
Northeastern Michigan.
Joseph W. Gentry II was named Vice President, Human Resources of the
Bank in February 2002, after serving as Director of Human Resources since
joining the Bank in October 2001. Prior to joining the Bank, Mr. Gentry served
as Manager - Industrial Relations / Safety for Lafarge - Presque Isle
Corporation, producer of chemical grade and aggregate limestone for the
construction and building materials market, since 1991, and was employed by
Besser Company, an international producer of concrete products equipment, from
1973 to 1991 as Personnel Manager / Safety Director. All previous employers are
in the Alpena, Michigan area. Mr. Gentry has taught economics at Alpena
Community College as an adjunct professor for the past 16 years.
James I. Malaski is Corporate Secretary of the Company and the Bank,
and is also Vice President of Corporate Relations of the Bank. Mr. Malaski
joined the Bank as Vice President in 1983 and was appointed as Secretary of the
Bank in October 1999. He has been Secretary of the Company since its formation
in November 2000. Mr. Malaski has previously filled the positions of Executive
Vice President and Chief Operations Officer for the Bank.
Sherri K. Quay was named Vice President, Lending of the Bank in July
2002. Prior to joining the Bank, Mrs. Quay served for three years as Vice
President, Mortgages at First National Bank of Gaylord, Gaylord, Michigan. Mrs.
Quay was employed at First National for 18 years. She has been involved with
many civic and charitable organizations in the Gaylord area during her 19 years
in banking.
OWNERSHIP REPORTS BY OFFICERS AND DIRECTORS
The Common Stock of the Company is registered pursuant to Section 12(g)
of the Exchange Act. The officers and directors of the Company and beneficial
owners of greater than 10% of the Company's Common Stock (10% beneficial
owners") are required to file reports on Forms 3, 4 and 5 with the SEC
disclosing beneficial ownership and changes in beneficial ownership of the
Common Stock. SEC rules require disclosure in the Company's Proxy Statement and
Annual Report on Form 10-KSB of the failure of an officer, director or 10%
beneficial owner of the Company's Common Stock, to file a Form 3, 4 or 5 on a
timely basis. During the year ended December 31, 2002, there were no late
filings.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The business of the Company's Board of Directors is conducted through
meetings and activities of the Board and its committees. During the year ended
December 31, 2002, the Board of Directors held 12 regular
5
meetings and seven special meetings. During the year ended December 31, 2002, no
director attended fewer than 75% of the total meetings of the Board of Directors
and committees on which such director served.
The Company has established an Executive Committee, which is comprised
of the full Board of Directors of the Company. The Executive Committee meets as
necessary in the intervals between meetings of the full Board of Directors. The
Committee has authority to act on all matters of the Company's business between
Board meetings, subject to the ratification by the Board of Directors at its
next meeting. The Executive Committee met six times in 2002.
The Company's Personnel Committee meets periodically to review the
performance of officers and to determine compensation of officers to be
recommended to the Board. It is comprised of the full Board of Directors. The
Personnel Committee did not meet during 2002.
The Company's Nominating Committee is appointed by the Chairman, and
includes all directors of the Company, except those who are in nomination. The
Nominating Committee selects nominees to the Board of Directors of the Company.
The Nominating Committee will consider nominees recommended by security holders,
but has adopted no specific procedure to be followed by security holders in
submitting such recommendations. The Nominating Committee met once during 2002.
The Company's Audit Committee is comprised of the non-employee members
of the Board of Directors. The Committee meets as needed in order to examine and
approve the audit report prepared by the Company's independent auditors. During
2002, the Audit Committee met twice. Each member of the Audit Committee is
"independent" as defined in the listing standards of the National Association of
Securities Dealers. The Company's Board of Directors adopted an Audit Committee
charter in July 2000.
AUDIT COMMITTEE REPORT
In accordance with rules established by the SEC, the Audit Committee of
the Company has prepared the following report for inclusion in this proxy
statement:
As part of its ongoing activities, the Audit Committee has:
- Reviewed and discussed with management, the Company's audited
consolidated financial statements for the year ended December
31, 2002.
- Discussed with the independent auditors of the Company, the
matters required to be discussed by Statement on Auditing
Standards No. 61, Communications with Audit Committees, as
amended; and
- Received the written disclosures and the letter from the
independent auditors required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit
Committees, and has discussed with the independent auditors
their independence.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements be included in the Company's Annual Report on Form 10-KSB
for the year ended December 31, 2002.
This report has been provided by the Audit Committee:
James C. Rapin
Gary W. Bensinger
Keith D. Wallace
Gary C. VanMassenhove
Thomas R. Townsend
6
DIRECTORS' COMPENSATION
In 2002, each director of the Bank received a $600 monthly meeting fee,
payable only if the director attended the meeting. Each director is paid for one
excused absence. The Chairman of the Board received $750 for each regular
meeting attended and each director received $600 for each special Board meeting
attended.
In addition to the foregoing, during the year ended December 31, 2002,
James C. Rapin, Gary W. Bensinger, Martin A. Thomson, Keith D. Wallace, Gary C.
VanMassenhove and Thomas R. Townsend received $1,400, $1,400, $1,300, $1,400,
$1,400 and $700, respectively, for their services as members of the Bank's
Executive, Personnel and Audit Committees. The Bank paid a total of $74,950 in
director and committee fees to members of the Board of Directors during the year
ended December 31, 2002.
No separate fees are paid to members for service on the Board of
Directors of the Company, or for service on committees of the Company's Board of
Directors.
EXECUTIVE COMPENSATION
The following table sets forth for the years ended December 31, 2002,
2001 and 2000, certain information as to the total remuneration paid by the Bank
or the Company to the Chief Executive Officer of the Bank and the Company (the
"Named Executive Officer"). No other executive officer of the Company received
total annual compensation in excess of $100,000 during the year ended December
31, 2002.
==========================================================================================================================
SUMMARY COMPENSATION TABLE
==========================================================================================================================
Long Term
Annual Compensation Compensation Awards
- ----------------------------------------------------------------------- --------------------------------------------------
Years Other Restricted
Ended Annual Stock Options/ All Other
Name and December Salary Bonus Compensation Awards(s) SARs Compensation
Principal Position (1) 31, ($) (2) ($) ($) (3) ($) (4) (#) Payouts ($) (5)
- ------------------------- ---------- ---------- -------- -------------- ------------ ---------- ---------- ---------------
Martin A. Thomson (6) 2002 $128,819 $ -0- $12,700 $3,506 1,000 $ -0- $3,809
President and Chief 2001 $ 65,998 $ -0- $10,200 $ -0- -0- $ -0- $ -0-
Executive Officer 2000 $ -0- $ -0- $11,100 $ -0- -0- $ -0- $ -0-
========================= ========== ========== ======== ============== ============ ========== ========== ===============
(1) No other executive officer received salary and bonuses that in the
aggregate exceeded $100,000.
(2) Amount shown is gross earnings.
(3) Includes fees for services on the Board of Directors and Board Committees
of the Bank and the Company. The Bank also provides the Chief Executive
Officer with the use of an automobile, insurance and other personal
benefits that are not included in the Cash Compensation Table because such
benefits do not exceed $50,000 or 10% of the officer's cash compensation
for the year ended December 31, 2002.
(4) The restricted stock award of 255 shares to Mr. Thomson, pursuant to the
Bank's Recognition and Retention Plan, was 100% vested at the time of the
award on March 27, 2002. The dollar amount set forth represents the market
value of the shares on the date of the award. As of December 31, 2002, the
market value of such shares was $3,646.
(5) Includes Bank contribution to 401 (k) as employer match, and director fees
for service on the Board of the Bank's service corporation subsidiary,
Financial Service & Mortgage Corporation.
(6) Mr. Thomson was appointed Acting President and Chief Executive Officer in
May 2001, and as President and Chief Executive Officer in October 2001.
BENEFITS
DEFINED BENEFIT PLAN. The Bank maintains a noncontributory defined
benefit plan ("Retirement Plan"). All employees age 21 or older, who have worked
at the Bank for a period of one year and have been credited with 1,000 or more
hours of employment with the Bank during the year, are eligible to accrue
benefits under the Retirement Plan. The Bank annually contributes an amount to
the Retirement Plan necessary to satisfy the actuarially determined minimum
funding requirements in accordance with the Employment Retirement Income
Security Act of 1974, as amended ("ERISA").
At the normal retirement age of 65, the Retirement Plan is designed to
provide a life annuity. The retirement benefit provided is an amount equal to
2.5% of a participant's average salary based on the average of the
7
five consecutive years during the participant's years of employment which
provide the highest average annual salary multiplied by the participant's years
of credited service to the normal retirement date. Retirement benefits are also
payable upon retirement due to early and late retirement. Benefits are also paid
from the Retirement Plan upon a participant's disability or death. A reduced
benefit is payable upon early retirement at or after age 55. Upon termination of
employment other than as specified above, a participant who was employed by the
Bank for a minimum of five years is eligible to receive his or her accrued
benefit reduced for early retirement or a deferred retirement benefit commencing
on such participant's normal retirement date. Benefits are payable in various
annuity forms as well as in the form of a single lump sum payment. For the year
ended December 31, 2002, the Bank made contributions to the Retirement Plan of
$212,400.
The following table indicates the annual retirement benefit that would
be payable under the Retirement Plan upon retirement at age 65 in plan year
2002, expressed in the form of a single life annuity for the final average
salary and benefit service classification specified below. As of December 31,
2002, Mr. Thomson had one year credited service (ie, benefit service) with the
Bank.
======================================================================================================================
YEARS OF BENEFIT SERVICE AT RETIREMENT
- ----------------------------------------------------------------------------------------------------------------------
HIGH 5-YEAR
AVERAGE SALARY 10 15 20 25 30
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
$15,000 $3,750 $5,625 $7,500 $9,375 $11,250
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
$25,000 $6,250 $9,375 $12,500 $15,625 $18,750
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
$50,000 $12,500 $18,750 $25,000 $31,250 $37,500
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
$100,000 $25,000 $37,500 $50,000 $62,500 $75,000
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
$150,000 $37,500 $56,250 $75,000 $93,750 $112,500
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
===================== ================== =================== ================== =================== ==================
DEFERRED COMPENSATION PLAN FOR EXECUTIVE OFFICERS. The Bank maintains a
non-qualified deferred compensation plan for executive officers. Such officers
may annually elect to defer a portion of their annual salary. The arrangement is
funded by the purchase of annuity contracts and/or insurance contracts on the
life of the employee. The Bank is the owner and beneficiary of the life
insurance contract. Upon retirement or separation of service with the Bank, the
employee will be paid an amount equivalent to the cash surrender value of the
life insurance contract. Upon the employee's death, the employee's beneficiary
will receive an amount equivalent to the death benefit provided under the life
insurance contract on the life of the employee. As of December 31, 2002, the
Plan had not purchased a life insurance contract on the life of Mr. Thomson.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST. The Bank has established an
Employee Stock Ownership Plan and related Trust for eligible employees. The ESOP
is a tax-qualified plan subject to the requirements of ERISA and the Internal
Revenue Code of 1986 (the "Code"). Employees with a 12-month period of
employment with the Bank during which they worked at least 1,000 hours and who
have attained age 21 are eligible to participate. The ESOP borrowed funds from
an unrelated third party lender and used the funds to purchase 48,000 shares of
the common stock issued in the Bank's initial stock offering. Collateral for the
loan was the Common Stock purchased by the ESOP. The loan was being repaid
principally from the Bank's contributions to the ESOP and was fully paid during
1999.
Contributions to the ESOP and shares released from the suspense account
in an amount proportional to the repayment of the ESOP loan were allocated among
participants on the basis of compensation in the year of allocation, up to an
annual adjusted maximum level of compensation. Benefits generally become 100%
vested after five years of credited service. Forfeitures will be reallocated
among remaining participating employees in the same proportion as contributions.
Benefits are payable upon death, retirement, early retirement, disability or
separation from service. The Bank's contributions to the ESOP are not fixed, so
benefits payable under the ESOP cannot be estimated.
8
The Bank's Board of Directors administers the ESOP. The Bank has
appointed First Bankers Trust Company, Quincy, Illinois to serve as trustee of
the ESOP. The ESOP Committee may instruct the trustee regarding investment of
funds contributed to the ESOP. The ESOP trustee, subject to its fiduciary duty,
must vote all allocated shares held in the ESOP in accordance with the
instructions of participating employees. Under the ESOP, nondirected shares will
be voted in a manner calculated to most accurately reflect the instructions it
has received from participants regarding the allocated stock so long as such
vote is in accordance with the provisions of ERISA.
401(K) PLAN. The Bank established a 401(k) Plan for Bank employees as
of May 1, 1999. The Plan is tax qualified and permits participants to elect to
defer up to 50% (as of January 1, 2002) of the participant's eligible annual
compensation into the Plan. During 1999, the Bank made a matching contribution
of 25% of the participant contribution to the Plan, up to 1% of the
participant's eligible annual compensation for 1999. After 1999, the Bank has
made matching contributions of 50% of the participant's contribution, with the
match being up to 3% of the participant's eligible annual compensation for the
year. All current employees at the time of the establishment of the Plan on May
1, 1999 were 100% vested in their contributions and in matching contributions.
Subsequently, new employees became 100% vested after five years of credited
service in matching contributions. However, beginning January 1, 2002 the
vesting schedule changed to be on an equally graduated basis over a five- year
period, which includes employees hired after May 1, 1999. Employees are 100%
vested in their elective deferral amounts at all times under the Plan.
Participants will be credited for years of service with the Bank prior to the
effective date of the Plan. Forfeitures of discretionary contributions will be
used to reduce the Bank's contributions in succeeding plan years.
STOCK OPTION PLAN. Certain employees and non-employee directors of the
Bank and the Company are eligible to participate in the Bank's 1996 Stock Option
Plan (the "Stock Option Plan"). The Stock Option Plan authorizes the grant of
stock options and limited rights to purchase 69,000 shares, or 10% of the shares
of common stock issued to minority stockholders in the initial public offering
by the Bank. Upon the formation of the Company as the Bank's holding company in
November 2000, the shares of common stock subject to the Stock Option Plan
became the shares of Common Stock of the Company. Pursuant to the Stock Option
Plan, grants may be made of (i) options to purchase Common Stock intended to
qualify as incentive stock options under Section 422 of the Code, (ii) options
that do not so qualify ("non-statutory options") and (iii) limited rights
(described below) that are exercisable only upon a change in control of the Bank
or the company. Non-employee directors are only eligible to receive
non-statutory options.
The Stock Option Plan is administered by a committee consisting of
certain non-employee directors of the Board of Directors (the "Committee"). In
granting options, the Committee considers factors such as salary, length of
employment with the Bank, and the employee's overall performance. All stock
options are exercisable in five equal annual installments of 20% commencing one
year from the date of grant; provided, however, that all options will be 100%
exercisable in the event the optionee terminates his service due to normal
retirement, death or disability, or in the event of a change in control of the
Company or the Bank. Options may be exercised within 10 years from the date of
grant. Stock options may be exercised up to one year following termination of
service or such later period as determined by the Committee. The exercise price
of the options will be at least 100% of the fair market value of the underlying
Common Stock at the time of the grant. The exercise price may be paid in cash or
Common Stock.
Incentive stock options will only be granted to employees of the Bank
and/or the Company. Non-employee directors will be granted non-statutory stock
options. No incentive stock option granted in connection with the Stock Option
Plan may be exercisable more than three months after the date on which the
optionee ceases to perform services for the Bank and/or the Company, except that
in the event of death, disability, normal retirement, or a change in control of
the Bank or the Company, incentive stock options may be exercisable for up to
one year; provided, however, that if an optionee ceases to perform services for
the Bank or the Company due to retirement or following a change in control (as
defined in the Stock Option Plan), any incentive stock options exercised more
than three months following the date the optionee ceases to perform services
shall be treated as a non-statutory stock option as described above.
Upon the exercise of "limited rights" in the event of a change in
control, the optionee will be entitled to receive a lump sum cash payment, or in
certain cases, Common Stock, equal to the difference between the exercise price
of the option and the fair market value of the shares of Common Stock subject to
the option on the date of exercise of the right in lieu of purchasing the stock
underlying the option. In the event of death or disability, the Bank and/or the
Company, if requested by the optionee or beneficiary, may elect, in exchange for
the option, to pay
9
the optionee, or beneficiary in the event of death, the amount by which the fair
market value of the Common Stock exceeds the exercise price of the option on the
date of the optionee's termination of service for death or disability.
Pursuant to the Stock Option Plan, non-employee directors at the
inception of the Plan on April 17, 1996, Bensinger, Rapin, Thomson, and Wallace
were each granted options to purchase 6,037 shares of Common Stock. These
options were granted at an exercise price of $10.00 per share, which options
have all been earned but not exercised. No options have been reserved for future
issuance to non-employee directors under the Plan, and therefore Messrs.
VanMassenhove and Townsend, who were appointed to the Board of Directors in
September 2001 and April 2002, respectively, have not been awarded options under
the Plan. Stock options for 1,000 shares were granted at an exercise price of
$13.75 per share to the Named Executive Officer under the Stock Option Plan
during the year ended December 31, 2002.
Set forth below is certain information regarding options granted to the
Named Executive Officer during Fiscal Year 2002.
=======================================================================================================================
OPTION GRANTS IN LAST FISCAL YEAR
=======================================================================================================================
Individual Grants
- -----------------------------------------------------------------------------------------------------------------------
Percent of Total
Options Options Granted to Exercise Expiration Grant Date
Name Granted Employees in FY 2002 Price Date Present Value (1)
- ------------------------- -------------- ------------------------- --------------- -------------- ---------------------
Martin A. Thomson 1,000 14.3% $13.75 3/27/12 $1,040
========================= ============== ========================= =============== ============== =====================
(1) The grant date present value was derived using the Black-Scholes option
pricing model with the following assumptions: volatility of 19.7%; risk
free rate of return of 4.0%; dividend yield of 7.0%; and an 8.0 year option
life.
Set forth below is certain information concerning options outstanding
to the Named Executive Officer at December 31, 2002. No options were exercised
by the Named Executive Officer during 2002.
=====================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
=====================================================================================================================
Number of Unexercised Value of Unexercised In-
Options at The-Money Options at
Year-End Year-End
- -------------------------- ----------- ------------ ------------------------------ ----------------------------------
Shares
Acquired
upon Value Exercisable/Unexercisable Exercisable/Unexercisable
Name Exercise Realized (#) ($)
========================== =========== ============ ============================== ==================================
Martin A. Thomson ----- $----- 6,037 / 1,000 $25,959 / $550
========================== =========== ============ ============================== ==================================
RECOGNITION AND RETENTION PLAN. Certain employees and non-employee
directors of the Bank and the Company are eligible to participate in the Bank's
Recognition and Retention Plan, which was adopted in 1996 (the "Recognition
Plan"). A Committee of the Board of Directors composed of "disinterested"
directors (the "Recognition Plan Committee") administers the Recognition Plan
and makes awards to executive officers and employees. Participants in the
Recognition Plan earn (become vested in) shares of Restricted Stock covered by
an award and all restrictions lapse over a period of time commencing from the
date of the award; provided, however, that the Recognition Plan Committee may
accelerate or extend the earnings rate on any awards made to officers and
employees under the Recognition Plan. Awards to non-employee directors vest at
the rate of 20% of the amount initially awarded commencing one year from the
date of the award. Awards to executive officers and employees become fully
vested upon termination of employment or service due to death, disability or
normal retirement or
10
following a termination of employment or service in connection with a change in
the control of the Bank or the Company. Upon termination of employment or
service for another reason, unvested shares are forfeited. Awards to
non-employee directors fully vest upon a non-employee director's disability,
death, normal retirement, or following termination of service in connection with
a change in control of the Bank or the Company. Unvested shares of Restricted
Stock will be forfeited by a non-employee director upon failure to seek
reelection, failure to be reelected, or resignation from the Board (other than
in connection with normal retirement, as defined by the Recognition Plan).
Pursuant to the Recognition Plan, non-employee directors at the
inception of the Plan on April 17, 1996, Bensinger, Rapin, Thomson, and Wallace
were each granted 2,415 shares of Common Stock, which shares have been earned
and issued. Messrs. VanMassenhove and Townsend, who were appointed to the Board
of Directors in September 2001 and April 2002, respectively, have not been
awarded any shares under the Plan. There were 255 additional shares granted
(which were 100% vested) to the Named Executive Officer under the Recognition
Plan during the year ended December 31, 2002. A total of 27,358 shares of Common
Stock have been earned and issued pursuant to the Recognition Plan as of
December 31, 2002 and 242 shares are reserved for future issuance.
Set forth below is information as of December 31, 2002 regarding equity
compensation plans categorized by those plans that have been approved by
stockholders and those plans that have not been approved by stockholders.
================================== ================================ ===================== ============================
Number of securities to
be issued Number of securities
upon exercise of outstanding Weighted average remaining available for
Plan options and rights exercise price issuance under plan
================================== ================================ ===================== ============================
Equity compensation plans
approved by stockholders 41,033 $10.35 20,309 (1)
- ---------------------------------- -------------------------------- --------------------- ----------------------------
Equity compensation plans not
approved by stockholders -- -- --
- ---------------------------------- -------------------------------- --------------------- ----------------------------
Total 41,033 20,309
================================== ================================ ===================== ============================
(1) Consists of 242 shares available for future issuance pursuant to the 1996
Recognition and Retention Plan and 20,067 shares underlying options
available for future issuance pursuant to the 1996 Stock Option Plan.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
Under current federal law, except for loans or extensions of credit to
executive officers and directors under Company-wide employee benefit plans, all
loans or extensions of credit to executive officers and directors must be made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with the general public
and must not involve more than the normal risk of repayment or present other
unfavorable features. In addition, loans made to a director or executive officer
in excess of the greater of $25,000 or 5% of the Bank's capital and surplus (up
to a maximum of $500,000) must be approved in advance by a majority of the
disinterested members of the Board of Directors. Bank policy requires that all
loans made to a director or executive officer must be approved in advance by a
majority of the disinterested members of the Board of Directors. At December 31,
2002, the Bank's directors and executive officers had loans outstanding totaling
$894,708 in the aggregate.
The Bank intends that all transactions between the Bank and its
executive officers, directors, and holders of 10% or more of the shares of any
class of its common stock and affiliates thereof, will contain terms no less
favorable to the Bank than could have been obtained by it in arm's-length
negotiations with unaffiliated persons and will be approved by a majority of
independent non-employee directors of the Bank not having an interest in the
transaction.
The Sarbanes-Oxley Act of 2002 generally prohibits an issuer from: (i)
extending or maintaining credit; (ii) arranging for the extension of credit; or
(iii) renewing an extension of credit in the form of a personal loan for an
officer or director. There are several exceptions to this general prohibition,
one of which is applicable to the Company. Namely, this prohibition does not
apply to loans made by a depository institution that is insured by the FDIC and
is subject to the insider lending restrictions of the Federal Reserve Act. All
loans to the Company's officers and directors by the Bank are made in conformity
with the Federal Reserve Act and regulations promulgated thereunder.
11
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has approved the engagement of
Plante & Moran, LLP to be the Company's auditors for the year ending December
31, 2003, subject to the ratification of the engagement by the Company's
stockholders. At the Annual Meeting, stockholders will consider and vote on the
ratification of the engagement of Plante & Moran, LLP for the Company's fiscal
year ending December 31, 2003. A representative of Plante & Moran, LLP is
expected to attend the Annual Meeting to respond to appropriate questions and to
make a statement if he so desires.
Set forth below is certain information concerning aggregate fees billed
for professional services rendered by Plante & Moran, LLP during the fiscal year
ended December 31, 2002:
Audit and SEC Reporting $37,150
Audit - Other $11,450
Tax Preparation and Planning $ 6,350
Financial Information Systems
Design and Implementation Fees $ --
Other Fees - Regulatory Compliance,
Testing, and Consultation $32,800
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining Plante & Moran, LLP's independence. The
Audit Committee concluded that performing such services does not affect Plante &
Moran, LLP's independence in performing its function as auditor of the Company.
In order to ratify the selection of Plante & Moran, LLP as the auditors
for the year ending December 31, 2003, the proposal must receive the affirmative
vote of a majority of the shares present at the Annual Meeting in person or by
proxy. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF PLANTE
& MORAN, LLP AS AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2003.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive office, 100
S. Second Avenue, Alpena, Michigan 49707, no later than November 19, 2003. Any
such proposal shall be subject to the requirements of the proxy rules adopted
under the Exchange Act.
OTHER MATTERS AND ADVANCE NOTICE PROCEDURES
The Board of Directors is not aware of any business to come before the
Annual Meeting other than the matters described above in this proxy statement.
However, if any matters should properly come before the Annual Meeting, it is
intended that holders of the proxies will act as directed by a majority of the
Board of Directors, except for matters related to the conduct of the Annual
Meeting, as to which they shall act in accordance with their best judgment. The
Board of Directors intends to exercise its discretionary authority to the
fullest extent permitted under the Exchange Act.
The Bylaws of the Company provide an advance notice procedure for new
business to be taken up at the Annual Meeting. In order for a stockholder to
properly bring business before the Annual Meeting, the stockholder must state
the new business in writing and file the description of the new business with
the Secretary of the Company at least five days prior to the date of the Annual
Meeting. A stockholder may make any other proposal at the Annual Meeting itself,
and the proposal may be discussed and considered, but unless stated in writing
and filed with the Secretary at least five days prior to the Annual Meeting, the
proposal will be laid over for action at an
12
adjourned, special or annual meeting of the stockholders taking place 30 days or
more thereafter. Nothing in this paragraph shall be deemed to require the
Company to include in its proxy statement and proxy relating to an annual
meeting any stockholder proposal that does not meet all of the requirements for
inclusion established by the SEC in effect at the time such proposal is
received.
The date on which the 2004 Annual Meeting of Stockholders is expected
to be held is April 21, 2004. Accordingly, advance written notice of business or
nominations to the Board of Directors to be brought before the 2004 Annual
Meeting of Stockholders must be given to the Company no later than April 16,
2004.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
A COPY OF THE COMPANY'S REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 2002 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO JAMES I. MALASKI, SECRETARY, ALPENA
BANCSHARES, INC., 100 S. SECOND AVENUE, ALPENA, MICHIGAN 49707.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ James I. Malaski
James I. Malaski
Secretary
Alpena, Michigan
March 14, 2003
13
REVOCABLE PROXY
[X] PLEASE MARK VOTES ALPENA BANCSHARES, INC.
AS IN THIS EXAMPLE
WITH- FOR ALL
ANNUAL MEETING OF STOCKHOLDERS FOR HOLD EXCEPT
APRIL 16, 2003 1. The election as directors of all
nominees listed (except as marked to [ ] [ ] [ ]
the contrary below):
GARY C. VANMASSENHOVE THOMAS R. TOWNSEND
The undersigned hereby appoints the official INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
proxy committee consisting of the entire Board INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE
of Directors with full powers of substitution THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
to act as attorneys and proxies for the undersigned ----------------------------------------------------------------------
to vote all shares of Common Stock of the Company FOR AGAINST ABSTAIN
which the undersigned is entitled to vote at the 2. The ratification of appointment of
Annual Meeting of Stockholders ("Annual Meeting") Plante & Moran LLP as auditors for [ ] [ ] [ ]
to be held at the Thunder Bay Recreational Center, the Company for the year ending
701 Woodward Avenue, Alpena, Michigan, on April 16, December 31, 2003.
2003, at 1:00 p.m., Michigan time. The official
proxy committee is authorized to cast all votes to
which the undersigned is entitled as follows: PLEASE CHECK BOX IF YOU PLAN TO ATTEND ---------> [ ]
THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH
OF THE LISTED PROPOSALS.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED,THIS PROXY WILL BE VOTED
FOR EACH OF THE PROPOSITIONS STATED ABOVE. IF ANY
OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS
-------------------- PROXY WILL BE VOTED BY THE MAJORITY OF THE BOARD OF
Please be sure to sign and date | Date | DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
this Proxy in the box below. | | KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- -----------------------------------------------------------
| |
| | THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
| |
- - Stockholder sign above -- Co-holder (if any) sign above -
- ------------------------------------------------------------------------------------------------------------------------------------
/\ DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE-PREPAID ENVELOPE PROVIDED. /\
ALPENA BANCSHARES, INC.
- ------------------------------------------------------------------------------------------------------------------------------------
Should the above-signed be present and elect to vote at the Annual Meeting or at any adjournment thereof and after
notification to the Secretary of the Company at the Annual Meeting of the stockholder's decision to terminate this
proxy, then the power of said attorneys and proxies shall be deemed terminated and of no further force and effect. This
proxy may also be revoked by sending written notice to the Secretary of the Company at the address set forth on the
Notice of Annual Meeting of Stockholders, or by the filing of a later dated proxy prior to a vote being taken on a
particular proposal at the Annual Meeting.
The above-signed acknowledges receipt from the Company prior to the execution of this proxy of notice of the Annual
Meeting, a proxy statement dated March 14, 2003, and audited financial statements.
Please sign exactly as your name appears on this proxy. When signing as attorney, executor, administrator, trustee
or guardian, please give full title. If shares are held jointly, each holder should sign.
PLEASE COMPLETE AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
- ------------------------------------------------------------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH
THE PROXY IN THE ENVELOPE PROVIDED.
----------------------------------------------------
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